The other day, I was talking to a friend who had a retail business in the fashion industry. With so many fashion brands coming up nowadays, he appeared pretty tensed because of the raging competition. The only aspect where his business lacked was customer service. He was following the traditional methods of serving customers. That’s when I suggested him to try out retail chatbots.
The retail chatbots function as virtual assistants and guide your consumers from the beginning to the end. So, right from suggesting the appropriate products to helping them with the best promo code for a discount on purchases, the retail chatbots have your customers covered.
Think of purchasing anything on Amazon or Flipkart. Both e-commerce platforms have interesting chatbots that navigate through the vast product catalog and help customers.
In a study by Epilson, researchers found that 80% of the customers make a purchase only when they get a personalized shopping experience. And to offer your customers this level of personalization, you need retail chatbots.
Why are chatbots essential in retail today?
In 2025, the entire retail sector is all about offering personalized services to their customers. Consider the Gen Z customers. They are quick and fast. Likewise, they detest long waiting hours. Besides, instead of doing things manually, Gen Z prefers being helped by virtual assistants as these are quick and instant.
To meet these demands of your customers, you need an AI-integrated retail chatbot. What makes AI chatbots popular is the mechanism with which they are built. Natural language processing, artificial intelligence, and machine learning are the three foundation pillars of retail chatbots. All these help the chatbots figure out what your customers are looking for.
Besides, you can integrate the retail chatbots with your retail websites, their social media channels, and with WhatsApp to track and monitor the customers at places where they are available. The 24/7 support of the chatbots helps the customers get their queries resolved instantly.
Another reason that has made these retail chatbots boom and thrive is their scalability and affordability. These retail chatbots can handle thousands of queries simultaneously, along with tracking customer behavior without causing any error or fatigue. Besides, the omnichannel presence of the chatbots bridges the gap between online and offline purchases.
Top 15 chatbot use cases in retail
The use of chatbots in the retail industry has gained such momentum now that 80% of the retailers and online e-commerce businesses are already using or are planning to use them. In fact, by 2027, researchers are expecting these chatbots to be a primary source for taking care of customers.
These retail chatbots are no longer reactive assistants. But they have become proactive and engaging support systems that stand as the backbone of every retail business. Let’s see how these retail chatbots can serve your business.
1. 24/7 customer support
One of the most useful and significant use cases of retail chatbots is their 24/7 availability. Imagine how you would feel if you had to wait for responses for hours and days. I’m sure you’ll leave the platform and look for another.
Now, you may question the accuracy and efficiency of the chatbots in terms of the information they provide, as they are pretty quick. Well, this depends on the dataset or the data source with which your retail chatbot is equipped. So, whether your customers come up with queries on a weekend night or on a weekday morning, these retail chatbots are all ears.
For example, the Alexa-based chatbot of Amazon helps users by allowing them to ask questions, lodge complaints, and track deliveries. Amazon chatbot offers a hands-free approach where customers can provide their queries via voice commands. This has reduced customer frustrations, especially during peak sales or shopping hours.
2. Personalized product recommendations
Your retail business caters to a lot of customers. Do all your customers have the same requirement? Certainly not. To meet the ever-evolving demands of customers and get loyalty from them for your retail brand, the only goal here is to offer personalization. But how do you do that? Is it humanly possible to ask all the customers individually about their likes and dislikes? Oh, that’s impossible!
The only way here is to implement AI chatbots in your retail business. Powered by machine learning and artificial intelligence algorithms, these retail chatbots track the previous shopping history and browsing history of the customers and come up with recommended products only after understanding their preferences. Consider the chatbot of Sephora. It suggests customer products only after understanding their skin tone and related issues.
3. Order tracking and delivery updates
What happens after your customer buys a product from you? The customer wants to keep track of the order and check delivery updates to stay on track. Now, you cannot expect your human resources to inform customers individually. The only way here is to install retail chatbots.
With the help of retail chatbots, your customers get a reliable post-purchase treatment. The chatbots keep on notifying your customers about the order shipping and logistics. This automatically builds trust in the minds of your customers.
Consider the Facebook Messenger chatbot of H&M. Right after the customer has bought a product, the chatbot sends real-time shipping notifications. Besides, it proactively alerts the customer about delivery confirmation and tentative arrival timings.
4. Cart abandonment recovery
How does it feel when your customers add products to the cart but leave the retail platform without completing the purchase? Frustrates you, right? Well, you can avoid this situation only if you implement AI-integrated chatbots into your retail business.
The moment your retail chatbot notices that a customer has added products to the cart and left the platform without completing the purchase, it sends real-time notifications to the customer. These act like reminders, asking the customers to take action. Often, chatbots also lure customers with price drops, certain discounts and offers.
I’ve used the virtual assistant chatbot of Nykaa several times. Sometimes, I would add products to the cart and then leave the platform. After a while, the chatbot sent me email notifications to complete my purchase. I also received notifications on WhatsApp.
