Why Are So Many Chatbots Missing the Mark?

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Doctors are using chatbots in exam rooms. Schools are using chatbots to prevent educator burnout. State governments are using chatbots to address all types of Covid challenges. Why are retailers struggling to implement the same technology?

The use of chatbots for retail customer service has been on the rise for years. According to a report by Drift, use of chatbots as a brand communication channel increased by 92% between 2019 and 2020. Nearly one quarter of consumers used chatbots to communicate with a business last year. But how many of those interactions were positive, and how many customers left those interactions feeling like their issues were resolved?

That’s a challenge retailers are struggling with in 2021, despite advancements in artificial intelligence and mobile communication technologies.

Chatbots have gotten a bad rap in the retail space, in part because they can be frustrating to deal with when a customer is having a challenging issue. More than half of consumers (56%) say chatbots have limitations that cause them to opt for chatting with a live representative instead. However, with the operational benefits of chatbots increasingly hard to deny, retailers are finding solutions to those challenges so they can improve the customer experience while lowering operational costs.

“​​The problem is that nearly all firms think of chatbot interactions as they would human conversations. They are not. They are no more like a human conversation than a Google search is like a conversation with a librarian,” says Kjell Carlsson, executive vice president of product strategy at Stratifyd, an AI-powered analytics platform. “This misunderstanding not only causes firms to create poor customer experiences, but it also misses the real opportunity of chatbots.”

New partnerships between chatbot developers and companies like Google are expanding the number of retailers that can take advantage of the technology. Just last month, AiChat announced a partnership with Google’s Business Messages, putting messaging directly in Google Click-to-Message (CTM) ads and Google Maps through Google My Business listings.

Conversational commerce tools are also being discussed more frequently as an option for businesses that want to use chatbots to engage with customers in a more dynamic way. For example, rather than sending traditional automated text messages and email alerts, retailers can use products like to connect customers with AI-powered chatbots or live human agents.

With the holiday rush already in full swing, retail analysts are anticipating that chatbots may play a larger role in both offline and online customer experience this year than previous holiday seasons. 

Enhancing, Not Replacing

Within the world of customer experience, Carlsson says there are ways for retailers to implement chatbots more effectively than they are currently. Some of the most well-known types of chatbots are customer support chatbots, e-commerce chatbots, skills chatbots, and booking chatbots.

Retailers miss the mark on chatbots when they use the wrong type of chatbot or when they try to use the technology to replace live human agents rather than to help human agents get more done. Chatbots perform best when they are used to replace conversations that customers didn’t want to have in the first place — for example, providing guests with order status updates, password resets, or opening hour information.

“Above all, they are complements to rich human conversations,” Carlsson says.

On the customer-facing side, Carlsson suggests that retailers use chatbots to help offload the information gathering and scheduling parts of conversations, where they can also preserve privacy. On the agent side, chatbots can surface relevant information and guide conversations to better outcomes. 

“It’s not about customers preferring live representatives over chatbots,” Carlsson says, “it’s about them preferring live representatives augmented with chatbots.”

​​Stephanie Miles is a senior editor at Street Fight.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.
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