Retail chatbots: The challenges and opportunities of conversational commerce

Abstract

Artificial intelligence (AI) refers to the ability of machines and/or robots to perform intellectual tasks like humans. AI technologies are widely used to support different activities in retail operations. In particular, retail firms have adopted chatbots to interact with consumers through various communication channels, including social media, live chat, SMS etc. In addition, chatbots have been used to support conversational commerce in which companies automate conversations with consumers about product selection and assist consumers to make informed choices throughout the shopping and decision-making processes. To investigate the state of the art of chatbots in the retail industry, this article qualitatively studies commercial chatbots from 40 retail firms. The study finds that chatbots assist consumers in completing general tasks, such as searching information, purchasing products, making reservations and collecting feedback. Chatbots are good enough to perform such general tasks, although they have limited capability with respect to processing and interpreting natural language. Chatbots also provide menus to address the most predominant issues encountered by consumers while running at a lower operational cost. It is anticipated that chatbots will gain popularity in the retail industry, and consumers would benefit from chatbots with improved features like more accurate predictions and better product recommendations.