Varos Glossary

AI Chatbot

As 2022 came to a close, ChatGPT was on nearly everybody's mind. Never before had there been an AI chatbot with an online presence quite so powerful. What's more, the hype around the software has only grown more powerful since it made its original debut. 

But how much of that hype was grounded in reality? What exactly is an AI chatbot? And what can this technology do for your eCommerce business?

What is an AI Chatbot?

An AI chatbot is exactly what it sounds like. It's a chatbot that leverages conversational AI — a multidisciplinary approach that combines natural language processing, natural language understanding, and natural language generation with machine learning. More sophisticated AI chatbots are typically capable of parsing the sentiment, context, and intent of a query then responding in a way that imitates real conversation. 

Using ChatGPT as an example, chatbots are capable of performing a wide range of different tasks, including, but not limited to: 

  • Engaging in casual conversation. 
  • Providing information.
  • Answering questions. 
  • Assist with tasks ranging from creating a shopping list to generating computer code. 
  • Generate stories. 
  • Produce web content.

How Do AI Powered Bots Differ from Regular Chatbots?

AI Chatbots are essentially just Chatbots driven by more sophisticated algorithms. While an ordinary chatbot is built on a rigid ruleset and must follow a pre-programmed conversational flow, an AI chatbot has a great deal more freedom in terms of what inputs it accepts and how it can respond. There is a trade-off, however. 

While you don't exactly need to train a regular chatbot, an AI-powered chatbot will typically need to ingest massive volumes of data in order to develop its algorithms. This also means, however, that the AI bot is capable of learning and improving with time. The regular chatbot remains relatively static, neither changing nor adapting on its own. 

The Benefits of Using AI-Driven Conversation Bots

The effective use of an AI conversation bot can greatly improve the eCommerce user experience, resulting in more sales, fewer returns, and more repeating orders.

Within the context of eCommerce, the benefits of AI chatbots include: 

  • Provides customers with 24/7 product and technical support. 
  • An improved and streamlined customer service experience. 
  • Insights into what your customers ask and how they think as the bot evolves in response to their queries. 
  • Deliver real-time personalization throughout the customer journey while also collecting valuable insights about each lead. 
  • Lower overall total cost of ownership compared to employing human support personnel.

Understanding the Limitations of AI Chatbot Technology

For all the hype, AI chatbots aren't perfect. There's even some debate as to whether or not they constitute true artificial intelligence — one computer scientist went so far as to describe them as a very sophisticated form of autocomplete.  What's more, if an AI chatbot is improperly or poorly trained, you could be looking at a range of problems including: 

  • Nonsensical or outright hostile responses. 
  • Delivering false information that the chatbot insists is accurate, known as 'hallucinating.' 
  • Unintentionally biased or discriminatory outputs. 

AI Chatbots also lack true emotional intelligence, and are generally incapable of performing creative tasks or thinking critically and independently on a topic. 

It's important that you understand the limitations of the technology prior to using it. There can be little doubt that the technology underlying software like ChatGPT is incredibly powerful. If you use it correctly, it can be immensely beneficial. 

However, it's not the holy grail that everyone is making it out to be, and it's important that you see through the hype.