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How chatbots can build ecommerce margins

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It’s fair enough to argue that the use of chatbots in ecommerce is one of those innovations that is open to hype.

Like much of artificial intelligence, the bots offer a lot of potential and significant uncertainty. Retail executives responsible for determining the course of their business’ technology strategy have been cautious when it comes to turning over — or more accurately, supplementing — their customer support and service with machines.

But Joe Beninato, founder and CEO of San Francisco commerce chatbot company Banter, has a story for them. It’s a story about how chatbots, properly deployed, can preserve precious profit margin in a time when retailers’ margins are under tremendous pressure. I met up with Beninato at, where Banter was featured as one of the young companies in the show’s TechLab exhibit area.

I wanted to talk to him about the ways artificial intelligence might be better used in ecommerce after a consumer has clicked on the buy button. My take was that a lot of the focus on artificial intelligence in ecommerce revolves around marketing and merchandising — getting consumers to click the buy button, in other words. 

Beninato zeroed in on one example that relies on technology from Banter, which essentially allows consumers to use messaging apps to communicate with retailers. He lays it out in the video below.



The margin case is a strong one in a time when retailers are being battered by what appears to be an ever-increasing need to offer discounts and promotions to a consumer base that has come to expect a good deal. But as compelling as Beninato’s example is, it seems that he and others pushing the potential of chatbots have a lot of convincing to do.

A recent survey by automation platform Linc found that only 7.7 percent of retailers say that artificial intelligence plays a regular role in customer service today, according to eMarketer’s “Artificial Intelligence for Marketers 2018: Finding Value Beyond the Hype.” A full 56 percent said they weren’t using AI for customer service at all. The rest said they were experimenting or weren’t sure whether they were using AI. 

In a second report, “Key Trends in Ecommerce Roundup 2017,” eMarketer said that only 6 percent of retail executives told IRS News and International Data Corporation that they had chatbots up and running. Another 5 percent said they were experimenting with the technology. And 56 percent said they had no intention of using chatbots, according to a survey by IDC. 

But there is hope for Beninato and others who are selling the technology. In a survey of business professionals around the world, IDC found that 75 percent of companies that had adopted some form of artificial intelligence were using or planned to use chatbots for customer service or to help customers find products. Among the companies that had not adopted artificial intelligence, the percentage that planned to deploy chatbots fell to 47 percent. 

The IDC figures sound a bit like a glass-half-full, glass-half-empty story for those developing and selling chatbot technology.

Forward-thinking retail executives who already have embraced artificial intelligence appear eager to embrace chatbots. But there is a significant segment of laggards who are not yet chatbot fans. They will need to be convinced. That convincing may come as they find success deploying other forms of artificial intelligence in other parts of their businesses. 

Once they see what AI can do for marketing and merchandising, for instance, their embrace of chatbots for customer service might be close behind. 

Photo by iStock

Contact Mike Cassidy at [email protected]; follow him on Twitter at @mikecassidy.





Mike Cassidy

Mike Cassidy

Mike is the head of storytelling at Signifyd. A former journalist and a retail geek, he covers ecommerce and the way technology is transforming digital commerce. Contact him at [email protected].