It’s good to know that the retail industry has undergone a drastic change over the past decade. But the ultimate transformation happened in the last five years. Retail chatbots came in. Now, the e-commerce industry is no longer restricted to just product listing and categorization. Instead, the e-commerce sector now welcomes an immersive customer approach where customer experience is prioritized over anything else.
With the integration of artificial intelligence and automation technologies, retail chatbots leverage several tools to streamline your retail business’s operations. Voila! Your human resources of the retail business get more time to invest in other business activities.
You must be wondering about the success of the retail chatbots or whether your retail customers will accept the chatbots. To clear your confusion, let’s take a look at some data that proves the worth of retail chatbots.
- In a report, PwC mentioned that more than 60% believe AI can reduce the time it takes to get answers while still being highly tailored to their preferences. 38% believe it can offer a “superior one-to-one personalized experience.”
- In a press release from Gartner, the researchers noted that chatbots resolved 58% of order returns and cancellations.
- In an article by Innovative Education and Scientific Research Foundation, researchers noted that AI systems like chatbots improve customer satisfaction by 20% and boost sales by 15%.
Still confused about the effectiveness of retail chatbots. This comprehensive blog will give you a detailed account of retail chatbots, their types, use cases, benefits and more. So, let’s dig in.
What are Retail Chatbots?
As you can understand from its name, retail chatbots are AI-powered virtual assistants that automate and regulate retail workflow. These virtual tools function exactly like human agents, provided you train them accordingly. They can interact with human customers and help them resolve queries in innumerable ways. These retail chatbots create a digital-first shopping experience to develop a better relationship with the customers.
Generally, these retail chatbots are featured with an adequate combination of technologies like NLP or Natural Language Processing, AI or artificial intelligence and ML or machine learning to ensure that they understand human language and dialect with ease. What’s even more interesting is these chatbots figure out the intent and sentiments of the customers just like humans. Sounds impossible? Let’s consider an example.
A few days back, I was checking the online shopping website named GoFynd. I was looking for some summer dresses that I could wear to any morning event. I asked this to the chatbot (Fify): “Please suggest some summer dresses.” The chatbot (developed by Copilot.Live) wanted more specifications and replied: “Could you please tell me the occasion?” I told the chatbot that I was looking for some summer dresses that could be worn for morning occasions. Soon, the chatbot came up with at least ten products that suited the occasion, my style and my physique.
Types of Retail Chatbots
Not all customers of the retail industry have similar requirements. Further, the retail industry is also vast, spread across various niches. This means you cannot expect one particular kind of chatbot to work for all retail businesses. Considering this diversification of the retail chatbot industry, here are the types of retail chatbots you can pay attention to:
1. Basic/Rule-based chatbots
The basic or rule-based chatbots are majorly beneficial for customer service agents as their primary task is to handle the workload. Since these chatbots are generic, they follow certain predefined rules. These chatbots can only handle simple customer queries and shopping transactions. To provide prompt services to customers, these chatbots offer 24/7 support with accurate answers and a positive shopping experience.
2. AI-driven chatbots
These chatbots are fully powered with artificial intelligence and machine learning algorithms. Besides, these chatbots are integrated with NLP or natural language processing so that they can understand human language and answer their queries like a human. Based on the previous behavior of the customers, these AI-driven chatbots offer product recommendations.
3. Virtual assistants
You must have come across assistants in person in several retail stores. Virtual shopping assistants are no less than that. These virtual assistants will guide you throughout your entire shopping experience. Besides, these chatbots help customers with detailed product information even before making a purchase. They also suggest products based on your preference.
4. Social media chatbots
Now, social media is the new buzzword. It's the talk of the town. So, the chatbot you choose for your retail business must be integrated into the messaging platforms of social media channels. Right from initiating conversations to answering queries and assisting them throughout the shopping journey, social media chatbots can do them all while increasing the engagement of shoppers.
