15 minute read
Conversational commerce / 102 Competition law
CONVERSATIONAL COMMERCE 101
Conversational commerce, which takes place via mobile messaging, has been steadily growing over the last decade. Now, 25 billion mobile messages are sent every day, and over three billion people use texting and mobile messaging apps every day – this massive phenomenon is what conversational commerce taps into, and is why every business needs to get to grips with conversational commerce, explains Dario Betti, CEO of Mobile Ecosystem Forum …
NEW PARADIGM IN MARKETING COMMUNICATIONS
By DARIO BETTI www.mobileecosystemforum.com
Conversational commerce is about ongoing engagement and deep interactivity with brands. It allows customers to speak to brands as if they are real people, building individual relationships that stick.
From the simple text message, to WhatsApp, to a variety of in-app one-toone messaging opportunities, we use our mobiles for conversations in a wide range of ways. We tend to use these platforms for personal conversations with friends, and, until now, they haven’t been fully leveraged by marketeers and brands. This is about to change.
So far, brands have been sending single messages – the ‘I am here’ message – but with true conversational commerce, brands ask you what you want, not tell you what they want.
Conversational commerce is an evolution of the app economy, representing the third wave of marketing strategy. The first wave was broadcast. Advertisers broadcast a single message to all potential customers via selected magazines, radio shows, billboards and TV placements.
The internet changed things by allowing for more personalised broadcast messaging via email and targeted ads. This was the second wave, which also started some interactivity through inbound marketing – customers could visit your website, browse your product selection and sign up for emails and offers. Unfortunately, interactivity via simple websites has been limited, and both email and digital advertising are oversaturated.
The third wave is conversational commerce, which elevates the interactivity offered by websites, apps and email to a new level, building lasting relationships through two-way individualised messaging via a unique mix of channels – the channels we use every day in our personal lives. In doing so, conversational commerce brings customer service full circle back to the level of individual customer service and engagement offered by traditional, family-run shops.
As yet, not all companies have managed to understand the full potential of conversational commerce – but at MEF (the Mobile Ecosystem Forum) we anticipate the market will grow rapidly over the few years as more businesses register the benefits.
And this is the tip of the iceberg. Conversational commerce will fundamentally change the way we buy, sell, and serve our customers.
To help you get ahead of the game, here are five things you need to know about conversational commerce if your business is to grow over the next five years:
1. B2C broadcast messaging is out Broadcast messaging is about sending the same message to everyone. It works extremely well to build and establish a consistent brand, but is terrible when it comes to interaction.
People now expect to have a meaningful conversation about products and services. They want to know what the experience of the brand is like, to really feel it. That’s why influencer marketing is so popular – there is an opportunity to engage with a real person and understand the brand experience.
A number of challenges are also leading to the rapid decline of B2C broadcast messaging – people skip ads by watching more streaming services, podcasts are on the rise, and email is so full of spam that it’s almost impossible to get noticed.
2. Understand the new messaging channels Conversational commerce will be delivered over a variety of messaging solutions, and the landscape continues to change – it is important for you to be familiar with the tools of this new trade. Some of the messaging solutions are
familiar – millions of businesses already rely on SMS for simple communications with consumers, WhatsApp is known for personal messaging, and is also now joining the business communication with new features. Different markets show different take up – the US prefers Facebook Messenger, WeChat dominates in China, Line in Japan. The list is long.
One messaging channel that should be known by many is RCS (Rich Communication Services). You can think of RCS as an evolution of SMS. Over 1.2 billion smartphones are already RCS enabled, so the potential is huge – and growing. RCS is supported by big tech companies like Google and the mobile operators that created the SMS texting in the first place. RCS is now replacing the SMS inbox in Android phones.
RCS has also been designed to facilitate a host of new opportunities for businesses and brands to engage with their customers, build relationships and increase sales. RCS offers an upgraded experience with unique features to enable rich and meaningful engagements among users and businesses.
What will make RCS so popular is that it brings new benefits to consumers – you can send larger, higher-quality images, stream audio and video, provide better group chat capabilities, enjoy greater security than found with most apps, and make use of a number of incall and post-call features.
