hatbots have been a point of contention for retailers and their customers alike for some time.

As online shoppers increasingly expect 24/7 service and support, brands have struggled to keep up with those demands and keep their customers happy. 

Today, chatbots are viewed as;

Generic, automated experiences that frustrate and annoy customers.

Sadly, this isn't that far from the truth when it comes to manual dialogue flow chatbots.

However, conversational AI powered chatbots have been unfairly lumped into the "bad chatbot experience" category without an understanding of the key differences that make it a powerful CX factor for retailers versus the limitations that come with standard legacy chatbot 2.0 systems. 

There is a general assumption that every chatbot experience is generic and useless at providing assistance of real value to the customer beyond the scope of its programmed script, but nothing could be further from the truth.

In contrast, truly advanced conversational AI chatbots can solve more than 75% of customer requests with some of the more advanced systems being as high as 94% depending on the vertical and use case. They can  accomplish this without any support team intervention - and they can do it 24/7. 

So, for the many retailers who have become convinced that; chatbots are dead, and have accepted less than satisfactory results from their current chatbot provider, we're going to examine some of the myths surrounding traditional legacy chatbots and conversational AI chatbots.

How is the Chatbot Experience Evolving?

When chatbots first came on the scene, they were a huge problem solver for retailers and their customers. They made it possible for people to visit the website, walk through a few prompts and solve simple problems.

Unfortunately, what ended up happening quickly was that businesses implemented overly generic legacy chatbot systems that only caused more frustration and headaches for their customers.

Over time chatbots became a sales tool for retailers as a priority over resolving the customers' support inquiries or improving their online shopping experience.

Instead of consumers learning to trust and rely on chatbots, they continued to seek out human interactions in order to get answers to their questions, which had no effect on alleviating customer support requests, calls, and emails as intended. 

The kicker is that; customers DO want a way to self-serve without having to call or email support. 

Customers prefer to go online and quickly figure things out when it is most convenient for them (often outside business hours). Even though chatbots cause frustration, customers are still happy to use these systems in place of more time-consuming avenues, particularly for simple returns, exchanges, etc. 

Conversational AI chatbots are the ideal solution to balance the often competing needs of retailers and their customers.

What is a Conversational AI Chatbot?

There are many definitions and sub-categories for conversational AI and its implementation in modern chatbots. Since our focus is on retail conversational AI chatbots the definition outlined below makes the most sense;

"Conversational AI chatbots are an advanced version of scripted dialogue flow chatbots capable of comprehending, intuiting, and resolving customer support inquiries much like a live human agent can. Powered by natural language technology, these conversational AI chatbots integrate deep into a retailers' database(s) along with any existing live chat, CRM platforms to deliver bespoke customer experiences, answer complex order questions and even generate revenue through timely and personalized product recommendations directly in the chat."

Conversational AI chatbots can;

  • answer questions without relying on a script,
  • troubleshoot order issues,
  • offer personalized product recommendations,
  • deliver bespoke 1:1 customer experiences, and
  • make small talk

With a conversational AI chatbot, there are no complicated customer paths to set up that take valuable time and resources. There are no complex chat rabbit holes that customers need to go down to get their questions answered.

With these more advanced chatbot solutions, retailers and e-commerce first brands can deliver personalized, automated support to solve simple and complex customer needs without staffing up their support team.

A conversational AI-powered chatbot is available day and night, giving customers the freedom to solve their own problems, make purchases, or ask complex pre-purchase questions on their schedule without being sent to leave an email for customer support.

Typically with a legacy chatbot once the chat goes off-script, they're limited in the amount of helpful support they can provide to the customer.

The great thing about these conversational AI chatbot solutions is that they look and feel like legacy chatbots.

When the customer lands on the website, they instinctively go to the chatbot and begin a conversation to solve a purchase problem, inquire about loyalty programs, receive a personalized discount offer, and more.

CX obsessed retail brands like PacSun (winner of the Retail Touchpoints 2022 Digital Brand Experience Award) have successfully deployed conversational AI-powered CX automation making customer satisfaction their top priority while building loyal brand advocates. 

A Legacy Chatbot Compared to a Conversational AI Chatbot

You might be reading this and thinking;

"We already have a chatbot implemented on our website, what is the difference between the chatbot we have and a conversational AI chatbot? Aren't they the same thing?"

