I’m asked frequently about chatbots and conversational commerce. People want to know: Are chatbots and Artificial Intelligence (AI) the next big thing in e-commerce? I think it’s important to understand that AI is just like any other tool: if you purchase or trial without intending a specific solution to a problem or pain point, it will fail.


In e-commerce, data is paramount: consolidating it, investing in it and ensuring that you truly understand your customer and their preferred channels, preferences, shopping behaviors and previous purchases. Today we can build bots that Listen, Analyze, Respond, Resolve and most importantly, Empathize, to a certain extent. The more customer data the bot has access to, the better these kinds of interactions and results.


Businesses can achieve potentially significant revenue growths when using chatbots to interact with consumers, and the benefit is not one-sided. In fact, more and more consumers strongly prefer these channels. For example, the IBM Watson Team reported that, “of 1,500 millennials across North America, over 65% of those surveyed said that they preferred going online to get support. They didn’t want to go to a store. They didn’t want to talk to a live agent of any kind.”


Amazon is one of the earliest pioneers in the monetization of AI. Along with a few other large retailers, their investment signals a crucial rise of AI and bots on the e-commerce horizon. Their “Alexa” enters people’s homes via the echo and enables Amazon to leverage customer data across their business services. While Alexa’s a bit gimmicky at this early stage, it’s very easy to adopt her new interface for help around the house. Whether it’s playing music, setting timers or getting access to news, music and traffic reports, Alexa can accept voice commands to purchase items and really does multi-tasking easy and convenient. I use Alexa in my kitchen while making breakfast and coffee.


Insights - Chatbots Changing the E-commerce Horizon? 1


As Alexa dominates the domestic scene, armies of bots are assuming customer service functions like password resets, returns, order status and tracking. And they’re good, even great at it. They can quickly address tasks and issues and resolve them at scale. Of course, the cost efficiencies to businesses are massive.


Chatbots, also have the ability to outperform traditional call center sales by leveraging individual preferences and gathered data to sell merchandise. For example, imagine the various parameters involved in selling a laptop attache. With their ready access to data, a bot might know that being fashionable is most valuable to one consumer, and versatility and durability to another.


Of course, as with most things in life, there are pros and cons:


The pros: While AI is gaining momentum and investment, chatbots are getting better with natural language and learning. This increasing facility has enabled better customer experiences, cost efficiencies and potential revenue increases within the e-commerce sphere.


The cons: Like most emerging technologies, there’s an element of mistrust at the start, and the task of proving applications has been left to early adopters. Teething problems will arise and this can put companies in the awkward position of trying to be transparent to establish a foundation of trust. But chatbots obviously don’t need to be trusted. They need to be reliable. I’m sure we’ll see more complexity in this industry and its regulations as legal compliance enters the AI space. Even so, I think the pros will outweigh the cons by far.


So, to answer the question I posed at the beginning of this blog: I do think AI and bots will change e-commerce in the future – they already have to a certain extent. The more important factor to keep in mind, however, is that the fundamentals will always remain the same: understand your consumer, invest in understanding data, create minimum viable products and get them out quickly to test new trends and technologies. Do this while keeping your site in an iterative and ever-evolving state, and yes, the chatbot will change your own e-commerce horizon after all.

George Ioannou

George Ioannou

Global Head of eCommerce & Optimisation


Experienced Digital Transformation Specialist and International Keynote speaker. Clients in a variety of sectors including: Retail, Apparel, Financial, FMCG, Publishing, Luxury, Government, Media & Entertainment, Telecom, Travel and Life Sciences.

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