For now, chatbots largely appeal to tech-savvy consumers already
using Facebook's Messenger, Kik or other platforms to chat with
friends. The audience is expected to grow as those types of
communication tools catch on. And as companies become more attuned
to what their bots can do, they'll promote them more widely—a
lot of initiatives are still in beta. For now, ordering Taco Bell
via Slack, for example, is only open to a select group of
There's wider adoption on other platforms. After introducing its
Messenger bot platform in the spring of 2016 with 33,000 bots,
Facebook now has some 100,000 active bots using the service to talk
To continue its momentum, Facebook recently unveiled a series of
upgrades, including a Discover tab where users can easily access
their most recently used bots.
"We see a lot of innovation happening," said Martin Barthel,
head of global retail and ecommerce strategy at Facebook, noting
that some brands are still in the testing phase but activations are
"ramping up significantly."
In addition to Messenger, brands are running bots on platforms
such as Kik and Telegram. Some, like Rose, simply run on SMS text. A host of startups are looking to
cash in on the trend, according to CB Insights, a venture capital
database. Those companies, like Claire, which uses a chatbot to
help brands with apparel trend forecasting, are receiving
substantial VC investment. Claire raised $1.7 million earlier this
year, for example.
"Most focus on working with brands to add chatbot functionality
to ecommerce platforms," said Zoe Leavitt, tech industry analyst at
Research from Forrester showed 5% of companies worldwide said
they were using chatbots regularly in 2016; 20% were piloting them;
and 32% were planning to use or test them in 2017. Success rates
are mixed as some companies struggle to define a bot's purpose, set
goals that are too ambitious for the technology that's available,
or launch them before they're ready.
"The development of artificial intelligence will make the
chatbots more advanced and truly smart," said Forrester Senior
Analyst Xiaofeng Wang, who's based in Singapore. "However, AI is
still [in] its childhood. Companies need to understand the
limitation of chatbots today and leverage the existing capabilities
to deliver customer and business value."
She points to success stories, such as OCBC Bank's Emma, a
chatbot focused on finding home loan leads that helped the
Singapore bank close millions of dollars in new loans. "To
companies, the point is whether technology can help deliver
business value, not chasing the new technology all the time," said
No seamless fix
Today's chatbots can quickly dispense Q&A type of answers, such
as the nearest location of a store or the price of an item online.
Wang predicts it could be five years or longer before chatbots will
be able to handle complex and lengthy interactions, like consulting
on products such as life insurance.
In these early days, bots aren't always a seamless fix for
marketers. Everlane, the trendy ecommerce brand known for its
sustainable supply chain sourcing, introduced a bot on Messenger
two years ago, but in March told consumers it had "decided to stick
with what we do best—email." The San Francisco-based brand,
which declined to comment further, offers email support to
customers with a four-hour response time. However, its bot still
appears accessible via Messenger. When Ad Age reached out, we
received a response within a few hours, but the communication
trailed off on the brand side after a few minutes. Such
inconsistency could damage customer relationships.
And let's not forget the cautionary tale of Microsoft's recent
bot exploits. The company was forced to kill off chatbot Tay when
it learned racist speech last year through interactions with
internet trolls. The company recently returned an ostensibly new
and impervious version, Zo. The English-speaking bot, however, has
already called the Qur'an "very violent," according to numerous
reports. Of course, Microsoft's chatbots, as machine-learning
experiments in AI, are a different breed than the preprogrammed
bots brands are using. Still, marketers are eager to see whether
machine learning and other technology can help their bots sound
less like bots and more like the people with whom they're
In many cases, particularly with Q&A scenarios, experts said
chatbots can substitute for chats with human representatives when
customers expect real-time interactions. But that does not mean
human interactions will completely disappear. "It's just like
digital media/online marketing took over some share of print
media/traditional media, but they still coexist," said Forrester's
Wang. "Chatbots will coexist with emails and human chatting."
