The global retail sector is set to spend $12bn on chatbots in 2023, according to Market researcher Juniper Research.
This is forecasted to reach $72bn by 2028.
With this projected increase of 470% over five years, much of this growth will reportedly be driven by the emergence of cost-effective open language models, most notably ChatGPT, in regions such as North America and Europe.
ChatGPT is a conversational assistant platform built on OpenAI’s generative pre-trained transformer 3 (GPT-3) family of large language models.
According to GlobalData, enterprises are quickly leveraging generative AI for use cases such as advanced search, content generation, data augmentation and customer management.
This is reflected in Juniper Research’s report, which predicts that the development of open language models will become a key driver for retail spending growth amongst small and medium retailers that were previously unable to invest in chatbots.
Research author Frederick Savage argues: "Chatbots have historically been a low priority for omnichannel strategies owing to the high cost of training AI-based algorithms. However, ChatGPT has significantly disrupted this trend; lowering the cost of implementation of chatbots for smaller retailers."
However, if leveraged inefficiently, chatbots can harm retailers’ relationships with consumers. In a recent consumer survey, 46% of respondents said they want more intelligent chatbots when shopping online.
What regions are spending more on retail chatbots?
The report forecasts Asia Pacific (APAC) will account for 85% of global retail spending over chatbots, despite only representing 53% of the global population. Messaging apps, including WeChat, Line and Kakao, have built strong partnerships with a wide array of online retailers. This results in high levels of confidence in chatbots as a retail channel.
However, the release of open language models is also forecasted to drive growth outside of APAC. By 2028, 66% of spend is forecast to be attributable to the region, as online retailers in other areas, such as North America and Europe, implement chatbots into retail activities. The report urges vendors to target online retailers in these two regions to maximise this growth outside of APAC.
