Insights

Changing World: Chatbot Commerce

October 4, 2020

Probably all of the readers of this note have been victims of long wait times to reach customer service. Overtime we have noticed that the quality and authority of the customer service representative on the line is deteriorating and only after an issue escalates can we finally get someone that can help us. While, I’m not a fan of robots and machines in general there are advantages to being served by advanced chatbots that can answer immediately and accurately. This is a nascent industry but projected to grow very strongly in the years ahead (see figure). It must be stressed that more than 50% of this growth is projected to come in China with another significant portion in Asia. But western countries will also see a high growth and prevalence of commerce chatbots.

Sources: Juniper Research; Somar Analysis

 

There is a risk that the chatbot misunderstands our request. That said there are significant advantages for consumers from these technologies:

  • Saving time: no wait times, easier and more accurate input of requests and faster response;
  • No need to transfer between operators for different issues: the chatbot can address most of your issues;
  • Relevant suggestions of additional products and services to the consumer.

 

There are at least two types of investment opportunities in the space: the companies that build and maintain the best technology behind chatbots; and the companies that can use chatbots to significantly increase their sales conversion and consumer service. Somar is looking at both.

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