Why AI Chatbots Fall Short for E-Commerce — And What Actually Works

Business
Marketing
Grant Bostrom
Head of New Ventures
5 min read
January 10, 2025
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The Promise of AI in Online Shopping

AI tools like ChatGPT have sparked a wave of innovation in e-commerce. Retailers are eager to harness AI to improve customer experiences and boost sales — and many start by adding a chatbot to their website, hoping it will act like a virtual sales assistant.

In theory, it’s a smart move: a chatbot that answers questions, guides customers, and helps close the sale. In reality? It rarely works that way.

The Chatbot Reality Check

At Karley, we spent over a year rigorously testing ChatGPT-style chatbots across dozens of e-commerce environments. We ran controlled A/B tests and gathered detailed feedback from real shoppers. The goal: to see if these bots could drive more sales.

The results were clear — and surprising: Chatbots solved support issues just fine, but they consistently underperformed when it came to converting shoppers.
In some cases, they even decreased sales.

Why Traditional Chatbots Miss the Mark

So why don’t these AI chatbots work for product discovery and shopping? Two core reasons:

1. Shoppers don’t use chatbots for product questions.

Most customers skip the chatbot altogether when browsing. Why? They associate chatbots with tech support, not product guidance — so they ignore them when trying to make purchase decisions.

2. Shoppers don’t always know what to ask.

Roughly 95% of purchase-blocking questions are latent — the shopper doesn’t consciously think to ask them, even though the answers influence whether they buy. Open-ended chatbot interfaces can’t surface these latent questions, so customers bounce without the confidence to purchase.

In short, traditional chatbots are passive, reactive, and disconnected from how people actually shop.

The Breakthrough: Embedded Generative Q&A

Instead of relying on pop-up bots, Karley built a smarter solution:

  • Embedded directly on the product page — no annoying pop-ups, just a seamless part of the shopping flow.
  • AI-powered prediction of buyer questions — instead of waiting for the shopper to ask, Karley surfaces the most relevant product questions automatically.
  • Conversational, but guided — the interface feels natural and helpful, not like starting from scratch with a blank chatbot box.

This approach doesn’t just feel better — it performs better. Compared to standard chatbots, Karley’s embedded Generative Q&A:

  • Drove 10x more engagement
  • Increased customer satisfaction significantly
  • Delivered a measurable lift in incremental revenue

And because it's powered by AI trained on a proprietary dataset, the experience keeps learning and improving — continuously optimizing for the questions that actually lead to conversions.


Final Takeaway

AI has huge potential to enhance the online shopping experience — but not every application of AI is a win for your customers or your business.

At Karley, we believe in using AI strategically, with the end user in mind. Our testing shows that traditional chatbots aren’t built for how people actually shop — and often create more friction than they solve.

The future of AI in e-commerce isn’t about bots that wait for a question. It’s about smart, embedded guidance that anticipates what shoppers need — and delivers it, instantly.