Source: Google Trends
Thousand unique readings of Chatbot Report 2019: Global Trends and Analysis prompted us that such materials are in demand — and therefore we are pleased to submit an updated Chatbot Trends Report 2021.
For several years chatbots were typically used in customer service environments but are now being used in a variety of other roles within enterprises to improve customer experience and business efficiencies. Known by a variety of different names such as a
conversational AI bot, AI assistant, intelligent virtual assistant, virtual customer assistant, digital assistant, conversational agent, virtual agent, conversational interface and more, chatbots are growing in popularity. But just as chatbots have a variety of different names, they also have varying degrees of intelligence.
Which of our predictions did come true? COVID-19 became a catalyst for business transformation: 76% of businesses plan on long-term IT changes. Conversational AI Market According to a new update to the International Data Corporation (IDC) Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide, spending on cognitive and AI systems will reach $77.6 billion in 2022, more than three times the $24.0 billion forecast for 2018. The compound annual growth rate (CAGR) for the 2017–2022 forecast period will be 37.3%.
Software will be both the largest and fastest growing technology category throughout the forecast, representing around 40% of all cognitive/AI spending with a five-year CAGR of 43.1%. Two areas of focus for these investments are conversational AI applications (e.g., personal assistants and chatbots) and deep learning and machine learning applications (employed in a wide range of use cases). North America is expected to hold the largest market size in the global conversational AI software market, while Asia Pacific (APAC) is expected to grow at the highest CAGR during the forecast period. North America is expected to be the leading region in terms of adopting and developing conversational AI. Growing investments in AI and ML technologies, presence of maximum number of conversational AI vendors, and increasing government spending on AI-based technologies are expected to contribute to the market growth during the forecast period. (Markets and Markets)
The chatbot market is expected to grow by USD 1.11 billion, progressing at a CAGR of almost 29% during the forecast period. According to the Technavio report, the market will not be majorly impacted due to the spread of the COVID-19 pandemic. 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. According to Lauren Foye, by 2022, banks can automate up to 90% of their customer interaction using chatbots. A new study from Juniper Research has found that the operational cost savings from using chatbots in banking
will reach $7.3 billion globally by 2023, up from an estimated $209 million in 2019.
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.
The rising popularity of live chats as an effective method of customer engagement and the increasing adoption of chatbot technologies to provide enhanced customer service is opening several new opportunities for market vendors.
According to Markets and Markets, the global conversational AI market size is expected to grow from USD 4.2 billion in 2019 to USD 15.7 billion by 2024, at a Compound Annual Growth Rate (CAGR) of 30.2%. Intelligent Virtual Assistants (IVA) and chatbots are the 2 segment types in the conversational AI market report.
The Chatbots segment will hold a larger market size during the forecast period. Research and Markets states that the Chatbots Market was worth USD 1.2 billion in 2018 and is projected to reach USD 7.5 billion by 2024 registering a CAGR of 34.75% over the period. The chatbots segment is estimated to hold a larger market size, owing to the increasing demand for AI-powered chatbots to analyze customer insights in real time.
PSFK says that 74% of consumers prefer chatbots when they’re looking for instant answers. With companies that use chatbots in retail seen as efficient (47%), innovative (40%) and helpful (36%).
Chatbot Adoption Growth Expected Across All Industries
The AI-based chatbots can be used by the enterprises to understand user behavior, purchasing habits, and preference over time and accordingly can answer queries.
The major factors fueling the market growth include the increasing demand for AI powered customer support services and omni-channel deployment, and reduced chatbot development costs.
Besides, organizations across various industry verticals are increasingly adopting AI to make more informed decisions. Many such factors will foster market growth over the forecast period.
The advantages of chatbots over other customer support options are one of the major factors propelling the market growth. Chatbots can be integrated into various channels such as websites, email, SMS, or messaging applications through which users interact. They collect consumer data from support interactions and databases and provide a personalized experience to the customer.
Also, they can recognize human emotions such as anger, confusion, fear, and joy. Many such advantages are increasing the adoption of chatbots among businesses, which is driving market growth. However, factors such as lack of awareness and standardization will hamper market growth.
Consumer retail spend over chatbots will reach $142 billion by 2024; rising from $2.8 billion in 2019. This represents average annual growth of 400 per cent over the next four years, according to a new report from Juniper Research.
The research identified the retail sector as a key beneficiary of advances in NLU (Natural Language Understanding) technologies. It forecast that NLU would be essential in providing a seamless retail experience for users and to establish chatbots as a reliable retail channel as it enables chatbots to efficiently process human inputs and produce more accurate automated responses to users.
The new research, Chatbots: Vendor Opportunities & Market Forecasts 2020–2024, forecasts that advances in NLU capabilities will drive the effectiveness of chatbots. It anticipates that over 50 per cent of retail chatbot interactions will be completed successfully by 2024, without the need for human intervention.
