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Everything You Need to Know About Using Chatbots to Grow Your Online Business (2022)

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As an ecommerce store owner or marketer, it is becoming increasingly important to keep consumers engaged alongside the other functions to keep a business running. 

From your own storefront to social media and all the other digital touch points you’ve established, keeping up with conversations at different stages of a buyer’s journey is only getting tougher by the day.  

The bad news is that in a competitive market, you can’t do away with conversations anymore. They’re your only ticket to impressing a consumer and getting them to engage with your brand in one way or another. 

The good news is that there’s a smart solution to do it all at scale – ecommerce chatbots. 

Chatbots have become popular as one of the ecommerce trends for businesses to follow. But there are still a number of brands out there who are skeptical about leveraging the technology for conversational commerce. 

If you’ve been trying to find answers to what chatbots are, their benefits and how you can put them to work, look no further. This blog is going to answer everything you need to know about chatbots in ecommerce! 

A chatbot is a computer program that stimulates an interaction or a conversation with customers automatically. These conversations occur based on a set of predefined conditions, triggers and/or events around an online shopper’s buying journey. 

Let’s explain this with a simple example. 

You visit Nykaa to explore their beauty and cosmetics range. But you’re not sure where to begin so you reach out to them via the chat bubble visible on their website. 

As soon as you click on the bubble, you’re presented with a question asking what your query is about and a set of options you can choose from. 

 

Now based on the response you enter, the chatbot then lays out the next steps. In this case, asking you for more details around your skin issues so that they can rope in an expert from their team to guide you. 

 

This is the most basic example of what an ecommerce chatbot looks like. 

While our example was of a chatbot implemented on a website, such interactions with brands can now be experienced on social media platforms and even messaging apps. 

Now let’s tell you a little about why brands as big as Nykaa, who can have a team of agents to reply to their customer queries, are using chatbots. 

Why are ecommerce chatbots important? 

1. Your customers want to talk to you 

In a study on consumer expectations, it was found that people want to talk to brands before making a purchase from them. This especially holds true now when most of our shopping has gone online, and there is a lack of touch and feel of a product before making a purchase. 

Your non-availability at a certain hour can be mistaken as you not wanting to talk to consumers, and only sell to them. 

A chatbot helps you talk to customers at a time and place they choose, assisting them in making purchases or addressing their anxiety, showing them your brand cares.  

2. Your customers want immediate replies 

How many times do you, as a consumer, wait for a brand to respond to a query in 24-48 hours?

Chances are, you’d walk away and look for another store to buy from that gives you more information around what you’re looking for. Or someone who can provide you with shopping assistance. 

According to various surveys, 82-90% of consumers expect immediate responses from brands on marketing, sales and support questions. 

Imagine having to ‘immediately’ respond to a hundred queries across your website and social media channels – it’s not possible to keep up. That’s where ecommerce chatbots come handy.

The technology is equipped to handle most of your customer support queries, leveraging the data already available on your website. This keeps the conversation going, keeping the consumer engaged with your brand and hence, more likely to make the purchase during the session with assistance. 

3. You can’t stay available 24/7 

Another reason why brands are slow at replying to consumers is their non-availability. You could be working on a new product launch, outsourcing material or looking for partners to promote your brand – there’s always a lot to do that can take you away from conversations. 

Now you could have a team of live agents to answer customer questions every day; but they too have a schedule. On the flip side, your customers and their shopping behavior has no schedule! 

Think about the number of times you made a purchase at midnight. 

A chatbot helps you stay available 24/7 to answer queries at any given point in time. In case a chatbot is not able to help the consumer, it is able to keep the conversation going by asking more questions and collecting data that you can follow up on the next day. 

4. Your customers are everywhere 

Owing to the pandemic, consumers moved to online channels to make their day to day purchases. But ‘online’ by itself is a vast arena. 

Now that we’re coming back to normalcy, there’s also offline channels coming back into the mix of a buyer’s journey. 

Simply put, your customers are everywhere. They can choose to engage with you on your online store, Facebook, Instagram or even WhatsApp to get a query answered. 

According to G2, multichannel sales is the only way for ecommerce businesses to keep up with consumers and meet their demands on a platform of their choice. 

Now imagine having to keep up with customer conversations across all these channels – that’s exactly why businesses are using ecommerce chatbots. 

5. Your live agents costs can get out of control fast 

Traditionally, businesses hired live agents to tackle customer queries across various departments. 

But think about the number of people you’d require to stay on top of all customer conversations, across platforms. 

While the relevancy of ‘human’ conversations still remains, the need for instant replies is where it gets tough for live agents to handle the new-age consumer. Hiring more live agents is no longer an option if you’re someone optimizing for costs to keep budgets streamlined and focused on marketing and advertising. 

