The future is conversational

Australian retail is fast becoming concerned almost entirely with convenience.In the past few  months, we’ve seen Woolworths and Coles trialling smaller, more customer-focused supermarkets, while Ikea, Domino’s and 7-Eleven have all trialled cashless stores and other businesses continually improve their click-and-collect and home delivery options.

However, many retailers still force customers with simple questions to fill out slow and tedious online forms, phone a customer service representative or go out of their way to visit a store to speak to a sales assistant.

It really doesn’t have to be this hard. 

While more complicated queries must still be handled by a human operator, businesses have discovered that basic questions can easily be dealt with by an automated chatbot – either through a dedicated website plug-in or a consumer-facing platform such as Facebook Messenger or WhatsApp. 

It’s no surprise that this is also leading to increased revenue in the space. A recent study by Juniper Research found that retail sales from chatbot-based customer interactions are expected to roughly double every year to 2023, from US$7.3 billion to US$112 billion. 

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Additionally, interactions between chatbots and customers are expected to skyrocket from 2.6 billion this year to 22 billion in 2023. 

However, the research notes that this increase in sales will largely be the result of customer migration from other channels, rather than the creation of a new revenue stream altogether.

This implies that those who do not invest in chatbot technology early may see sales decrease without a method of retaining tech-savvy or time-poor customers. 

According to Facebook, there are 700,000 local businesses on Messenger each month, with approximately 20 billion messages sent each month to consumers by businesses. 

Facebook group industry director Paul McCrory says customers are actively seeking businesses on the platform, with 73 per cent of Australians communicating with them via direct messages. Twenty-nine per cent have contacted a brand to find information they couldn’t access on their website. 

“Say you want to go out and find information from a retailer and you can’t be arsed getting on the phone, because it’s a nuisance and it takes forever and you don’t have time to go to the store –you can quickly connect, get your answers, be serviced, buy the product or whatever it may be,” he says. 

“People are dictating what’s happening on the platform because they don’t want friction in their lives for processes they can get easier service on.

“‘Now’ is the new norm. We’re busy, we’re on the go, we want stuff now and so the expectation is that if you message a business, you have an adequate response time. If the business gets back to you instantly, you’re hooked in. 

“Straight away, you’ve [made] a great impression.”

Utility over style

However, it is important for a retailer to ensure their chatbot is suited to their customers’ needs. According to Tomas Haffenden, product lead at Australia’s first specialist messaging agency On Message, the best chatbots tend to focus on utility above and beyond anything else.

“Two great examples are Samsung’s Izy and Laureate’s Lisa,” Haffenden explains.

Given most common requests are related to repairs, Samsung designed a chatbot that allows customers to book a repair and receive updates relating to the repair. As a result, the chabot has directly reduced call centre volumes – meaning better service for people using their phones and those looking to get a repair.

Likewise, global university network Laureate created a bot to assist prospective students in researching various courses, resulting in an increased return on investment (ROI) of over 350 per cent. 

The data gathered from these conversations led the network to realise most of its users were searching for courses on a Monday night. Laureate moved its Virtual Open Day to match this and saw a huge increase in attendance. 

Haffenden adds: “The Lego e-commerce chatbot is a third great example of why simplistic, focused problem solving is far more important than trying to fit too much in. They saw an amazing ROI from a bot that was extremely simple in its structure.”

Lego’s chatbot, named Ralph, was created to help customers choose Lego sets for Christmas gifts in 2017. The bot asked customers questions about the recipient, interspersed with playful GIFs, which created a friendly environment for customers to interact with the brand. 

“Things are certainly getting more advanced, but when it comes to chatbots, I think the focus should always remain on solving a limited number of problems well – not creating a bloated environment,” Haffenden suggests. 

Converting through conversation

Though primarily used for customer service, chatbots can also be used for commerce.  

Australian streetwear brand Culture Kings recently experimented with Messenger as a platform for advertising and found substantial success in the experiment. 

“We’re always looking to try something new at Culture Kings and Messenger is a massively untapped market,” says Culture Kings social media coordinator James Wastell.

“We currently use Messenger for customer service enquiries, but using it as a platform to advertise was something we never knew was possible. We ran two campaigns, one around Black Friday and one around Click Frenzy, specifically targeting two messenger audiences.

“What we expected to achieve for this campaign was a 1200 per cent ROI, which was what we usually receive through any other campaign. But to achieve a 5000 per cent ROI was something that blew our minds.”

According to Wastell, the key strength of the platform is being able to apply one-to-one personalisation to your marketing, ensuring the right message reaches the right audience. 

“By bringing together people with brands that matter to them, Messenger is the ideal platform for us to connect with our fans in a personalised and direct way. Our customers are always on Messenger, so we know we can connect with them quickly and at scale, making it more effective and efficient than other forms of direct marketing,” he says.

Robert Tadros, chief executive and founder of marketing firm Impressive Digital, lauds Culture Kings for its chatbot and describes it as “noticeably advanced”.

“Not only do they promote deals, providing direct links to point of purchase on their website, they also promote their own brand by sending out chatty messages, [giving] Culture Kings a human-like personality,” Tadros says. 

“Intelligent enough to understand when a customer is talking to it as though they are a human, the chatbot informs them that it’s a robot [and] directs the user to a live chat with a real human.”

This is an important step. While chatbots are becoming more advanced, they still pale in comparison to a human’s ability to understand conversational language and subtext. 

“In terms of marketing from a business owner’s point of view, the chatbot represents the brand during communication with the customer, and is a great way to build a brand – brands like Culture Kings prove that,” says Tadros.

Just the tip of the iceberg

However, marketing specialist at Forward Media, Nick Miller, believes he has yet to see a major Australian brand truly take advantage of the Messenger platform, though the way each industry should implement a chatbot differs greatly.  

For restaurants, chatbots regularly send digital offers to customers – allowing owners to see who their customers are, how often they return, and what their average spend per customer is. People can also submit feedback or reviews if they have a positive experience. 

In the music industry, chatbots can be used to provide a method for market research, asking fans what their favourite song is or if they want to be notified of upcoming tour dates. 

In the travel sector, Qantas created a Messenger bot called Concierge, which helps customers plan their trips and offers relevant places of interest in the regions they are visiting. Of course, the knock-on effect would be an increased number of people buying flights on the airline.

One particularly effective use of chatbots for retail is to turn an abandoned online cart into a sale, according to Juniper Research senior analyst Nick Maynard. 

“An abandoned online cart can still be a source of revenue. 

“Chatbots can remind customers of the products still in their shopping cart and ask them if they are willing to proceed with the purchase, do nothing or clean the cart,” Maynard says, pointing to a front runner in chatbot cart recovery, Octane Ai, which reaches 90 per cent of customers who abandon their carts and converts 10 per cent back into sales. 

And while Messenger has more than twice the users in Australia as its closest rival WhatsApp, this doesn’t necessarily make it the best place for a business’ chatbot. 

“The strengths and limitations of each platform are more to do with subtle UI difference than communication styles,” Haffenden advises. 

“That said, the conversational copywriting element cannot be underestimated when considering styles of communication. 

“Chatbots give brands a unique opportunity to speak directly to their consumers in an informal and conversational way – the platform is less important than the message you want to communicate, and the style in which you want to say it.”


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