Chatbots are increasingly finding their way into e-commerce and e-services, as their implementation opens up promising opportunities to improve customer service. The present paper examines chatbots in this context, elaborating on their functional aspects that are rapidly leading to significant improvements in service quality. First, based on a literature review of recent publications in this field, an overview of their key features and functionalities underlining the relevance of chatbots for customer service is provided. Second, a further contribution is made by introducing two categories of chatbots' objectives based on their functional dedication, i.e. "improvement of service performance" and "fulfilment of customer's expectations". The considered chatbots' customer-related functions are interaction, entertainment, problem-solving, trendiness, and customization. The chatbot categories are discussed in detail. Their positive influence on service quality, constituting the chatbots' functional goal, as well as the potential of chatbots in customer service are pointed INTRODUCTION In the rapidly evolving world of customer service, chatbots have emerged as a prominent and transformative technology. This report aims to explore the future of customer service and the pivotal role that chatbots play in reshaping customer interactions. A chatbot is a computer program governed by a set of predefined rules or artificial intelligence that grants it the capabilities to communicate with and like a human. A set of commands is fed into the system that makes it smart enough to interpret and react to user inputted quries. The purpose of this report is to provide an in-depth analysis of chatbots as a key component of the future of customer service. It aims to examine the benefits, challenges, and potential trends associated with chatbot implementation. The report seeks to inform businesses, service providers, and decision-makers about the importance of chatbots in enhancing customer experiences and improving operational efficiency. This report focuses on the application and impact of chatbots in the realm of customer service. It covers various aspects, including the evolution of chatbot technology, benefits of chatbots in customer service, challenges faced in their implementation, and future trends that are likely to shape the industry. The report also considers the scope of chatbots across different industries and highlights their potential in transforming customer service practices. The information presented in this report is based on a comprehensive analysis of existing literature, industry reports, case studies, and expert insights. Research from reputable sources, including academic journals, market research firms, and technology publications, has been utilized to gather relevant data and insights. The methodology involved a systematic review of available resources to ensure the accuracy and reliability of the informa