Boomtime ahead for chatbots in retail
New data from Juniper Research predicts consumer interaction with chatbots in retail will reach 22 billion by 2023.
The figure represents a sharp increase over an estimated 2.6 billion interactions this year.
According to the new research report “AI in Retail: Segment Analysis, Vendor Positioning & Market Forecasts 2019-2023”, chatbots in retail will enable effectively automated customer interactions for both online and offline vendors.
A crucial enabler of this development will be improvements in NLP (Natural Language Processing), which will dramatically reduce the failure rate of chatbot interactions, by making them more natural and valuable for customers.
Juniper anticipates that retailers who do not adopt chatbots will face strong challenges from more technologically-adept disruptors, who will use chatbots as an extension to the crucial omnichannel retail experience.
The research also found that chatbots used for customer service have a strong potential to reduce costs; with deployments realising annual savings for retailers of US$439 million globally by 2023, up from just $7 million this year.
These potential savings will act as a key “pull” factor, given the margin pressure that many retailers are presently feeling.
“By embracing automated customer service with chatbots, retailers can act in a more flexible and efficient way,” explained research author Nick Maynard. “The wider retail market means that chatbots are no longer a luxury, they are essential.”
Meanwhile, sales resulting from interaction with chatbots in retail will reach $112 billion by 2023, up from $7.3 billion this year; representing an annual growth rate of 98 per cent.
The research found these sales will largely be a result of migration from other channels, rather than a new revenue stream. Accordingly, the research emphasised that while retailers must adopt chatbots for ease of use (and to reduce consumer churn), their return on investment will come from efficiencies, rather than new income.