That’s where chatbots come in.

Comparisons have found that chatbots are easy to scale, handling more than thousands of queries a day, at a much lesser cost than hiring as many live agents to do the same. A study by IBM saw 30% savings in businesses using chatbots. 

What are the different types of chatbots? 

To be able to offer the above benefits, chatbot technology is continually evolving. While there’s still a lot of work happening on the automation front with the help of artificial technology and machine learning, chatbots can be broadly categorized into 3 types. 

While we’re not going to get into the technical aspects of each, here’s a brief overview on three types: 

1. Simple chatbots 

Simple chatbots are the most basic form of chatbots, and come with limited capabilities. They are also called ‘rule-based bots’ and are extremely task-specific, making them ideal for straightforward dialogues only.  

This means that the chatbot is set up in such a way that it poses questions based on predetermined options. The consumer can then choose from the options until they get an answer to their query. 

In this case, the chatbot does not draw up any context or inference from previous conversations or interactions. Every response given is based on the input from the customer and taken on face value. 

For example, ordering a pizza. To order a pizza, this type of chatbot will walk you through a series of questions around the size, crust and toppings you’d like to add. It will walk you through the process of creating your own pizza up until you add a delivery address and make the payment. 

Another example is that of chatbots being used for order status. A simple chatbot will simply ask you for the order number and provide you with an order status update or a tracking URL based on the option you choose. 

2. Smart chatbots 

Now smart chatbots are one step ahead of the logical chatbots above. They’re designed using technologies such as AI to understand human interactions and intent better before responding to them. They’re able to imitate human-like, free-flowing conversations, learning from past interactions and predefined parameters while building the bot. 

For example, shopping assistants on online stores. 

A consumer can converse with these chatbots more seamlessly, choosing their own way of interaction. If they’re looking for products around skin brightening, they get to drop a message on the same. The chatbot is able to read, process and understand the message, replying with product recommendations from the store that address the particular concern. 

If you’ve been using Siri, smart chatbots are pretty much similar to it! No matter how you pose a question, it’s able to find you a relevant answer.  

3. Hybrid chatbots 

Typically, a hybrid chatbot is a combination of simple and smart chatbots, built to simplify complex use cases. They are set up with some rule-based tasks, but can also understand the intent and context behind a message to deliver a more human-like response. 

Let’s go back to the pizza example. 

A hybrid chatbot would walk you through the same series of questions around the size, crust and toppings. But additionally, it can also ask questions like – How would you like your pizza (sweet, bland, spicy, very spicy) – and use the consumer input to make topping recommendations. 

The two things in common about each of these chatbots is their ability to be customized based on the use case you intend to address, and seamless hand-offs when a conversation requires you to step in to address a customer query. 

Are chatbots in ecommerce really successful? 

If statistics are to be believed, the answer is yes and they’re already being put to use across various industries.  

  • According to Gartner, 85% of our engagement will be done without interacting with another human; we’ll be using self-service options and chatbots more often.
  • The global chatbot market is expected to be worth $9.4 billion by 2024; growth led by consumer demands for self-service and 24/7 customer support. 
  • As per a Facebook survey, more than 50% of customers say they’re more likely to shop with a business that they can connect with via chat. 
  • Approximately 74% of consumers say they make use of chatbots to research or buy products and services from a business. 
  • 57% of businesses have experienced chatbots delivering a conversational experience to buyers, leading to higher ROI with minimal effort. 

But here are the interesting numbers to convince you that it’s time to use ecommerce chatbots: 

  • More than 59% of millennials and 60% of Gen Xers have interacted with chatbots. 
  • Almost 50% of shoppers are open to buying products/ services from a bot conversation. 

Now that you know that your consumers are more bothered about getting the right response, than getting it from ‘you’ alone, let’s take a look at how you can use chatbots in ecommerce. 

How can you use chatbots in ecommerce? 

There are a number of ways in which ecommerce businesses are using chatbots. Here are some of the most effective use cases:  

1. Collect customer information 

Chatbots are a great way to capture visitor intent and use the data to personalize your marketing campaigns. 

For example, when someone lands on your website, you can use a welcome bot to initiate a conversation with them. As you talk to this visitor, you can capture information around the products they’re looking for, how they’d like to be notified of the products and the deals around them and so on. 

2. Offer shopping assistance/ customer support 

No matter how in-depth your product description and media gallery is, an online shopper is bound to have questions before making a purchase. 

You can use a chatbot to answer queries around sizing guides, product variants available, ongoing discounts that they can redeem or even make product recommendations based on what they’re looking for. 

3. Upsell and cross-sell to buyers 

You walk into a store to buy a pair of jeans, but often walk out with a shirt to go along with it. That’s because the salesperson did a good job at not just upselling you a good pair of jeans, but cross-selling from another category of products available. 

