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How E-commerce Businesses Can Improve Sales and Retention with Chatbots

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Online shopping is the new normal. 

People are on the internet longer than they are outside. 

So, it makes perfect sense for them to purchase what they want through the channels they’re on. Such as apps, emails and online sales social media platforms. 

And, how do people get there? Through e-commerce chatbots. 

What are e-commerce chatbots?

Chatbots are computer programs that imitate human speech to carry on a conversation with a real person. E-commerce chatbots are conversational bots that connect buyers with sellers through conversations. Chatbots make it easy for companies to instantly communicate with their customers and resolve issues on the digital platforms that they’re on. 

What can an e-commerce chatbot do?

  • Bring in more customers

Chatbots make communications with customers easy and frictionless. When you let your bot lead the front line efforts, you establish a connection quickly with your customers. 

When your customers click on an ad you’ve posted or a CTA on your website or social channels, let that action trigger a bot.

The bot would then answer the customer’s preliminary queries right when their interest in your brand has piqued, which could result in positive experiences for your customers, for you and ultimately culminate in a purchase. 

Customers would also share these positive experiences with other people, which means high possibilities for more purchases and repeat purchases from the customers themselves. 

  • Increase conversions

A conversion happens when a customer is convinced that he/she needs your product. 

Chatbots can drive those decisions in several ways. 

Usually, personalization of offerings is based on factors like area, order history, browsing history and so on. 


But, what makes a customer like a particular item? 

Understanding these exchanges, the ones that go beyond trackable actions, are what chatbots are great for.

Information from these variables in conversations will let the chatbot analyze which stage the customer is in the journey and direct flows accordingly, enhancing the experience and leading to a purchase.

Similarly, purchase suggestions for upselling or cross-selling is another feature that bots can pull off quite easily. By combining previously collected customer data and customer actions data, chatbots can create personalized communication flows with customers, taking them to a purchase.

A chatbot can also be the quick help guide your customers need for immediate answers to their queries. Solutions abound, and if you cannot help at the right time, your customer will go elsewhere for a solution. So, let your chatbot be a quick help guide to your customers as they make purchase decisions.

Beyond doubt, experience influences decision making. With AR, customers can experience living with your product, making decision-making super quick and increasing chances for conversion. 

Eliminating the need for searching a huge load of options to find the perfect one – chatbots can help here too. Chatbots can help customers quickly find what they are looking for and close the purchase. 

Chatbots can also help bring back lost customers. Cart abandonments happen all the time and chatbots can be a great way to engage with those customers and bring them back to the sales funnel.


  • Improve retention and engagement with existing customers

Transactional messages sent at the right time on a convenient platform can improve retention by a huge percentage. Pushing these messages on a chatbot can open up possibilities of more conversations that go beyond the transactional message.

Post-sales check-ins through your chatbot can be a great way to share “how-to” instructions that customers need while setting up the product. Chatbots can prompt customers to provide reviews or ratings, and if customers share a review, the bot can directly post it on social media. Chabots can even ask customers to recommend your products to others.

You can even push product life-cycle offers and reminders when you’re notified that the consumption cycle of your product is nearing completion. It has been observed that such reminders serve as a highly efficient source of revenue with about 50%-60% CTR. You can even pair that restock message with subscription offers to add more value.

While engaging with customers you can even ask them to refer your product to their friends as well as sign up for your loyalty program. Referral leads have high possibilities of being a qualified lead and engaging with them would be a lot easier since the chatbot would already have a lot of information on them making communication natural and interest generation obvious.


  • Improve returns on investment

Engaging and helpful bots will draw customers to your brand. 

For example, if your chatbot is helping your customers through the entire length of the customers’ journey – from consideration to decision-making to post-purchase – with helpful content like comparisons with alternatives, features that could help with the users specific needs, product unboxing or feature walk-through videos – this could improve the engagement levels together with the helpfulness of your bot and would result in possible sales conversions. 

However, to monitor these metrics closely, it’s important to set up robust analytics monitoring that tracks the bot’s engagement – its conversations and total users. 


  • Enhance security and trust

Chabots that have end-to-end encryption stops anyone other than the sender and the recipient from viewing the content of the message. 

Chat services like WhatsApp and large tech companies have been keen to guarantee the security of such encryption to their users. This is one way chatbots can ensure security and trust among customers. 