Top 10 Use Cases of Retail Chatbots in 2025
As mentioned earlier, retail chatbots are not just for replying to customer queries. There’s even more. Already, 80% of retailers and e-commerce enterprises have implemented chatbots in their business.
By 2027, it is expected that these chatbots will become the principal customer care channel for more than a quarter. This statistical data is enough to highlight the transformation that these AI retail chatbots can bring in the future.
Let’s check out some of the beneficial use cases of retail chatbots in 2025:
1. FAQ automation
Now, the first hand support for all retail businesses is these retail chatbots. Every customer has a different set of queries regarding different products or the entire shopping experience. None of the human agents have ample time to sit back and reply to all customers. This is where a retail chatbot comes into play.
Instead of making customers read the long FAQ pages or wait for responses to be provided by human agents, these retail chatbots can answer promptly within a few minutes. Due to the integration of NLP in these chatbots, they understand complex human queries and escalate a customer to a human agent when required.
2. Product discovery assistance
Think of the massive product catalog your retail business has. What if your customers do not get the actual products they are looking for, even though your retail online platform has the same listed on the website? Well, this leads to losing customers and affects your sales poorly.
To combat this issue, the retail chatbots help your customers find products according to their choices and preferences. Since these chatbots are featured with machine learning and artificial intelligence, they record the previous browsing and purchase history of the customers and suggest products accordingly. Besides, the retail chatbots can also understand the intent of the customers to suggest relevant products.
3. Transaction and payment support
Your customers will return to you or refer you only when they experience a smooth checkout process. Often, you must have come across customers who complain of struggling with payment gateways. Either they fail to pay the correct way or do not make a payment even after liking a product due to security issues.
However, with the help of retail chatbots, your customers will never face this issue. Right from initiating payment links to resolving issues regarding payments, these retail chatbots are featured with robust and secure payment gateways that promise a frictionless monetary transaction. This automatically builds trust and loyalty in the minds of the customers.
4. Order/delivery tracking
What does a customer expect from a retail business after ordering some products? Well, if you consider the psychology of customers, most of them are quite excited to receive the products as soon as possible. They look for some tracking method to be relieved about the steady and secure delivery of the products.
The retail chatbots help customers track an order without even having to navigate to a different tracking page. Yes, these chatbots offer that simple and smooth customer experience. When your customer has some delivery-related queries, these retail chatbots will take care of those without any human intervention. This builds trust in the minds of the customers and reduces post-purchase anxiety.
5. Promotions and campaigns
Now that your retail business’s products are ready, it’s time to promote your business to ensure that you reach out to your target audience with ease. Indeed, it gets challenging for human agents to take care of marketing and promotional campaigns of your retail business. Besides, the marketing campaigns for retail businesses do not work on the policy of ‘one-size-fits-all.’
This is where you need a customized retail chatbot. Once your marketing campaign is ready, these chatbots can promote them by sending them to customers and attracting them. The chatbots send notifications on sales, discounts, coupons, limited offers and flash deals. This creates a good rapport between the customer and your retail brand.
6. Customer feedback collection
Indeed, there are several retail businesses with the same products as yours. So, how do you know whether your customers are preferring you over your competitors? One of the finest ways to know this is to make use of chatbots to collect customer feedback. Here, the retail chatbots initiate conversations to find out whether your customer is satisfied.
For example, last week, after purchasing at an online e-commerce retail store, the chatbot initiated a conversation to find out about my experience. The chatbot asked me to rate the product, its delivery and the overall shopping experience. You will also come across retail chatbots asking you to participate in polls and send emojis.
7. Appointment booking
Most customers complain about booking appointments to specific retail sectors like wellness, fashion, etc. Understand that your customers are busy. They do not have the leisure time to come to a respective retail store physically and book an appointment. Instead, if you can offer them a solution that helps them book appointments right from the comfort of their homes, they’d be more than happy.
This is why your retail business needs an AI-based chatbot. In place of a human agent, the chatbot will connect with the customer and help him book an appointment. After confirming the booking, the chatbot will notify of available time slots, and interact with customers for direct consultation.