A chatbot can help you do this online. Based on what a consumer is looking for or the page they are looking at, a chatbot can start a conversation that helps them discover other options available to them that may be better than what the consumer had in mind. 

Similarly, using the intent of the buyer, the chatbot can also recommend products that ‘go along with’ the product they came looking for. Think of this as product recommendations, but more conversational like a chat with the salesperson you met. 

4. Prevent and recover abandoned carts 

There could be a number of reasons why an online shopper chooses to abandon a purchase. With chatbots in place, you can actually stop them from leaving the cart behind or bring them back if they already have. 

For example, if you see a visitor abandoning the cart and exiting your website or taking too long to move to the next step, a chatbot can be used to trigger a conversation to ask if they need any help. Be it calculating shipping costs, offering a discount on the cart total or simply sharing return/ exchange policies to ease their anxiety, a chatbot can handle it all to prevent cart abandonment

Similarly, if the visitor has abandoned the cart, a chatbot on social media can be used to remind them of the products they left behind. The conversation can be used to either bring them back to the store to complete the purchase or understand why they abandoned the cart in the first place. 

5. Keep customers engaged 

If you have been sending email newsletters to keep customers engaged, it’s time to add another strategy to the mix. 

Chatbots are actually great at keeping customers engaged. The two-way conversation contrary to the one-way push of information and updates is much more effective and gives you many more opportunities to get to know them better, or sell to them. 

For example, once a customer has made a purchase from your store, you can use chatbots to send them product how-tos, or introduce them to other products that suit their interests. You can use their responses to nurture them further and lead them back to your store for more! 

6. Collect customer feedback and reviews 

Chatbots are also extremely effective at collecting customer feedback. 

Think about the traditional emails requesting product feedback. 

Now think about walking into a store and being asked about your shopping experience before leaving. 

You’re more likely to share feedback in the second case because it’s conversational and we as humans love to talk. 

With the help of chatbots, you can collect customer feedback proactively across various channels, or even request product reviews and ratings. Additionally, chatbots give you the ability to gauge negative feedback before it goes online, so you can resolve a customer issue before it gets posted about! 

7. Offer easy order tracking and updates  

Another great use case of a chatbot is order tracking. 

While most ecommerce businesses have automated order status alerts set up, a lot of consumers choose to take things into their own hands. 

Now instead of increasing the number of messages and phone calls you receive to track orders, you can tackle the queries with a chatbot. 

A chatbot can pull data from your logistics service provider and store backend to update the customer about the order status. It can also offer the customer a tracking URL they can use themselves to keep track of the order, or change the delivery address/ date to a time that suits them the best. 

Simply put, an ecommerce chatbot simplifies a customer’s buying journey with a brand by bringing back conversations into the digital world. 

Additional read: What bots can (and can’t do) for your online store

And the good thing is that ecommerce chatbots can be implemented across all the popular digital touchpoints consumers make use of today. 

Where can you use ecommerce chatbots? 

The good thing about ecommerce chatbots is that the technology can be implemented across various platforms, giving businesses an opportunity to leverage its features and use cases more proactively. 

Some of the popular channels where we see ecommerce chatbots shine, include: 

1. Live chat (on your store) 

Considering how 46% of customers prefer using live chat over contacting business on email or phone calls, the very first place you should consider implementing a chatbot is your own online store. This will help you welcome new visitors, guide their buying journey, offer shopping assistance before, during and after a purchase, and prevent cart abandonment! 

Chatbots have also proven to improve customer experience and reduce the bounce rate by keeping visitors meaningfully engaged. 

Here’s an example of what a chatbot on live chat looks like: 


2. Facebook 

As per a study by Facebook, a number of consumers choose to interact with brands on the social platform to get more information about products, deals and discounts. That’s why implementing a chatbot on Facebook Messenger is important. 

With a Facebook Messenger chatbot you can nurture consumers that discover you through Facebook shops, groups or your own marketing campaigns. The chatbot can be used to direct them to your website or introduce them to ongoing deals and discounts they’d find there. 

Here’s an example of a Facebook chatbot: 

source

3. Instagram 

Studies have found that almost 150 million Instagram users have a conversation with a business every month on the platform. In fact, Instagram has now become one of the leading channels for consumers to discover new brands and make purchases. 

Traditionally, businesses reply to DMs manually. But as the business grows, managing DMs and staying on top of conversations (some of which are repetitive) can become all too overwhelming. This is where Instagram chatbots can help. 

You can use them in a similar fashion as Facebook chatbots. You can use a hybrid chatbot to collect customer information, provide product information or direct them to your site based on what they’re looking for. 

