Chatbots’ ability to deliver accurate personalization, interactive information and immediate action all in one place will transform how brands and consumers will communicate with each other. A number of cultural and technological forces are increasing the momentum behind the growth of this emerging conversational interface:

  • 1-to-1 messaging platforms have seen unprecedented growth. In 2019 65% of the global population will be using messaging apps (e-Marketer).
  • App fatigue has set in with app downloads in decline. Most US smartphone owners download ZERO apps in a typical month (comScore).
  • Machine learning and NLP advancement are taking conversation with chatbots to a new level. Spending on AI and Machine Learning will grow from $12 billion in 2017 to $57.6 billion by 2021 (IDC).
  • Growing usage and awareness of chatbots. Publicis Media’s study tracked usage at 54% of those surveyed.
  • Big benefits for company operations are making chatbots a priority for senior leadership across categories. 80% of businesses said they currently use or are planning to use chatbots by 2020 (Oracle).

Hype Cycle Reality Check

Chatbots are holding their own against more established digital mediums. In fact, chatbots that were perceived as fun, easy to use
and helpful drove significant increases in brand preference metrics compared to mobile websites and apps. In addition, for those more
discovery-oriented brands, chatbots out-performed mobile websites and apps in “contentment” scores, signaling the satisfaction users
feel from friction-free interactions that guide decision-making. Chatbot experiences also lifted emotional connections to brands by almost
20% which was on par with mobile websites (+16%) although behind apps (+30%). This result is compelling given how nascent
chatbots are vs. these established digital platforms. It also provides a more realistic assessment of current chatbot impact versus marketplace
hype. However, chatbots are poised to improve quickly as development and investment in Natural Language Processing and AI
progress at phenomenal speed. As ever, timing and right-sizing your investment in a new technology platform like chatbots will be critical.

IMPLICATION: Put chatbots on your innovation roadmap to assess when it’s right to experiment or scale. To take advantage of brand
preference uplifts, set utility and enjoyment goals for chatbot content creation. Increase friction-free associations with your brand by
employing a chatbot for discovery-oriented tasks.

Shopbot Intel

Shopping online can quickly shift from efficient to paralyzing if consumers don’t know what they’re looking for. Shoppers are drawn to
the idea of chatbots helping them overcome this analysis paralysis by acting like a highly knowledgeable sales assistant or personal shopper
who is available 24/7 to answer questions, clarify doubts, and offer recommendations. Adding conversation like this to the e-shopping
process enables chatbots to learn more about a shopper’s intent and build more relevant interactions. However, a common pitfall of many
commerce chatbots is they treat the experience as another point of purchase focusing more on buying rather than shopping. These failed
attempts often manifest as an inferior version of the web or app purchase experience masquerading as a “helpful” chatbot.

IMPLICATION: Ensure shopbot development focuses on shopping before buying. Use shopbots to learn more about your
consumer’s intent enabling richer shopping experiences. Be more than a link to your website.

Mirror Mirror

When first time users think of chatbots they hope for a highly personalized experience with natural back and forth conversation. Interest
and excitement in these conversational, companion-like chatbots (e.g Replika) is a logical extension of digital dependency. Contrary
to social media, which encourages judgment and curation, friendlike chatbots prompt emotional honesty with a single companion.
Feeling ‘connected’ is not necessarily about other people, it’s first and foremost about yourself. That type of personalization, one that
brings a person closer to themselves, has the power to build deep loyalty and elevate a brand’s value by connecting on a deeper level.

But reservations around becoming “too dependent” on a bot and self-consciousness about what others think has people wanting
to keep this ‘enjoyment’ secret. The idea of a companion bot feels very futuristic and users haven’t internalized their comfort level with
this type of experience, especially in the climate of data privacy and breaches.

IMPLICATION: Over-invest in strong NLP and machine learning capabilities to deliver on personalization expectations. Design your
chatbot to ask insightful questions that encourage self-reflection conversations to connect on a deeper level.

Conversation Makeover

Discovery preference affects people’s attitudes to chatbots. Some users like to have access to all the available options the internet
can provide and so find chatbots too restrictive. Other users find the search process overwhelming and want it to be more streamlined.
For those people, chatbots are viewed in a very positive light as they narrow down infinite options, take the work out of getting
information and get users up to speed quickly on a new topic before going broader online. It’s this ability to streamline complex topics
or multiple options that uniquely positions chatbots to build new relationships with people who have become disengaged or overwhelmed
with the category by making information more relatable and digestible. But with any emerging platform, it’s the little things
that are eroding chatbots credibility in this space. Giving users “the runaround” with incorrect or generic answers; circular conversations;
lack of comprehension; and basic tech glitches all work to erode trust in the experience.

IMPLICATION: Reconnect with disengaged consumers by using chatbot functionality to reduce choice, connect with personal preferences,
and simplify confusing or complex topics associated with your brand. Avoid giving your

Download additional trends and findings from our Chatbot research here.

Methodology
Spent six months with 70 highly engaged chatbot users in the US and UK to explore their experiences with messaging chatbots and
expectations for the future. Conducted behavioral research (n=800) in the USA to understand the brand impact of chatbot experiences
versus mobile websites and apps. Conducted quantitative survey of chatbot users (n=2,484) in USA, UK, France, Mexico, India,
China and Australia to measure global impact of qualitative insights.