Opinion

The rise of conversational marketing

The evolving COVID-19 pandemic has brought about a new reality for how we live and work. From a retail perspective, current changes have exposed vulnerabilities in leadership, strategy, systems and processes. As the crisis has deepened around the world, communication with customers, employees and suppliers has become a vital part of the strategic response. Specifically, digital communication has accelerated the shift towards frictionless experiences – where there is little to no interaction between retailers and customers in a physical realm.  

With limited mobility, stores closing and more people working remotely and consuming content online, our reliance on digital assistants has increased. Chatbots and voice agents can replicate human speech and understanding, and they’re playing a central role in connecting and scaling where people currently cannot – deepening relationships with customers through two-way contextualised conversation, support and sales. 

According to research from Capgemini, before this crisis, more than 75 per cent of retailers considered chat and voice assistants ‘a future priority’, not realising they would soon become essential communication tools. In the last two weeks, some companies have seen a 200 per cent uplift in chatbot usage, with 60-70 per cent of queries being related to COVID-19.

Highly engaging, relevant conversational experiences have been proven to increase customer engagement by identifying sentiment changes, trending content and concerns, as well as increasing sales and minimising costs. Recent studies show that conversational interfaces can reduce customer service costs by up to 20 per cent and reduce churn rates by up to 20 per cent. During the current economic downturn, these technologies are a cost-efficient, scalable way for businesses to translate physical retail experiences online.

At the same time, retailers are launching chat assistants that can speak, listen to and understand their customers; messaging apps are transforming their interfaces to enable brands to communicate beyond standard formats. Native apps, such as Facebook Messenger, enable fluid onboarding, back-and-forth customer service, and Q&A interactions with audiences. Other platforms like WhatsApp, Slack and WeChat leverage the same technology as virtual assistants at scale. Smart speakers and home assistants are enabling people to browse and shop for products instantly, powering the first wave of voice commerce. And, the recent popularity of apps such as Houseparty and gatherings for ‘wifi-wine’ over Zoom presents an opportunity for brands to look at more unconventional partnerships.

For retailers that invest in a conversational strategy, chat then tends to become the customer’s preferred channel over other, more traditional platforms.

Brands that are starting the conversation

Specifically in response to COVID-19, fashion-forward brand Summersalt, has launched Joycast, a text line that offers ‘joy on demand.’ By texting JOYCAST to a number, the brand will respond with an inspiring text message within minutes. Content ranges from self-care ideas and meditation tips, to uplifting videos and cute animal GIFs. 

For TechStyle Fashion Group, a multi-service chatbot has been able to field 90 per cent of customer queries on social media by layering an AI solution over the human customer service team, according to an article from Footwear News. The number of customers proactively engaging with the brand on Facebook Messenger has increased by 74  per cent and the retailer has been able to phase out its email support channel to increase reliance on digital assistants.

In the luxury sector, Gucci was the first fashion house to replicate the in-store experience online and it continues to take experimental approaches to reach new audiences. Today, the brand uses AI to enhance online shopping by providing the sales team with access to a customer’s browsing history and the contents of their shopping cart. This valuable information allows staff to suggest complementary items, or personalise offers, even when they’re not physically in the same space.

 Closer to home, the Australian divisions of Lancôme and Kiehl’s have taken a similar approach. Using the Australian startup Powerfront, a back-end customer service platform, the online sales team has access to a digital rendering of their store. Customers are displayed as digital avatars throughout the virtual space, with helpful cues such as facial expressions indicating a customer’s mood, or colour-coding to show whether a customer is a repeat visitor. The platform helps the brand to visualise their online customer experience better and understand previous browsing habits.

Forever New, one of Australia’s fastest growing retailers, has also experimented with this platform to translate their in-store experience online. In Forever New’s ‘chat to a stylist’ program, sales associates guide customers via chat in real-time, providing personalised service similar to what they receive in-store. The results have been strong. 

According to Powerfront, “One in five customers who speak to a chat stylist convert to a sale, and customers who chat convert at a 37 per cent higher rate than those who are engaged users, but don’t speak to a stylist.”

It’s time for a re-think

During a crisis like this, you cannot avoid communicating with customers. Retailers should think about how the customer’s journey to purchase has changed, and subsequently revise layouts, key interaction points and communications strategies. If not, there’s a risk of revenue leakage, especially if competitors move to occupy space in the minds of customers.

As top-tier service is increasingly being considered a profit driver, conversational interfaces not only allow retailers to easily communicate with the customer, but as a conversation is the literal representation of the ‘voice of the customer’, the data and insights that retailers can tap into hold enormous potential to guide business strategy and future technology investments.

Now, more than ever, retailers should work towards a future where online shoppers can move fluidly from browsing to purchasing, especially as behavioural shifts, reliance on convenience and increased usage of digital assistants are likely to remain permanent once the market has stabilised.

Times like this force us to think differently and force retailers to address problems in new ways. The question every retailer should be asking is, where are the opportunities to reduce friction and help customers self-serve using digital assistants?

Emma Sharley is a marketing expert and the director of Sharley Consulting. To support the Australian retail industry, Sharley Consulting is offering a free consultation for any retailer looking for brand, marketing and conversational guidance during COVID-19, or for support in developing 3-6 month roadmaps to come out the other side stronger. Contact: info@sharleyconsulting.com

This story is from the May 2020 issue of Inside Retail magazine. Subscribe here.