Retail chatbot: Top 10 chatbot use cases in the retail industry

Retail chatbots for improved customer experience

It’s estimated that by 2025, 95% of customer interactions will be powered by artificial intelligence (AI). And we’re already seeing that trend in the retail sector with the rise of retail chatbot use.

This fast-evolving technology is used to enhance customer experience, drive sales, and improve ROI. That’s part of why so many retailers are using chatbots.

What is a retail chatbot?

Retail chatbots are automated virtual customer assistants (VCAs) in retail shopping. Chatbots in the retail industry drive sales, help customers, improve customer experience (CX) and more. They can answer questions, provide suggestions, and connect shoppers to resources. These chatbots are integrated into retail websites, apps, social media and other platforms.

Chatbots for retail are either rule-driven or AI-driven. The original chatbots were rule-driven. These bots follow a specific set of guidelines to respond to user inputs. The responses they provide depend on the user asking the right questions.

Advancements in chatbot technology integrate machine learning. AI powers these chatbots and typically possess natural language processing (NLP) capabilities. This means they can respond to normal human speech. And AI retail chatbots can learn over time, so the more interactions it has, the better its results tend to be.

The importance of chatbots in modern retail

Chatbots are very important in modern retail. In fact, by industry, retail has the highest rate of chatbot adoption.

Increase personalization

Retailers are using chatbots to provide personalized customer experiences. Because chatbots have access to the entire customer journey, they can customize interactions to each user’s specific needs. According to McKinsey, 80% of people surveyed desire personalization from their retailers.

Reduce costs and increase ROI

Like any industry, retail wants to spend less and make more revenue. Chatbots can substantially reduce costs for your business. They automate a significant quantity of menial and repetitive tasks. And by providing faster, more personalized service, they improve customer loyalty and customer retention.

Improve customer service

Gartner reports that businesses that use a virtual assistant or chatbot see a 70% decrease in call, chat, and email inquiries. That means that your customer service agents can spend more time on the more complicated issues that require human interaction. They also help agents provide more personalized and efficient service, reducing time to resolution.

Overview of the top 10 retail use cases

There are endless ways to use chatbots in the retail industry. Let’s take a look at ten common retail industry use cases.

Use case 1: Extending customer support hours

If you don’t have 24/7 customer service agents, a chatbot can bridge the gap. 

For example, if a customer has an issue, they activate the chatbot. The bot then answers basic questions, provides order status, and offers help with tasks on your site, all in real time. If the question or need is too complicated, the bot can schedule a follow-up with a person at the customer’s convenience.

Many issues can be fully solved by a chatbot without any human interaction. That means your customer’s experience won’t suffer if you don’t have round-the-clock support. 

Use case 2: Product recommendations and upselling

Chatbots can act as a retail salesperson for your online shoppers. Just like your associates in-store, chatbots can help customers narrow their search, find the right product, and identify upselling opportunities. 

As a customer shops on your e-commerce site, your chatbot can gather information and then make recommendations based on that information. Many retailers use surveys or quizzes to determine customer needs and then provide a selection of options. If you choose, chatbots can also offer related products and improve sales. Chatbots can do some of this a little better than a salesperson in the store because they have access to past purchase history to further personalize recommendations.

Use case 3: Order tracking and notifications

Chatbots can help clients track orders they have placed online. Let’s face it, waiting for your products to arrive is one of the worst parts of online shopping. Chatbots can improve this experience for your customers by sharing tracking information via email or messaging channels and updating them as the product heads its way.

Another way chatbots can help with order tracking is by answering queries on your website. Add find my order to your chatbot so customers can find their package fast. And if there’s a problem with the order, the chatbot can escalate the issue to a live agent.

Use case 4: Abandoned carts

Retail chatbots can turn abandoned carts into sales.

Here’s how it can work. A customer puts items in their virtual cart or shopping bag as part of the decision-making process. However, they end their session before making a purchase. A chatbot later sends the customer a reminder of their full cart. The chatbot has the ability to select the customer’s preferred channel, so reminders could be via email, SMS messaging, or a platform like WhatsApp.

Beyond reminders, your chatbots can ping the customer when something in their carts is on sale or take advantage of FOMO with a notification that an item is low in stock or being discontinued soon in order to prompt a transaction.

