Ecommerce Chatbot: The Way to Transform Customer Experience with 24/7 Assistance 

With online shopping being as popular as it is today, AI chatbots for ecommerce have become indispensable, taking sales and customer support to another level. Reuters states that, according to a Salesforce report, AI-based chatbot services are used 42% more than a year ago. These clever virtual assistants operate 24/7, offering personalized recommendations and guiding users through their shopping journey any time they need it.

While ecommerce consulting can help you decide whether your business needs a chatbot, knowing how to develop one is always useful. In this article, we will talk about the benefits, use cases, and key features of ecommerce chatbots and will also discuss how to create an AI chatbot.

What is an AI chatbot for ecommerce?

Let’s first define what a chatbot is so we can better understand how it works and what it’s capable of.

Chatbots are automated computer programs designed to imitate humans and interact with your customers through text or voice chat. There are three main types of chatbots:

• Rule-based chatbots. They follow a predefined set of rules and scripts to interact with users. These chatbots are perfect for handling simple, repetitive queries, like answering FAQs or providing basic information. They don’t draw any context from previous conversations and give responses only based on the input. All the user has to do is select options from a menu or type in a specific keyword, and the bot will respond accordingly.
• AI-based chatbots. They use conversational AI, natural language processing, and machine learning algorithms to process, understand, and learn from users’ queries. Therefore, these chatbots can respond appropriately and engage in meaningful conversations. Machine learning also allows them to improve their answers over time as chatbots adapt to user behavior.
• Hybrid chatbots. Naturally, hybrids combine features of traditional and AI-based chatbots. They start off with the rule-based foundations, handling those straightforward queries with ease. But when things get a little more complex, they can seamlessly switch to AI-driven responses, providing the best of both worlds.  

You can deploy chatbots across various platforms, such as ecommerce websites, social media (Facebook, Instagram, etc), and messengers (WhatsApp, Telegram, etc).

Types of ecommerce chatbots

When it comes to applications of AI chatbots for ecommerce, we can divide them into several categories. That includes:

Customer support chatbots

Customer support chatbots are perhaps the most common application of chatbots in ecommerce. These bots serve as the first point of contact for customers, addressing queries and resolving issues at any time of the day. That includes: 

• Answering customers’ questions;
• Resolving simple issues like password resets;
• Assisting with order placements;
• Connecting customers with human agents.

Sales-focused chatbots

These chatbots are your virtual salespersons. They are designed to help customers with their purchases, helping them through the shopping process. Sales-focused chatbots use customer information, like past purchases or browsing history, to make personalized suggestions based on their needs. They also streamline the check-out process and increase conversions, as they answer the queries in real-time. 

For example, H&M uses a sales-focused chatbot for ecommerce on its website. Users can interact with the bot and answer some questions about their style. Then, based on their preferences, the chatbot sends customers several outfit pictures so they can choose what they like most. This bot can also search for matching products, saving them time for browsing and cross-selling additional items.  

Order tracking and post-sale service chatbots

It’s natural that customers want to know the status of their order after making a purchase on the marketplace or any other platform. That’s where order-tracking and post-sale chatbots shine, as they will keep your customers updated on every order-related query. That includes:

• Updates regarding the status of the order;
• Refunds in case of lost packages or any other issues;
• Returns or orders;
• Information about shipping delays, etc.

These chatbots can also collect customer feedback, encouraging shoppers to share their opinions about their buying experience. This feedback is invaluable for businesses looking to improve their services and products while showing customers that their opinions matter.

Benefits of using chatbots for ecommerce

According to the Research and Markets report, the AI chatbot market is expected to reach $46.64 billion by 2029. And that’s not surprising, considering all the benefits that chatbots bring businesses. Let’s take a closer look at all the advantages of AI chatbots for ecommerce. 

Improved customer service with quick answers 

Unlike human specialists, ecommerce chatbots don’t have a working schedule and are available 24/7. Whether it’s a midnight query about product features or a morning request for order tracking, they are always here to assist customers. Therefore, customers can quickly get the information they need and don’t waste their time waiting. 

Personalized shopping experience

Integration with internal systems allows chatbots to draw information from customer profiles. That includes their preferences, browsing history, and purchase behavior. Besides, AI chatbots also analyze the information from their conversation with customers. Based on this data, they can provide tailored product recommendations, making the shopping process more engaging and personalized.

Reduced cart abandonment rates

Cart abandonment is one of any business’s most unpleasant and costly issues. According to the Baymard Institute, the cart abandonment rate in online shops is nearly 70%.  Many customers leave without buying anything for various reasons. However, the common one is that they couldn’t find the information they needed in time. 

Ecommerce chatbots can solve this problem. They answer customer questions in real-time, assisting them with any concerns they have. People don’t need to wait for ages to get the information, so they can continue shopping without distractions.  

