A new trend in retail lets customers haggle directly with Artificial Intelligence-powered bots, negotiating discounts on everything from clothing to furniture. They aim to boost engagement as online shoppers get the satisfaction of earning a price they are happy with. Before they reshape ecommerce further, retailers need to prepare for the potential impact on returns, writes Wouter ten Heggeler, product manager at ReBound Returns.
Haggling in retail isn’t new – it’s been around as long as open-air markets. In recent years, consumer-to-consumer marketplaces such as eBay and Vinted have allowed shoppers to “make an offer”. This new wave of technology blends negotiation with AI, so customers can haggle in real-time with retailer bots. For the first time, we are seeing some of the world’s largest and most successful ecommerce brands trialling this tech.
The success of haggling bots will largely depend on how well they match with individual customer expectations and values; some will find it exciting, others frustrating. Executed well, this could provide a new strategic growth opportunity for internet retailers.
Accelerating the growing returns rate
Returns are at an all-time high, and we are expecting this rate to spike further in the over this peak season. This could be exacerbated by haggling bots that gamify the sales process, shifting focus from the product’s usefulness and value to the customer to the thrill of “winning” a discount.
Some retailers may even add additional gamification features like negotiation scores or leaderboards, amplifying the impulse-buy effect and frustrating customers who feel they have “lost”. The items would likely be returned when the excitement fades and buyer’s remorse creeps in.
If chatbots focus on personalisation, so the customer feels they have achieved a unique deal, the interaction is much more likely to increase satisfaction.
A new lens to view customer returns behaviour
The chatbots offer retailers a unique way to understand consumer behaviours in a new sales dynamic. Hidden in the mixture of responses to bots are clues to customer motivations, actions, and even their communication styles.
Data collection is crucial for effective retail returns, from understanding the reasons for returns to tackling the growing returns fraud issue. Used correctly, the chatbots are a tool to collect valuable insights about how customers think and act.
Transforming the returns process, inside and out
There are two sides to the return process. The visible side is what consumers see and experience, such as returns initiation and customer support interactions. The invisible side is everything else: the many hurdles that retailers must overcome in getting returned items back to stock safely, and refunding customers quickly.
On the customer-facing side, we’re likely to see chatbots play an increasingly prominent role across the entire customer journey. This already happens in other industries such as aviation, where the same bot can help you to make a purchase and assist when something goes wrong. This requires large amounts of available data, and for returns, it means being coupled with the original sales process. This data-sharing technology already exists, and forward-thinking retailers can benefit from it now.
Over time, machine learning will add new levels of personalisation, such as predicting the most suitable exchange options to offer customers based on their previous purchase and returns behaviour.
Behind the scenes, AI can be incorporated into the process to create a faster, more predictable returns journey. At ReBound, we are currently rolling out sophisticated machine-learning forecasting models to better staff our warehouses around the world, considering the different retailer profiles, country characteristics, and warehouse operating procedures. Over time, prediction models will be rolled out across the entire supply chain. One example is to better anticipate incoming return volumes. All of this operational refinement will ultimately benefit the customer experience.
Will we see haggling return-bots in future?
In the near future, we will likely see smarter chatbots that don’t just initiate returns but also use customer, product, and location data to suggest the best options, like nearby drop-off points for those that don’t want to travel far, or the most environmentally friendly carrier for the eco-conscious.
Longer term, we may see haggling bots that negotiate partial refunds or store credit with customers, or suggest they sign up to memberships schemes for free returns, instead of automatically processing a full refund. This approach will need careful consideration to avoid any impression of unfairness that would harm brand loyalty and reduce the chance of repeat purchases.
While AI chatbots can handle many of the visible aspects of returns, there will always be cases where a traditional customer success team is needed to handle complex cases. It will also take time for the latest iteration of this technology to integrate across entire supply chains. AI can only use the information it can access. To create a data framework that accounts for variables such as refund delays, carrier speeds, warehouse issues, and the different expectations of consumers around the world, that can then identify and notify the affected customers, would be an enormous undertaking for even the largest of retailers.
Rethinking the chatbot’s role in ecommerce
Chatbots are no strangers to retail, and many online shoppers will have already asked basic bots for updates on orders, returns, and refunds. For many retailers, there are simpler, less costly improvements that can hugely benefit the returns process before implementing AI returns bots. However, this new ability to incorporate negotiation into customer interaction signals an exciting, experimental shift in ecommerce – and it’s only the beginning of what might be possible.
Wouter ten Heggeler, product manager at ReBound Returns
