Conversational Commerce Is Encouraging Customer Engagement And Driving Sales

Consumer engagement is key in an increasingly interconnected marketplace, and the success of WeChat, a Chinese text-based commerce app, has motivated Western brands to step up their game.

Recently, Apple rolled out its Business Chat feature in iOS 13, which prompts iPhone users attempting to contact companies such as Burberry, Hilton and Verizon to “start a Business Chat instead, so you can interact with a business from a text instead of waiting on hold.”

This simplified model seeks to replace mass emails used to promote products and to reduce phone calls to overloaded customer service departments. Yet, aside from fielding inquiries, the feature hopes to expand into product promotion and sales through customer engagement.

On WeChat, 170 million shoppers browse and purchase products on more than 600,000 “mini-programs” within the app. From hailing a cab, buying groceries, booking appointments and even receiving tourism recommendations, the possibilities for businesses is endless.

Now, Apple Business Chat wants to follow WeChat’s lead and allow consumers to engage directly with brands within the Messages app by using next-generation AI chatbots and enabling them to inquire about products and purchase them through Apple Pay. Apple’s motivation is clearly guided by statistics. In 2018, more than half of all global online traffic came from mobile phones.

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“[Users] might have a particular question about tax statements, or want a video to learn about options trading,” said Vijay Sankaran, chief information officer at TD Ameritrade, which uses the platform. “They don’t want to have to go on the website, or search YouTube. They can just ask a specific question, and the artificial intelligence engine interprets it.”

Promoters say texting works in commerce because it affords simplicity and personalization. For example, if a flight is canceled, leaving hundreds of people stranded, customer service lines will be overrun, which will result in frustration and discontent. With Business Chat, however, airlines can allow passengers to text their preferences, then await a response from the comfort of a lounge.

“The idea that [customer service] has to be this synchronous thing where you settle down for a 10-minute conversation on the phone is ridiculous,” said Charles Golvin, a researcher at Gartner. “The actual aggregate amount of time you need might be 30 seconds.”

Delta Airlines has been testing Business Chat through the Delta Fly app for the past few months, allowing users to purchase tickets, change seats and check baggage limits. Text volume has already surpassed all of Delta’s other social media channels.

“There is no shortage of demand,” said Tori Forbes-Roberts, a customer care specialist at Delta. “Intuition would say that millennials like it, but I will tell you that our core customers are just as engaged as the younger demographic who might be more tech-savvy.”

Engaging customers with personalized and expedient service is crucial. Rather than depending on customer service agents to field every inquiry, companies are able to use AI to answer questions using chatbots, which can be directed to actual employees when necessary.

At TD Ameritrade, Apple Pay allows customers to purchase stocks via text message as well as pay for transactions directly through their bank account, a process that in the past took several days. “It’s really what the client wants,” Sankaran said.

This isn’t the first time an attempt at conversational commerce has been attempted in the West. Three years ago, Uber integrated ride-hailing into Facebook Messenger, prompting product designer Chris Messina to christen 2016 as “the year of conversational commerce,” yet it’s taken some time for the technology to catch on. In the past three years, sales volume has tripled as in-app messaging within Facebook, Instagram and Pinterest has become more popular.

Yet it’s not only multinational brands looking to technology for customer engagement. Companies like UENI, which helps small businesses build an online presence and access customers searching online, also offers services to help small and mid-sized business grow through AI platforms and conversational commerce. According to Christine Telyan, co-founder and CEO of Ueni, expanding technology to smaller businesses is vital.

“Our mission is to make all businesses visible online,” she says. “Whenever we need to buy things, the first thing we do is search the internet. But by and large, search results turn up chains and franchises, and many small businesses are invisible online.”

Brian Long, chief executive of Attentive, a Sequoia-backed start-up that builds text platforms for more than 400 brands including Jack in the Box fast-food and luxury apparel brand Coach, said that traditional email marketing does not work, especially among younger generations.

“People under the age of 35 don’t want to get emails from almost anyone,” Long said. “Nowadays even when a friend calls, it’s like, ‘Do I really need to take this call, can’t I just text?’ ”

Apple Business Chat may have an advantage over other platforms not only because of its messaging app with Apple Pay, but also its enhanced security. When iPhone users text a brand, Apple will encrypt a user’s data as well as the payment.

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Apple has not revealed how many brands are using Business Chat, but it has reached an agreement to allow all 800,000 online sellers on Shopify to engage with customers via text and accept transactions with Apple Pay.

Michael Perry, director of product for conversational offerings at Shopify, said brands using conversational commerce to engage with consumers are fostering customer loyalty that results in greater expenditures.

“You’re more likely to pay a premium [for] a brand you like,” he said. “And messaging, more than any other medium, powers that.”

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