As the world's largest online-only retailer of health and beauty products, drugstore.com stocks a lot of inventory — more than 40,000 SKUs, about four times the number offered by a typical bricks-and-mortar drugstore. That selection can be daunting to both casual and expert shoppers alike, so the company added a live chat component and reaped immediate rewards: 25 percent of all chat sessions converted into sales.

Live chat has proven beneficial for smaller e-tailers, too. Zach Heller, director of web development for online continuing education retailer Lawline, said he not only saw an increase in sales upon adding live chat, he saw improvements to customer service and customer relationships.

"Many people hesitate to call our support line, most likely because they are afraid of spending a long time on hold only to talk to someone who is trying to sell them," he said. "Live chat eliminates those pressures and makes communication very easy."

But retailers embarking into the realm of live chat need to understand that there are potential pitfalls, and if the technology isn't used honestly it can backfire in spectacular fashion.

Drugstore.com incorporates a live chat link on each product page.

Shopper opinions about live chat

From the customer perspective, opinions are mixed about live chat. Shopper Amber Powers loves the concept when it works — but says when it doesn't, it is a major irritant.

"So many times that I've used live chats, I get this response — 'Thank you for waiting, your patience is appreciated,' sometimes for 30 minutes or longer." she said. "I get so caught up in my multitasking, I forget that I even signed into a live chat session."

And once you do connect with an agent, the issue arises of the quality of the conversation.

"The responses always appear to be canned and rarely relate to your actual inquiry, especially if it is very specific," said Sam Pocker, retail blogger/podcaster and author of "Retail Anarchy: A Radical Shopper's Adventures in Consumption." "You often wonder if Stephanie is a man in India on the graveyard shift or a woman sitting at home in her pajamas screaming at her children while she tries to respond."

Indeed, if there is one major threat to the perceived validity of live chat, it is the growing consumer awareness of "chat-bots" that could give the entire concept a black eye. Retail watchdog site The Consumerist regularly posts chat logs sent in by readers, often quite painful to read, in which it is obvious the customer is conversing with software rather than a real human being.

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But even if it is a real human being on the other end of the chat, a poor or unhelpful conversation can end up being more detrimental to the brand than no chat in the first place.

"Sometimes you receive generic, copy-and-paste responses that don't answer the question you have," said shopper Kristin Delfau. "Or the person tells you that you have to call the call center — which is what you were trying to avoid."

A positive live chat experience, on the other hand, can be overwhelmingly strong and worthwhile. Sherry Gavanditti, a public relations officer with an assisted living facility in Beachwood, Ohio, was tasked with purchasing new printers for her office. Her search led her to HP, where her online research led to a live chat with an agent.

"It was refreshing and satisfying to not get the hard sale of a face-to-face encounter, and to be able to ask questions and get answers and graphics, pictures of the product we were inquiring about, and comparisons at the same time," she said. "(The agent) also later sent us the entire chat session so that we could refer back to it.  A week later, he followed up with a polite email offering his assistance should we have additional questions. I was never really interested in the live chat method before, but HP made it simple, effective, and a pleasant experience."

Live chat is still new enough that most shoppers are not using it — according to Ryan Hoppe, marketing director with provider ATG e-Commerce, roughly three to four percent of online shoppers that are offered live chat will accept it. But he added that satisfaction levels tended to be very high among those who do use the service, often as high as 80 or 90 percent.

As with many other aspects of the shopping experience, live chat acceptance is largely generational, and e-tailers wanting to reach younger demographics need to embrace it accordingly. "There is an entire generation that is now much more comfortable communicating via chat and SMS than voice," said Jon Rauschenberger, chief technology officer of retail consultancy Clarity. "If a retailer has employees that are communicating with customers and don't offer text-based real-time communications, they are putting an unnecessary barrier between their customers and their employees."