7 advantages of chatbots for your e-commerce business
Are chatbots really helpful in e-commerce, or do they actually scare off your customers? As is true with any technology: it's only as good as the human idea and implementation behind it. We explain if chatbots are really worth it for online shops, and what advantages they can truly bring.
"Do you have this in my size?" "What types of payments can I use?" "How can I check the delivery status of my order?" E-commerce companies are very familiar with these questions: they are the typical recurring customer service questions you get daily. And because customers ask these questions over and over again, the answers rarely change, and they still take up a lot of your time, many companies use virtual assistants to answer them.
Currently, about 19 percent of companies use customer service chatbots, and the chatbot market is expected to reach 454.8 million US dollars by 2027. But: is the technology really worth it for your business? And what are the real advantages of chatbots in e-commerce?
Chatbots in e-commerce: helpful or a turn-off?
If you're thinking about integrating a chatbot into your e-commerce business, the first question is often: do my customers even want it? Because let's face it, most of us have had a bad experience with a chatbot. And for a lot of companies, it's also important to offer personal service.
However, customers' acceptance of chatbots is higher than you probably suspect. According to Adweek, 65 percent of users prefer getting their questions answered without any human support. And according to data from Solvvy, 55 percent of people would rather interact with a chatbot than wait for a live agent.
That might sound surprising, but chatbots can be really helpful for customers.
- They get answers immediately (no more being put on hold for hours).
- Their queries get solved right away (even outside business hours), and customers save time.
- Chatbots can be integrated in popular messaging channels, such as WhatsApp or Telegram, so customers don't have to leave their favorite platforms anymore, and can ask their questions "on the go".
- Chatbots are always friendly.
The main reason why users welcome chatbots has therefore less to do with the technology itself, and more with the fact that the virtual assistants improve the customer experience.
Of course, different markets have different needs and expectations.
Chatbot acceptance in the UK, US, and India
In the UK, chatbot acceptance is wide-spread, with 44 percent of customers using a website chatbot to find out more about a product. Similarly, in the US, 62 percent of consumers like using chatbots to interact with businesses.
In India, the landscape is somewhat different, with the majority (59 percent) of people preferring to talk to a customer service agent when they have questions. On the other hand, 61 percent of "digital" users, which are typically the e-commerce customers, prefer interacting with chatbots.
The acceptance of chatbots in India increases even more when users can interact with bots on their favorite messaging app, WhatsApp. In fact, due to the popularity of WhatsApp in the country, several local and federal government initiatives are based on educating the public with the help of WhatsApp chatbots.
Especially in e-commerce though, where customers are more tech-savvy, and are already interacting digitally with your business, chatbots will offer a lot of advantages in any market.
7 advantages of chatbots in e-commerce
1. Save resources
Chatbots can take over up to 80 percent of the most frequently asked questions. Instead of your team having to answer the same questions over and over again, just have a chatbot manage the most common queries.
By automating FAQs, your customers get help faster, while you can noticeably reduce the workload for your team. This, in turn, helps them to take the necessary time to deal with more complex customer issues. In other words: you are able to assist your customers even better!
And: it's also a motivational push, as it's more rewarding for your team to solve complex issues than dealing with FAQs.
🚀 Success story: Find out how BMW was able to automate 80% of inquiries with a WhatsApp chatbot!
2. Reduce costs
In the first level support, meaning the first contact between customer and e-commerce company, chatbots can help to save up to 30 percent of service costs. If chatbots can help reduce the high call center costs, you can save up to 20 percent in labor costs per year.
Another plus: chatbots are very low-maintenance. They don't need many updates, or costly IT check-ups.
3. Improve availability
As e-commerce company, your web presence can be accessed around the clock. This leads to many queries coming in outside your regular business hours. It's impossible for human agents to answer all these queries in real time. For chatbots, on the other hand, it's not a problem at all. They are never on vacation, they never get sick, and they can work 24/7.
So, instead of your clients turning to your competitors, because you didn't answer fast enough, a chatbot can send them an automated message, acknowledging their request, and either providing an answer, or letting them know when they can expect an answer.
4. Increase efficiency
Chatbots excel at storing and accessing data. If an existing customer gets in touch with your e-commerce company, the chatbot will know immediately what they bought last time, and can help them faster, and even give shopping recommendations. Especially, if you connect your chatbot with your CRM system, chatbots can even push sales.
