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Chatbots – Further Enhancing Customer Personalization

Innovation in Retail Technology in recent times has been focused around the need for enhancing customer personalization. The latest development in the form of Chatbots (powered by Artificial Intelligence) is no exception. A chatbot, is essentially a computer programme that responsively interacts with people in the form of human speech by using data and intelligence. Chatbots can help in guiding customer purchases & answering customer queries in the form of an interaction. As a result, the entire buying process of customers can be made a lot more easier. This entire process of orders being placed through online conversation is known as Conversational Commerce. It is one of the most recent trends in retail.

chatbots retail tech


Why Chatbots?


According to American research firm Gartner's Prediction, companies offering an increased level of personalization to its' customers will outperform competitive brands by 15% by 2018. The AI powered chatbots can read messages and analyse past purchasing behavior & browsing history of the customers and make pertinent offerings through the interaction. Let's have a look at a few bright aspects of Chatbots.


  • Chatbots go a long way in keeping the customers engaged and this helps in scoring conversions. According to a study by Rosetta Consulting, engaged customers are 90% more likely to make frequent purchases and six times more likely to try a new product.


  • Chatbots definitely score over social media interaction as responses are quick and feedback is instant. Another 2015 study by the Northridge Group reveals that around one third of customers who contact their brands on social media are not reciprocated back. This is hardly ever the case with chatbots.


  • reveals that app installs on an average cost brands US $1.78 on IOS and $2.51 on Android. With retention rates dropping, gaining a customer who is loyal can cost up to 25 times more. Bots or Virtual Assistants on the other hand,requires no coding and can easily drive customer loyalty and also considerably reduce the development cost.

Chatbot Adopters targeting Messenger Apps


Messenger Apps have surpassed Social Networking Apps. The following illustration reveals the same.

Messenger Apps


According to, over 2.5 billion people have at least one messaging app installed, and by 2018, it's expected to reach 3.6 billion. With the rising popularity of messaging apps among customers, brands are looking to amalgamate chatbots and messaging apps, in order to strike up a conversation with customers. The eventual objective obviously being to perform 'Conversational Commerce'.


  • Beauty Retailer, Sephora made its debut on Kik (Messenger App) which has about 275 million users. Customers can make purchases from Kik as a result of chatting with a Sephora Chatbot. The conversation begins with a quiz so that the programme can deliver the pertinent responses. All that customers need to do is give details about their age, brand & category preferences, and the products that they would love to acquire. A recommendation video at the end helps to guide the purchase of the customer.


  • Mexican Fast Food Company Taco Bell launched 'TacoBot' by teaming up with the messenger, Slack. TacoBot meets the role of a virtual butler as it helps to answer the queries of the customers and also provides recommended items to them.


  • Mark Zuckerberg (Facebook-CEO) at the company's F8 Developer Conference earlier this year, confirmed that the platform will provide businesses an opportunity for better connecting with customers in retail. He was referring to an interaction with an artificial intelligence chat robot. Spring (Online Retailer) and already feature on Facebook Messenger's bots section.

Shortcomings and Potential Future


These days, Chatbots easily qualify as the 'buzzword' among experts when talking about trends in retail. We have already been subjected to a bot powered digital assistant in our daily lives such as Apple's Siri. We do sometimes tend to criticize when Siri misunderstands our commands and completely ignore its' utility. One massive failure was Microsoft's AI powered bot called Tay which was shutdown for making racist comments on tweets featuring on Kik and GroupMe. Now it was not intended as the bot was designed to learn from the people it interacted with. Online users provided their fair share of ill-informed political opinions, which the bot essentially picked up. As a result the bot made involuntary racist comments. It's fair to say that there was an error in the way it was designed.


Microsoft's inability to design the perfect bot should not justify the credibility of chatbots as a whole. Although chatbots may not be entirely perfect, one will have to say they are mighty impressive. Experts believe that an entire paradigm shift beckons with the further development of chatbots. Founder and CEO of Chatsuite, Asaf Amir says that "not all bots are created equal and this would definitely improve in the future with better bot selection". At a conference, Microsoft's Chief Executive Satya Nadella is of the opinion that people-to-digital assistant, digital assistants-to-bots and bots-to-digital assistants & people conversation is what the world can expect in the time to come. He also went on to say that "Bots are the new apps".


In a nutshell, chatbots has a lot to offer to modern day retail and is definitely taking customer personalization to a whole new level.

About Ajay Hirawat

Ajay Hirwat has 5 + years of experience in Program Management and has been the Key Contributor of success at Marque clients of Tickto. He has been involved in the development and making sure that product works as promised. An BE ( Hons) from CSVTU, Chattisgarh, Ajay started his career with Maketick as an QA Analytic and grew through the ranks to become a Lead in his current role. He shifted to Tickto from July, 2015 and since then has been integrally involved with key customer accounts.

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