Apart from encryption, authentication and authorization is another method by which chatbots and ensure security in communications. With measures like biometric authentication, two-factor authentication, user ID and authentication timeouts chatbots can offer the most effective defensive measures. 

E-commerce chatbot examples

To understand what an efficient chatbot looks like, let’s look at some examples of the most helpful chatbots in the e-commerce space.


Sephora is a leader in global beauty retail, teaching and inspiring clients to play in the world of beauty. The brand has been changing the face of prestige cosmetics since the early 1970s.

Sephora launched the chatbot platform to deliver an immersive retail experience for its online customers. It has enabled shoppers to interact and learn more about the brand. Sephora partnered with Facebook and Kik to launch the platforms. 

The bots have been successful in deeply engaging its customers. The booking conversion rates via the chatbot has been 11% more when compared with other channels of booking. 



Burberry is a famous British luxury fashion brand that has embraced chatbots as a platform to connect with its customers.

Burberry launched its chatbot in 2016, and has been using the platform as a powerful tool for engaging with their customers. 

Originally envisioned as a platform for sharing behind-the-scenes looks of their collections and allowing customers shop for exclusive items from shows, the digital-savvy brand went a step ahead to use their chatbot to send push notifications to those with recent interactions with the bot, facilitate live chats with a Burberry consultant and even an option to book an Uber to take customers to their stores. 



Ebay is a multinational e-commerce brand that facilitates consumer-to-consumer and business-to-consumer sales via the website. 

Ebay has a virtual personal shopping assistant that helps its users find the items they want in the price they want. Users have to describe what they’re looking for, to which the chatbot will ask certain questions to find the perfect fit and color for the user. 

It was found that users were three times more likely to answer questions about the product they’re looking for via the chatbot as compared with methods like browsing the inventory to find it



H&M is a multinational clothing retail company known for its fast-fashion clothing for all. 

H&M has developed an interactive bot on the Kik platform to recommend preference-based products. It simply asks its users a select the clothing that they like and pick personal favorite styles. 

Based on your answers on photo options and questions, the bot will create a comprehensive profile of the style that the user likes. You can even view styles other users have created, making the platform double as a fashion advisor and a public forum to rate styles.


Pizza hut

Pizza hut is a restaurant chain known for its Italian American cuisine that includes pizzas and pastas.

Customers can now order pizzas by chatting with Pizza hut on Facebook or Twitter messenger. Customers can even have their questions answered and get information about the latest offers on their chat box. 

Pizza hut has been immensely successful in enabling such a simple channel for their sales and since pizzas are very often an impulse buy, this bot has been a valuable asset to improve sales. 

E-commerce chatbots are popular

Digitization has made it easy for brands to connect with their customers. Among all the processes made easy, the convenience of buying something perfect by making conversation is simply revolutionary.

There are other reasons for the rising popularity of chatbots in e-commerce:

  • More people are on messenger apps: Almost all of your consumers are on four major messaging platforms: WhatsApp, Facebook Messenger, WeChat and Viberr. 

  Using a chatbot can put you where your customers are, bringing you more visibility and more increased purchase opportunity.

  • People like the ease of shopping via chat: Customers like to interact with brands through chat. 
    • 47% users are okay with purchasing the things they want through a bot – Hubspot
    • 71% users don’t mind getting customer support help via a messaging app – Hubspot
    • On average, customers would spend more than $55 on a purchase via a chatbot – Observer
  • Business are increasingly using bots: More businesses are using bots because they’ve proven to support buyers efficiently. This is a defining aspect of business survival today and reason businesses must not think twice about whether they need a bot for their business.

E-commerce chatbot use cases 

Now that we know why chatbots are popular in e-commerce, here are some of common use cases for e-commerce businesses.


Top-of-funnel conversions

Offering highly personalized experiences to customers is one of the most successful use cases of a chatbot. 

Chatbots can answer all your product-related questions providing support to customers who have questions or hesitations while at checkout. 

They can even up-sell and cross-sell products, offer discount codes and so on, much like a store that encourages customers to come back for a purchase. 

Boost marketing strategies

Building a chatbot and programming it to push ads and messaging based on your marketing emails, can be how you personalize marketing based on their personas. 

They can also analyze data points and trends, giving businesses the information they need to capitalize on.

Manage your online store

Chatbots can keep track for inventory, letting you know what’s in and out of stock. 

They can also let end customers know when a particular item is restocked. 

