
Retail therapy shouldn’t be stressful. It’s a way to unwind, discover new products, and enjoy the experience.
Yet sometimes buying things online isn’t super straightforward. Confusing navigation and unanswered questions can lead to shopping cart abandonment and have other negative consequences.
That’s where retail chatbots — AI agents that streamline e-commerce — come in.
Let’s explore chatbots for retail and how they are shaping the future of digital shopping.
What are retail chatbots?
Retail chatbots are intelligent virtual assistants designed to enhance the shopping experience by supporting customers and boosting sales.
Using advanced natural language processing (NLP) and conversational AI, they:
- Answer shoppers’ questions
- Provide personalized recommendations
- Assist with transactions
They are one of multiple AI agents that can be used for digital marketing. When used effectively, they engage customers, drive conversions, and improve retention, all of which contribute to a stronger bottom line.
So, if a customer asks, ‘Do you have this dress in a different size?’ the retail chatbot can instantly check inventory and respond with, ‘Yes, it's available in a medium and large. Would you like me to add it to your cart?’
Similarly, if a shopper abandons their cart, the chatbot can re-engage them with a reminder or an exclusive discount to encourage checkout.
How do retail chatbots work?
Retail chatbots use AI-driven technology to make online shopping easier and more efficient.
Here's a step-by-step breakdown:
1. Understanding customer inquiries
The retail chatbot processes messages using NLP to identify intent and context.
Say, a shopper asks the retail chatbot, ‘Do you have these sneakers in size 9?’ — the chatbot recognizes the intent and checks inventory.
2. Providing personalized assistance
Once the chatbot for retail has understood the customer’s intent, it enhances the shopping experience by tailoring responses based on customer preferences, browsing history, and product availability.
If the sneakers are available, the chatbot might respond with, ‘Yes! They're in stock. Would you like them in black or white?’ It could also suggest similar styles based on the shopper’s browsing history or trending products.
If the size is unavailable, the chatbot may:
- Offer alternatives
- Notify the customer when it's restocked
- Suggest joining a waitlist
3. Handling transactions and orders
Once a shopper decides to buy, the retail chatbot guides them through the process.
If the shopper confirms the sneakers—the chatbot responds, ‘Great choice! Would you like to proceed with checkout now?’ If they agree, it collects shipping details, processes the payment securely, and sends an order confirmation.
For returning customers, stored preferences make checkout even faster. Once the order is placed, tracking details and estimated delivery times are provided instantly.
4. Recovering abandoned shopping carts
Many shoppers add items to their carts but leave without completing the purchase. A chatbot for retail can re-engage these customers by:
- Sending reminders
- Addressing concerns
- Offering incentives
So, if the shopper leaves the sneakers in their cart without checking out—the chatbot might follow up with, "Still thinking about these sneakers? They’re selling fast! Want to complete your purchase now?"
If the shopper hesitates, it can provide additional details, answer questions about shipping, or even offer a limited-time discount to encourage checkout.
5. Seamless integration with retail systems
For a chatbot to provide real-time support and personalized experiences, it needs to connect smoothly with existing retail systems.
If a shopper asks, "When will my order arrive?" the chatbot instantly retrieves tracking details from the order management system. Similarly, when checking product availability, it pulls live inventory data to ensure accurate responses.
By integrating with CRM platforms, chatbots can recognize returning customers, access past purchases, and offer tailored recommendations.
Beyond customer interactions, chatbots also sync with payment gateways, loyalty programs, and marketing tools.
6. Escalation to human support
While chatbots handle many customer inquiries, some situations require human assistance. When a request is too complex, the chatbot seamlessly transfers the conversation to a live agent, ensuring a smooth customer experience.
Imagine a shopper asks, "Can I combine two discount codes?"
- The chatbot may not have the authority to approve special requests.
- Instead of giving a generic response, it connects the customer to a support representative while providing context from the conversation.
Key features of retail chatbots
Here are a few key features that make retail chatbots essential in an increasingly digital world:
FAQ chatbots
As a core part of retail chatbots, FAQ chatbots deliver instant responses to common customer questions, including store policies and product availability.
By handling repetitive questions, they reduce support tickets and free up employees for more complex issues.
Product recommendations
Using customer data, chatbots for retail provide tailored product suggestions and dynamic upsell opportunities based on browsing history and past purchases.
So, if a shopper is browsing running shoes, the chatbot might recommend matching athletic socks or a limited-time bundle deal.
Automated cart recovery
Shopping cart abandonment is a significant challenge in e-commerce, with 70% of online shopping carts abandoned globally. Yet, $260 billion worth of lost orders are recoverable just by improving better checkout flow and design.
If a customer adds items to their cart but doesn’t complete the purchase, the chatbot can:
- Send timely reminders
- Answer concerns
- Offer incentives to encourage checkout
Say a shopper leaves a pair of sneakers in their cart, the chatbot might follow up with, ‘Still thinking about these? They’re selling fast! Complete your purchase now and get free shipping.’
Automated customer support & FAQ handling
FAQ chatbots handle common customer inquiries, including store policies and return processes, without requiring human agents.
