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3 Biggest Benefits & 4 Best Uses of Chatbots in Retail

3 Biggest Benefits & 4 Best Uses of Chatbots in Retail

Retailers struggle to provide a personalized experience to each of their customers. On one hand, there are rising customer expectations with every second and on the other, there is an increasing number of challenges to provide a seamless buying experience. A Customer Care Measurement & Consulting study, in 2015, found that 54% of retail customers are not satisfied with the buying experience. With new innovations every day there is an ever-increasing number of items in a typical retail store and to provide a personalized buying experience is way too difficult to achieve with the human effort alone. Retailers need to find out innovative ways to solve this issue and thankfully they have one at their disposal - Chatbots. Chatbots can be effectively used by retailers to provide an effortless buying experience for the buyers, making them more satisfied than ever.

Chatbot in retail- online shopping experience

Read More: 5 Benefits of Using Cloud Computing in Retail

What are Chatbots?

Chatbots are programs based on artificial intelligence that can simulate a human interaction by understanding user’s queries and providing a human-like response. Chatbots use a technology called natural language processing to understand human inputs (voice or text), apply context and provide output. While chatbots are still an evolving technology they offer a wide array of ways that can enable personalized communication with customers and help retailers provide a better buying experience across various customer touchpoints like in-store, website, mobile etc.

Want to know more about chatbots? Download our free eBook to get a hands-on guide on the what, how and why of chatbots.

Benefits of Chatbots in Retail:

1. Lower cost:

In comparison to human assistants, chatbots require a very small investment for development and maintenance. Once deployed a chatbot can cater to the queries of any number of customers on the go. This will allow customers to enjoy immediate assistance without the need for waiting in long calling queues or listening to that 30 min solo on the helpline!

2. Better engagement:

There are many limitations of human assistance. They specialize in giving advice on one subject and one person cannot work 24x7 365 days a year. Fortunately, there are no such limitations with chatbots. They can cater to any number of customer requests and serve customers whenever they are needed.


3. Personalization:

No matter how good your website’s FAQ section is, your customer will need to do an effort to find the solution they are looking for. This is not the case with chatbots. Chatbots can immediately answer your customers’ concerns and help them with personalized recommendations and solutions.

Want to see a chatbot in action? Check out our retail bot today!


Chatbots in Retail - Ways of using them for better customer experience:

Chatbots in Retail


Online stores have categories and filters to help customers find the right product. Think of the number of steps you need to take a find a formal men’s shirt of small size within the price range of $250 to $350. Though these categories help in finding the right product, they need a lot of human effort. How about a chatbot that can take inputs like size, gender and required item and directly display the desired results? A popular clothing brand H&M already uses this approach to help their users find the right product. 


Studies by Google show that 97% of consumers are using their phones while shopping for appliances to research for further information. This should not come as a surprise since investing in appliances involve a considerable amount of money. Chatbots can help customers find the solutions, comparison reports etc. for various items thus enabling them to make an informed decision. It can also advise customer with recommendations based on their budget.


Food and Beverage retailers like restaurants can leverage chatbots to give personalized suggestions and advice based on customer’s preferences. There are 20+ different types of cuisines in the world like Japanese, Vietnamese, Indian, Turkish, Spanish, Caribbean etc. and each one consists of a wide number dishes. Except for professionals hardly anyone fully understands them. A chatbot can help answer the basic questions about any dish and take individual customer’s preferences to suggest a suitable option.


In fashion based on a person’s individual choice of clothing, a chatbot can showcase latest trends, suggest clothing on the basis of occasions, give personalized style advice and help them dress up in style. It can provide information like washing instructions and help in maintaining wardrobe. By giving such recommendations fashion brands can improve the customer’s experience and provide a seamless buying experience. Generating more buzz for latest trends can also help in increasing sales and revenue.

Read More: 5 Uncommon Ways of Leveraging Big Data in Retail

A word of caution while using chatbots in retail:

Though chatbots have a lot of potentials, they are still an emerging technology. If you properly utilize them you can definitely outshine from your competitors but they still cannot replace the effectiveness of your helpdesk and ground staff. Chatbots have a long way to go to address all types of customer concerns. You should always offer an escape route while giving solutions with chatbots like -  “If you are not satisfied with the response then please reach out to our customer care executives”. Overall they are still very useful and you should definitely move forward to including them in your innovation strategy.

Read More: 5 Simple Rules to Create an Addictive Chatbot

At NewGenApps we specialize in creating innovative solutions using disruptive technologies like artificial intelligence, natural language processing, chatbots, machine learning etc. If you want to develop a sophisticated chatbot to cater to your customer’s need then feel free to contact us.

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