Why Costco did not consider chatbot? The pros and cons of chatbot

In Q2 2020, large waves of requests reached the travel agencies, credit card companies, airlines, and cruise lines to cancel or reschedule trips due to the COVID-19 pandemic. Costco's travel arm, Costco Travel, experienced the most serious crisis in their reputation among customers due to extremely long waiting times. 

Costco is famous for its customer loyalty. It generates over $3 billion revenue from membership fees and 98.5 million customers, whose average household income exceeds $100,000. However, customers spent hours on the phone waiting for customer service to deal with cancellations. The record shows certain customers waited for up to 7 hours holding before their calls were answered. 

A big part of the reason for a failure in customer service is that Costco travel continues to use live agents to answer customer calls. If you log into Costco Travel, you will see a real person travel agent on the right hand of the page, with a name and contact number. 

In comparison, many retailers have switched to a combination of the chatbox, live chat and call centers to deal with the increased volume of customer inquiries. Chatboxes are normally the first line of response when the customer initiates an inquiry if it is simple and straightforward enough. Indeed, the study by Acquire found that 80% of the customer inquiries can be resolved by chatboxes without supervision. In this way, only 20% of the total call volume requires human intervention. 

Of course, as customers, we all prefer human interaction and being heard (i.e., the exact cons of chatbox). That means, it is hard to completely eliminate live chat or call center, but at least building in the chatbox functionality can speed up the processing of the customer inquiries and avoid long waiting time. 

It is important to note that chatboxes are an important way of marketing products and services. They collect firsthand customer information and data, engage customers in a significantly more scalable way, and build trusted customer relationships accordingly. Chatbots are definitely a wave that any retailers want to catch in the next ten years. 

Source: https://www.travelmarketreport.com/articles/Costco-Travel-Clients-Fill-Social-Media-with-Complaints-Amid-COVID-19-Outbreak