Millennials Championing Increased Use of Chatbots in Retail

Survey by customer engagement software provider [24]7 finds that millennials leading adoption of messaging apps, embracing live chat and chatbots, but they still want to talk to humans when needed.

Online shoppers would much rather interact with a chatbot and go through a purchase process without talking to a human being—unless it's absolutely necessary.
We know this because an industry survey released Nov. 14 indicates that chat has surpassed phone and email as the most popular way for consumers to interact with retailers. The study, based on a survey of more than 1,000 consumers, highlights the important role that millennials are playing in this shift.
The research was provided by 16-year-old customer engagement software and services provider [24]7.
Yes, [24]7 -- including the brackets -- is the exact name of the Campbell, Calif.-based company.

Keep It Impersonal, Please
The report, titled "A Retailer's Guide to Chat," finds that 28.9 percent of consumers prefer to interact with retailers through online chat (25.8 percent) or messaging apps (3.1 percent) while making a purchase. Together, these chat tools are now more popular than both phone (28.7 percent) and email (27 percent) as the preferred method of interaction with retailers.
This has been a trend for at least the last year, especially among millennials, who had opted for chat as their first choice for online interaction starting about seven years ago.
Here are some quick statistics from the survey concerning the emergence of chatbots and use of messaging apps in retail:
1. Nearly one-third of consumers (28.9 percent) prefer chat tools over phone (28.7 percent) or email (27 percent) for interacting with retailers (jumping to 37 percent for millennials)
2. Two out of 5 consumers are open to interacting with a chatbot in a retail scenario.
3. Nine percent of millennials prefer to always interact with a robot instead of a human.
4. Nearly 40 percent of millennials are open to interacting with a company through a messaging app
5. One in 5 consumers are most excited to receive instant order updates via a messaging app, over receiving other retail tech offerings, such as immersive virtual experiences and drone delivery

Chat Becoming Big for Retailers, Too

As consumers use more messaging apps in their personal lives, the study also shows that chat is emerging as a primary communication channel for retailers.
"Messaging apps are incredibly valuable for retailers looking to enhance relationships with consumers, particularly millennials," [24]7 Chief Marketing Officer Scott Horn said. "With chat technology evolving, it's becoming a much more efficient and engaging customer-service channel."
The growing use of messaging apps by businesses has the potential to further accelerate the trend toward chat as a primary way to communicate with retailers. In the survey, 26 percent of consumers said they're open to interacting with a company through a messaging app such as Facebook Messenger or WhatsApp -- and the number jumps to 39 percent for millennials.
Half of all consumers see benefits to interacting with retailers through a messaging app, with the biggest advantages being convenience, access to conversation history and ease of use, Horn said. When asked to weigh which retail technology would most improve their shopping experience, 21 percent of respondents said receiving proactive order updates through messaging apps would be most useful, outranking other trends such as virtual reality, drone delivery and mobile wallets.

AI Everywhere is Behind All of This
Messaging apps aren't the only new technology causing increased use of chat as a customer-service channel. Nearly four out of 10 consumers (39 percent) say they're willing to have automated conversations with chatbots, which have exploded this year as artificial intelligence has gone mainstream.

Interestingly, nearly one in 10 millennials (9 percent) prefers to always interact with a robot instead of a human while interacting with a retailer online.
That's not to say that humans don't still play an important role in the customer experience. Almost two-thirds of consumers (62 percent) prefer to interact with a human over a robot at all times, and 13 percent of shoppers have no problem talking to a chatbot as long as they can easily escalate the conversation to a human representative.
In addition, consumers' preferred method of interaction with retailers shifts to phone (40 percent) when attempting to resolve an issue post-purchase, while chat tools drop in popularity (21 percent).
"The most effective uses of this technology will provide effortless transitions to human agents for unique or complex scenarios," Horn said. "Consumers still value a human touch in their interactions with retailers, even as AI improves their customer experience."
The study is based on a survey of 1,007 U.S. consumers that was conducted online Sept. 27-29, 2016. To download the full report, go here (PDF format).

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 15 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...