- As it looks to capture more of the rising chatbot commerce market, e-commerce chatbot provider Zowie raised $14 million in Series A funding on Tuesday from Tiger Global Management, Gradient Ventures, 10xFounders, Inovo and Jack Altman, bringing the company's total funds raised to $20 million.
- Zowie will use the funds to hire more employees and expand its product. The company plans to develop more tools aimed at customer support for e-commerce companies' specific needs.
- Zowie automates 70% of inquiries for online retailers, such as questions about packages and shipping addresses, and connects retailers' customer service teams to shoppers that could use personalized product recommendations or non-automated help.
Though chatbots can be a convenient way to answer frequently asked questions, research from VentureBeat suggests that consumers still prefer customer service with a personal touch. In a survey commissioned by customer service outsourcing firm Simplr, 71% of respondents rated calling and talking to a live person between eight and 10 on a scale of one to 10; the same percentage rated chatting with a live person between eight and 10. The survey, which included 1,000 Americans aged 18 to 75, found that only half of the respondents gave the same rating for using chatbots.
Though the COVID-19 pandemic has accelerated e-commerce growth, a 2021 Forrester report estimates that retail spending in physical stores will still significantly outweigh e-commerce in the future. While Forrester’s research found that the U.S. e-commerce market grew by 30% in 2020, it also predicts that nearly three-fourths of retail will still occur offline by 2024.
Despite that, spending via chatbots, as well as the overall e-commerce market, is expected to grow. A 2020 report from Juniper Research predicts that consumer retail spending through chatbots will reach $142 billion by 2024. E-commerce spending as a whole is projected to reach $1 trillion this year, according to Adobe’s Digital Economy Index report.
With the chatbot market expected to grow in the coming years, Zowie is positioning itself as a startup that can turn customer service into a marketing tool for online retailers. In its announcement, Zowie CEO Maja Schaefer said its tools are meant to assist customer service employees with offering personalized care and product recommendations.
"We all know by now how beneficial it is for brands to build valuable, lifetime relationships with their customers," Schaefer said in a blog post on the announcement. "Our focus at Zowie is: how can we create more opportunities for brands to actually do that – and boost sales at the same time?"