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Christine Kern
 |  January 23, 2017


As customers increasingly turn to technology to showroom, price compare, and search for the best deals, retailers need to be responsive to these new consumer behaviors. One way that retailers are trying to better connect with their customers is through the increased use of chatbots and messaging apps, according to a new study from [24]7, a provider of chatbot and human agent assistance for retailers.

Customers on the hunt for superior service

Customers want to connect with their favorite brands, but brands that offer great service experiences are in the minority. A 2015 Customer Care Measurement & Consulting study found that 54 percent of retail customers are dissatisfied while Gartner predicted that companies offering personalization will outperform competitive brands by 15 percent by 2018 revealing the clear cut opportunity costs associated with innovation. Consumers are turning to chatbot technology as it becomes more integrated within their personal lives and evolves to provide better, more efficient and engaging customer service.

Scott Horn, CMO of [24]7 stated, “Messaging apps are incredibly valuable for retailers looking to enhance relationships with consumers, particularly millennials.”

Preference of chat bots to other traditional customer service outlets

The [24]7 study, titled, “A Retailer’s Guide to Chatbots, Live Chat, and Messaging,” found that nearly one-third of consumers (28.9 percent) prefer chat tools over phone (28.7 percent) or email (27 percent) for interacting with retailers (jumping to 37 percent for millennials).

Other findings include:

  • 2 out of 5 consumers are open to interacting with a chatbot in a retail scenario
  • 9 percent of millennials prefer to always interact with a robot instead of a human
  • Nearly 40 percent of millennials are open to interacting with a company through a messaging app
  • 1 in 5 consumers are most excited to receive instant order updates via a messaging app, over receiving other retail tech offerings, like immersive virtual experiences and drone delivery

The findings demonstrate that retailers need to be flexible enough to meet the needs of their customer segments via the channels they prefer and already use in their everyday lives. Less than a quarter of millennials prefer email (23 percent) or phone (21 percent) as methods to contact retailers. Retailers who adopt channels such as Facebook Messenger is a strong path to this demographic.

The growing use of messaging apps by businesses has the potential to further accelerate the trend toward chat as a primary way to communicate with retailers. In the survey, 26 percent of consumers said they're open to interacting with a company through a messaging app such as Facebook Messenger or WhatsApp -- and the number jumps to 39 percent for millennials.

Convenience (15 percent) and access to conversation history (10 percent) were the top reasons customers cited for using messaging apps, while the top concerns included security and privacy (28 percent) and distrust of third-party apps (12 percent). One in five consumers also said that instant order updates via messaging apps are the best way to improve their online shopping experience, second only to location-based coupons on mobile devices (24 percent).

And providing an effortless checkout process is still crucial to driving completed sales, as 13 percent report that they would abandon a shopping cart if they could not find answers to their questions, while 15 percent say that incomplete or inaccurate product information is a serious roadblock. Chatbots can provide a more seamless checkout process and save some transactions that might otherwise be abandoned.

Last spring, retail heavyweights Sephora and H&M launched bots on messaging app Kik that help shoppers browse and buy their products, and Taco Bell showed off its TacoBot, a way to use the messaging app Slack to place a meal order. Facebook also announced that it has created a platform that allows companies to develop bots that run within its Messenger app, which has some 900 million users worldwide.

Bots are the new apps

Microsoft chief executive Satya Nadella said, “Bots are the new apps.”

The case for a bot-centric future goes like this: Smartphone users have proved they are only willing to download and spend time in a limited number of apps. So companies might be better off trying to connect with consumers in the apps where they are already spending plenty of time. And proponents say that a bot can potentially provide greater convenience than apps and Web searches because it can understand natural speech patterns.

Because bots are designed for one-to-one conversation, they may ultimately find their most logical home in messaging apps, which are seeing explosive growth in users and are the digital-communication channel of choice for Generation Z. There were 76 million people in the United States using messaging apps such as Kik, WhatsApp and Facebook Messenger in 2014, according to research firm eMarketer.  That figure shot up to 113 million last year, and is it expected to surge to 177 million by 2019.

The study asserted, “Although chatbots cannot resolve transactional hurdles at purchase like price and delivery, they can help customers find desired information, fill out fields based on prior purchases and answer queries. With the right solution, anything more complex can be escalated to a live human agent.”

Let AppSheet work with you to develop a relevant app that can incorporate the elements that will best reach your customers today. With AppSheet, retailers can design affordable, easy and attractive mobile apps to improve your customers’ shopping experience. Give it a try today!

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Christine Kern

Christine Kern is an AppSheet contributor and freelance writer, editor, and educator based in Erie, Pennsylvania who writes on a wide range of topics, including all things IT, from healthcare to retail to government/education and beyond.

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