Photo: Canva
Do Online Shoppers Want To Haggle?
Nibble, a chatbot that allows consumers to negotiate lower prices online, promises to significantly improve conversion rates and average order value (AOV) for sellers while driving a fun and engaging experience for shoppers.
The Nibble experience begins on the online product page. Consumers see a “Negotiate Price — Instant Chatbot” button underneath the “Add To Cart” button. Clicking the button starts a conversation and potential negotiation with the bot, named Nibble.
Consumers can then strike a deal with the chatbot to earn a specified discount or free shipping if they complete the acquisition within a certain time frame, acquire a second item, provide an email address, or take some other action. The discount or incentive is determined by the retailer.
In many cases, retailers are using the chatbot to encourage bundling to increase overall spending. Nibble can offer suggestions to pair with the initial selected purchase.
For many retailers, Nibble reduces cart abandonment. Baymard Institute concludes that, based on its analysis of 49 different studies, the average cart abandonment rate is 70.19%.
Direct-to-consumer furniture retailer Industry West, which works with Nibble, finds the average discount offered through Nibble to be slightly below the standard 20% it offers when a shopper abandons their cart. However, the Florida-based retailer is fine with a higher discount if it completes an online sale. Ian Leslie, chief marketing officer for Industry West, told Digital Commerce 360, “This person, what they wanted was 20.6%. If that 0.6% was all I needed to gain the sale, that’s amazing. I’m all for that.”
The bot further helps with clearance. Personalized discounts promise a better margin return than broad discounts across items.
Sucharita Kodali, a Forrester analyst, told Forbes, “Instead of having to give a blanket 30% discount to everyone, they instead give a 20% discount to one person who’s ready to buy.”
For consumers, successful haggling feels like they’ve scored a deal. While the business was inspired by an interaction at a Turkish bazaar, Nibble’s founders note that the art of haggling still exists within car dealerships, mattress sellers, flea markets, and other spaces where both sellers and buyers feel they’ve benefited.
When asked if there was a “lightbulb moment” in inspiring Nibble, Rosie Bailey, CEO and co-founder, told Founders Hub, “Realizing what is missing in e-commerce was a win-win approach where the buyer feels like they have paid what they believe the value of a product is worth to them, and the seller still makes a profit from the sale, which is personalized and fun.”
Discussion Questions
What do you think of the promise of chatbots to haggle, or negotiate prices, to help drive online conversion for retailers? Do you see enough appeal for consumers?
Poll
Loading …BrainTrust
Melissa Minkow
Director, Retail Strategy, CI&T
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
An interesting concept that will work in some circumstances. I can see how it can reduce discount rates and improve conversions. It is essentially personalizing pricing so that consumers pay what they feel is fair and what an item is worth to them. However, I can also see other customers absolutely hating this type of interaction!
It’s getting monotonous to have to agree with you almost every day…
“However, I can also see other customers absolutely hating this type of interaction!”
Definitely: it will be those people who find out they’re willing to pay more than others.
Haggling is in our DNA. You don’t even have to be a fan of The Life of Brian movie to know that “We’re supposed to haggle!” Give and take is the art of making everyone happy, and this sounds like the perfect match. Yes, retailers should pay attention to Nibble the hagglebot, and for many reasons. First, it works—it convinces some shoppers to stick around and not abandon their cart. Second, it offers yet another customer experience that can be shaped and controlled by the retailer itself. And third, it essentially gives retailers another outlet for discounted items that could avoid shipping costs and a potential future in odd lots.
Perhaps most important of all, Nibble represents the tip of the iceberg when it comes to potential uses of AI in retail. The AI working behind the scenes of a realtime buying session can reach into it’s bag of freebies, concessions, discounts, and whatever else the retailers wants to put on the table—and it also know, in real time, whether sealing the deal will benefit the retailer’s bottom line. Take a minute to think about every aspect of your retail and multichannel business. What are the other ways that AI could add to your bottom line?
An interesting new application of technology (after all, one is haggling with a bot). However, it will have limited success. I suspect (a survey project here) the majority of consumers won’t embrace it, either because they don’t have the patience, or because they don’t have the desire to go through the effort. Some would-be-abandoned carts will be saved.
I read the headline and I was horrified. I read the article and my curiosity was piqued. If there is a mechanism here that elevates the engagement and increases conversion and/or basket size, that’s great. If all it does is invite price haggling, then it’s a modern day Pandora’s Box. It’s not a slippery slope. It’s a cliff. Do we really want a retail market that operates like the stock market? Buyers “bid” and sellers “ask”…???
