The cost saving of replacing customer service representatives with chatbots will be $11.5 billion annually for all businesses in the retail, healthcare and banking sectors by 2023, according to research from Juniper.
Retail will lead the chatbot push with Juniper estimating that by 2023 over 70 per cent of the chatbots accessed will be retail based and chatbot ecommerce transactions will reach $112 billion.
The Juniper whitepaper, How Chatbots will Transform the Retail Industry, found the retail, healthcare and banking sectors would collectively save 2.5 billion hours by 2023 by using chatbots, but retail stood to be the big winner because of less regulation and consumers being relatively more comfortable interacting online.
The $11 billion cost savings, are a considerable jump from the potential current levels estimated by Juniper – $6 billion in 2018. The research found actual current cost savings are $48.3 million, suggesting adoption will continue to be a challenge.
However, the Juniper research authors argue the potential cost savings of chatbots is increasing.
“Chatbots hold the potential one day to replace the tasks of many human workers with AI programs sophisticated enough to hold fluent conversations with human users,” the white paper authors wrote.
While the immediate cost savings of a chatbot over a customer service representative are apparent, the research also found “huge potential” for the monetisation of chatbots. Chatbots have the ability to automate up-selling and abandoned cart programs.
According to the research, at the Facebook messenger bot can reach 90 per cent of the customers who abandon their carts and has a 10 per cent success in those reminders ending in sales. Those benefits come in addition to the traditional roles of a chatbot like answering customer queries.
The retail benefit
Chatbots provides a particular benefit for retailers, provided they establish and maintain consumer trust. In order to fully leverage chatbots, they must be “fed” with consumer data, something only possible if consumers trust a retailer enough to provide their personal information.
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Retailers also operate in a considerably less regulated industry compared to banking and healthcare. And while retail chatbots are bound by several regulations regarding consumer protection, Juniper researchers see a clear advantage for the sector.
“Lenient regulation and users which are more relaxed using technology in the retail sector, allows scope to use alternative techniques to build trust as long as mistakes are not made.”