Conversational commerce is exploding and smart merchants are cashing in on the opportunity to engage with consumers in meaningful ways across every available channel. Learn the impacts of conversational commerce on customer loyalty.
U.S. ecommerce sales grew 16% in 2017, making it the fastest growing year for ecommerce since 2011. Representing 13% of total retail sales, ecommerce contributed to almost half (49%) of retail sale growth last year. The apple didn’t fall far from the tree: smartphone commerce transactions increased 13% year over year in North America in 2017.
Ecommerce is a broad umbrella under which mobile commerce (m-commerce) falls, however the customer journey has become increasingly sophisticated as more and more people use multiple screens, devices, and things to make purchases. Consider this:
The bottom line is that consumers are interested in the easiest way to pay. As omnichannel purchasing options become more prevalent, consumers are taking advantage of new commerce channels. This extends to more nascent commerce trends, like conversational commerce, where people interact with AI-powered chat or voice bots to complete purchases. In fact, 35% of people who own voice-enabled speakers reported using them to make a purchase at least once, while 22% reported using them frequently.
Convenience is the Name of the (Commerce) Game
Customer value convenience more than ever and want to pay whenever and wherever they want. Conversational commerce has become a popular method for shopping because it enables this type of convenience. AI technology enables voice assistants to “learn” information about its owner (shopping habits and preferences, favourite brands, etc.) and make shopping suggestions based on prior shopping history. What’s more, the entire payments experience is embedded, meaning consumers bypass it altogether. Rather than rifling through a physical wallet or touching a smartphone to access a digital one, a user’s payment information is stored in their online account (think: Amazon), where the entire transaction happens behind the scenes.
Most people are familiar with this technology via interfaces like Siri. These chatbots can mimic human-like conversational experience by analysing huge volumes of data and use algorithms to personalize experiences for end-users. This sort of personalized experience allows the consumer to get what she needs without having to interact with a human.
AI Technology Provides a Strategic Game plan
In theory, this all makes sense; however, the technology needed behind the scenes to make chat- and voice-bot experiences meaningful and realistic enough to drive revenue is complex. Conversational commerce requires trust with consumers, the ability to enables frictionless payments, and top-notch transaction security.
To implement conversational commerce, merchants often work with technology partners that can build custom solutions tailored to their unique needs. With chat- and voice-bots, there are many layers to consider for proper functionality:
Each of these layers are necessary and work together to provide the most realistic, accurate, and streamlined experience to end customers.
Understanding the Loyalty Playing Field
The loyalty space has grown crowded and hard to differentiate. Many merchants offer loyalty programs through a variety of mechanisms and incentives and rewards have grown commonplace. Unfortunately, this runs counter to the original intent of loyalty programs, which was to entice consumers to choose—and remain with—one brand over the others. Today, a more human, unique, and empathetic approach is required to see success in loyalty programs. In a recent Wunderman study, 56% of respondents said they feel more loyal to brands who “get me” and illustrate a deep understanding of their priorities and preferences. This highlights the need to accurate and highly targeted personalization within loyalty programs.
Interest in premium loyalty programs are also on the rise. People are more willing than ever to pay for premium services (think: Amazon Prime) that offer special benefits. The key is ensuring the personalization piece is in place. A recent LoyaltyOne survey reported that 62 percent of respondents said they’d consider joining a fee-based rewards program. That number jumps up to 75 percent for Millennials. Merchants must embrace this reality over the outdated notion that people are not willing to “pay to play”.
Evolving Loyalty Programs for the Game-Winning Touchdown
The happy intersection of consumer preferences and AI technology is increased customer loyalty. As the number of connected devices grows and as merchants become better able to interact and engage with consumers anywhere and anytime, they will be able to have a better understanding of these complex consumer preferences. The amount of data that is available for collection will increase exponentially. Brands and merchants that harness AI technology to analyse and apply that data in a meaningful way will come out as the winners.
The better merchants understand consumers, the more they will be able to cater to their increasingly sophisticated preferences. The end result is an ability to drive brand preference and affinity in the form of loyalty. Customers have increasingly become acclimated to interacting with their desktop, laptop or smartphone screen to complete a purchase. As more and more people begin interacting with – and conducting commerce through – chat/voice-bot technology, they will grow accustomed to more human-like interactions, akin to the beginnings of commerce in brick-and-mortar shops. Conversational commerce presents a unique opportunity for brands to engage with customers on this level, forming emotional bonds with customers and meeting their expectations on a deeper level.
The key is to work with a technology partner that can help you create the most meaningful experiences for your customers. This means building a tailored solution that properly represents your brand tone and voice from the bottom up. By building a custom solution that is also connected to other backend systems, merchants can facilitate a streamlined, frictionless experience from start to finish, increasing customer loyalty, driving revenue, and boosting lifetime customer value.