8. Loyalty program support
You must have tried a lot of ways to retain your customers' attention. Unfortunately, you failed. As a result, you watch your competitors grow. First of all, if you don’t speak about the loyal and support programs to your customers, they won’t know. Secondly, your human resources in your retail business do not have the time to approach customers personally.
This is where you need retail chatbots. On behalf of your human agents, these retail chatbots can be integrated with your retail business’s CRM system. This helps your customers to check their loyalty points, the status of their memberships and redeem rewards. Instead of calling and bothering customers personally, the chatbots send this information via chats.
9. Personalized shopping recommendations
Undoubtedly, every customer has different kinds of shopping requirements. If retail businesses have to capture the market, they need to offer hyper-personalization. Your human agents can't cater to all customer's personalized shopping experiences. That’s why retail customers have taken up this responsibility.
These AI-integrated chatbots make use of NLP and machine learning to understand the sentiments and intent of your customers and recommend products to them accordingly. Besides, the chatbot keeps track of all the browsing histories of the customers and recommends products.
10. Cart abandonment recovery
As owners of retail businesses, the least that you would want your customers to do is to leave products in the cart and abandon your e-commerce site. This means either your customers are not interested in your products anymore or they have found a better retail platform. To ensure that your customers complete a purchase, the retail chatbots play a pivotal role.
The moment a customer exits your e-commerce site, these AI chatbots detect it instantly. Soon, they send a follow-up message. The chatbot also lures the customer with discounts, coupon codes, and alternative items. Generally, the chatbot sends such reminders via WhatsApp, emails or normal messages.
Benefits of Using Chatbots in Retail
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Once you use chatbots in the retail industry, it is sure to save your time and expenses as you don’t need to employ human agents to take care of customer relationships. This is one of the many benefits of retail chatbots, and there’s more.
In a study titled ‘Issues and Perspectives in Business and Social Sciences,’ 67% of retail businesses use chatbots to increase sales. Let’s take a look at the benefits of using retail chatbots here:
1. 24/7 support: Automate queries
What makes retail chatbots a perfect choice for businesses is their 24/7 availability. No human resource can stay glued to the customers always and answer to their queries. Besides, think of the days when you have a sale going on in your e–commerce business. The traffic is huge, and the customer queries are endless.
This is where your retail chatbots come into play. Unlike human agents who are restricted by working hours and physical exhaustion, these retail chatbots offer customer service 24/7. This enhances customer satisfaction and makes them trust your retail business.
2. Personalized shopping experience
Today, if you offer a generic shopping and customer experience to customers and expect them to return to you again and again, I’d ask you to come out of this bubble. Understand that every customer has a different requirement. Their tastes, choices and preferences are also different.
Now, this is impossible for human agents and resources to conduct a survey and find out what every customer of your retail business is looking forward to. This is where you need a retail chatbot. With a retail chatbot, you can figure out the choices of your customers and recommend them products accordingly.
3. Boost conversion and engagement
Every retail business aims to boost conversion and engagement to build a healthy relationship with their customers. If you are on the lookout for the same, you need retail chatbots now. These chatbots proactively engage with customers. This means they do not wait for the customers to start a conversation. Instead, the chatbots initiate the communication to find out whether your customers are satisfied.
For more engagement and conversion, chatbots market automation systems and push promotional offers to your customers. This automatically brings customers to your retail platform and drives purchases. Besides, if you want to improve ROI, chatbots bridge the gap between customer interest and action.
4. Recover abandoned carts
Let’s talk about another potential retail industry challenge. You see a customer wishlists a product and adds it to the cart after a few days. Then, the customer simply vanishes. Why does this happen? Maybe because the customer has forgotten about the product or he has found a better option.
Here, if you have a chatbot implemented in your retail business’s online platform, you can be sure of customers completing purchases. Here, the retail chatbot tries to attract your customers, playing the role of a perfect virtual assistant to drive sales. The chatbot sends lucrative discounts, promo codes and offers to bring the customer back to the retail platform and complete the purchase.
