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How Chatbots are Changing the World of Retail

#Marketing and AdTech

You may not be familiar with the term, but you’ve definitely had an experience with a chatbot, whether you realized it or not.

You’re visiting a webpage. A text box pops up on the screen that reads, “How can I help you?” If you reply, chances are you’re not actually speaking (or “chatting”) with an actual human being. You’re having a conversation with a chatbot.

A chatbot is a computerized program written to anticipate questions and select appropriate responses from a pre-populated database of answers. It runs automatically and acts as an interactive “FAQs” section.

The First Chatbot

When I envision the very first chatbot, I always think of “Clippy” - the paperclip character that would pop up on Microsoft Word or Excel when I clicked the help button. But actually, the origins of the chatbot date back to 1950 and the “Turing Test.” Computer scientist Alan Turing developed a way to measure the ability of a computer to successfully impersonate a human being during a conversation well enough to fool the other party. In 1966, MIT Professor Joseph Weizenbaum created a computer chatbot called ELIZA that was the first to pass the test.

The chatbot has now evolved into our modern day virtual assistant tools, including Google Assistant, Amazon’s Alexa, and Apple’s Siri. The next generation of chatbots are utilizing AI and are poised to change the landscape of the retail industry.

Chatbots & Retail

With such an increased focus on the customer experience, retail organizations are adding chatbots to their custom marketing software stack, as they are looking to enhance their customer service offerings. Major brands such Sephora and H&M are using the chat app Kik to provide makeup and fashion suggestions to users.

It’s ironic that the millennial generation conducts the majority of their retail purchases on their mobile devices, yet they are very hesitant to use that some mobile phone to actually “call” a retailer’s toll-free number if they have a question or problem. Why? Because they want instant gratification. In most cases, chatbots can deliver this type of immediate response.

By taking the additional step of powering a chatbot with artificial intelligence, retailers can now determine user buyer preferences and habits better than ever before. Not only are chatbots succeeding in making the customers happier, but they’re also making the retailers themselves happier with a much healthier bottom line.

Will chatbots replace live customer service reps or salespeople anytime in the near future? It’s very doubtful. There are still going to be times that a consumer wants to speak with a real human and have that real relationship and interaction. And with the current continuing trend of store closings and strip mall abandonment, those retailers that offer a variety of communication channels - including chatbots, messaging, social media, email, and, of course, live agents - will be the ones with true staying power.

Would you like to learn more about how a chatbot program could improve your customer satisfaction and retention rates? Contact us!

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