Cart abandonment recovery
With 70% of online shopping carts abandoned, chatbots play a crucial role in re-engaging customers who leave before checkout. They send reminders and address last-minute concerns to drive purchase completion.
Order tracking & post-purchase support
Customers frequently ask, ‘Where is my order?’
Retail chatbots integrate with order management systems to offer real-time tracking updates and assist with returns, improving the post-purchase experience.
In-store assistance & contactless shopping
Some retailers use chatbots in-store via kiosks or mobile apps to help customers find products or check inventory, bridging the gap between physical and digital shopping.
Fraud prevention & secure transactions
By integrating with payment gateways and fraud detection tools, chatbots verify transactions and guide customers through secure payment processes to prevent unauthorized purchases.
Benefits of retails chatbots
24/7 availability
Chatbots for retail provide 24/7 assistance, ensuring shoppers get answers anytime. Whether it’s late-night browsing or international customers in different time zones, chatbots eliminate long wait times and improve response rates.
Increased sales & personalization
Retail chatbots analyze customer preferences and past purchases to suggest relevant products and enhance the shopping experience.
A shopper searching for running shoes might receive recommendations for complementary items like socks or fitness trackers, encouraging higher-value purchases.
Cost saving & efficiency
Retailers can cut customer service costs by automating repetitive inquiries like order tracking and product availability. This allows human agents to focus on more complex issues while chatbots handle routine interactions.
Seamless omnichannel experience
Retail chatbots integrate across various platforms, from websites and mobile apps to social media and messaging services. This enables customers to seamlessly continue interactions across channels, ensuring a smooth shopping experience.
Metrics for evaluating retail chatbot success
Containment rate
The containment rate measures the percentage of inquiries resolved by the retail chatbot without human intervention. A high containment rate typically indicates that the retail chatbot is successfully managing routine interactions, reducing the workload on human employees.
It is, however, important to balance automation with smooth escalation for more complex issues.
Conversion rate
This metric tracks the percentage of chatbot interactions that lead to a completed sale or a desired action, like:
- Signing up for a newsletter
- Adding an item to the cart
A high conversion rate indicates that the chatbot is successfully guiding customers through the buying journey and reducing friction in the decision-making process. Ultimately, it reflects the chatbot’s ability to turn engagement into revenue.
Cart abandonment recovery rate
Nearly 70% of online shopping carts are abandoned, making recovery efforts crucial for retailers. This metric tracks how effectively the chatbot re-engages customers who leave before completing a purchase.
A retail chatbot that excels in cart recovery directly contributes to sales growth.
Average order value (AOV) impact
A retail chatbot’s role doesn’t end at driving purchases. It can also increase the value of each transaction.
This metric looks at how chatbot interactions influence AOV by promoting:
- Personalized recommendations
- Upsells
- Product bundles
Customer satisfaction (CSAT) & sentiment analysis
Beyond efficiency, a chatbot for retail must deliver a positive customer experience.
CSAT scores and sentiment analysis help retailers understand how customers perceive chatbot interactions and whether adjustments are needed.
An engaging, helpful chatbot boosts satisfaction, while a frustrating one can drive customers away.
Response time & resolution time
Speed is essential in online shopping.
- Response time evaluates how quickly the retail chatbot replies to inquiries.
- Resolution time measures how long it takes to fully resolve an issue.
This is especially important for time-sensitive inquiries like product availability or order tracking.
Retention & repeat interaction rate
One-time chatbot usage isn’t enough to prove long-term value.
This metric shows how often customers return to engage with the retail chatbot, indicating whether they find it useful beyond an initial interaction. High retention suggests that the chatbot is providing ongoing value in the shopping experience.
Click-through rate (CTR) on promotions & recommendations
Chatbots for retail play a key role in product discovery and promotions.
This metric measures how often customers engage with chatbot-suggested:
- Discounts
- Limited-time offers
- Product recommendations
A high CTR indicates that the chatbot delivers relevant, well-timed promotions.
Live agent handoff rate
While retail chatbots should handle most inquiries, some situations require human assistance. This metric tracks how frequently interactions escalate to a live agent.
A balanced chatbot experience ensures that customers get fast, automated help when possible while seamlessly transferring them to human agents when necessary.
Cost savings & operational efficiency
Retail chatbots impact more than just customer interactions; they also reduce operational costs.
- This metric evaluates how much the chatbot lowers customer support costs by automating repetitive inquiries.
- A well-implemented chatbot allows businesses to scale support without significantly increasing overhead.
Deploy a custom retail chatbot now
‘It is a well-known fact that bringing in technologies in the retail sector is good for customers.’ — N. R. Narayana Murthy, co-founder of Infosys.
And at the heart of it, customer experience is everything.
Botpress is a highly flexible, enterprise-grade chatbot platform designed for retail. Our technology enables businesses to create custom chatbots that enhance customer interactions and drive sales.
Our enhanced security suite ensures that customer data is always protected, and fully controlled by your team.
Start building here. It’s free.