Meet the Chatbots: How AI is Taking Over Customer Service

If you work in customer service and you're afraid robots might take your job, well, you might be right.

Chatbots have exploded in popularity in the couple years since they've come on the market. Let's take a look at how these friendly robots impact both the grocer and the customer.

What are chatbots, exactly?

Chatbots are AI apps that communicate with customers to answer questions, manage online carts, and gather data. The most visible examples are Alexa and Siri, two voice-bots who have rapidly become household names (or you might say, household butlers). Most chatbots, though, communicate via text or social media. As of 2017, Facebook Messenger hosted over 100,000 chatbots – up from 30,000 in 2016, according to Cloud Communication Advisor Get Voip.

Why so popular?

For one thing, email has become overcrowded. With a click-through rate (CTR) of just 5%, email marketing simply isn't as effective as it once was. Chatbots, though, show impressively high engagement – a CTR of 15-60%, says Chatbots Magazine, and enable an immediate connection with customers while they’re in the midst of their shopping journey.   

Many businesses are embracing chatbots because, like many cases of automation, they can lower costs while increasing value for the customer. How, exactly? They can store information from previous orders, add an item to a basket ("Hey Alexa, buy orange juice"), and recommend products based on past purchases. Furthermore, depending on total order volume, bots can provide a level of customer service that would otherwise be expensive to scale in-house.

They can also store and analyze data, which can be used to make pivotal business decisions. For instance, if a chatbot gets frequent questions about gluten, the chatbot's analytics will inform the grocer that this is an area of interest. The grocer can then decide to offer more gluten-free products, label products more clearly, and take other actions to appeal to gluten-sensitive customers.

Okay, but do they actually save grocers money?

Juniper Research forecasts that chatbots will "bring about $8 billion worth of savings per annum by 2022, up from $20 million in 2017." That savings will likely be due not only to cutting the cost of human labor, but also by improving the customer experience. For example, the Canadian chain Rogers reported a 60% improvement in customer satisfaction after launching Anna, their customer service bot. According to Salesforce, "69% of consumers prefer chatbots for quick communication with brands,” which isn’t a surprise considering this digital era defined by speed and convenience.  

Meet the chatbots

Chatbots are still new in eGrocery, but here are some you might run into:

  • Boxed, the NYC online wholesale grocer, rolled out the Facebook Messenger-based bot Bulky in 2017 to help shoppers "discover new products, add to baskets and track orders" (Business Insider)

  • Whole Foods also uses Messenger for its bot, who not only answers questions about orders but also gives advice on recipes and cooking – hence its nickname "robot chef"

  • In 2019, the discount chain Lidl launched Margot, the world's first robot sommelier – that is, a chatbot who helps you pick out wine. According to Retail Insight Network, Margot is "more conversational than other chatbots in retail and helps users…[find] wines by country, region, grape, colour and/or price. It also gives users tips on food pairings and tests their knowledge with a quiz."

Predictions for the future

It looks like chatbots are becoming the new norm, and this time, it's not just for the industry giants.

Though fulfillment via a fleet of robots may be unrealistic for small-format grocers, out-sourcing automation in other areas may be more attainable - customer service being a prime example. Companies like LivePerson, Conversable, and Botmakers all offer AI communication technology, sometimes as low as $399.

That accessibility might be why Chatbots Magazine reports that "by 2020 organizations will succeed in capturing 85% of customer contact with technology."

Compared to apps, customers say chatbots are 35% better at answering both quick, and complex questions.

Compared to apps, customers say chatbots are 35% better at answering both quick, and complex questions.

But that doesn't mean all human workers in customer service will be out of a job. The software development firm Jasoren says 50% of customer service questions are routine and can therefore be handled by chatbots, leaving the more specialized questions to humans. Also, customers still report a demand for human contact, according to CGS’s 2018 Consumer Customer Service Survey. 40% of Americans and 50% of UK residents prefer a human to a chatbot, citing that chatbots aren't as detailed and are less helpful.  

Some experts laud the rise in chatbots for their ability to bring together multiple channels (such as sales, confirmation, and delivery), creating a more seamless customer experience (Chatbot Magazine). Emerj Artificial Intelligence Research predicts that "AI within the food industry will continue to address various challenges, such as synchronizing multiple operating systems between various departments and functions (e.g., POS, warehouse management logistics)."

AI technology continues to evolve, requiring grocers and retailers to stay alert to industry trends. Investing in a platform marked by flexible integration will be the key to successful scaling, as opportunities for automation arise. To see how locai can help your grocery business stay competitive within the changing landscape of eCommerce, contact us here.