Chatbot Industry Overview

Chatbot Industry Overview

Author: Atakan Kantarci

chatbot is one of the primary applications of artificial intelligence. Its potential benefits and promising results of successful bot examples make the technology popular among companies. However, multiple chatbot projects fail due to complexities of natural language and businesses should follow best practices to minimize risks.

Beratics is a Spinoff of ETH Zurich and supported by Innovation Agency of Switzerland. Beratics develops customer specific chatbots. Our technology enables our bots to understand complex paragraph without training as well. Click here to see the Chatbot offers of Beratics!

We compiled 80+ up-to-date chatbot statistics from industry and customer surveys to help you in your chatbot research/feasibility study. You can explore below pros and cons of chatbot and make a data driven decision before starting a chatbot project.  We examined chatbot stats based on 6 categories  (13 sub-categories). If you came for a quick answer, you can select the category from table of content below:

Market forecasts

Market Size Forecast

Interest in chatbots is increasing and market is expected to be $1+ billion by 2025.

  • Conversational AI is an emerging market and there are wildly different estimates about the market size. The global chatbot market
    • is expected to reach USD$1.3 billion by 2025, growing at a CAGR of 24% (Cognizant)
    • was estimated at $2.8B in 2019 (Business insider)
  • Projected value of chatbot eCommerce transactions by 2023 is $112 billion. (Juniper Research)
  • According to Google Trends, interest in chatbots has increased almost 5 times over the period of 5 years.

Prevalence of chatbots

~50% of large companies (i.e. those surveyed by companies like Accenture & Gartner) are considering more investment in chatbots.

  • 56% of companies say conversational bots are driving disruption in their industry, and 43% report their competitors are already implementing the technology. (Accenture)
  • By 2021, more than 50% of enterprises will spend more per annum on bots and chatbot creation than traditional mobile app development. (Gartner)
  • 75-90% of percentage of queries is projected to be handled by bots by 2022. (CNBC)

Business Adoption

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Current Adoption

Though adoption of chatbots are more widespread among B2B companies, adoption growth hasn’t reached its plateau yet.

  • Among companies that adopt chatbot technology, 58% of them are B2B companies. However, as of 2018, only less than 1% of B2B sites were using a chatbot. (Boomtown)
  • When executives were asked “What AI-powered solutions do you imagine having the largest impact on your business?” virtual assistants(31%), analytics (29%) and automated communications like emails and chatbot (28%) become the most common answers. (PwC)
  • 53% of organizations use chatbots within their IT department, 23% use them to support their administrative department, and 20% use them to support the customer service department. 16% of organizations are also using AI chatbots and assistants in their sales and marketing departments. (Spiceworks)

Demographic Adoption

  • USA, India, Germany, the UK, and Brazil are the top 5 chatbot using countries.  (Chatbots Life)
  • USA has the highest chatbots/1000 people rate. However, the stats below seems US focused and what is defined as a website with chatbot has not been clarified. For example. we are sure that the number of sites with chatbots in India are far more than a few hundred. (Boomtown)

Customer Perspective

Customer Expectations

In most surveys, at least 30% of consumers are enthusiastic about chatbots. This is likely to be driven by desire for 24/7 service and the user experience can be improved by providing an option to transfer to a live agent.

  • 54% of customers report companies need to transform how they engage with them. (Salesforce)
  • Over 50% of customers expect a business to be available 24/7. (VentureBeat)
  • 40% of shoppers don’t care if they’re helped by an AI tool or a human, as long as their question gets answered. (HubSpot)
  • 35% of consumers want to see more companies using chatbots. (Opus Research)
  • 38% of consumers think brands should use chatbots for deals, coupons and promotions. (Uberall)
  • 30% of consumers had a tepid response to chatbots, saying they were somewhat uninterested, and 29% indicated no interest at all. In total, nearly 60% of consumers lack strong enthusiasm for chatbots. (Uberall)
  • 69% of respondents said they’d prefer chatbots for receiving instant responses, and the same percent said they’re most likely to use chatbots for service related inquiries. (Cognizant)
  • 86% of users expect chatbots should always have an option to transfer to a live agent. (Aspect Customer Experience Index)
  • 55% of of consumers are likely to try a chatbot that offers location-based deals. (Uberall)

Why customers would interact with a bot

Results show that customers use chatbots for problem resolution or product purchase when they prefer a fast response.

