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How Chatbots are Transforming Ecommerce

A person showcasing an innovative message on a smartphone, exploring the transformative power of chatbots in ecommerce.

Learn how product recommendation chatbots help brands capture customers’ attention and steer them closer to checkout.

Personalization is an ever-evolving movement in ecommerce that closes the gap between digital and in-person shopping experiences. Brick and mortar stores have long held an advantage over online shops, because good salespeople can observe shopper behavior and offer suggestions based on judgment and past experiences with customers.

Thanks to great advancements in the development of Artificial Intelligence, today’s retailers are able automatically provide persuasive product recommendations that, unlike good old gut instinct, are statistically most likely to drive conversion, cross-selling, up-selling and revenue.

Chatbots are the newest development in the B2C industry aimed at imitating aspects of the in-person shopping experience. According to Tidio, by responding to customer concerns in real time, chatbots can reduce customer services costs by up to 30%.

How exactly do they work? Read on to to learn how chatbots take your existing personalization efforts to the next level.

How do Chatbots and Product Recommendations Work?

Product recommendation engines are an innovation of machine learning. Artificial intelligence engines analyze both the behavioral and transactional data of webshop visitors to create shopper profiles in a process called collaborative filtering. Comparing shoppers to those with similar profiles, advanced algorithms accurately predict what products an individual customer is most likely to be interested in based on their browsing history, past purchases, and the currently viewed product.

Powerful product recommendation tools also incorporate other layers of data, such keyword-based descriptions and product tagging. These layers empower the algorithms to discover another level of product relevance and insights.

Chatbots apply this same powerful machine learning in a different format, proactively offering personalized recommendations that enable customers to find relevant products faster.

Benefits of Product Recommendation Chatbots

Since Amazon began using them to drive product discovery, ecommerce product recommendations have become a staple in digital sales growth. Successful retailers have since followed suit, building product recommendation strategies that personalize each unique customer interaction.

Chatbots provide a similar level of personalization.

Chatbots take the powerful tool of product recommendations and add an extra layer of interaction. Much like ecommerce pop-ups, they draw the shopper’s attention to products that are relevant to their interests, keeping their eyes on the page (and eventually, towards checkout).

Chatbots can be programmed to provide answers to frequently asked questions, but they also use the cutting edge value of natural language machine learning to comprehend customers’ questions and provide them with relevant product recommendations. Not only does this improve the customer experience by making it easier and faster to shop, but it provides your artificial intelligence engine with more data to make even more accurate predictions of what products might interest a consumer.

Examples of Ecommerce Chatbots

SALESmanago Live Chat

The SALESmanago Live Chat bot combines behavioral data with the consumer’s interaction with the chatbot to produce personalized, persuasive recommendations to customers. Retailers are able to use the chatbot to share a variety of messaging.

Sephora Assistant

Sephora leads the beauty industry in their creative approach in providing memorable ecommerce experiences to their customers. Their latest innovation is a chatbot named Sephora Reservation Assistant. With this chatbot, Sephora is able to answer questions from their customers in an automated, yet conversational manner as well as make beauty care reservations in the location nearest to the customer.

Learn more: Uncover Sephora’s transformative approach to ecommerce success in our Beauty Retail Masterclass.

Tidio Chatbot

This innovative company offers both free live-chat and chatbot applications for Shopify. With a very intuitive interface, it’s easy for small retailers or healthcare companies to get started. Their chatbots help out with both customer service and marketing needs of retailers.

From Chatbots to Checkout (and Beyond): How to Expand Your Use of Product Recommendations

While product recommendations in chatbots are part of the avant-garde revolutionizing the ecommerce industry, there are many other effective ways to implement recommendations across your website and external channels to offer the personalized experiences your shoppers expect.

From engaging first-time visitors on the homepage, to driving more cross-sells, up-sells and average order value on checkout pages, to re-engaging indecisive customers through email marketing, product recommendations go a long way in increasing traffic, conversion and revenue.

Need some inspiration to make the most of product recommendations? Check out 40 product recommendation examples you can easily implement across your online store and email marketing channels.

Special thanks to our friends at Nosto for their insights on this topic.
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