And with this popularity and growth among consumers comes opportunities for business for engage in true conversational commerce that will build lasting relationships with customers.
3. Persona marketing is in To elevate their marketing and meet the needs of modern consumers, brands need to become personas. Through conversational commerce, brands can now both sound and behave like a person. They can be their own influencer.
They can describe and explain products, engage potential users and discover their needs, convert people into loyal customers, and provide a fantastic ongoing service.
Take, for example, a retailer selling barbeques in bricks-and-mortar stores. Typically, they will sell lots of products in June and, if they’re lucky, see customers again in a year.
customers (photo credit iStock.com/ftwitty) calls are often a frustrating journey for Lacking in data co-ordination, sales support
With conversational commerce, this retailer can understand their customers’ needs (such as having a garden party), can service those needs (by informing customers when the weather is likely to be sunny or sharing recipes, for example), and provide ongoing support (like how to effectively clean and service the barbeque).
RCS allows the retailer to deliver a tailored mix of video instructionals, personalised messaging and two-way interaction. This can elevate a simple sale into an ongoing relationship with their customers. The retailer can better understand their customers and their needs and thereby provide the very best service, which in turn leads to recommendations and repeat business.
4. Data needs orchestration To make conversational commerce work, companies need data. They need to understand what their customers want, need, and expect. And that data needs to break out of the rigid siloes in which they’re so often confined.
A typical support journey might start with web support articles. A customer clicks through various options to find the most useful article. If that doesn’t help, they may escalate to a chatbot or phone support, where they are often greeted by robots asking many of the same questions. Finally, they will reach a human who then asks them all the same questions for the third time.
It’s a frustrating and time-consuming journey for customers, and an inefficient use of support staff for companies. It’s like having three different shop windows – there is no co-ordination. Brands need to drastically rethink their communication and orchestrate their data to help.
Omnichannel orchestration is incredibly important. At RCS, when we interact with people, we automatically choose the right channel for the job and can switch task, tone, and register at ease. We drop a message to a colleague via Slack, jump on a quick video call, and share a Google Doc to efficiently and effectively complete tasks. With conversational commerce, brands can do the same.
By bringing the customer data along with them on their journey, you make the customer feel truly heard and service their needs in the way they want. Ultimately, that is what conversational commerce is all about.
5. People are lazier than ever Traditional transactional commerce is all about getting the sale as quickly as possible. The aim is to get the customer to do one thing fast.
But people become bombarded with sales messages, reducing the efficacy of calls to action. When you are told 20 times in a day to “buy now”, you start to tune it out. Even worse, customers will begin to actively avoid your brand, feeling burnt by pushy sales techniques when what they need is support.
People no longer want simple transactions – they value conversation, being heard, and an understanding of who they are and what they’ve done. They have a wealth of information at their fingertips and don’t have time for pushy marketing or waiting on hold. They’re better informed, yet lazier than ever.
Imagine, however, being able to bring the personal service of bricks-andmortar shops, where assistants can help you achieve your aims, together
with the efficiency of digital services and the functionality of RCS, allowing you to be helpful and engaging at scale. You could make every interaction count, make messaging stick, and provide a great customer experience that gets you noticed for all the right reasons.
6. Robots are our friends But how much will all this cost?! It’s a fair question. Providing an orchestrated omnichannel conversation commerce strategy that looks after every customer’s individual needs would be prohibitively expensive for most businesses.
Fortunately, the robots are here to save us. AI can guide customers in the right direction and quickly learn what they need. While chatbots have, historically, been unpopular due to their frustrating limitations, many of us are now speaking to chatbots without even realising. And they’re getting smarter every day!
It’s important not to outsource the entire process to robots, however. There is still an essential role humans play in conversational commerce. While the AI could help and guide customers, it may get to the point where they need to speak to a human being. And this is key to conversational commerce – giving people what they want and need at the right time in the most helpful way.
By bringing all the data the AI has already gathered along on the journey, the human operator can quickly and effectively deal with the issue, allowing call centre staff to get on with the job of customer care rather than focusing on admin and call time targets.
