Nibble wants to help retailers and customers in Middle East with price negotiations online
This AI-powered chatbot helps customers negotiate prices online and enables retailers to improve sales, capture customers, and clear excess stock. The founders of Nibble are eyeing opportunities in the Middle Eastern market, which is culturally not averse to price negotiations.
Monday March 27, 2023,
7 min Read
- Nibble is an AI-powered chatbot that allows customers to negotiate prices on e-commerce platforms.
- It executes over 25,000 negotiations per month across the world.
- The negotiations are controlled through discounting thresholds set by Nibble’s clients.
Three years ago, Jamie Ettedgui, a resident of the UK, was in a bazaar in Turkey, looking for a pair of trainers. He found a pair that he liked, but he was not happy with the price. Then he tried haggling a bit with the shopkeeper and it worked.
“I just needed a ‘nudge’ to complete the transaction, so I asked,” he says, adding that he enjoyed the little “chit-bat” he had with the shopkeeper. “The retailer got a price that worked for him, and I got a price that worked for me."
This incident made Ettedgui wonder if he could take price negotiations to the world of ecommerce.
Ettedgui shared this idea with Rosie Bailey, whom he had met while pursuing a Sloan Masters in leadership and strategy from London Business School. Bailey found this interesting and was on board.
By the end of the year (2020), the duo had introduced—an AI-powered chatbot that facilitates price negotiations online, before customers make a purchase.
While Nibble is a global product, Ettedgui and Bailey are particularly eyeing opportunities in the Middle East, where it is not uncommon to see negotiations between buyers and sellers. The Middle East—much like India—does not shy away from bargaining.
How Nibble works
Nibble essentially sits on an ecommerce store and allows a shopper to have a natural language negotiation with the retailer and agree on a win-win price—a price that works for the retailer and the customer.
“All you have to do is make an offer to the chatbot and ask for a discount that would work for you,” explains Ettedgui.
Retailers also tell Nibble the discount they’re willing to offer, and the chatbot will negotiate accordingly—for the selected products—as per the retailers' guidelines.
Thus, the negotiations are controlled through the discounting thresholds set by the retailers, which help optimise the bot’s behaviour.
How Nibble helps improve sales
Nibble, according to its founder, can help improve sales in different ways. The bot can be used as part of a retailer’s promotional strategy and also for specific products on the site.
Ettedgui illustrates possible use cases. Nibble can come in handy when a retailer is implementing a Black Friday campaign or using a voucher code for a particular cohort of individuals. It can also be used if a retailer wants to capture sales from someone trying to leave their website.
Additionally, the chatbot also nudges undecided customers to make a purchase on the basis of their exit intent, website dwell time, number of visits, page revisits, purchase history, and more. The retailers can choose whether they wish to make Nibble available for every visitor or for specific user behaviour.
All this makes online shopping a more interactive experience, says Ettedgui.
Apart from this, Nibble can also help retailers clear stock at better margins, says Ettedgui. “We have seen case studies where instead of clearing stock at 50% (discount), we’ve cleared it at 27%,” he notes.
“For example, say a retailer wants to encourage increased order values. Rather than saying something along the lines of ‘get three for two or hit a certain target and get free shipping’, we can use a trigger for Nibble and say ‘buy three items or spend over a certain price and get a special discount’. This helps increase the average order value at a smaller margin,” he adds.
At present, Nibble executes over 25,000 negotiations per month across the world, according to the founder.
Tapping into the Middle East
The founders are eyeing the Middle East market, where culturally people are used to negotiating prices.
“In cultures such as the Middle East and India, people see negotiating as a fair and transparent way of getting to know your retailer, customer, and forming a relationship,” says Bailey.
“Our geographic expansion has been an area of pull rather than push. Tapping into the Middle Eastern market was very much inbound. Our Middle Eastern clients found us,” she adds.
Globally, Nibble has over 250 clients, including Warner's Gin, Sarojini by ReThought, Watch Rapport, and Thrift +. The team secured its first client in the Middle East this year and now has five clients in the region in the areas of homeware, automobile and fashion.
The 12-member team behind Nibble is focused on establishing a client base in the Middle East and connecting with larger retailers. They are also actively exploring partnerships in the region.
At the moment, Ettedgui and Bailey are attending regional conferences and using their existing clients to further their growth in the Middle East region.
“With our existing customers, we are working on case studies so that we can start marketing and promoting,” says Ettedgui.
The founders are also looking to leverage their London Business School network in Dubai.
“The Middle East is a forward-thinking market, and Dubai is going to be a very personal network driven environment for us,” says Bailey.
She also says that a third of Nibble’s clients are involved in the circular economy, adding that it is an important segment for the startup.
“On peer-to-peer marketplaces such as eBay, Depop, Poshmark, etc, there's an established expectation of making an offer. We see ourselves as an enabling technology for sustainable business models.”
Apart from online retail stores, Nibble is also available on platforms such as Shopify, Magento, and WooCommerce along with an API for non-app stores.
Revenue and future roadmap
The startup charges a 2% commission on the sales it secures. The team also offers three pricing plans—basic, professional and premium.
The basic plan allows 250 negotiations per month and is free of cost. “It is for small customers. We’re a new concept and we think it's really important that people try it out and see how effective it is,” says Ettedgui.
The professional and premium pricing plans allow 1,000 and unlimited negotiations, respectively.
The pricing depends on factors such as average order value boosting tools, app availability, and algorithm optimisation.
Speaking of competition, Bailey says Nibble competes against different forms of promotions delivered through voucher codes, live chat by having customer agents negotiate prices, and blanket sales on websites.
“Our competition also includes ‘make an offer’ apps in the Shopify store that allow users to submit a price and talk directly with the retailer, but they don’t really automate the conversation like us,” elaborates Ettedgui.
Nibble competes globally, though not directly, with Zendesk (US), Haptik (India), Tidio (US), and Gorgias (US).
The artificial intelligence market is clocking significant growth across the world. In the Gulf Cooperation Council, it is expected to register a CAGR of 14.4% during 2022-27, as per market research firm Imarc Group. The global AI-enabled e-commerce solutions market is likely to grow at 40% CAGR during 2021-2026, as per a report by Global Market Estimates.
In 2022, Nibble raised $3.3 million in a seed funding round led by Vernex.
At present, the Nibble chatbot interacts globally in English. Going forward, the goal is to localise interactions based on language as well as cultural expectations.
“But we'll probably do it market by market as we see a significant uptick,” says Bailey.
Commenting on the role of chatbots in ecommerce, Bailey says chatbots are now being perceived in a positive light more than ever.
“I think we’ve benefitted enormously from open AI, because perhaps two years ago, people found chatbots to be universally annoying. Now the expectation is that chatbots can be understanding and easy to talk to,” she says.
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Edited by Swetha Kannan