Chatbots for Retail: Exploring Powerful Chatbot Use Cases in 2024

Retail & Ecommerce April 18 2024

Chatbots for Retail

As retail continues to undergo a rapid technological evolution, businesses are harnessing the potential of artificial intelligence (AI) to drive innovation and magnify revenue streams. Retail chatbots have emerged as pivotal tools in this digital revolution by facilitating seamless interactions between consumers and brands.  

Beyond their role in customer engagement, chatbots are proving instrumental in reshaping key performance metrics like Average Order Value (AOV) and Lifetime Value (LTV). Through personalized recommendations and enhanced customer experiences, these intelligent personal assistants are not only boosting conversion rates but also fostering stronger relationships between retailers and consumers. 

With chatbots already being so prevalent in retail, let’s consider the type of impacts we can expect from them: 

  • Around 40 percent of USA-based consumers state that they have used chatbots to engage with the retail industry. (Source: Statista)   
  • Worldwide retail spending on chatbots is set to soar from $12 billion in 2023 to $72 billion by 2028. (Source: Emarketer)   
  • By 2027, chatbots will become the primary customer service channel for roughly a quarter of organizations. (Source: Gartner)

Now let’s explore what a retail chatbot is and the top five use cases for chatbots and how they are redefining the retail landscape.

What is a Retail Chatbot?

A chatbot is a highly automated shopping assistant engineered to simulate human conversation and improve the customer and employee experience. Many of these new chatbots are partially or fully AI driven.  

Through interactions with users in text or voice-based channels, they handle customer inquiries, offer product recommendations, distribute promotional codes, and even facilitate sales—all without the need for human intervention.  


Use Cases of Chatbots for Retail 

Retail chatbots have the potential to perform various value-adding tasks that can create a positive impact on consumers’ buying decisions. Here are a few of the versatile use cases that contribute to improving operational efficiency and support shoppers in resolving queries.  

1. Post-Sale Customer Support

A product’s value goes beyond sales figures; post-sale support is equally important. Here is how a fashion e-commerce retailer is utilizing a chatbot for post-purchase assistance: 


These convenient bots can provide 24/7 support to address post-purchase queries like,

  • Order Status: Customers can track their orders and get answers to “Where is my package?” inquires 
  • Returns and Exchanges: Customers can utilize chatbots for easy returns and exchanges, simplifying the process while minimizing hurdles 
  • Collect Feedback: Retail chatbots prompt ratings, ask targeted questions, and encourage open-ended responses to aid retailers in gathering real-time insights, boost response rates, and gain a deeper understanding of shoppers 
  • Product Troubleshooting: They offer step-by-step instructions, FAQs, or even connect users with relevant knowledge base articles to help them solve common product issues 
  • Warranty Claims: Chatbots can collect initial product data and direct customers to the appropriate resources by streamlining the warranty claim process 
  • Connecting with Agents: It reduces the shoppers’ dependency on customer service agents, freeing them up to address more complex issues

The above-mentioned uses can lead to long-term trust, consumer loyalty, repeat purchases, and higher LTV (Lifetime Value). 


2. 24/7 Answer Agent

One of the most valuable features of retail chatbots is their ability to answer customer questions around the clock. This makes them a highly valuable investment for retailers. 

So, what can chatbots answer? 

  • Almost anything and everything consumers wish for! Chatbots handle a wide range of inquiries, from product details and pricing to personalized recommendations and account management. 
  • Need to update your password or resolve a billing issue? Chatbots can handle that too! Unlike traditional customer service, chatbots offer instant answers, even at 2 am or 2 pm. This convenience keeps your customers satisfied and engaged.  
  • The chatbot can even direct users to published articles for in-depth information on certain issues. This not only saves the customers time and effort but also enhances the customer experience.

Ready to Fire-Up Your Retail Excellence?  

3. Automate Sales

AI-powered retail chatbots assist sales teams in automating tasks, allowing them to concentrate on more complex issues. 

Here’s how chatbots can enhance the sales process: 

  • Act as a lead-generating machine by collecting leads and qualifying them anytime 
  • Personalized selling has become the norm with chatbots! They can recommend products based on past purchases and facilitate a holistic customer journey 
  • Schedule appointments, generate quotes, prompt users to the next step of the purchase process, and complete basic order processing 

Here is how an audio and wearables company is utilizing chatbots for automating sales: 


4. Store Locator  

Don’t let your omnichannel business wear you out!  

With a retail chatbot, you can help your prospective clients with virtual shopping and help them buy from your brick-and-mortar store. Chatbots provide full details of nearby store locations, opening and closing hours, and proper directions to persuade your shoppers’ buying journey.  

It saves you from wasting time, effort, and resources on answering these repetitive queries. Your staff can look after more complex interactions while doubling their productivity with the integration of intelligent chatbots. 

5. Promotions and Discounts

These human-friendly virtual assistants let you offer exclusive deals according to your consumers’ shopping habits. Here are its offerings: 

  • Exclusive Offers: Chatbots can provide unique discount codes or promotions only accessible through chat interactions 
  • Targeted Deals: Based on user preferences, chatbots can suggest relevant discounts on products or services they are likely interested in 
  • Automated Reminders: Chatbots can remind users about ongoing sales or flash deals, prompting them to take advantage of the discounts 
  • Interactive Contests: Run trivia contests or polls through chatbots with discount codes as prizes, increasing engagement, and brand awareness 
  • Giveaway Entry: People can enter giveaways directly through the chatbot by following instructions like answering a question, completing a microtask, or sharing contact information 
  • Interactive quizzes: Design engaging quizzes with multiple-choice or open-ended questions related to your brand or industry 

For example, Pizza Hut’s chatbot serves as a valuable marketing tool. It provides customers with timely updates on discounts, promotions, coupon codes, and special offers. By leveraging customer data and purchase history, their chatbot can deliver personalized recommendations on different menu items as well.  

In short, the strategic usage of chatbots for marketing allows you to create a more unique and personalized customer experience leading to increased brand loyalty. 


Wrapping Up

In the next few years, you can expect chatbots for retail to feel more human-like and bring a fundamental transformation in the way retailers’ approach and interact with consumers.  

To sum up, this modern technology can move the needle for your retail business with its lucrative outputs such as higher conversion rate, higher AOV (Average Order Value), reduction in cost of customer acquisition, more sales, forging personalized connections, and gaining substantial revenue. 

Ready to discover how a retail chatbot can streamline customer queries and enhance efficiency for your retail business? 

If yes, then you need the assistance of an expert! With more than 20 years of expertise in AI, data, and digital innovation; Rysun Labs is the go-to retail expert for developing cutting edge AI and data products such as chatbots.  

Whether you’re a small boutique or a multi-store retailer, our futuristic chatbot solution can stay true to your unique requirements. 

Discover how chatbots can bring the best shopping experience to your retail store.


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