It’s all about finding a holistic approach than brings information together to find the best way to help. It may be a simple SMS reminder, how-to videos, a quick call-back, or an ongoing text conversation. Sometimes we need immediate help, sometimes we want to peruse information at our own pace.
Conversational commerce is about listening, hearing, and helping. By understanding what your customers want and need, how and when they consume information, and opening the process up to two-way communication, you can create lasting relationships that transform simple sales into a complete service.
It may sound futuristic, but companies already implementing a conversational commerce strategy, and are seeing 10 x the efficacy of their marketing communications.
This competitive advantage won’t last long, however. In the next five years, conversational commerce will become the new paradigm in marketing communications – so make sure you’re not left behind
PEOPLE NO LONGER WANT SIMPLE
TRANSACTIONS – THEY VALUE AN UNDERSTANDING OF WHO THEY ARE AND WHAT THEY’VE DONE
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COMPETITION TIME
New competition laws in both the UK and the EU came into force last month, which will affect many distributorship agreements as well as other supply chain agreements. Stephen Sidkin considers the implications for suppliers and distributors …
SUPPLIERS WILL BE ABLE TO CHARGE
DIFFERENT PRICES FOR GOODS TO BE RESOLD ONLINE
By STEPHEN SIDKIN www.foxwilliams.com
On 1st June, there was a change in competition law with implications for suppliers and their distributors. Although the UK has ceased to be a member state of the EU, it had retained EU competition law so far as suppliers and distributors were concerned. As EU competition law in this area changed on 1st June 2022, so too did UK competition law.
The new UK law (the Vertical Agreements Block Exemption Order (VABEO) is concerned with exposing those distributorship and other supply chain agreements where the anti-competitive elements of the agreement are substantial enough to affect competition within the UK. Where, however, the elements are not substantial enough, an agreement will be exempted from this part of UK competition law. The VABEO achieves this objective by providing a ‘safe harbour’ – a block exemption – for certain distributorship and other supply chain agreements. So, what’s changed?
Suppliers operating an exclusive distribution network at both the wholesale and retail levels are permitted under the VABEO to combine exclusive and selective distribution in the same or different geographical areas.
The VABEO introduces the concept of shared exclusivity. This allows a geographical area or customer group to be allocated to more than one ‘exclusive’ distributor. The number of appointed distributors, however, needs to be in proportion.
Dual distribution occurs where a supplier sells through independent distributors (such as retailers), and also directly to end-customers in competition with its distributors. Under the VABEO, dual distribution extends to cover importers as well as wholesalers, provided neither compete with the supplier at the level at which it purchases the goods.
Dual pricing means that suppliers will be able to charge different (possibly higher) prices for goods to be resold online than for goods intended to be sold in-store by the same distributor.
The VABEO allows the criteria for a selective distribution system to differ for online and offline sales.
Non-compete obligations are often included in agreements to prevent the purchaser from competing with the supplier. Previously, competition law made clear that if the obligation was for a period of not more than five years it did not fall foul of competition law.
This was extended to agreements where the non-compete obligation was tacitly renewable beyond the five-year period. This, however, has changed, as the Competition and Markets Authority (CMA) has made clear that a noncompete obligation which is tacitly renewable beyond the five-year period will be treated as being an obligation of indefinite duration, and therefore will not benefit from the block exemption.
Parity obligations are contractual provisions concerning the terms on which goods or services are offered. Under the VABEO, wide parity obligations become hardcore restrictions. Typically, wide retail parity obligations are found in agreements with online marketplaces. Usually, they specify that goods or services may not be offered on better terms (including price) on any other sales channels, including the supplier’s own website, or online platforms or by other distributors.
This change in the law comes after the CMA imposed a £17m fine in 2020 on Compare the Market for imposing wide parity clauses in its agreements with home insurance companies. However, it is worth noting that wide parity obligations that apply to wholesale B2B will not be hardcore restrictions. In addition, ‘narrow’ parity obligations that provide for goods or services not to be offered on better terms on the supplier’s own website only will continue to be block exempted under the VABEO.
The VABEO provides a one-year transition period which will end on 31st May 2023. However, parties to distributorship and other supply chain agreements need to be giving thought now to what the changes brought about by it mean for them and their agreements