5. Loyalty programme support
Every customer is a treasured asset for your retail business. To make them understand their value, you must show them the benefits they can enjoy from your retail platform. Again, humanly, this is not possible as every customer has different requirements. That’s where a retail chatbot comes in.
You must have certain reward points and loyalty programs to benefit your customers. Once you implement a retail chatbot, it will send these perks and benefits for a better shopping experience. Besides, the chatbot also sends notifications to your customers about the expiration of these programs.
This gives your customers a dynamic experience on the overall shopping spree as well as sheds light on your retail business. Above all, this is the kind of personalization that customers these days look forward to.
6. Product availability lookup
Often, you must have come across retail or e-commerce sites where the products are unavailable. Your frustration level heightens when you’re in dire need of the particular product, but it’s not available on the online platform.
Here, the retail chatbot plays a pivotal role in addressing inventory and product stock-related queries. To meet the expectations of your customers, the chatbot informs you whether the product is available in the inventory. Therefore, your customers don’t have to navigate through a massive product catalog.
The chatbot of Decathlon allows customers to check certain products even before they head to the nearby store. For this, all that the customer needs to do is enter the appropriate zip code. This saves your customers’ time.
7. Customer feedback collection
Remember that your retail business is entirely focused on the customers and their buying behaviour. What if they stop buying from your retail business due to a lack of customer satisfaction? How will you understand if your customers are satisfied with your services or if they’re looking for more?
Well, the only solution here is to implement a retail chatbot in your retail business’s online platforms. After every purchase by every customer, the chatbot will proactively gather feedback from the customers. Later, you can analyze this feedback to make the necessary changes in your retail business.
For example, the fashion brand Zara has a chatbot that conducts post-purchase surveys through their website and app interface. This immediately captures the attention of your customers. Moreover, gathering feedback right after the purchase gives you more authentic and real responses.
8. Returns and exchanges
Often, customers leave retail shopping platforms due to poor return and exchange systems. It may so happen that your customer has purchased the wrong or a misfitted product. Now, they want to either return it or exchange it. This is where your retail business’s responsibility shows.
Here, a retail chatbot takes care of all the product returns and exchanges and streamlines the entire process. The moment a customer shows interest in returning or exchanging a product, the chatbot reaches out to the customer, asks the reason for the return or exchange, and streamlines the whole process.
The chatbot IKEA guides customers with the return and exchange policies in detail. Right from going through their return claims to generating shipping labels and fixing scheduled pickups, the chatbot does it all.
9. Promotion and sales alerts
Gone are the days when leaflets and pamphlets were used to promote your retail business and sales. Now, people barely have any interest in looking at those pieces of paper or hoardings. With the change in the entire sales and marketing dynamics, you need to accept technology and incorporate it for better sales.
A retail chatbot can revolutionize your entire business. These retail chatbots send promotional emails and messages from time to time according to the preferences of the customers. This increases the number of leads your business can receive. Also, your customers prefer such personalization.
As reported by Salesforce to Reuters, consumers have enhanced the use of chatbot services by 42%. In fact, during the 2024 holiday season, there has been a 4% rise in online sales in the U.S. due to the presence of AI-powered chatbots.
10. Store navigation support
How does it feel when your customers reach out to any store in person and then fail to find products due to their lack of availability? Yes, it’s damn frustrating! In fact, such things can disrupt your customers’ loyalty and make them choose your competitors over you.
So, how do you retain your customers? Well, here again, an AI chatbot can help. Nowadays, several retail businesses have chatbots that help customers with information on locating products and aisles easily. This offers your customers an easy and smooth shopping experience.
Industry popular retailers like Levi’s have integrated such personalized technologies within their chatbot to help customers find out relevant products and enhance the overall shopping experience of the customers.
11. Multilingual assistance
You want customers from all over the globe to buy from your retail business. When it comes to addressing people all over the world, language is a huge barrier. Not all people understand English.
This is the reason retail chatbots are now supported with a multilingual feature. This means the chatbot offers a seamless communication feature for both native and non-native speakers.
In a business report by the Harvard Business Review, these are the facts the Common Sense Advisory survey came up with:
- 72.1% of the customers prefer spending more time on websites that respond in their own language.
- 72.4% of customers are likely to buy a product that has information in their native language.
- To 56.2% of the customers, getting information in their own language is more important than the price of the product.
12. Gift finder guidance
Your customers must have visited several gift online e-commerce stores to look for the perfect gift for his or her friend on a specific occasion. What if your customers do not get the desired gift and leave your retail website forever? Yes, you can lose customers if you cannot serve them well.
Here, a retail chatbot can help you with gift finding assistance. Generally, your customers struggle to find the perfect gift during peak sales seasons. Such retail chatbots help your customers with tailored product recommendations to enhance customer engagement and improve your business’s conversion rate.
Think of a platform like Gift Genie. The retail gift store uses AI to showcase personalized gift suggestions. To do this, the chatbot asks the customers to input their interests, age, and preferences of the customer. For a better shopping experience, this platform’s chatbot simplifies the shopping experience by suggesting products that the customer might not have thought about.
