North America and Europe Chatbot market was valued at USD 1,826.3 million in 2020, and it is expected to reach a market value of USD 11.149.7 million by 2026. to register a CAGR of 34.61% over the forecast period (2021 - 2026). Businesses are constantly seeking opportunities to connect with customers and ensure positive communication. Conversational chatbots are becoming companies’ priority with the increasing need to develop more prominent communication platforms. During the pandemic, many enterprises opted for chatbot implementation to automate customer services.
Key Highlights Investing in automation solutions such as chatbots enables organizations to enhance customer service. Due to the rising use of messenger applications, the integration of chatbots into them has yielded a higher return on investment as approaching the customers on their preferred application improves user experience.
Chatbot also allows organizations with consumer analytics. Insight into customers’ behaviors can help businesses make changes to their sales, marketing, and product development strategies to boost customer acquisition, improve customer satisfaction, and continue growing the business.
Many enterprises still face troubles in understanding the need and method to use a chatbot. Low awareness regarding the benefits provided and the need for chatbots to enhance customer satisfaction and achieve consumer analytics are the reason for the same.
During the outbreak of the COVID-19 pandemic, the chatbot has been increasingly deployed by various organizations to respond to customer queries and other related information. As the different organization has adopted remote working due to lockdown imposed in states/countries, the company are heavily dependant on chatbots to reduce the burden of customer query due to minimal availability of customer service employees.
Key Market Trends
Increasing domination of messenger application is driving the market
Chatbots on messaging apps allow organizations and brands to personally engage at a high scale with people on the platforms where they’re already spending a lot of time. Moreover, chatbots can be connected to a variety of data sources via APIs to deliver information and services on demand. The potential for chatbots to improve customer experiences has companies investing in them as a new way of interacting with consumers. The messaging app usage statistics of October 2020 show that WhatsApp has 2.0 billion users worldwide and Facebook Messenger 1.3, WeChat is just behind with 1 billion. Chatbots with the ability to reasonably mimic humans allow brands to more efficiently engage consumers on these growing messaging platforms. Due to the rising use of messenger applications, integration of chatbots into them yield a higher return on investment as approaching the customers on their preferred application improves user experience. Moreover, messenger applications allow chatbots to save the user chat history for future purposes that enable chatbots to personalize the user experience and gain actionable insights about the user. Thus, due to easy integration and higher returns, usage of chatbots over messenger applications is expected to increase over the forecast period.
Italy expected to witness high growth rate
In Italy, chatbots are increasingly being used to reduce costs and improve operational efficiencies in a wide range of customer-facing industries, including retail, healthcare, banking, telecommunications, and utilities, with various innovations and funding activities.
The country is significantly witnessing increased demand for Healthcare and Hospitality, and further, the market is innovating chatbots considering the after pandemic travel situations. For instance, in February 2021, Hotelway announced a hospitality chatbot in Italy for Italian customers. The company is ready to capitalize market after travel resumes in Italy to cater to guests’ needs with the Hotelway chatbot.
The market vendors are actively launching chatbots for Italian customers on various platforms. For instance, in February 2021, The READ-IT announced the release of the chatbot’s Italian version. The chatbot asks a series of five different prompt questions and can be accessed through a web browser and the Telegram messenger service app. The chatbot was created by Dr. Alessio Antonini (KMi) of The Open University in collaboration with colleagues in English and Creative Writing (OU).
The country is witnessing increased adoption of chatbots for healthcare and museums during the forecasted period. According to the Osservatori Digital Innovation, in 403 respondents, 24% of the museums and other institutions polled in Italy stated that they planned to offer chatbots in the future. The country is witnessing an increasing demand for AI chatbots.
The market is highly fragmented and competitive. The industry comprises several large and established players from the AI market and the smaller, local companies operating with smaller clientele.
January 2020: Google announced the creation of a new chatbot Meena, a 2.6 billion parameter end-to-end, conversational neural model that can conduct more sensible and specific conversations than existing state-of-the-art chatbots. January 2021: Microsoft filed a patent that raises the intriguing possibility of digitally reincarnating people as a chatbot. Instead of using the conventional method of training chatbots using conversations and material from a wide sample of users, Microsoft’s patent - as spotted by Ubergizmo - raises the possibility of creating a chatbot from the output of a specific person. September 2021: Personetics and KBC have partnered to improve digital consumer engagement and financial wellness. The two firms will collaborate to provide multilingual, proactive, data-driven solutions to boost consumer engagement on KBC’s mobile app while meeting customer needs.
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