5. Increase customer satisfaction
Chatbots are always friendly, polite, and helpful. They also deliver fast answers, if users are in a rush, or can take their time to answer as many questions as necessary. What client wouldn't like that? Surveys show that 69 percent of consumers find chatbots helpful.
6. Offer a more personalized service
Chatbots are a lot better than humans at remembering information. In e-commerce, where you gather a lot of digital data, this is a skill you can use to your advantage. Allow chatbots to gather important customer data before handing the customers over to a human agent. That way, the agents will have more information on the customers faster, and can offer a more personalized service.
7. They reduce returns
With no in-person customer support, e-commerce companies typically deal with a higher level of returns than phyisical stores. While about nine percent of products are returned in-store, the e-commerce return rate is around 20 percent. Handling these returns is a big cost factor! Chatbots can help you reduce the amount of return shipments.
The e-commerce mattress seller Casper offers their customers the option to address a trouble shoot bot if they have concerns about a product they bought. The bot then answers questions, such as "I think my mattress has a funny smell", and resolves the concerns that might have led to a return.
It's also possible to have chatbots offer a discount for the next purchase or a replacement product to unhappy customers, and thus also reduce the number of returns.
Chatbots in e-commerce: How companies use them to their advantage
E-commerce companies that are already using chatbots are very successful, as the following examples show.
Saffola: Going viral with chatbot campaign
The e-commerce company Saffola decided to create a chatbot campaign around its Active Slimming Nutri-Shake exclusively for the Indian market.
The idea: It's really hard to not think about chocolate, ice cream, or chips right when you are craving them. As a distraction, Saffola developed a WhatsApp chatbot to help users stay away from unhealthy foods. Every time a user was thinking of eating something they were trying to avoid, they could enter the food item into the chatbot, and the chatbot would give nutrition facts and information about the food that helped stop the cravings.
The "Beat the Crave" campaign was hugely successful! Within the first month, sales for Saffola's Nutri-Shake went up by 483 percent!
The State Plate: 85% of queries resolved with WhatsApp chatbot
The State Plate is an e-commerce platform that sells traditional and regional Indian food from ten different states throughout the country. A lot of their requests come through WhatsApp. Their offer became so popular that The State Plate decided to automate some interactions through a WhatsApp chatbot.
The chatbot was answering the customers' most common questions, and was thus able to resolve 85 percent of queries. Call volumes for the company reduced, customers stayed informed throughout their entire order and delivery process, and received support.
"Response times were reduced by an average of 90 percent. Not only did we see phenomenal customer cart recovery rates, we immensely improved our customer experience resolving customer queries so much faster."
Raghav Jhawar, co-founder The State Plate
The e-commerce company was also able to tackle another big e-commerce issue: the abandoned cart! They had 80 percent improvement of abandoned cart recovery rate over e-mail.
Women's Best: More personalized service
Women’s Best is a successful social media start-up that sells athletic wear and premium fitness nutrition for women in their online stores. The e-commerce company offers consultations and customer service on WhatsApp and Apple Messages for Business.
Upon first contact, a chatbot pre-qualifies the customer request in the messaging apps by asking for more information about the customer's preferred language, country, name, and e-mail address before handing the customer over to a human agent.
The gathered information helps the agents to have a more personalized interaction with the customers.
The e-commerce chatbot made the customer service at Women's Best twice as fast.
How to integrate a chatbot into your online store
You can integrate a chatbot into your e-commerce through a live chat, in your app, or as a messaging bot on apps like WhatsApp.
A live chat button on your website is something most customers are familiar with, and a good option if your customers have a lot of questions as they are buying a product.
In-app bots are helpful if customers are using your custom app for their purchases. This requires more technical skills and regular maintenance, though.
Another, more hassle-free option is therefore a bot on a messaging app, like a WhatsApp bot or a Telegram bot. If your customers contact you on messaging apps, this is a great way to automate the first contact, and offer help with the most common questions right away.
‼️ Important: You can only integrate a chatbot on WhatsApp if you use the WhatsApp Business Platform. Chatbots do not work with the WhatsApp Business app!
You get access to the WhatsApp Business Platform through official Business Solution Providers and professional messaging tools like Sinch Engage. With Sinch Engage you can use our drag-and-drop chatbot builder, and set up your first chatbot in minutes! It's really simple, and doesn't require any IT skills.