Conversing For Commerce: How The Rise Of Chatbots Will Improve Your Customer Experience

Chatbots offer an opportunity for retailers that shouldn’t be missed.

Imagine meeting a personal stylist online who will make specific recommendations for clothing you need to purchase — including matching items and accessories. No more filters or hundreds of search results to click through.

Take that a step further, and your stylist will be able to parse recommendations based on your size and budget, as well as available inventory. Finally, you can easily get input from your trusted friends online, make a final decision, and then click once to purchase.

With recent improvements to messaging, chatbots, and artificial intelligence technology, that scenario is entirely possible, and the stylist doesn’t even need to be a real person. Artificial intelligence (AI) platforms can do much more than comb through product listings and return search results. They can learn and save customer preferences, customize results to match those preferences, and even recommend related products that others found useful or entire outfits to match a customer’s personal style.

Rue21, a specialty retailer of teen apparel and accessories, is one of the latest to embrace such innovations and launch a chatbot. Designed by mode.ai (a company that builds platform-agnostic, AI-powered virtual style bots for retailers), rue21’s chatbot is a virtual stylist that works to learn a shopper’s interests and preferences, respond to their requests, and even make recommendations for complementary items. These features serve to simplify and personalize the shopping process for customers, improving their overall brand experience.

Facing pressures experienced by many brick-and-mortar stores, rue21 recently closed about one-third of its physical locations. To continue to connect one-on-one with customers as associates would in a physical store, the retail brand is integrating its virtual stylist chatbot on Facebook Messenger to help retain and engage customers in a new way.

“Chatbots offer an opportunity for retailers that shouldn’t be missed,” says Karen Ouk, senior vice president of business development for mode.ai. “For the first time, millennials have the most buying power — and yet they are the least engaged consumers. However, they’re very, very active on messaging platforms, indicating there is a need to engage with them and younger generations on a platform where they’re already active.”

Progressing from Customer Service to Customer Experience

While traditional chat interactions are hosted on brand sites to facilitate customer service conversations between a human agent and the customer, chatbots are hosted on a messaging platform, are powered by AI, and fill needs far beyond customer service inquiries. Chatbots can even respond to customer queries posed by voice, text, or images, and can manage a group conversation as customers invite their friends to the chat.

Michael Klein, Adobe director of industry strategy for retail, explains that while chatbots can lessen the load of a customer service team and sales associates, the bigger opportunity maps back to personalization and engagement. “Retailers can’t afford to make the mistake of selling chatbots short. They have the potential to not only deliver exceptional online experiences, but also inspire purchases and increase the number of items in people’s shopping carts.”

In the example of rue21, the chatbot is dubbed a “virtual stylist” to immediately communicate its purpose — helping customers select items for purchase that will match their style, needs, and budget. Narrowing the scope of a chatbot to a single purpose is an important step toward creating helpful, rather than frustrating, interactions. Quick reply buttons also can help customers navigate the chatbot and educate them on what the features and functionality of the bot are.

Beyond chat, which at this early stage may be limited by the bot’s ability to understand a natural-language description, mode.ai includes a visual analysis function. Shoppers can upload a picture to the chatbot, select an article of clothing from that photo, and get recommendations for similar items from the retailer. But they don’t need to believe the chatbot stylist when it comes to fashion recommendations. Using new social sharing features in Facebook Messenger, shoppers can get input from their friends by simply clicking on a share button and selecting the friends they want to consult with.

Working Through the Learning Curve

The catch is that chatbot technology is relatively new. Many current generation chatbots are like children — eager to please but lacking in depth of experience — and sales and service can have a very steep, unforgiving learning curve. Fortunately, with AI, each new interaction teaches chatbots how to behave in order to be most helpful. But that process can be costly if those interactions turn away customers.

To facilitate learning, brands need to focus on simplicity and make the experience as intuitive as possible. They should also offer some guidance to customers, teaching them how to interact with chatbots for a positive experience. To put it in perspective, consider online shopping. Just 15-20 years ago, nobody bought much online. Connections were slow, options were limited, and the interface was confusing. Now, shoppers can expect that nearly every online store has roughly the same visual layout, creating a streamlined interface that feels comfortable for customers no matter the store.

Chatbots will undergo a similar evolution. At Facebook’s F8 developer conference in March, the company announced additional features in its Messenger app that will improve the chatbot experience, including a menu structure. The interface is starting to standardize, and improvements to the experience are ongoing with phased roll-outs from retailers.

According to Eitan Sharon, founder and CEO of mode.ai, “Chatbots are developing faster than apps did when the App Store was introduced. Every month, messaging services roll out more functionality that improves chatbot capabilities — resulting in more and better chatbots.” Pioneers in the space, like mode.ai, will set the bar for everyone else to follow.

Examining Best Practices for your Chatbot

In addition to limiting the scope of a chatbot and guiding shoppers through the experience, a key to smoothing the transition from physical to digital interactions is to set the right expectation for customers. Some brands like to make digital interactions as human as possible. The problem arises when the gimmicks work too well. If people initially don’t realize that they’re talking to a computer, they have a different expectation. When the chatbot hits a snag and can’t help the customer, the curtain drops and the computer behind it is revealed. On the other hand, when proper expectations are set, customers typically are not put off by a chatbot’s limited understanding or ability, and their impression of the interaction remains positive.

To further reassure customers, companies need to have an effective fallback mechanism. For example, if your customer is overbilled for an order or receives the wrong size, the chatbot may not be able to help them. Errol Denger, director of the commerce program and strategic alliances at Adobe, says, “You need to have an effective protocol to say, ‘I’m sorry. I’m unable to help you this time. Let me transfer you to a live representative who can.’ And then you make sure the problem is resolved, so your customers don’t lose faith in the entire process.”

In that scenario, sending a shopper to the right channel for help provides a great experience. However, brands with chatbots should also recognize that they can design a complete experience for their customers in that single channel — from browsing all the way through purchase. Karen says, “We see the success of one-click purchases on Amazon, and other retailers who can offer this same seamless, mobile, frictionless experience will see higher engagement and conversions. That’s what we’re hoping to help retailers with.”

Evolving Channels Uncover New Opportunities

In the end, chatbots are still an emerging technology, but they are quickly taking root and it won’t take them long to mature.

Eitan shares that 1 billion people from other parts of the world are already actively participating in e-commerce via messaging. “This channel is a very successful trend and retailers should become believers. This is something that has already happened and we are late to the game.”

Karen explains another appeal to the messaging channel: “It took us less than one month to get the rue21 virtual stylist out the door in a live, brand new channel that has the potential to reach 1.2 billion Facebook Messenger users. There are not very many new channels that retailers can launch in, in this short amount of time and with that amount of reach.”

In the near future, getting a new look from a chatbot fashionista will feel totally natural — and then we’ll wonder how we ever got by without it.

Learn more about how emerging technologies will shape future retail experiences.