Moreover, chatbots can also remind customers about items left in their cart, offer personalized discounts, or highlight limited-time offers to encourage them to return and finish the purchase.

Streamlining routine tasks

Chatbots for ecommerce are really good at automating tasks such as answering FAQs and other routine tasks like processing returns and exchanges. This allows human agents to focus on more complex issues and provides customers with faster and more efficient service.

Multichannel conversations

As we mentioned, ecommerce chatbots can engage with customers across various platforms, including websites, social media, and messaging apps. This way, businesses can maintain consistent communication with their customers, regardless of where the interaction occurs.

Efficient order management

Nobody wants to deal with the hassle of manually processing every single order. That’s where chatbots can be real lifesavers. They automate the processing of orders, track inventory, and manage shipping. Additionally, they can update inventory levels, calculate shipping details, and notify customers when their orders arrive. Moreover, chatbots are less prone to errors, so the chances of order mix-ups or delayed deliveries are quite low.

Reduced cost for customer support 

Another great benefit is that implementing chatbots can reduce operational costs related to hiring and training customer service staff. Of course, they cannot fully replace human specialists, as customers still prefer live conversations, especially if they have any issues. But chatbots can handle multiple queries simultaneously. That’s much cheaper than hiring and training as many agents for the same task. 

Key features of an effective ecommerce chatbot

An effective ecommerce chatbot should come equipped with various features that cater to the dynamic needs of businesses and customers alike. Some of the essential features include:

Natural language understanding (NLU)

Natural language understanding is an integral part of natural language processing, which allows AI-based chatbots to understand not only the words themselves but also the meaning and intent behind them. This capability enables chatbots to process and recognize different sentence structures, slang, and language nuances and maintain natural, human-like conversations. That’s why the majority of ecommerce chatbots are powered by large language models (LLMs) like ChatGPT, Google’s Bard, etc. Therefore, NLU helps to create a more personalized experience for your customers, providing them with accurate responses. 

For example, when a user is looking for a gift but doesn’t have any ideas, they might visit an online store with a chatbot. If they type, “I want to buy a present for my mom,” the AI-based chatbot can ask clarifying questions to help the customer narrow down their options and provide a personalized list of suggestions.

Besides, natural language understanding facilitates the interpretation of multiple languages. That is especially important for ecommerce because multilingual support broadens the customer base and expands the reach to a global market. 

Integration with other platforms and systems

One of the crucial features of an AI chatbot for ecommerce is the ability to easily integrate with your other systems, like CRMs, inventory management software, payment getaways, and other different third-party tools and platforms. This way, you can reduce the need for manual intervention and streamline workflows. For example:

• Integration with payment getaway will enable the chatbot to handle the entire transaction process. That means customers don’t need to leave the chat to make the payment, which reduces the chances of cart abandonment. Moreover, if there are any difficulties with the payment, the bot can troubleshoot those issues in real time. 
• CRM integration gives your ecommerce chatbot access to the customer profiles so they can provide more personalized service based on their preferences. And the best part? The chatbot can also update the CRM with new information, keeping those customer profiles up-to-date.
• With inventory management integration, your chatbot will always know exactly what’s in stock, ensuring customers have the most current information as well. For example, if a customer asks, “Do you have the red dress in size M?” the chatbot can instantly check inventory and confirm availability.

The list goes on – from syncing up with marketing automation tools to connecting with shipping carriers, the possibilities for integration are endless. The more these chatbots can plug into your existing systems, the more efficient, streamlined, and customer-centric your ecommerce operations can become.

Data analytics and report capabilities

Advanced data analytics is especially important in ecommerce. It allows businesses to identify trends, create efficient marketing strategies, and make more informed decisions. Chatbots can be a great help in collecting customer behavior data, therefore providing insights into business performance. You can also use this information to enhance the work of your bot. 

For example, businesses can analyze conversational logs and identify frequently asked questions so they can optimize their FAQ section. They can also identify common pain points and develop strategies to address them more efficiently.

Omnichannel support

Today, customers do not stick to one channel for shopping and switch between devices and platforms. They engage with brands across various websites, apps and social media like TikTok, Instagram, and Facebook. Therefore, they expect a seamless experience across all platforms they use. Omnichannel chatbot maintains consistent communication, ensuring that customers receive the same level of responses and assistance no matter where they engage.

How to make an AI chatbot for ecommerce

Building your own chatbot may seem daunting, but it’s exciting at the same time. However, you can always find a reliable IT vendor that will help you with that. Let’s see a step-by-step process of AI chatbot development:

Step 1: Defining business goals and customer needs

Before diving into the technical aspects, it’s crucial to clarify why you want a chatbot. What problems do you aim to solve? 