As companies devote more resources to the effort and AI
technology improves, the belief is that interactions with chatbots
will seem more like conversations with actual people, leading to
Some brands have found that bots, if implemented correctly, can
replace more costly initiatives like apps. Unlike with apps,
companies don't have to convince customers to download something
extra—traditionally a huge hurdle for retailers—because
bots run on platforms that people already use, like Facebook. In
addition, bot development costs significantly less—roughly a
third of the $300,000 to $1 million it costs to build an app,
according to R/GA's Marcus. Maintenance costs are also lower, he
said, and consumers don't need to update bots as they would an app
with each IOS or Android software upgrade.
"There's almost innumerable opportunities for bots to engage with
consumers," Marcus said. "They're the website of the '90s, meaning
every brand is going to need one. ... Everyone is going to have
some natural language entity so [consumers] can engage with branded
intelligence to get details about the content or services a brand
wants to offer."
Rose isn't the only chatbot having some flirty fun. In China,
Microsoft's chatbot Xiaoice acts like a teenager and reportedly has
tens of millions of users. When asked questions like, "How many
people do you talk to a day?" she'll reply, "Only you." And more
than 100,000 merchants are using Alibaba's AI-enabled "store
concierge" chatbot in China to field millions of customer questions
for their own virtual stores.
For eBay, which introduced its ShopBot on Messenger last
October, the initiative provides additional customer data to better
equip future marketing, which can be more personalized than ever.
For example, if someone asks the bot about a new jacket in a
certain size, the next conversation will begin by the bot showing
items in that same size. The company is working on brand affinity
as well, in which the bot will show brands similar to those a
customer has previously explored, according to RJ Pittman, senior
VP-chief product officer at San Jose, Calif.-based eBay. He noted
that though the bot is still in its beta stage, it's already seeing
high double-digit growth every month. Customers can also upload
pictures on their phones of items they're searching—an added
bonus for anyone who's ever secretly snapped a picture of a
stranger's bag in the hopes of buying one similar.
"This is one of the easiest ways to onboard new-to-eBay
customers," said Pittman. "If you're already on Facebook Messenger,
you can come over and shop in our catalog and buy things—it's
the least amount of friction."
For most brands, some consumers have been game. The
Cosmopolitan's Rose has proven a valuable tool at driving customer
engagement with the brand, Peers said. Nearly 15% of guests have
opted into texting the bot. Of those who do, around 70% have
contacted her at least three times.
1-800-Flowers, which rolled out a Messenger bot in April of 2016
and an artificial-intelligence gift concierge powered by IBM Watson a month later, finds the new
initiatives make the gift brand more accessible to consumers in
"Allowing customers to engage with us on their terms, in the
channels of their choosing, helps brands stay competitive and
deliver a more personalized experience," said Amit Shah, chief
marketing officer. He said the company has seen growing adoption
with its customers. The gift concierge—known as GWYN for
Gifts When You Need—has seen customers interact on average
for more than two minutes; 80% of consumers say they will use the
Restaurant companies including Domino's for now are using a basic
approach, with functions that let people place orders within
Messenger and other platforms.
When Dennis Maloney, Domino's chief digital officer, started
hearing about the potential of bots nearly three years ago, the
company already offered multiple tech-savvy ordering options, from
mobile phone apps to Dom, its own virtual-voice ordering assistant.
Domino's opted to add bots to the list as well, and began taking
orders through Messenger in September. It declined to say how many
diners have used its chatbot, which asks for details such as
location and presents images of menu items to help with orders.
Maloney said that when it comes to chatbots, technology has a
way to go before they will truly catch on.
"We really look at the bot stuff now as, honestly, it's very,
very early, early, early adopters of the technology who are just
trying to play around with what's possible from a consumer
experience standpoint," Maloney said. "We're still even limited by
some basic functionality that would be really important for us,
from an ordering experience, [that] still isn't even possible
Contributing: Angela Doland