Are chatbots actually making any money for retailers

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Are chatbots actually making any money for retailers

Hello! Thanks for your question about revenue from chatbots. The short version is that yes, these chatbots are making a profit for the companies that use them. In 2015, chatbots generated $19.14 billion worldwide. Below you will find a deep dive of my findings.

Increase in Profits
Chatbots can increase revenue for retailers because they lead to a higher retention rate than other mediums, they limit the number of necessary sales representatives, and provide a straightforward, user-friendly interface for customers to make purchases. According to this graph, it's estimated that 36% of sale representative positions in the US, and possibly 29% of customer service representatives could become automated as a result of chatbots. It's expected that by 2020, 85% of customer interactions with companies are set to occur without a human. It is important to note, however, that bots themselves are not profitable unless, of course, you are building and selling chatbots. Chatbotslife.com states "let’s get one thing clear — a bot is a type of user experience and a way to expose products, services, or a brand." Without a product or service to sell, these chatbots won't be profitable.

Facebook Messenger
With over one billion users and more than 30,000 chatbots, Facebook Messenger offers customers the ability to use a platform they are familiar with to navigate their way through a new company's products and to seek customer service support. Medium states that there is an "85% open rate and 53% click rate through Messenger Chatbots compared to a 20% open rate and 2% click rate expected through traditional email." Recently, Facebook has enabled users to make payments via Messenger using PayPal and Transferwise Ltd., hoping to have the same success as Tencent's WeChat.

WeChat
WeChat, a popular app in China similar to Messenger, has an average revenue of more than $7 per user per year. That's with over 889 million accounts. WeChat reported a total revenue of $21.9 billion for 2016. On average, there are 53 transactions each month made on WeChat per user.

Conclusion
To wrap it up, chatbots can bring in new revenue to retailers who utilize the technology well, but are also able to increase profit by reducing expenses. The ease of use for many shoppers makes chatbots an effective option for communicating and marketing. Many are calling chatbots the "next big thing" for a reason.
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