Want to chat with “people”? Just direct message (DM) the big brand Facebook Pages! In recent years, chatbots have been a marketing tool used by many brands. According to verloop, the development trend saw nearly 80% of companies using chatbots in 2020, and more than 50% of customers expect companies to provide 24/7 customer service support; by 2022, chatbots will bring about more than eight billion dollars in savings to the global market. Chatbots are set to set off a wave of “conversational commerce” in the future e-commerce market.

In the application of chatbots, we believe that there are two general directions: internal and external (internally with respect to database retrieval, internal management; externally with respect to customer service, marketing, etc.). For the e-commerce industry, the company’s external application is more important. Shrinking the purchase journey of consumers can increase their willingness to place orders. Most chatbots will link to social media, communication apps, etc., to take advantage of social commerce, quickly and effectively targeting the products to potential consumers.

This article focuses on the external applications of chatbots. We will examine how major e-commerce brands use chatbots for customer service and sales by combining social commerce with conversational commerce to create a marketing method that is closer to the modern consumer’s lifestyle! 

Article Directory

• What elements does a chatbot need?

• Three e-commerce brands’ chatbot application scenarios

• Summary

What elements does a chatbot need?

 Before discussing the application of chatbots in e-commerce, we need to understand what elements a good chatbot needs to have. From the consumer’s perspective, features that capture your attention, effectively solve your questions, tempt you to place an order directly through the chat window are the 3 crucial elements. 

1. Logic

The logic of the chatbot is mainly related to the script you write. Therefore, when setting up the chatbot’s responses, the script should be written very clearly. Only logical chatbots can effectively solve the instant problems of consumers and reduce the labor cost of customer service. In a script set up, it is necessary to be very clear about the problems frequently encountered by consumers, so that consumers can be guided at every step of the way towards the final answer in the conversation.

For the script settings of e-commerce brand chatbots, product-related questions and purchase FAQs are all necessary, to allow consumers to find answers via the 24/7 chatbot. 

2. Humanization 

Humanized dialogue is one of the marketing engagement weapons for brands, giving consumers a sense of service enthusiasm. A chatbot too standardized will make consumers feel distanced, despite immediate response time as it lacks the humanization aspect. Therefore, a humanized dialogue setting is an important element to enhance the chatbot application to brands.

Through colloquial settings, personalizing response to include consumer names (such as: hello Kevin, how can I help you?), and even adding some interactive forms of fun (such as: interesting riddles, rhetorical conversations) etc, will make consumers perceive the dialogue as less mechanic.

When applied to e-commerce, humanized elements will not only make sales interesting, but also shift consumers’ impressions of brand chatbots to be authentic and personal. For example, the chatbots of Shopee Taiwan often use themed games with play on words and copy to engage consumers’ participation, and finally provide discounts to arouse consumers’ willingness to buy.  Consumers also change their perceptions of Shopee Taiwan’s chatbots all the while as more interesting.

Figure 1. Shopee Taiwan chatbot applies interesting mini games that help to increase the willingness to interact and can also stimulate purchase

3. Convenience

The convenience of using chatbots is also very important. A complex bot triggering and when each command requires consumers to enter longer keywords, will greatly reduce consumers’ willingness to chat. In this case, default buttons can be used to provide convenience, allowing consumers to change from active input to passive input through preset choices. These preset choices can also guide consumers towards preset scenarios and effectively answer their problems.

In addition, the convenience of the chatbot is the establishment of the member information where it can help input personal information on behalf of the consumer through Q&A, bypassing the need to separately open the website registration form. This feature greatly reduces the chance of consumers giving up during member registration.

When it comes to e-commerce sale enabled by chatbots, convenience is particularly important. You can add buttons for popular products, order inquiries, event information, brand FAQs, etc. to the chatbots, so that consumers can get the information sought from their social media and communication app without having to open the website to log in.

Three e-commerce chatbot application scenarios

According to overseas survey data, chatbots are most commonly used in the context of customer service, which can effectively respond in real time and reduce customer service labor. In addition to customer service, sales of goods and shopping FAQs are also very important chatbot applications for e-commerce companies. We will share 3 overseas e-commerce case studies of chatbot applications. 

Case 1: LEGO (Sales Scenario)

Figure 2: LEGO chatbot Ralph

LEGO, a well-known toy brand, used a Facebook Messenger chatbot (Ralph) assigned to solve the main problem of “choosing the right gift”. Since LEGO is one of the relatively higher priced toys, many of its buyers are parents of children, elders, etc.

As for the type of toys that children like, LEGO designed a guided dialogue for gift selection, so that parents can select gifts customized to their children. Furthermore, the chatbot is also connected to the localized inventory information on LEGO’s official website to prevent consumers from buying out-of-stock products.

Towards the end of the interaction when the consumer confirms the purchase, it only takes a click to be redirected to the online store page where the product has been placed in the shopping cart. Frequent offers of free shipping code and unique gifts also dont hurt in stimulating consumers to purchase. EDELMAN DIGITAL and Sumo’s case analysis data mentioned that LEGO’s chatbots promoted the quarter’s social media sales growth by 25%, and multiplied ROAS (return on advertising spend) by 6 times, and reduced cost per conversion by 31%.

Case 2: Lidl (FAQ+Sales Scenario)

Figure 3. Lidl chatbot Margot

Lidl Supermarket is a German supermarket chain with more than 8,000 branches around the world. Among these branches, a chatbot (Margot) is available to stimulate wine purchases, tips on food pairings, and even education on wine making methods. Integrating marketing content in the dialogue, Lidl achieved its sales goals through more than 200 kinds of food pairings recommendation, over 600 different types of wine-related questions to answer and promoting wine to be sold. 

Case 3: H&M (sales + understanding customer preferences)

Figure 4. H&M’s chatbot interface options

H&M’s chatbot mainly recommends suitable products for you through gender and style selection. At the same time, you can also choose to like or dislike this recommended product, so that consumers can find products through Q&A with the chatbot. With a redirection link to the store website to make purchases, consumers are more willing to buy. Effectively, H&M is indirectly learning what consumers like and how product categories perform, all of which can be used as references in marketing strategy planning.

Summary

The above are three case studies on the application of chatbots in e-commerce. In the future, as social commerce gradually integrates into the lives of modern society, channels that can quickly reach consumers will definitely strengthen product sales; case-in-point with chatbots being one of these channels. Perhaps some challenges may lie ahead. But we believe that in such a booming AI era, these challenges will be solved accordingly and completely change mainstream consumption habits.

Are you also using chatbots? Is it helpful for online store sales? Feel free to share your comments!