One chat away: Conversational commerce levels the playing field for brands online

MARKETING BRIEFING One chat away: Conversational commerce levels the playing field for brands online

Leaving consumers with unanswered queries can result in $2m missed revenue per day.

Fiona Thia, business development director at TMX, was looking for a ring online. She can only roughly estimate her ring size based on the chart posted on the store’s website. Already expecting her order to be hit-ormiss, she then received a message from the brand asking for a photo of her finger to help settle the size and assuring her that, if the item did not fit, she can have it exchanged with no additional payment. Thia also received a follow-up message to check on the item delivered.

In the end, Thia became one of the brand’s satisfied customers. This is conversational commerce at work.

“Conversational commerce focuses on messaging,” Thia told Hong Kong Business.

It is a strategy that benefits the brand itself because it enables businesses to control their own sales channel strategy and lower the rates of returns. Thia noted that processing returns is costly, takes up too much time, and businesses even have to figure out if the item returned could be shelved or just thrown away.

The adoption of conversational commerce rose in popularity as brands expanded their presence online through social media, such as Facebook and Instagram.

“It’s really about capitalising on your own followers. That’s the reason why we believe that social commerce is quite an equal playing field for all brands of different sizes and different verticals,” Thia said.

Specific sectors, such as beauty brands, can adopt conversational commerce by relying on messaging applications to sell their products and have live chat advisors to answer queries from customers. Through messaging, customers can send their photos to the brands and have the retail associates on-screen recommend the type of products suitable for them.

For fashion brands, this can also be adopted as some customers could have ordered two sizes at a time, especially when they have no idea about their size, and just have one of them returned as soon as the customers get to try on their purchased items.

The right channel

When opening stores online or in a new channel, Thia said that it is important to have a proper channel strategy, taking into consideration the target audience per channel. She noted that younger customers may be more present via social media, whilst slightly older or more loyal customers might be on the brand’s own marketplace or website.

Data from Sprout Social showed that Gen Z shoppers, or those aged 18 to 40, are the most enthusiastic to make purchases via social media, particularly on Instagram, TikTok, and Whatsapp.

In Hong Kong, one of the best channels to run conversational commerce would be WhatsApp, given that it’s the most used app in the market, AnyMind Group’s Deputy Head of E-Commerce Enablement for Japan, Mai Endo, told Hong Kong Business.

Based on data from Statista, WhatsApp receives 89,600 monthly downloads, making it the most downloaded free app in the social media category in Hong Kong in April 2022.

But for brands present on various platforms, Thia cautioned that they do not “cannibalise” each channel, citing as an example the need for their products to be sold at the same price regardless of the channel.

Botversation alone is a no-no

One of the main purposes of having conversational commerce is to give online consumers the experience they would have in brick-and-mortar stores: having an assistant or staff to guide buyers through their purchase.

Endo, therefore, emphasised the need for and importance of both the human and artificial intelligence (AI) elements in conversational commerce.

Leaving consumers to chatbots only will lead to unresolved chats, which, in turn, can result in an average of $2m per day of missed revenue, according to a study by customer experience solutions company, Simplr.ai.

“Chatbots can just recommend a product, but not answer consumers who have doubts on whether they should buy this colour or that colour,” Endo said, adding that as part of their product offering, AnyChat, the company can also provide a customer with a support person who operates within regular working hours.

Since the platform has yet to have a 24/7 chat support, Endo said operators can instead segment concerns by “tagging,” so the next time a similar inquiry pops up, and there’s no available person to talk to, the chatbot can answer on behalf of the personnel.

Thia echoed Endo, saying that businesses should have a person managing chats that will ensure a seamless shopping experience for customers and for the business for smooth processing of orders.

Social commerce is quite an equal playing field for all brands

It’s really about capitalising on your own followers

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DIREACH_HK

DIREACH was founded in Hong Kong in 2020 with the core value of “Premium Product. Premium Brand.” The brand specialises in mobile digital product accessories, including audio accessories, power banks, chargers, charging cables and UV disinfection boxes.

DIREACH has been awarded the “e-brand awards” by e-zone in 2020 and 2021; the “Most Innovative Enterprise Award 2020” by Business Innovator, the Asian business creative content platform; and “The Excellence Brand Award 2021” by PCCW and Yellow Pages.