13. Staff productivity support
Is it possible for all your human resource agents to attend to customers individually to find out their preferences and to answer all their queries? Well, that’s not just impossible but also impractical.
Here, an AI-powered chatbot can help. If you can leverage your chatbot to perform repetitive tasks, this saves the time of your retail business staff. Your human agents can use this time to take care of some other critical business tasks.
For example, Walmart has adopted a generative AI tool named ‘My Assistant’. The purpose of this chatbot is to serve corporate employees with workplace efficiency. This frees up their time, which they can use for other high-value functionalities.
14. Virtual try-ons and AR shopping
Have you ever thought of offering a virtual tour of your online retail store to your customers? Yes, it is possible only if you can implement retail chatbots. However, for offering a virtual try-on or touring feature, the chatbot should have augmented reality incorporated into it.
With the help of augmented reality, you can offer your customers a virtual tour. In fact, various fashion and makeup brands make use of a try-on feature where they offer customers the benefit of trying out products even before buying.
Think of all the luxury makeup brands like Sephora, Nykaa, or L’Oreal. After adding the try-on feature to L’Oreal’s website, customers enjoyed the AR-based virtual try-on feature as it led to a 150% increase in the usage of the same.
15. Size and fit guides
If you’re in the fashion retail business, you need your customers to stick with your brand. Your customers will never like it when they face discrepancies in the product fit and size. If you have to address this, you need AI chatbots in your fashion retail business.
When your customers get product recommendations according to their right fit and size, it builds trust and loyalty in your customers towards your brand. According to a report published in 2023 by Coresight Research, 53% of people returned apparel purchased online due to size and fitting issues in the past twelve months.
Implementing such chatbots that guide your customers with the right size and fit enhances their satisfaction while reducing logistical and unwanted financial burden.
Real-world examples of successful retail chatbots
Already, several retail brands have implemented chatbots in their retail business and have gained immense popularity amongst their customers. Of all the retail businesses, these are the promising ones:
1. GoFynd (Fify)
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GoFynd is a new-age e-commerce fashion brand with an interactive chatbot named Fify. After the incorporation of Fify, the retail business has undergone a complete transformation. Fify helps customers with answers to all their queries. Besides, Fify guides all customers with customized product recommendations, based on their previous purchases and browsing history.
I had personally tried Fify and had a wonderful experience. I asked Fify to suggest some multi-colour birthday dresses. I added my right size and fit. Soon, Fify came up with a list of products. I barely had to find my preferred dresses from its vast catalog.
2. Nykaa (NVA Assistant)
Nykaa, a popular makeup and wellness retail platform, has a chatbot named Nykaa Virtual Assistant. The chatbot functions like a virtual assistant, where it provides all the necessary customized product recommendations to customers based on their skin type. To understand the skin type and concerns of the customers, the Nykaa chatbot has a fun quizzing session.
Through this unique quiz, the chatbot understands the skin concerns and types to recommend products accordingly. This has not only increased customer engagement, but also it has shown higher repeat-purchase behaviour with time. Besides, the post-purchase service of the chatbot keeps the customers hooked to the brand.
Future trends in retail chatbot innovation
Indeed, the retail chatbot sector is here to stay. However, your chatbots need consistent updates. These are some of the common future trends in retail chatbots to watch:
- Voice commerce: Now, retail chatbots are incorporated with the understanding of voice commands of the customers. Already, Walmart and Carrefour have started implementing voice commands with the help of Alexa and Google Assistant. Adding voice commands to the chatbot means you’re offering your customers a hands-free shopping experience.
- Chatbots in the metaverse: This is yet another wonderful addition to the retail chatbots. With the incorporation of the metaverse in the retail chatbots, you give your customers a complete view of your retail store virtually. So, your customers get a complete experience of what they can get from you even before entering your online store.
- Video-based support: Now, visual content is one of the most powerful ways to keep your customers engaged. These retail chatbots help your customers with videos that work like tutorials or guides to your customers. Think of the video-based support of Lenskart. It helps customers to try out spectacle frames while providing face-to-face assistance.
- Sentiment-aware AI responses: Now, the next-gen retail chatbots are trained to understand the sentiments and emotions of your customers so that they can provide the necessary products. These chatbots recognise the frustration, confusion, or satisfaction of the customers. Once these chatbots are combined with NLP, they start offering empathy like human beings.
Conclusion
Now, these AI-powered chatbots have become an integral part of your retail business. Right from offering immense customer support to helping them post purchases, these chatbots play a pivotal role in your business. If you still haven’t implemented these chatbots in your retail business, it’s time you do it now.
Look at the retail businesses that have already gotten an impressive chatbot. With time, they have upgraded the chatbot and met the demands of their customers. And now? They are reaping the benefits of their labor. So, embrace these technologies now and position your retail business as an expert in the industry.