5. Improve operational efficiency
Often, retailers find it difficult to manage customer support. In most cases, online retail businesses don’t even have any human support to resolve customer queries. Gone are the days when you had toll-free numbers to connect with customers. Howeve,r with the implementation of retail chatbots, you can improve the operational efficiency of your retail business.
Chatbots can take care of multiple conversations at the same time and help customers with valuable and customized data. Besides, these retail chatbots can be integrated with the existing CRM of your retail business and help customers with relevant product recommendations. This integration improves flexibility in your retail business and customer satisfaction.
Best Retail Chatbots For Your Business in 2025
With the rise in customer expectations, now retail businesses are looking for reliable catbot builders to create customized chatbots and serve customers in a better way. If you are looking for one, here is a brief list of the best retail chatbots for your business in 2025:
1. Copilot.Live
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Of all the chatbot building platforms, Copilot.Live is the best retail chatbot builder that creates customized AI agents. Right from lead generation to helping you with shopping assistance, Copilot.Live can deploy your AI agents across WhatsApp, web browsers, Slack, emails, and voice calls. With the retail AI chatbots for Copilot.Live, you can train your retail website to provide customers with instant support.
Since Copilot.Live’s chatbot can be integrated with WhatsApp, you can notify your customers of cart abandonment, price drops, offers and loyalty programs. Regarding the workflow automation feature of the chatbot, Copilot.Live’s retail chatbot allows you to integrate the chatbot with the existing CRM system and gather customer data from there.
What makes Copilot.Live a powerful AI chatbot builder is its text and image recognition feature. For example, if your customer uploads an image, the chatbot will read the image and help you with similar product recommendations. Besides, the retail chatbot also supports the multilingual feature that helps outreach to customers all over the globe.
2. Tidio
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With Tidio, you get a perfect combination of live chat and artificial intelligence mechanisms in a single platform. This is one of the many reasons for Tidio is becoming popular with small and medium-sized businesses. Tidio has a plug-and-play interface that allows retail businesses to set up the entire workflow in minutes, even if it is an overwhelming one.
You can boost your sales funnels and lead generation with Tidio’s contextual Flow feature. Right from conducting interactive customer journeys to cross selling products across multiple platforms, Tidio gives you all the benefits that a retail business needs to upscale and drive more purchases.
3. Giosg
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If you want to conduct meaningful connections with your customers and want them to come back to you again and again, nothing is better than Giosg. It is a powerful AI-driven chatbot builder that takes pride in developing intelligent chatbots and lead-generation processes. The chatbot sends dynamic pop-ups, virtual assistance and product suggestions to engage with your customers at the right time.
With real-time behavioral targeting, Giosg chatbots understand what your customers are exactly looking for and provide recommendations accordingly. Further, it helps the chatbot integrate into your existing retail CRM system to streamline data and analytics. Right from guiding shoppers to building a customer community, Giosg can be your go-to retail chatbot builder.
4. Liveperson
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Retail businesses need conversational AI to engage with customers on a personal level. Here, Liveperson chatbot builder is dedicated to creating retail chatbots that are AI-driven and robust. In your entire retail business journey, Liveperson can stand as a rock-solid partner to your business.
Liveperson has a conversational cloud feature by which you can conduct almost 1 billion conversational interactions every month. Again, Liveperson has a conversational intelligence feature that helps you to gather a deep understanding of consumer insights. Besides, Liveperson has generative AI, which understands the complex queries of the customers and resolves doubts.
5. Haptik
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As a subsidiary of Reliance Jio, Haptik is yet another powerful retail chatbot builder in India that supports generative AI. For all retail businesses, Haptik offers a complete end-to-end automation process so that you don’t need to employ human resources or agents. What makes Haptik stand out amongst the crowd is its Smart Skills Builder.
With this feature, Haptik can help you create a conversational flow of the entire retail work without the need for any coding. Haptik helps to integrate the retail chatbot across more than ten channels and understand more than 100 languages with a complete plug-and-play integration.