Below is a short example of a typical legacy chatbot with a basic scripted dialogue flow vs a typical conversational AI chatbot responding to an inquiry that goes off script. (Example taken from a recent Forrester webinar)

As you can see from the chatbot comparisons in the video, conversational AI chatbots can deliver a holistic omni-channel bespoke customer experience at scale, without requiring a live human agent.

Legacy chatbots can only understand what they have been programmed to understand.

The CX Automation 3.0 conversational AI chatbot in this example was able to extract "White Jeans" "Sister" and "501's" from the conversation and offer a highly personalized product recommendation that will drive sales and boost CSAT scores dramatically.

It would be a time-consuming and costly endeavor to program a scripted dialogue flow chatbot to be capable of extracting "White" "Jeans" "501" "Sister" and "Women's" out of every possible combination of questions a customer could ask.

Even some modern chatbots that claim to be:

  • no-code
  • easy to use
  • conversational AI powered
  • turn key deployment
  • scalable
  • Intuitive and holistic

Still require you as the retailer to program the dialogue flow with what to do, hire an agency to program it for you, or be limited to pre-made chat templates that don't fit your unique business requirements. 

This is not the case with true Gen 3 CX Automation powered by conversational AI chatbots.

3 Ways Retailers Are Using Conversational AI Chatbots

Although legacy chatbots are still more commonly used than conversational AI-powered chatbots, many pioneering enterprise retailers have tapped into the CX supercharge that robust conversational AI can give when brands adopt a CX automation-first strategy.

The technology that powers these CX Automation 3.0 systems, as their called, has made it unbelievably easy for retailers to make the switch from the legacy chatbot to the conversational AI chatbot.

Here are three conversational AI chatbot tools that retailers (your potential competitors) are leveraging to enhance their customer experience, drive revenue, lower support costs, and relieve over-burdened customer support teams quickly and seamlessly;

  1. Consultative Selling: Your customers no longer have to wait for the next available agent to get complex pre-purchase questions answered. You can help your customers easily find what they’re looking for through a consultative selling approach. When someone new lands on your e-commerce website, you can offer a personalized bespoke customer experience tailored to their needs, making the buying process easy and enjoyable. You also can save conversations so your customers on future visits can easily recall or reference any pertinent information.
  2. Buying Assistance: Leave no questions unanswered with personalized buying assistance tools. If a customer is looking to make a return, use a store locator, get promo code support, inquire about in-store sales, or other pressing questions, your conversational AI chatbot can make sure that your customers get the answers they need efficiently.
  3. Post-purchase Order Support: Retailers are flipping the script on returns and making them into revenue-generating opportunities. Conversational AI-powered chatbots like this can solve over 85% of customer issues while saving your support team’s valuable time for the highest impact inquiries that require a human agent. Once someone buys from you, this tool ensures that they have an exceptional purchase experience. If they need to return or exchange something, they can go to your website, and the chatbot will pull up their purchase history quickly, answering their questions, resolving any purchase needs expediently, and even offering your customers personalized product recommendations to drive sales. 

Are Chatbots Dead?

So far we've driven a hard distinction between the legacy chatbots we're all accustomed to and the Next Generation conversational AI chatbots.

To be fair, scripted dialogue flow chatbots a.k.a. "legacy chatbots" will always have a place with small to medium-sized retailers, service providers, and businesses requiring a basic chat solution to offset customer support costs. 

Some retailers and e-commerce brands are not at a place in their growth where a conversational AI chatbot solution is feasible or even necessary concerning their business goals.

A legacy chatbot makes perfect sense in these scenarios. 

Enterprise retail brands in competitive verticals like clothing and apparel, sporting goods, or beauty brands still using legacy chatbot platforms, integrated with multiple technology stacks, are falling behind CX-obsessed competitors who have already made the switch to conversational AI chatbots and modernized Gen 3 CX automation tools.

Done right, implementing automated chat is far from dead, it evolves your customers' experience and increases profitability. Win-win!

In the coming years, we can expect Gen 3.0 CX Automation powered by conversational AI to become the industry standard for all online interactions between customers and brands as legacy chatbot solutions are phased out.

Sep 2, 2022

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