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Chatbot Vs. Live Chat: Which Is Winning the Customer Service Game in Retail?

Simon Johnson, General Manager of Freshworks UK, considers whether chat bots or live chat are delivering the best experience for online customers

According to the latest figures from the Office of National Statistics, online sales now account for 18 per cent of all retail sales in the UK. With this figure set to continue climbing, the pressure is on retailers to ensure a seamless omni-channel experience for customers that generates all-important sales. Indeed, according to PwC’s latest Global Consumer Insights Survey, the less friction in the purchase journey, the more often consumers will shop and the more they’ll spend.

One area that can be a barrier to purchasing is when consumers can’t get the information they need. To counteract this, many leading retailers have begun investing in virtual assistants to deliver on-demand service. And while there has been some initial hesitation around this, primarily around effectiveness and privacy, actually, over half (51%) of consumers say they prefer chatbots over customer support emails, given they are easy to communicate to. Additionally, 63% of Millennials say live chat is their go-to customer service rather than traditional channels, indicating that consumers still value human interaction – even online.

But, how should retailers pick and choose the best solution for their business? Here are a few key considerations:

1. Types of Incoming Questions
Chatbots are a great tool for filtering out basic how-to questions, such as those around a failed payment, identifying payment options and answering shipping questions. They can also be used to up-sell products and services; guiding customers through their shopping venture by suggesting products based on their preferences. However, if customer queries are unique and complicated, opting for a live chat that is handled by trained agents would be a better choice.

2. Customer Demographic
Though over half of Millennials prefer to chat over other modes of communication, this younger demographic is also more accommodating should chatbots make minor errors such as taking them to the wrong product or service. But when you have a customer base that is mainly comprised of older age groups, as some brands may do, mirroring traditional customer service may be the best route, such as opting for a live-chat widget.

3. Frequency of Queries
One of the main reasons live chat has grown in popularity is for the instant responses it delivers, which typically range from between six to 15 seconds. Anything longer than this, and live chat won’t work. For retailers thinking about implementing live chat, it’s essential they maintain a low first call resolution time. There are a number of steps to this. First, make sure at least one agent is available to immediately respond during active hours. Second, use a ticket assigning system to avoid overlap or confusion. Finally, conduct regular product training sessions for agents to cut down the time spent to search for solutions to support issues.

On the other hand, chatbots can also be a great way to drive up first call resolution, since they can handle multiple queries at once and be available round the clock. In fact, studies suggest that chatbots help businesses cut down first call resolution time by answering up to 80% of customer queries.

4. Cost Efficiency
Cost plays an important role when choosing the best online customer service tool. Chatbots can cut down customer costs by 30%, while also having the added benefit of providing 24-hour customer service, helping to address emergency issues no matter the time. Live chat can also reduce costs when deployed over other common channels of support. For example, installing a live chat function to a website can be 50% cheaper than offering a toll-free number, paying the call charges and making it available in a large region. However, when it all boils down, chatbots are one of the most efficient in terms of the value they offer compared to other channels, since they cut down agent onboarding and training costs.

5. Knowledge is Key
According to our 2019 Customer Happiness Benchmark report, having a detailed knowledge base or FAQ section boosts customer satisfaction and allows retailers to be more customer centric. If retailers have a detailed knowledge base of their customers at their disposal, then chatbots are also well-equipped to handle customer queries and offer personalised support on-demand. In addition, retailers can use chatbots to also track frequently opened FAQs and what the customers are searching for, which helps to further define FAQs.

The Best of Both Chat Worlds
Chats – whether bots or live – have grown in popularity among consumers and brands alike because they break down the invisible wall that traditional channels have. Emails and calls require customers to initiate conversations, whereas chat agents can start providing proactive assistance: A simple “May I help you?” can get conversations started and help customers if they’re in need. Additionally, since customer conversations are more nuanced, retailers are able to cut down their response times, boosting customer experience and enticing consumers to come back for repeat purchases.

However, for chats to be truly effective, retailers must ensure that they are easy to locate on the website and communicate with empathy so that consumers feel heard. When it comes to overall customer experience, it’s also important for organisations to transcribe customer chat conversations to give greater insight into user behaviour and provide better support in the future with context.

Ultimately, chats can improve retailers’ bottom line if done well. Not only are they cost-effective compared to traditional channels but research shows that site visitors who engage in chats are twice as likely to convert into businesses and spend 60% more on e-commerce websites. To get the best of both worlds, integrating both chat systems by employing chatbots to deal with basic questions and use live chat to address detailed queries, would create a well-equipped business ecosystem ready to deliver a high-level of customer service that consumers now expect.