Here’s what an Instagram chatbot looks like: 


4. WhatsApp 

WhatsApp has over 390 million users in India alone and with the launch of WhatsApp Business API, ecommerce businesses now have an opportunity to tap into this user base for marketing. 

As of today, there are more than 5 million businesses on WhatsApp, and the numbers are only increasing to meet the need of conversational commerce. But imagine responding to customer queries over a chat app at scale – impossible to keep up with!

WhatsApp chatbots can help businesses streamline communication on the messaging app, driving better engagement on their broadcast campaigns. We are seeing businesses use these chatbots to offer better customer support, recover abandoned carts, request customer feedback and much more. 

Here’s an example of a WhatsApp chatbot:

 

Even WHO uses the WhatsApp chatbot to educate its audience on topics of their concern. 

 

You can learn more about WhatsApp marketing and chatbots here.   

5. Telegram 

Telegram is another messaging app we see businesses use for marketing and customer support. 

Similar to WhatsApp, you can set up ecommerce chatbots on the messaging platform to tackle customer queries and keep them engaged, driving more store visits and conversions. 

But before you jump the gun and implement chatbots across all channels, let’s take a quick look at some of the best practices to follow. 

Best practices to use chatbots in ecommerce 

A chatbot is meant to remove the barrier between you and your customers by enabling seamless and proactive conversations. But to make the most of them, you should: 

  • Identify the goals you want to achieve: Before you implement a chatbot, make sure you have your use cases and goals clearly identified and documented in a strategy. 
  • Identify your most-used channels: Next, look into your analytics to identify your top traffic sources; prioritize chatbot implementation accordingly. Start only with the absolute must-haves. 
  • Keep your chatbot flow simple and intuitive: Don’t complicate the process of communicating with your brand. Think consumer-first when implementing a flow to keep things simple. 
  • Keep your FAQs ready: Most consumers reaching out to businesses have repetitive and common questions; take note of them all and create an extensive FAQ library that you can add to your chatbot flow for ease of information. 
  • Leverage the chatbot across a buyer’s journey: Don’t restrict the use case of chatbots; learn more about how you can use conversations to improve a buyer’s journey before, during and after a purchase. 
  • Ensure hand-offs: There will be moments when a chatbot is not capable of addressing a consumer query; make sure there is a way to notify you and hand-off the conversation in a timely manner. 
  • Integrate with your CRM: A chatbot collects a lot of customer data during the conversation. In times when personalization is the need of the hour, make sure you’re recording all the data in a systematic manner. This is where integration with your CRM can come in handy! 
  • Monitor and optimize: Don’t set up chatbots and forget all about them. Continually learn from how customers engage with it and what you can do to improve their experience; implemented well, a chatbot can help increase your conversions and sales. 

Additional read: 6 best practices for chatbots on ecommerce websites

Now that you know why chatbots are important, how you can use them and where, let’s not miss another conversation. It’s time for you to set up an ecommerce chatbot! 

Set up a chatbot on your Shopify store today! 

There are a number of ecommerce businesses that build a chatbot from scratch. But that means added time and resources to implement a chatbot on each channel, before you actually begin using it. 

Now if you’re a store on Shopify, setting up a chatbot for your business is easy – no matter what channel you want to use them on. 

There are a number of apps in our App Store that help you set up a chatbot on live chat, social media platforms or messaging apps like WhatsApp, in no time. All you need to do is evaluate which of the apps suits your needs the best, the integrations it has to offer and the ease of set up. 

If you’re just getting started with ecommerce chatbots, we recommend exploring Shopify Inbox

The chatbot functionality is built to help you streamline and manage on-site customer queries with ease by setting up quick replies, FAQs and order status automations. 

But if you’re looking at implementing social media and messaging app chatbots as well, you can explore all our apps here

What is an ecommerce chatbot?

What is an ecommerce chatbot?

An ecommerce chatbot is an AI-powered technology implemented by online retailers to engage customers at every stage of their buying journey as virtual shopping assistants.

How do I use ecommerce chatbot?

There are a number of ways to use ecommerce chatbots. You can use chatbots to welcome first-time visitors and collect contact information, offer customer support, enable shopping assistance, gather customer feedback and much more, across all your digital touchpoints including your website, social media pages and messaging apps. 

How do I add chatbots to Shopify?

Adding a chatbot on Shopify is easy. All you need to do is identify the channel you want to simplify customer conversations on, and install a chatbot app. From live chat to social media, and messaging apps like WhatsApp, there’s a chatbot app for them all. Explore all Shopify chatbot apps here.

Does Shopify have chatbots?

Shopify offers Shopify Inbox to ecommerce businesses hosted on the platform. The app helps you create automated messages on live chat and makes it simple to manage customer conversations. But for social media chatbots, you will need to explore Shopify apps.

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