- Consumers are demanding round-the-clock service for assistance in areas ranging from banking and finance, to health and wellness.
- Because of this demand, chatbots are increasing in popularity among businesses and consumers alike.
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With messaging apps on the rise, chatbots are increasing in popularity among businesses and consumers alike. Chatbots are artificial intelligence (AI) systems that enable customer engagement via messaging, text, or speech.
Many are deployed on chatbot platforms such as Facebook Messenger, WhatsApp, WeChat, Slack, or text messages. Facebook’s expansion with Facebook Messenger has been giving businesses the opportunity to better reach their target audience through different APIs, and chatbots are becoming a necessity in certain industries.
Despite the complexity of AI, machine learning (ML), and natural language processing (NLP), used to pick content and context from conversations with users, there are a number of platforms and solutions available to build a sophisticated chatbot. The ease and accessibility to build a customizable bot alongside the increased usage of messaging apps only proves the growth and strength that will push the chatbot industry forward. As the industry matures, the underlying AI technology continues to develop and grow more sophisticated.
Chatbot Market Stats: Size & Growth
As chatbots continue to reduce operating costs for enterprises, the market size will likely continue to swell. Chatbot marketing, payments, processing, and service are different segments chatbots can work in—but when it comes to chatbot revenue, service has a majority of the market share.
By 2024, consumer retail spend via chatbots worldwide will reach $142 billion—up from just $2.8 billion in 2019, according to Juniper Research.
Today, consumers are demanding round-the-clock service for assistance in areas ranging from banking and finance, to health and wellness. As a result, companies are rapidly looking to develop chatbots and virtual assistants to answer questions cusomters may have at any time of day.
Nearly 40% of internet users worldwide perfer interacting with chatbots than virtual agents, and with major industries including retail and healthcare turning to digital technology, chatbots will likely increase in popularity moving forward.
Chatbot Market Trends & Forecasts
Some of AI and machine learning’s biggest advancements in recent years have been in perception and cognition. Voice recognition still has a way to go but Apple, Amazon, and Google have made leaps and bounds on advancements in voice recognition with Siri, Alexa and Google Assistant, respectively.
Machine learning systems are now being used to decide trades done on Wall Street and to predict if users will click on particular ads, increasing efficiencies on both the business and consumer ends. In addition to being revenue generators, chatbots can also serve as research bots, or for lead generation and brand awareness to save businesses money.
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And because chatbots can simulate human agents via AI and natural language processing, each interaction and additional piece of customer data collected improves their ability to understand a user’s intent. And companies should take note that the more successful chatbots are the ones that are able to drive a good conversational experience that mimics human agents.
In 2019 Microsoft released a service that allowed different firms to develop their own chatbots. Giving firms the tools needed to alleviate administrative tasks via chatbots earned Microsoft a top spot in the healthcare market. Insider Intelligence estimates that up to 73% of healthcare admin tasks could be automated by AI, and the adoption of chatbots could save the healthcare, banking, and retail sectors $11 billion annually by 2023.
As more businesses and consumers use chatbots, the more demand will exist for better development of chatbots, thus making it easier for companies to implement them within their business.
Chatbot Industry Ecosystem & Company Landscape
The chatbot ecosystem is quickly expanding despite the relatively robust ecosystem that currently exists. The ecosystem of the underlying technology and platforms for chatbots include deployment channels, third-party chatbots, companies that provide the technology for building chatbots, and native bots.
Deployment channels such as messaging apps, cloud networks, SMS, and email clients are where chatbots live and interact with users. Third-party chatbots are brands and businesses that a customer may use to, for example, order an Uber through Facebook Messenger.
Bot building companies are typically third-party companies that employ AI technology to help businesses deploy their own chatbot across a platform. Finally, native bots are built by the platform or app in which they are operating (for example, Apple’s Siri or Google Assistant).
More and more major companies continue to announce their support for chatbots within their own business, such as LinkedIn, Starbucks, British Airways, and eBay. The key players within the chatbot industry, such as Facebook, Google, and Microsoft have been investing in the development of chatbot technologies for years and continue to work on major bot projects.
The rise of chatbot usage has launched an abundant amount of startup tech following in their footsteps in a variety of industries. Some chatbot startups such as MobileMonkey and Chatfuel are strong in funding and have the potential to revolutionize the industry.