Chatbots: Friend Or Foe Of Retail?

Automation has come to several industries.

From manufacturing to customer service, there have been several parts of today’s workforce that have been automated by some form of smart technology. One in four Americans are currently at risk of having their jobs automated, according to a research paper from Ball State University, “How Vulnerable are American Communities to Automation, Trade, and Urbanization?”

From the research, it was shared that, “Both trade and automation related to economic growth are hallmarks of a vibrant economy. However, the social and political unease that accompanies large shocks with varying distributional inequities felt by workers in different occupations and with different skill levels is real.”

Over the last few years, chatbots have taken the retail space by storm, helping to automate several key aspects of customer service. In its arena, chatbots’ underlying technologies driving it is a combination of artificial intelligence (AI), machine learning and natural-language processing.

With 100,000 branded chatbots and growing on Facebook Messenger alone, it doesn’t appear that chatbots have any intention of going away any time soon. As such, it’s important to explore whether or not integrating chatbots into companies is having a positive or negative effect on its operations.

Some may argue that retailers should be extra careful when it comes to chatbot development, but others are moving forward at full force.

What’s the effect of chatbots on the retail industry? Are they helping or hindering?

At this time, it appears that the core function of chatbots is to help facilitate various customer service aspects throughout the consumer sales cycle.

Analyst firm Gartner has shared its predictions that though 30 percent of interactions with new smart technologies will be via conversations with smart machines by 2018, 85 percent of all enterprise interactions will be with zero human back and forth by 2020.

In a contributed piece, IBM fellow, Vice President and Chief Technology Officer for IBM Watson, Rob High, commented on the progression of chatbots and what it will ultimately mean for industries down the road.

“As cloud and AI [artificial intelligence] technology progresses, chatbots will continue to become more skilled in data analysis, natural communication and emotional intelligence through deep conversational technology,” High said. “Ultimately, cloud and cognitive technology will fuel the customer service interaction of the future by understanding human intention, learning and reasoning at scale, and augmenting human thinking to help consumers make better purchases and smarter decisions across every aspect of the customer experience.”

North Carolina’s iCenter found that 80 percent to 90 percent of inquiries sent to its IT desk were asking for routine information like lost passwords. Brookings Institution argued that the automation of these mundane tasks would free up workers to concentrate on the more innovative tasks.

As some may fear that all of this automation via chatbots in the retail industry will have a negative impact, others are more hopeful regarding the news.

Sean McKee, eCommerce and customer experience director at retail brand Schuh, shared his thoughts with Retail Week on how chatbots will benefit the industry. “It’s not too hard to envisage chatbots allowing us to more efficiently handle routine site interactions with our customers in a way that is both more efficient, low-friction and enables us to free up our most precious resource — our people,” he said.

Currently, it seems as though chatbots are more friend than foe when it comes to their use in the retail arena. As the industry continues to undergo its evolution with regards to the right types of technologies for each sub-sector, it’s likely that we won’t have a precise picture until there’s a solid case study in place to help move the ball forward.

The ease with which consumers have started to interact with chatbots is a positive sign for retailers that the technology is helping out with engagement and retention efforts and is also likely here to stay. Determining how to best utilize chatbots for company gain will be configured on an individual basis.