For example, if you want to increase sales, you will need to tune your chatbot to be able to provide personalized recommendations, identify upselling and cross-selling opportunities, and so on. But if you just want to streamline customer support, you can keep things simple and opt for a rule-based solution, focusing on handling FAQs and basic inquiries. 

Step 2: Choosing the right technology stack

Selecting the right tools is important for seamless chatbot development. There are numerous platforms that can help you with the task. Some popular options include:

• Dialogflow: A Google Сloud-based service for building chatbots using natural language processing (NLP).
• Chatfuel: A user-friendly platform that allows businesses to create chatbots without coding.
• Rasa: An open-source option allowing for more customization, ideal for tech-savvy teams.
• Microsoft Bot Framework: Provides tools to build, test, and connect intelligent bots.

It’s better to choose the one that will best align with your goals for developing an ecommerce chatbot.

Expert Opinion

Creating a chatbot doesn’t necessarily require third-party services; you can build one using Python and specialized frameworks. Python offers a wide array of libraries that simplify the development of chatbots. For instance, frameworks like Rasa and ChatterBot provide robust tools for natural language processing (NLP), dialogue management, and machine learning. These frameworks enable you to design and train your chatbot on custom datasets, allowing for a tailored conversational experience. Furthermore, Python’s extensive ecosystem includes libraries such as NLTK and spaCy, which are instrumental in text processing and understanding. By leveraging these tools, you can create a fully functional chatbot capable of handling complex user interactions without relying on external services.

In recent years, many companies, including SoftTeco, have opted to build chatbots using a combination of Large Language Model (LLM) APIs, vector storage, Retrieval-Augmented Generation (RAG), and custom APIs for frontend data exchange. This hybrid approach leverages the strengths of LLMs for generating human-like responses while using vector storage to efficiently handle and retrieve relevant information. RAG techniques further enhance the chatbot’s performance by combining retrieval-based methods with generative models, ensuring accurate and contextually appropriate responses. Our custom API facilitates seamless communication between the chatbot and the frontend, ensuring a smooth user experience. This architecture not only improves the chatbot’s capabilities but also provides greater flexibility and control over the data and interactions, making it a preferred choice for many modern chatbot implementations.

Data Scientist at SoftTeco

Roman Kyrychenko

Step 3: Training the AI with ecommerce-specific data

Training your AI with domain-specific data is vital for its effectiveness. Compile a dataset that includes past customer interactions, FAQs, product details, and promotional offers. Use this data to teach the chatbot to recognize common queries and provide relevant responses.

After that, design the conversational flow. Consider the various scenarios your customers might encounter and design responses accordingly. Here are the key components you need to address to create the conversation flow:

• Greeting messages. Establish a friendly tone right from the start!
• Intent recognition. Use NLP to understand what the customer is asking.
• Fallback responses. Prepare for scenarios when the bot doesn’t understand a query by providing helpful next steps.

Step 4: Testing and deployment

Before launching the bot, conduct extensive testing to ensure smooth functionality. Gather feedback from team members and early users to identify areas for improvement. For better testing, focus on the following questions:

• Are the responses relevant and accurate? Confirm that the chatbot understands the queries accurately and provides the correct information.
• Is the chatbot easy to navigate? Ensure a user-friendly interface where customers can easily transition between conversation topics.
• How effective is the bot? Assess engagement metrics such as resolution rate, user satisfaction scores, and sales conversions resulting from the chatbot’s assistance.

Furthermore, make sure to set proper security measures in place, as there’s always a chance for a malicious attack on AI chatbots.

Step 5: Ongoing optimization and updates

Once the chatbot is live, continuously monitor its performance and gather user feedback. Regular updates and optimizations are essential to keep it functioning at its best.

Future trends in AI chatbots for ecommerce

As artificial intelligence continues to advance, AI chatbots are becoming more capable as well. They are already quite good, however there are even more exciting innovations to come in the near future. That includes: 

Integration with augmented reality 

Imagine interacting with a chatbot while trying on virtual clothes or visualizing how furniture might look in your home. AR capability can create engaging shopping experiences, making it easier for customers to make informed purchase decisions. 

Advancements in conversational AI for hyper-personalization

These chatbots are going to get smarter and more intuitive than ever before. With advancements in natural language processing and machine learning, they’ll be able to engage in even more natural, human-like conversations. They are already pretty good at it, but progress does not stand still.  Imagine a chatbot that can pick up on your unique preferences, shopping habits, and even mood and use that information to provide hyper-personalized product suggestions and support. 

Final thoughts

Chatbots are surely enhancing customer experience and support services for many businesses. They help solve a variety of customer-related problems, increase customer satisfaction and brand loyalty, as well as streamline operations and reduce operational costs. With further advancements in artificial intelligence and machine learning, chatbots will be even more adept at addressing complex queries. And that is what makes them essential for competitive businesses.