Not long ago, chatbots were an odd fringe customer support tactic, but advances in artificial intelligence, machine learning, and natural language processing have made them sophisticated and even mainstream. A report suggests that the chatbot market will grow at a compound annual growth rate of nearly 35% from 2021 to 2026 to reach $102B – growing from $17B in 2020 to a staggering 500% growth in six years, Asia Pacific will See the highest growth. Meanwhile, consumer retail spending via chatbots is expected to surge to $142B by 2024 from $2.8B in 2019, a 4,328% increase over five years. (Yes, you read that right.)
Retail isn’t the only industry embracing AI chatbots: entire industries are seeing the light, including healthcare, such as in France, where AI chatbots have been shown to reduce vaccine hesitancy, and Woebot, a digital mental health startup, Recently received Series B funding and is experimenting with cognitive behavioral therapy support.
For many companies, ignoring the rise of artificial intelligence is a risky business. Understanding chatbots—understanding how they work and why they are so powerful—is a great way to get started. If you feel overwhelmed by artificial intelligence, think of chatbots as low-risk gateways to new possibilities.
Chatbots: AI’s secret weapon to boost engagement and revenue
AI chatbots can provide instant responses so users feel “heard,” they can significantly reduce wait times, and they capitalize on consumers’ preference for chatting online rather than calling a 1-800 number and waiting. They also provide higher conversion rates, often among customers who abandon their carts, a major pain point in online retail. For example, a lively chatbot could say: “Hey, you have items in your cart! Buy them before they disappear!”
Best of all, AI chatbots can help e-commerce companies make product recommendations based on a user’s browsing activity, previous purchases, and/or demographic data, and they allow businesses to offer 24/7 customer support at an affordable price. After all, chatbots don’t need breaks, vacations or holidays; they can also take over mundane tasks (“You asked where your package is. I found it!”), leaving the more interesting customer service requests to live agents, then They themselves are more likely to be involved.
Additionally, a good chatbot, supplemented by a real person, can help any business deal with a surge in demand (like holiday shopping) or a situation where customer service representatives are suddenly unavailable, like when call center workers get sick during a pandemic. Ultimately, chatbots can be a win-win for businesses and consumers, as they can significantly reduce customer service downtime and can be key to business continuity strategies.