Why should retailers involve conversational commerce within their digital strategy?
Gartner published a recent report on conversational commerce from which CIOs of retail commerce companies can gain insights while building their digital strategies: Retailers Must Move Beyond Chatbot to Gain Competitive Advantage Through Conversational Commerce. We want to summarize the important takeaways from this report to offer a guiding blog for retailer commerce companies.
Today’s customers are more mobile and social with rising expectations. Despite their endless needs and desires, they do not want to download an app for every function, but tend to use messaging platforms to interact with the businesses for varying needs. But, only texting does not satisfy today’s always social customers as they expect to “see, hear and speak” besides texting. It seems that conversational AI is the next big thing that helps industries satisfy rising customer expectations, mostly shaped by the digital native companies. This is because conversational AI enables the customers to engage with businesses through their most favorite style of interaction and through their most prefered channel – web, mobile, social or voice assistant.
Retail commerce is an industry that conversational AI has a big potential to increase efficiency, customer loyalty and profitability. “Conversational” can be used for every phase of a retail commerce experience – product search, transaction and support. Retailers can use a conversational commerce to make all these phases faster and simpler for the customer.
Gartner predicts that for the next several years conversational commerce will be a new strategic channel for retailers. We witness a fast rise in mobile messaging apps and voice-enabled smart speakers, as global shipments of smart speakers increased 187% between 2Q17 and 2Q18. Gartner also predicts that end-user spending for the worldwide wireless speaker market will reach $3.52 billion by 2021, up from $0.72 billion in 2016. (Gartner Says Worldwide Spending on VPA-Enabled Wireless Speakers Will Top $3.5 Billion by 2021)
In Gartner’s 2018 United Retailer Survey, 69% Tier 1 retailers in the UK and Europe responded that they have already deployed chatbot in production or in pilot or plan to deploy by year end 2020. This means that the use of chatbot will not be a differentiator in the sector, but a business as usual as we have seen in the “mobile” previously. Although their existence will not be a differentiator by itself, there will be some features and capabilities that will differentiate a conversational experience from the others. The most apparent of them is proactivity of a voice assistant or a chatbot, in other words its ability to to push information or to offer choices to users on an as-needed basis, based on the user’s habits and preferences. It is a shift from today’s user-request driven conversations to event-driven models.
Therefore, it is important for a retail commerce company to position conversational technologies and changes within their unified digital strategy. Gartner suggests that the competitive advantage of conversational commerce will be around comprehensive customer-centric service, convenience and flexibility that successfully mixes and balances the digital and the physical experiences.
Mobile messaging apps have become the mainstream mode of interaction
Globally, more than 4 billion people said that they use messaging apps on a monthly basis as of of January 2019. Also use of virtual assistants is rising both via smartphones and home devices. A study by e-Marketer in May 2018 reports that use of virtual assistants is growing 47,9% annually and it is a growth rate faster than any tech product since the smartphones. (Global Smart Speaker Users 2019 — Trends for Canada, China, France, Germany, the U.K. and the U.S.,” eMarketer PRO and “Smart Speaker Users Growing 48% Annually, to Hit 90M in USA This Year,” Forbes Media)
Now we predominantly see the usage of chatbots by the retailers, but at the same time they are exploring other opportunities offered by voice and virtual assistants. Gartner’s 2018 retailer survey revealed the current and planned use of virtual assistants. In the UK and Europe, the ones who have already deployed virtual assistants in production or in pilot, or have plans to deploy them by year end 2020 reached 78%, while in China this includes the whole sample.
Gartner’s Personal Technology Study 2018 revealed that 63% of smart speaker owners use the device once or more per day. The rise of virtual assistant usage is obviously an opportunity for the retailers make their brand easily accessible and visible, and to provide conversational experiences to their customers. Currently, it is possible to shop on Amazon if you have Amazon Echo or Alexa via voice, by finding product reviews or receiving support as well. In addition, Google Home has formed partnerships with large retailers in the US.
Highly integrated conversational channels including chatbot and virtual assistants
One of the major challenges of today’s enterprises is siloed nature of legacy systems. This is more controversial for retail commerce where customer engagement requires a comprehensive customer centric perspective. But conversational technologies have the potential to disrupt this siloed nature and provide a consistent experience to the customer. Also conversational AI solutions can provide the employees an opportunity to see the customer results through a platform. The conversational platforms also give the chance to create a conversational online store as well.
Gartner asserts that although a fully integrated conversational AI platform will not be widespread stream in the near future as it is too complex, conversational interfaces require alignment of many touch points with a comprehensive approach. Obviously this approach, covering web, mobile, call centers, has to put customer trust and privacy at the heart of the system with explicit data policies compliant with the regulation. The other side of the issue is the enterprise applications which provide powerful conversational AI use cases. Gartner predicts that the majority of the future acquisitions in this area is likely to be from large enterprise software vendors, including ERP, CRM and robotic process automation vendors.
Leading retailers have already begun interconnecting internal and external conversational channels, including chatbot and virtual assistants to better facilitate two-way, contextual conversations with consumers.
Transforming enterprise workflows to deliver better experiences for both customers and employees
Gartner suggests that voice-powered conversational platforms should work in coherence and integration with human-based channels like live chat or human customer agents in general. The crucial point here is the intense collaboration, smooth handover and the delivery of a seamless process. Therefore, conversational technologies will transform workflows in the retail enterprise. They do not only increase customer engagement and loyalty, but has the same effect on the employee side as they free the employees up from highly routine tasks. Conversational interfaces make employees lives easier also by enabling them to reach the relevant information in the simplest way whenever they need both online and in-store.
In addition, voice offers an easy way to collect customer feedback. Listening the customer during the voice experience and collecting feedback can be used also for the employee training to leverage customer experience. As conversational technologies provide a comprehensive overview of the customer, it not only ensures consistency across channels but also empowers employees to have a consistent understanding of the customer. Another point to note is the ability of conversational technologies specifically voice to authenticate the customer for web and mobile channels.
In summary, retail enterprise workflows will be transformed to deliver excellent employee and customer experiences with the power of conversational technologies.
To sum up
As a result of all these, Gartner recommends the CIOs of the retail commerce companies to lead the teams to;
1- redesign the operations and workflows by involving the conversational technologies within their strategies
2- improve customer service by addressing the needs that conversational AI can improve the service and increase customer loyalty
3- evaluate conversational technologies, considering the overall shopping experience of the customer
4- have conversational technologies on the agenda while building the digital workforce strategy, involving the physical stores as well
5- focus on involving chatbot and virtual assistants to augment store associates in terms of accessing the knowledge base
6- use pilots to understand the results and always involve CHRO within conversational AI projects
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