  • 47% of consumers would buy items via a chatbot. (HubSpot)
  • 69% of consumers prefer to use chatbots for the speed at which they can communicate with a brand. (Salesforce State of Chatbots Report 2018)
  • Consumers see chatbots as a faster way to connect humans. 34% of all consumers see chatbots helping in finding a human service assistance. (Salesforce State of Chatbots Report 2018)
  • 27% of adult clients in the US are ready to purchase basic goods through a chatbot and 13% of adults in the US have at least once bought expensive items via chatbots. (Drift)
  • 84% of consumers admit to using natural language processing at home and 44% in the car, while only 27% said they would at work. (HubSpot)
  • 35% of people use chatbots to resolve a problem, or for getting detailed answers (Drift)
  • 37% of users say they would use a chatbot to get timely responses in an emergency. (Drift)

Positive feedbacks from customers

  • 80% of consumers who have engaged with a chatbot report it as a positive customer experience. (Uberall)
  • Nearly one-quarter (22%) of respondents said they already trust chatbot recommendations for product purchases. (Cognizant)
  • 61% of respondents said that they accept chatbots to answer their questions as long as the answers are correct and 2% even prefer chatbots to live agents.
  • 27% of consumers weren’t sure if the last customer support interaction they had was with a real person or a chatbot (PwC)
  • When how they would rate their experiences with intelligent assistant or chatbot technology was asked to customers by Aspect,  the results were:
    • Friendliness (65%)
    • Ease of Use (65%)
    • Speed (62%)
    • Interaction Success (55%)
    • Accuracy (55%)
  • Better bot experiences with more engaged audiences are getting 80-90% response rates. While even the least favorable experiences are in the 35-40% range. (Matt Barby)

Negative feedbacks from customers

Customers don’t trust the understanding capabilities of the chatbots they interacted with. As a result, they prefer humans to take over conversations. This could be remedied with better chatbots or more smooth chatbot to human handover processes.

  • According to Uberall survey, when asked what elements of chatbots needed improvement,
    • 43% of respondents said chatbots need to work on their accuracy in understanding what customers are asking or looking for,
    • 27% of respondents said the ability of customers to get “a human customer rep involved where needed”
    • 19% of respondents said the ability to hold a more “human-sounding, natural conversation”
  • 46% of respondents felt that chatbots were being used specifically to keep them away from a live agent.(GetVoip)
  • 65% of users seem to not trust chatbots and feel that chatbots don’t fully understand their issue. (GetVoip)
  • 46% of respondents would choose a live person over a chatbot even if engaging with a chatbot saved them 10 minutes (Usabilla)
  • 22% of users think that chatbots lack a personal touch. (ShoppingTomorrow)

Customer breakdown by age

As expected, younger users tend to prefer bots more compared to older users:

  • 40% of millennials engage with bots on a daily basis (Mobile Marketer)
  • 67% of US millennial internet users would purchase a product/service from brands using a chatbot. (eMarketer)
  • 66% of millennials versus 58% of Baby Boomers consider 24-hour service as the top benefit of using chatbots. (Drift)
  • 70% of millennials reporting positive chatbot experiences. (Forbes)
  • 60% of consumers aged 35-44 in US report that companies are too quick to replace human representatives with chatbots. (CGS)

Benefits

The key benefit of chatbots is enhancement of customer service so that businesses can deliver a better customer experience which eventually leads to increased revenue.