Use case 5: Collecting feedback

Consumer feedback is a key component of creating a positive user experience. But feedback isn’t always easy to get. If you send out surveys in an email, responses depend on the customer opening the email and choosing to complete the survey. Chatbots are a great way to quickly and easily collect in-the-moment feedback from customers.

For example, when a customer engages a service agent through live chat, the agent answers their question or resolves their issue. When the chat session ends, a chatbot pops up with a short survey about the session. The chatbot records the customer’s responses in your CRM for future use and analysis.

Nobody has to solicit the information. No emails need to be sent and returned. No external survey platform is needed. And you get valuable information about customer satisfaction.

Use case 6: Find a brick and mortar location

If you have both an online and brick-and-mortar presence, a chatbot can help you connect the two. Today, online retailers have some innovative tools available to them to help customers envision their products in their own homes or on their own bodies. But for some purchases, customers can really benefit from seeing or trying on the item in person. 

Some websites allow customers to upload a picture of themselves or enter their measurements in order to create an image of how the item might look on them. However, a chatbot can also find the item in the right size at a nearby store location without the customer having to track it down themselves.

Use case 7: FAQ

Most retailers encounter the same questions from customers over and over. Program your chatbot to be at the ready with your most frequently asked questions. When a customer initiates a chatbot session, those questions can be right at the top. Although your questions will be unique to your products, common FAQs include how to return a product, how your sizing works, and order tracking.

By setting up your chatbot with FAQs, the customer can find the answer they’re looking for in two clicks without even having to search your site or type their question. This easy interaction improves customer experience. It also means your agents don’t have to spend their precious time on these mundane requests.

Use case 8: Support your agents

Your support agents are a precious resource, so it makes sense to maximize their productivity and efficiency. Retail chatbots can take the pressure off of agents in various ways.

Here’s how it works. When a customer initiates a live chat session on your website, the chatbot gathers important information, such as the customer’s name or account number or the nature of their question. When they have the answers, it transfers the issue to an agent, creating a better interaction from the start. Bots can also offer answers to common questions to avoid an agent altogether. 

Once the agent and customer are connected, the chatbot assists the agent by offering suggestions and other information. Chatbots can prompt the agent with answers to questions, suggestions for help documents, and much more. This improves the overall quality of the interaction and decreases the time to resolution.

Chatbots with translation capabilities can help your agents transcend the language barrier. If your team speaks only English but has customers who speak other languages, chatbots make communication possible. The bot detects the customer’s preferred language and provides real-time translation over live chat.

Use case 9: Improve marketing and lead generation

Your chatbot can help with lead generation and marketing activities, such as collecting contact information or helping the client sign up for your newsletter. Although tools like web forms are popular ways to collect lead information, some potentially valuable leads are reluctant to use these methods of lead generation.

However, chatbots collect information in the course of a conversation or more personal interaction. In this context, potential clients may open up and provide their data. An additional benefit to lead collection with a chatbot is that you typically get more information than a simple web form can provide. Your salespeople will see the whole interaction, and your AI will have more data to use to score and assign that lead.

Use case 10: Loyalty programs

Loyalty programs play a critical role for many retailers because of their ability to boost revenue, encourage referrals, and promote customer engagement. Retail chatbots boost your loyalty programs.

The use cases for chatbots augmenting loyalty programs span the entirety of the customer journey. Bots can suggest or invite clients to join your loyalty program, enroll them, prompt them to use the features, and update customers about the status of their rewards.

Why choose Freshworks for your retail business?

Freshdesk Omni offers robust chatbot tools to address any use case your retail business throws your way.

• Freshworks offers a wide variety of third-party Integrations, including your CRM, website, and order management software.

• No-code chat builder enables you to get started fast with your chatbot without a dedicated IT team or advanced programming knowledge.

• Omnichannel capabilities allow you to deploy your chatbot across your messaging apps and Facebook Messenger.

• Freshworks’ AI-driven solutions are always learning and improving, enabling you to automate resolutions, reduce handle times, optimize support, and increase CX.

Click here to learn more about why Freshworks is the right choice for your retail business.