As a result, the research urges retailers to implement chatbots as part of a wider omnichannel retail strategy in order to maximize their presence on a number of key retail channels.
Additionally, the research found that 80 percent of global consumer spend over chatbots will be attributable to discrete chatbots by 2024. These are embedded directly into a retailer’s mobile app, rather than accessed via a browser or messaging application.
The research anticipates that control over development and the ability to retain company branding will drive discrete chatbots to become the most popular chatbot medium in retail.
The report also forecast 70 percent of the global number of chatbots accessed by 2024 would be attributable to Far East & China. Furthermore, over $80 billion will be spent via chatbots in China in 2024; accounting for over 55 per cent of global chatbot spend in that year.
The research, however, highlighted that this will still only be around 4 percent of total mobile and online spend on digital and physical goods in the region.
2019 only five percent of customer interactions with contact centers globally are powered by AI technologies, but Gartner estimates that by 2021 this will rise to nearly one in six. Fortunately, government agencies have access to a new generation of AI-enabled chatbots, capable of detecting caller intent and responding to the root causes of customer inquiries, considerably reducing call volumes.
According to an April 2019 survey from Forrester Consulting, 89 percent of customer service decision makers in North America believe chatbots and virtual agents are useful technologies for personalizing customer interactions. But problems arise when the capabilities that chatbot vendors promise to deliver just aren’t there or require too much involvement from internal IT teams.
During 2021, more than 50% of enterprises will spend more per annum on bots and chatbot creation than traditional mobile app development (Gartner).
Forrester says that a typical request for proposal (RFP) doesn’t work for conversational AI. In his opinion, it’s almost impossible to differentiate between the products on paper. Forrester recommends carrying out proof of concepts to evaluate conversational AI chatbot development tools. Data shows that chatbot usage and engagement is on the rise.
Today, only five percent of customer interactions with contact centers globally are powered by AI technologies, but Gartner estimates that by 2021 this will rise to nearly one in six. Fortunately, businesses have access to a new generation of AI-enabled chatbots, capable of detecting caller intent and responding to the root causes of customer inquiries, considerably reducing call volumes.
To secure the benefits of AI, businesses need to consider more than just the technological capabilities of the AI tool they want to deploy. They must ensure that technology enhancements go hand-in-hand with developing people and creating new organizational processes to support AI-powered services. Only then will they be able to improve the overall experience and reap the rewards of greater operational efficiency.
AI Chatbots 2021 and beyond
- By 2022, 70% of white-collar workers will interact with conversational platforms daily (Gartner).
- $3.9 trillion projected AI-driven business value growth by 2022 (Gartner).
- $8 billion projected business cost savings from chatbots by 2022 (Juniper Research, 2017).
- 75% to 90% projected percentage of queries to be handled by bots by 2022 (According to CNBC, 2017).
- $0.70 projected chatbot cost savings per customer interaction (CNBC).
- 5 billion hours projected time savings for businesses and consumers from chatbots by 2023 and $112 billion projected value of chatbot eCommerce transactions by 2023 (Juniper Research).
- The Chatbots Market was worth USD 946.55 million in 2017 and is projected to reach USD 5,638.64 million by 2023 registering a CAGR of 34.64% over the period 2018–2023 (Business Wire, 2019).
- The operational cost savings from using chatbots in banking will reach $7.3 billion globally by 2023, up from an estimated $209 million in 2019 (Juniper Research).
- AI, including chatbots, will have a highly disruptive impact on insurance claims management, leading to cost savings of almost $1.3 billion by 2023, across motor, life, property and health insurance, up from $300 million in 2019 (Juniper Research).
- According to Markets and Markets, the global conversational AI market size is expected to grow from USD 4.2 billion in 2019 to USD 15.7 billion by 2024, at a Compound Annual Growth Rate (CAGR) of 30.2% is forecast during the same during the forecast period (Markets and Markets).
- The Chatbots Market was worth USD 1274.428 million in 2018 and is projected to reach USD 7591.82 million by 2024 registering a CAGR of 34.75% over the period (2019–2024) (Research And Markets).
- By 2024, AI will become the new user interface by redefining user experiences where over 50% of user touches will be augmented by computer vision, speech, natural language and AR/VR (IDC).
- Annual global AI software revenue is forecast to grow from $9.5 billion in 2018 to $118.6 billion by 2025 (Tractica).
- By 2025, customer service organizations that embed AI in their multichannel customer engagement platform will elevate operational efficiency by 25% (Gartner).
- According to the current analysis of Reports and Data, the global Chatbot market was valued at USD 1.17 Billion in 2018 and is expected to reach USD 10.08 Billion by year 2026, at a CAGR of 30.9% (Globe News Wire).
It’s clear that chatbots are here to stay. As the market matures, only the intelligent and capable conversational AI chatbot platforms will remain. BRN.AI platform will transfer your Industry Expertise in AI Business for exponential scale.