  • Business leaders claim chatbots have increased sales by 67% on average. (Forbes)
  • 57% of businesses claimed that chatbot delivers large ROI on minimal investment. (Accenture Digital)
  • Nearly 90% of respondents report that they have recorded measurable improvements in the speed of complaint resolution, and over 80% have noted enhanced call volume processing using AI. (MIT Technology Review)
  • 80% of respondents report measurable improvements in customer satisfaction, service delivery, and contact center performance. (MIT Technology Review)
  • 64% of businesses believe that chatbots will allow them to deliver a more customized customer support experience. (Statista)
  • Chatbots can help companies save up to 30% of their customer support costs by by speeding up response times, freeing up agents for more challenging work, and answering up to 80% of routine questions. (IBM)
  • Chatbot automation can lead to $23 billion in savings from annual salaries. (BusinessInsider)
  • Consumers and businesses will save over 2.5 billion customer service hours by 2023. (Juniper Research)
  • Chatbots are projected to save $0.70 per customer interaction (CNBC)

Challenges

  • According to Accenture Digital Chatbot Report, top reasons of companies who don’t plan to implement chatbot are:
    • User adoption hesitancy: reluctance to engage with a conversational bot (64%)
    • Sub-par performance: inability to incorporate history/context for personalized experiences (51%)
    • Sub-par performance: failure to adequately understand human input (47%)
    • Uncertain exposure to a new privacy, security, legal, regulatory frontier (45%)
    • Shortage of skilled developers (44%)
  • According to same Accenture report, top challenges bot supporters have faced or expect to face when implementing bots are:
    • Lack of skilled talent to develop and work with bots. (65%)
    • Deployment cost (49%)
    • Cost to acquire/purchase (46%)
    • Data privacy & security (42%)
    • Self-learning/ Self-aware abilities (42%)

Industry Specific Stats

According to Chatbot Life’s 2019 chatbot report, top 5 industries that benefit from chatbots are real estate (28%), travel (16%), education (14%), healthcare (10%), and finance (5%). Therefore, we compiled statistics from these industries:

Finance

  • Chatbots will be able to reach 90% success rate in customer interactions by 2022. (Juniper Research)
  • Average amount banks save per chatbot interaction is $0.60 (Opus Research)
  • JP Morgan saved more than 360,000 hours of labor using its COIN chatbot to quickly analyze complex back-end contracts. (The Financial Brand)
  • 43% of digital banking users in the US prefer to use a live chat or chatbot to address issues. (eMarketer)

For more, feel free to check our banking chatbot research.

Travel/Hospitality

  • 33% of consumers would use a chatbot to make a reservation at a hotel or restaurant. (Drift)
  • Consumers see travel chatbots as a viable option. Two-thirds of those surveyed would find a chatbot useful (40%) or very useful (26%) in managing all of their business and work travel arrangements. (Humley)
  • 37% of users would prefer to deal with an intelligent chatbot when arranging travel plans or comparing booking options. (Humley)
  • 87 % of users would interact with a travel chatbot if it could save them both time and money. (Humley)
  • Chatbot from GRT Hotels & Resorts, GReaTa,has exchanged over 175000 messages within two-and-a-half-months of its launch. 84% of those who interacted with the bot shared their contact details, and 40% among them had booking intent. (Haptik)

Retail

  • 34% of retail customers would be comfortable speaking with customer service through an AI chatbot instead of live chat. (Statista)
  • Over 70% of chatbot conversations will be with retail chatbots by 2023. (Juniper Research)
  • In a 2019 survey, ±40% of U.S. consumers stated that they have used chatbots to engage with the retail industry (Statista)
  • Clothing is the most popular product type sold online with the assistance of chatbots. 22% of the most successful online stores sell clothes. Next are health products (9%), furniture (9%), electronics (8%), and jewelry (8%). (Tidio)

Recruiting

  • By 2022, 35% of organizations will turn the job application process into a simple conversation by utilizing conversational user experience and natural language processing in their recruiting process. (Gartner)
  • Recruiting chatbot vendor XOR claims that their chatbot solution allows businesses recruit 33% faster and screen 85% more resumes with the same budget while spending 50% less per hire. (XOR)
  • According to Allegis survey,
    • 58% of candidates were comfortable interacting with AI and recruitment chatbots in the early stages of the application process.
    • 66% – were comfortable with AI and chatbots taking care of interview scheduling and preparation.

This article was taken from AI Multiple, in order to check the original article, click here.

Author: Atakan Kantarci from AI Multiple

Beratics develops chatbot solutions for its customers. Beratics has its own technology for FAQs answering, that enables the bot to understand complex sentences without training, explore more about our solutions.

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