A little under a year ago chatbots emerged with great fanfare — the world of e-commerce was about to change fundamentally. Web pages were done, apps were passé and pretty soon all commerce was going to take place within the confines of Facebook Messenger and Kik.
It was a lovely story — with one notable fly in the ointment. The chatbots came in legions, but the customers were not conquered. Chatbots didn’t live up to their potential — consumers complained they were hard to use, glitchy and in many cases kind of annoying.
“The thing about chatbots and probably the biggest miss with their developers is that they forgot to ask what problem they are trying to solve,” ReplyYes CEO Dave Cotter told Karen Webster in a recent chat. “Does it help you discover things more quickly or answer a questions more accurately? What is this actually adding to a consumer’s life? And unfortunately, the answer for a lot of them is ‘I am going to talk to an icon and have it return random stuff.’”
The randomness is the obvious problem, notes Cotter — but the talking is also a problem, because as it turns out, customers don’t have a burning desire to converse with software. There is a reason someone is interacting with a chatbot — and the faster they can get to it, the happier they are, particularly on mobile. Forcing a series of interactions between the consumer and the bot for the customer to get what they want isn’t only not taking friction out of the e-commerce process, notes Cotter, it’s acutally adding to it.
“My experience with a lot of these bots is I don’t know what to type to get it to do what I want. I get trapped in like a cul de sac of wrong commands — and as soon as that happens I’m just going to close that chatbot and never talk to it again.”
Dave Cotter is not a generic hater of chatbots — far from it. Cotter’s firm ReplyYes was arguably working with chatbots before chabots were a thing, or at least it can be counted as a pioneer in chat-based commerce.
“We started before the word chatbot was being kicked around — and we are still going at it now that the word chatbot has been, let’s say, applied widely.”
But the ReplyYes conversation is very short — it’s really not a chat so much as a Q&A session. The customer gets a text with an option for purchase. If the customer replies yes (or, according to their CEO, “heck yes” “hell yes” “absolutely” or “I need it now”) it shows up at their front door a few days later.
It’s a different proposition, but one that is picking up steam – the firm is announcing today a $6.5 million Series A investment to expand its e-commerce over mobile messaging platform. That round, in conjunction with the Series A, ReplyYes signed Universal Music Group to white-lable their services for the creation of new engagement and shopping opportunities for UMG artists, bands, and their fans worldwide.
And this is a journey, their CEO noted, that started in a somewhat unusual place — vinyl records.
What e-Commerce Can Learn From Vinyl
When trying to reinvent commerce for the era of mobile, vinyl records might seem like a strange starting place, since it doesn’t get much more retro than vinyl.
And, Cotter noted, the alumni from Amazon, Google, Zulily and other Valley tech-commerce firms didn’t come together to disrupt the admittedly niche world of vinyl music sales. Instead, he noted, the early goal was to find a way to restructure e-commerce for the small screen mobile device — as opposed to just importing a lot of old frictions and then adding new ones overtop.
“Our founding question was what can we do in our pursuit of frictionless ecommerce and how do we stitch together the increase in use of messaging apps, the personalization and hyper targeting that users are accustomed to in their digital commerce experiences and then present that in a way that is easy and enjoyable from an instant gratification perspective?”
What they came up with was text message ecommerce, an easy and direct way for consumers to interact with their platform, reply in three letters and have an album in 6 or 7 days. Vinyl was chosen, he noted, because it baseline consumers were an unusually good fit for the platform’s function.
“We tested a few other things and we found that the SMS inbox is a fairly reserved place for people and things you really know and like. So we wanted to find categories of products where the user has an emotional connection such that they would be open to receiving regular offers because they really care about the category. Insurance won’t really do it.”
But music — particularly music on vinyl with its fully illustrated liner notes and tangibility — has an extremely active fan base that converts often.
“What we’ve seen is that 75 percent of users will buy a second album within 30 days of replying yes to the first one, and 34 percent of our customers have 6 albums in 180 days or less. We also have some very high-spending shoppers — we have a customer who has spent upwards of $4,000, which is a lot of vinyl.”
Those rates, Cotter notes, are driven by the fact that his learning AI gets to showcase its skills particularly well with the records — giving customers an easy way to enter their payment and shipping information once and then both shop and educate the system with a series of short, directed communications, either through SMS messaging or through Facebook Messenger.
Rethinking Customer Communication
The point, Cotter notes, is using those short conversations to build the right customer experience — instead of drawing consumers into long conversations they don’t want to have with a robot. After an initial sign-up, when users give the system a broad overview of their tastes and preferences, ReplyYes builds its catalog of suggestions around the consumers’ actions — what they say yes to, confirm they already own or just ignore entirely.
Moreover, Cotter notes, ReplyYes uses its chat-based interface to solve problems for the customer — it helps with discovery (and on items that can be hard to find), it streamlines the buying process and it asks very little of the customer.
“Our goal is to stay within the problem set of doing something for someone. We set out to basically build the world’s greatest company for people to discover things they love. If you can say grounded in solving a fundamental problem in categories where the problem is notable, we think you can see big results.”
And, with its latest round of funding, ReplyYes will be pushing its problem solving abilities further and wider. That might include expanding onto chat platforms beyond Facebook and SMS — though Cotter notes the firm is taking a wait-and-see approach to what actually catches on and lets consumers guide what they plug into their platform. It will certainly involve its white lable partnership with UMG that will see the massive music conglomerate to use the platform to connect fans to a variety of artist products like music, tickets and promotional events.
And, Cotter notes, it will even involve an expansion beyond music and into the other areas of e-commerce where there is lots of customer love — and thus potential for ReplyYes. That will include lifestyle brands — particularly those oriented around experiences — and consumables like coffee and wine.
The goal, he said is first to grow — but also to inspire change. The world moved to mobile, he noted, but imported a lot of web-based problems with them, notably clutter in the e-comerce line. ReplyYes thinks it can clear that clutter.