Real-World Examples of Retail Chatbots
Several retail companies have already integrated chatbots in their browser and relevant platforms and are reaping the benefits now. These real-world chatbot examples in the retail industry are paving the future for better work process automation and reducing human labor. Let’s take a look at the top three real-world examples of retail chatbots.
1. GoFynd
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A fashion retail brand, GoFynd has created their AI chatbot named Fify with the help of Copilot.Live. This chatbot is integrated with Facebook Messenger and offers a simplified shopping experience. Right from browsing clothes to recommending relevant products according to the tastes and preferences of the customer, the chatbot offers customers a completely personalized shopping experience.
For product discovery, customers can follow a filtered approach instead of navigating through the entire extensive product category. Apart from product viewing, the chatbot of GoFynd also allows you to purchase products directly within the chat.
2. Sephora’s Virtual Artist
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What makes Sephora’s Virtual Artist stand out in the crowd is its integration of augmented reality and artificial intelligence. Customers can avail of this chatbot through the mobile app of Sephora, thereby making the entire retail business more customer-friendly.
Besides, the chatbot has a virtual try-on feature where the customers can try different makeup products even before buying. This has not only boosted customer engagement and sales but has also developed a sense of reliability and loyalty from the customer’s side.
3. Nykaa
Being a leading beauty and wellness online retailer in India, Nykaa has lately come up with a chatbot that is integrated into their mobile app and web browser. With the help of this AI-integrated chatbot, customers can track their orders, find products according to their skin type, track delivery timelines and get details of products.
However, the chatbot goes beyond transactional support and helps customers with beauty tips and tricks similar to any other human beauty consultant. The data-driven conversations that the chatbot conducts with the customers enhance their trust and reliability.
How to Create the Best Retail Chatbots in Simple Steps?
By now, you are already aware of the power of retail chatbots and how they can transform your entire retail business. Now, it’s time to look for the steps you need to undertake to create the best retail chatbots. Here, I’d suggest using Copilot.Live as the chatbot builder due to its creation and installation simplicity. These are the steps you need to follow:
• Step 1 - Sign in: First and foremost, sign up on Copilot.Live. It is just a two-step process. All you need to add is your name and email address, and it’s done!
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• Step 2 - Name and design: Now, Copilot.Live will lead you to its dashboard. This is the place where all the primary creation of the chatbot happens based on your retail business’s personality and style. Click on the ‘Configuration’ option to set the theme and personality of your retail chatbot.
• Step 3 - Train the chatbot: A lot of work goes here as this step will determine how your chatbot will behave with customers and response to their commands. Here. Copilot.Live has a ‘Data Source’ menu in the dashboard where you have to add all the data related to your retail business and its customers. The more accurate data you add, the more human the chatbot will respond.
• Step 4 - Test and deploy: This is the step where you keep your fingers crossed and hope everything works well. Keep on testing the chatbot until you get the desired results. Whatever conversations your chatbot has are all stored here so that you can analyze them later and make necessary changes.
• Step 5 - Monitor performance: Finally, now that your chatbot is live, your work doesn’t end here. Instead, it is just the beginning of building some more customised for your customers. For better performance monitoring, ask for customer feedback.
Best Practices for Retail Chatbot Implementation
You certainly want your retail chatbot to offer top-notch functions to your customers. The performance of the chatbot largely depends on how well you train and implement it. Here are some best practices for retail chatbot implementation, which, if undertaken, is sure to make your retail chatbots run smoothly.
- Define business objectives: Make a blueprint of what you want the retail chatbot to achieve for your retail business. Whether it is increasing sales or enhancing customer engagement, every goal will alter the way the chatbot is designed. With clear goals, you can track the performance of the retail chatbots with ease and cater to specific business priorities.
- Use hybrid models (bot + human): When you implement a hybrid chatbot, it is a perfect combination of problem-solving abilities and empathy, something that you majorly find in humans. Your goal should be to make the chatbot appear as a substitute for a human agent. This strikes the right balance between complete workflow automation and customized customer support.