It sounds like you left as you entered: horrified (or at least uneasy). Dare we say your conversion was abandoned ??
I can’t disagree with this reasoning more. Haggling belongs in bazaars and garage sales. Haggling online will encourage more abuse to associates who won’t be allowed to do that OR if they do, it will mean many transactions will be open to reduced margins because staff know they can give the discount.
What a fun concept! This will have to be an opt-in feature for online customers, since some hate haggling no matter what. The chatbot will also need the option to transfer communications to a human CX rep. Retailers that employ it will need to, at the very least, hire someone to respond to negotiations that reach the end of Nibble’s AI brain.
With that said, it’s a fun concept that I can see being incredibly popular at ever-expanding online marketplaces.
This is an interesting approach to minimizing cart abandonment. If it reduces the historically high abandonment rate of 70% without giving away too much margin, then it is a big winner for both retailers and consumers. This is the first I have heard of online haggling, but if consumers get used to it, it may become an expectation. I hope that is not the case.
When the Bot hallucinates and says yes to any offer, will the Retailers figure it out quickly and still honor the sale? Keeping prices accurate is still a challenge for many Retailers, I think fair pricing is a better route.
I’m extremely biased because I’ve been a fan of Nibble since I was introduced to Rosie by fellow Brain Trust panelist, Melissa Minkow. If you ignore the “how” (technology), the “what” leaves one wondering why no one thought of this sooner. To me, Nibble does three things beautifully well. Nibble moves existing, abandoned cart functionality to the pre-abandonment period, puts a twist on existing discounting strategies by making them feel more dynamic (haggling) and does both with an element of fun and human connection. We all know people that wait to receive email discounts when they abandon their carts. Nibble attempts to keep that shopper engaged and reduce the additional friction and potential loss of sale from that person leaving the shopping/buying journey. I’ve experienced Nibble and it’s not intrusive. Sure, no one wants to haggle when in a hurry but if you’re in a hurry, you’re probably not going to engage Nibble. Regardless, if you haven’t gotten the chance, next time you’re at a conference, say hi to Rosie. She’s brilliant – shameless plug – and I wish her continued success.
I have been a huge fan of Nibble for a couple years now. The current economic climate is perfect for a system like Nibble, as consumers are both empowered and spendthrift. The fact that in aggregate, retailers don’t lose any profits from this system and can avoid cart abandonment more successfully makes it ideal for all involved. Surge pricing has been such a pain point for consumers- this makes individualized pricing palatable and fun.
For those who believe a negotiation opens the floodgates for the “race to the bottom” – average discounts via Nibble last month were 8%. That’s lower than most retailers’ standard voucher codes… let alone their clearance pricing.
I think this is interesting however as a society this is not embedded in our “shopping cluture”.. Why haggle when you can just go in to a store and take stuff?
Haggling with a chatbot? That’s a thing? This is less about haggling and more about figuring out how to game the algorithm I suspect.
Oh boy… This is interesting. The first thing that crossed my mind was “used car purchase.” I have nothing against buying a used car, but the traditional stereotype is whatever the price is on the car, you can get a lower price by negotiating, which is often a negative experience. Are we going to be conditioned to “haggle” and negotiate on online purchases? Perhaps dropping a link to a competitor with a lower price or promotion could be a more legitimate way of doing it. Something like: “If you see a lower price, just put the URL here, and we’ll match it.” I look forward to seeing how this plays out.
I get informed by services when I leave items in my basket already and the systems entice you to complete the transactions with an incentive. Not unusual.
This is an exciting development, especially as it’s human nature to get the best possible deal. As consumers increasingly engage with AI-powered chatbots in their digital interactions, an online capability to enable consumers to haggle and negotiate prices was inevitable.
With their price negotiating chatbot, Nibble offers a real-life instance and business case where AI capabilities could be integrated within the digital commerce shopping experience. Backed by data science and algorithms, it appears as though Nibble could provide the right incentives in the form of promotions, discounts, free shipping, etc., to increase the AOV and drive greater conversion rates.
However, with any new service and capability, fast adopters will enjoy this experience, and others will resist it. It will be interesting to see how this plays out.
Haggling with a chatbot is a long way from cash on the Barrelhead. Does that indicate how advanced we have become or how ridiculous?
A little bit of <s>haggling</s> bargaining is fine. As an everday occurrence, not so much; for one thing it becomes unproductive spending dollars to save dimes when everything, however small, is negotiated. Of course the point of the bot is to do the heavy lifting, and reduce those costs, but I still think the novelty will wear off (assuming it was ever there in the first place). There’s something to be said for an orderly world of uniform pricing.