Join in human conversations to boost sales

Learning customers’ online behavior with audience insights tools can be a source of information to understand the customer behavior and help chatbots to push sales ahead.


Reduce customer service costs

Chatbots are a cost-efficient way of supporting your customers. It provides excellent customer service, tracks customer contact histories, and gives people immediate as well as non-urgent support. 

And most times, this functionality is all that is required of the chatbot.


So, how are e-commerce chatbots doing this?


In a short period of time, chatbots have taken over front-line roles in customer interaction. We’ve discussed how they’ve become so popular, but it’s equally important to know how they work.

Building your e-commerce chatbot

How do these magnificent programs work?

Rule-based chatbots

These chatbots work on a set of rules. Rule-based chatbots only respond to specific commands and cannot interpret the user’s language.  

Rule-based chatbots are great if customers are expected to have only a few simple queries that needs limited information. 

AI chatbots

These chatbots leverage machine learning to answer a wide range of questions and requests from users. 

Instead of responding to specific questions alone, AI chatbots can understand users’ natural language, and respond to questions appropriately. 


What are different platforms on which you can build an e-commerce chatbot?

There are multiple platforms. Some of them are fairly easy to set up with no coding required and others would need intermediate to advanced coding skills. 

Once you’ve evaluated the functionality in your process for which you need the bot’s support, you can go for an option that supports the need with features and option to integrate with programs that provide add-on functionalities. 


  • Facebook Messenger: Facebook Messenger offers a Messenger platform to build bots to publish on Messenger. 

You’d need basic to advanced coding skills, but it comes with a drag-and-drop design kit for the user interface. 

It is free to use. 

  • Chatfuel: Chatfuel is a leading platform for Facebook Messenger that requires no coding skills and has an inbuilt NLP (through facebook) and claims 46% for Facebook Messenger chatbots. 

It’s best for merchants who want a mostly free Facebook Messenger that is integrated with remarketing.

  • Dialogflow: Dialogflow runs on Google’s Cloud Platform and can scale to hundreds of millions of users, and integrate with Google Assistant, Alexa, Facebook Messenger, Twitter, Telegram, Slack, Skype and more. 

Though Dialogflow is comparatively complex to develop, developer resources would be able to fill that gap and it can support multi-platform publishing, voice capabilities and has SDKs for internet of things devices. 

  • Kik: Kik offers a bot dashboard on which you can build bots to publish on their messaging app. 

A user would need intermediate to advanced coding skills to build a bot on their dashboard. 

The platform does not offer coding support, but it is free to use and you can launch your app on the Kick Bot Shop. 

Tracking analytics of your e-commerce chatbot

Once you’ve decided on which bot to set up, you’ll need to look at options to track data that delivers intelligent information that helps the bot in personalizing messages and also letting you take informed business decisions. 

While most platforms would have its own tracking systems to help the user with basic-level insights, there are other third-party platforms that provide more advanced into the performance of the chatbot. 

Some of these platforms are built just for tracking metrics and can be used to track the bot’s performance across multiple mediums. 



Dashbot is one the widely-known chatbot analytics tracking platforms and lets you track a wide range of metrics like retention, engagement conversational analytics and user behavior. 

It also lets you use bot-specific metrics for a deeper understanding of what your users are talking about. 

Dashbot is great to understand the kind of conversations your users are having. 



Chatbase is Google’s chatbot analytics tool that offers easy optimization options for your existing chatbot. 

Such as the ability for bot builders to understand what works to increase customer conversions, increase the bot’s accuracy and create better user experiences.

Using this tool, developers can track metrics like active users, sessions and user retention.  



Botanalytics is great tool for tracking individual users. 

It displays the user lifecycle, charting number of conversations, date and length of conversations per user. It shows metrics like the best time for re-engagement with users, best conversation phrases and so on. 

Botanalytics is great for tracking a user’s lifecycle.

These are the most popular among the plethora of platforms that track advanced metrics which help you get an in-depth view into what your customers want and even show businesses how to build those winning conversations. Choose the tools and platforms that work for you and get the show up and running. 

E-commerce chatbots: a new normal

There aren’t really clear best practices for chatbots and businesses must decide how they are going to tread this technology and implement it for big wins. 

Understanding where your customers are, what conversations they’re engaging in, placing your bot as an agent in those channels to add value to those conversations is the way ahead. 

So, get the bot that best fits perfectly with your business needs, address customer needs and build the winning framework. Then see how your customers naturally come to do business with your brand.