Consumer interactions with artificial intelligence – enabled chatbots in retail shopping experiences

By Xiaoxia Cao

Supervisors:   Dr Nisreen Ameen and Professor Chris Hackley
Royal Holloway, University of London

Companies are increasingly relying on artificial intelligence to automate marketing tasks. For example, chatbots are frequently mentioned to be beneficial for the retail industry regarding customer service (about 95%), sales/marketing (about 55%), and order processing (about 48%) (Rese, Ganster and Baier, 2020). “A chatbot is software that simulates human-like conversations with users via text messages on chat” (, 2021). There are more than 300,000 active chatbots integrated on Facebook Messenger offering customer services (Nealon, 2018). The chatbots market is predicted to reach USD 7.5 billion by 2024 (Peart, 2020). Besides, more than 70% of chatbot conversations are expected to be with retail chatbots by 2023 (Dilmegani, 2020). It is undeniable that the interactions between consumers and AI-enabled chatbots in the retail industry were accessible and convenient, and these interactions will continue to grow in the future. Thus, we need to figure out what consumers gained from previous experiences with AI-enabled chatbots in the retail industry, and what is required further for the long-term relationship between them. Chatbots, once considered as “virtual idiot”, have gained popularity during the COVID-19 pandemic because of their immediacy (Miller, 2020; Ward, 2021). Consumers also became more tolerant of chatbots usage during 2020 (Ward, 2021). Thus, are there other issues we also need to consider when building such a long-term relationship? For example, emotions, privacy, and security issues.

Consumers’ perceptions of retail environments and their shopping behaviour outcomes have been significantly influenced by emotions (Herter, dos Santos and Pinto, 2014). As artificial intelligence technologies improve, digital agents transformed from merely providing information to being emotionally intelligent (Gelbrich, Hagel and Orsingher, 2021). However, the current research on the effects of consumers’ emotions in the interaction with AI-enabled chatbots in retail industry has not been done in depth. It is also unclear that whether the effects of emotions from other digital agents are similar to these AI-enabled chatbots because of their specific functions in the retail industry. Meanwhile, as Mogilner, Kamvar and Asker (2011) examined that participants’ perceptions of positive emotions, such as happiness, change with age. Thus, users of different ages and cultures may interact differently with AI-enabled chatbots.

The combination of artificial intelligence and big data gives retailers the capability to collect and store customer data from multichannel, which can be used to gain insights, and improve their products and customer experiences. While customers are willing to share their personal information in exchange for personalised services, they also express concerns about privacy (Davenport et al., 2020; Okazaki et al., 2020). Another factor that affects consumers’ perception of the online retailing environment is security, which mainly refers to online transactions (Mukherjee and Nath, 2007). Even though the retailers adhere technological solutions and legal guidelines to guarantee security and privacy. Consumers’ perceptions of privacy violations also rely on their knowledge and control (Wang, et al., 2020). In the face of so many ambiguous warnings and complicated advice, security awareness may be ineffective (Bada, Sasse and Nurse, 2019).

In conclusion, this research aims to fill the gap in knowledge on the long-term relationship between AI-enabled chatbots and consumers in the retail industry, and to provide a better understanding of concepts such as emotions, privacy and security in human-chatbots interactions. At present, this research is still at the early stage of the literature review, aims to get a solid understanding of all these concepts related to human-chatbots interactions. I am currently looking for opportunities to work with companies in this area or discuss with academics in the field.


Xiaoxia Cao
PhD student in Management
MSc International Management (Marketing)
Bachelor of Economics


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