Chatbots – the next phase of customer experience innovation or just another gimmick?

Dan Hartveld, 26th May 2016

Chatbots and the concept of 'conversational commerce' have really taken off - CTO Dan Hartveld looks at what this means for retailers in his latest article for MyCustomer

This article originally appeared on MyCustomer.com

Read the original article here: https://www.mycustomer.com/community/blogs/dan-hartveld/chatbots-the-next-phase-of-customer-experience-innovation-or-just

It’s the latest tech trend. Facebook, Microsoft, WeChat and Baidu have all thrown their hats (and sizeable budgets) into the chatbot development ring – some with more success than others (Microsoft Tay was a disaster, while Xiaoice,  the virtual companion it built for the Chinese market, is a much-loved friend to around 40 million registered users).

Retail has also been bitten by the chatbot bug. The concept of ‘conversational commerce’ has really taken off – we’re fascinated by the idea that humans can talk to intelligent virtual assistants in natural language about purchases, deliveries and service issues without ever realising that they’re talking to a bot rather than another person.

But is it really something customers need or even want, or simply a way for retail technology providers to flex their developmental muscles?

Chatbots have had an interesting past

The history of chatbots is long and varied – from artificial intelligences trying to crack the Turing test to the aforementioned Tay and her unfortunate opinions learned from the worst of Twitter and other messaging platforms.

Almost anyone who has consulted customer services online will have been invited to take part in a ‘live chat’ with an assistant – more often than not, these are bots gathering information from the brand’s website with varying levels of contextual relevance, depending on how sophisticated their programming is. Usually we can spot them from a mile off, because both questions and answers are formulated in a prescribed, syntax-specific way. Similarly, smartphone users are likely to have asked Siri or Cortana a couple of questions, if only to elicit the latest novelty response.

Clearly the concept itself is nothing new – so why is everyone getting excited about chatbots right now?

When it comes to users, there are a couple of reasons why chatbots are becoming more acceptable. First, the growing popularity of messaging platforms (Facebook M, WhatsApp, Kik, Skype and many more) has seen the majority of people signing up to at least one service and using it on a daily basis.

Second - app fatigue. Users are becoming increasingly reluctant to go to the trouble of downloading an app which will likely be used only once or twice, simply because of the effort involved in accessing it (having to move from one smartphone function to another, perhaps having to remember a password, having to search for information rather than ask for it).

From a tech industry perspective, the quality of communication with chatbots has improved immeasurably since cognitive computing reached a point where it is ‘good enough’ to recognise natural language (spoken, typed, slang, emojis – you name it) and give it context.

Finally, retailers are beginning to see the benefits of using bots to carry out simple admin-type tasks – tracking a delivery, for example, or checking stock availability – because they are relatively quick and easy to develop, cost a lot less than a branded app and don’t need updating every few months. Bots fit straight into the customer’s preferred messaging platform, giving them a direct channel of communication with the retailer via text – the only function which is used by 100% of mobile phone owners.

Real customer focus, real business benefits

Chatbots are entirely geared to what the customer wants – they choose the platform, they decide how they want to talk to the bot, they don’t have to download an app, go to a website or remember any passwords. All they have to do is open the messaging service they already use every day and ask a question – and because it’s a bot, it’s available to answer whenever and wherever the customer wants, 24 hours a day, 7 days a week. Retailers can support this customer choice on a very wide range of platforms without the need to build bespoke interfaces, saving time and money.

Chatbots are a quick, cost effective, customer-focused way to elevate service levels and hand control of the customer experience to the customers themselves. There’s nothing gimmicky about that.