- Train bots with domain-specific data: If you want your retail customers to build a healthy relationship with your retail brand, you cannot offer generic data. Instead, train the chatbots with industry-specific datasets to make them understand both retail and customer terminology. The chatbots that are aware of the context of your retail business make fewer errors, produce accurate responses and deliver answers on time.
- CRM and backend integration: When you integrate the chatbot with the existing CRM of your retail business, it gives the chatbot a detailed idea of the product category. This fetches real-time data. It ensures that your chatbot is up-to-date and consistent for all the platforms.
- Analytics and feedback optimization: The success of your retail chatbot lies in the way you pay attention to analytics and feedback. Gather customer feedback to find out if they are facing any challenges with your retail chatbot. This is how your chatbot develops your retail business.
What Challenges Can You Face in Retail Chatbots?
Indeed, chatbots are a blessing to your retail business. But do you have to face any challenges while dealing with retail chatbots? Yes, you might have some. Here are the challenges that you can expect:
- Handling complex queries: Often, your retail chatbots find it challenging to deal with multiple customer queries and intents. This results in the chatbots failing with response accuracy. To overcome this, your chatbots should be featured with hybrid models. This means the moment your retail chatbot fails to comprehend any complex query; it immediately escalates the customer to a human agent.
- Maintaining user trust and security: In every online retail platform, customers share crucial private information with the chatbot. Here, the retail chatbot must be compliant with the data protection rules and regulations. Your retail platform should inform customers about the data that is collected for online shopping purposes. Provide necessary reassurance to prove your retail platform as credible.
- Making bots sound natural: If you add heavily scripted data to your chatbot, it is sure to sound robotic. This is something customers never entertain. Use NLP and machine learning to make conversations appear more natural and human-like. Add necessary dialectical and linguistic inputs to cater to the global audience.
- Avoiding over-automation: Automation of your retail business to some extent is considerable. But when this automation exceeds the limitations, your chatbots fail to perform like humans. To overcome this, regularly monitoring the performance of the chatbot is a must. Remember, your retail chatbot must maintain a balance between human empathy and automation.
The Future of Retail Chatbots
What does the future hold in store for retail chatbots? Well, considering the rapid growth and development of digitalization in the retail industry, implementing chatbots in your retail business platforms can benefit you greatly, especially with customer services. Let’s take a look at some of the future trends of retail chatbots that ar where to stay and rule.
- Predictive AI and smart assistants - In the upcoming days, retail chatbots are going to be equipped with predictive AI. Here, the chatbot directly initiates communication with the customer to delve deep into the customer’s preferences and choices. It switches the entire chatbot algorithm from a reactive to a proactive setup.
- Voice, AR/VR integration - When you integrate voice assistants into chatbots, you offer customers a hands-free service. Besides, the AR and VR integration into the retail chatbots gives the customers a virtual experience of what products they can expect in reality. This reduces customer’s uncertainty and cart abandonment.
- Conversational commerce trends - Through conversational commerce, chatbots allow customers to make purchases via chatbots. So, the customers no longer have to take the headache of browsing the web or the app always. Instead, the chatbots study and analyze their preferences and suggest products accordingly.
- Omnichannel bot strategy - Now, retail chatbots need cross-platform integration to offer a unified shopping experience to customers. Through an omnichannel bot strategy, your customers can begin a purchase on a web browser and finish it on some other social media platform of your retail business.
Conclusion
Therefore, your retail business can be a deal-breaker in the industry only if you implement retail chatbots built by a reliable platform. The kind of upliftment chatbots can give to your retail business is unimaginable.
Even though it comes up with certain challenges, you can still overcome them, provided you choose a trustworthy retail chatbot builder platform. Make sure to choose one that offers all the features - right from retail business automation to offering customer hyper-personalization. Get in touch with a retail chatbot builder and give wings to your retail business now.
