Retail

Conversational Commerce Finds Its Voice In Digital Retail

Conversational Commerce Finds Its Voice In Digital Retail

Consumers want information in the digital-first economy – actually, they wanted it yesterday. As new PYMNTS data show, they want to know about everything from shipping dates to available inventory to pricing to the exact time their package is being delivered curbside. And if they don’t get that information, they’ll be off to the nearest competitor.

Although it’s hardly a new concept, conversational commerce is seeing a pandemic-driven surge as a result of this informational urgency. Voice commerce may grab more headlines due to the presence of Google, Apple and Amazon, but conversational commerce – its younger cousin – is finding its own way as the information superhighway to a purchase.

“We look at it as a conversation that drives action, which has a consequence for everything from a purchase to a loyalty program,” Mike Herrick, SVP of technology at customer engagement platform Airship, told PYMNTS. “Through working with customer engagement technology for more than a decade, we’ve come to see conversational commerce as something that takes the friction out of a transaction. It can drive user attention effectively, and it personalizes the way our technology works. By removing friction, we can provide more value and ultimately help our customers grow faster.”

Airship thinks so highly of the potential for conversational commerce that it recently closed its acquisition of mobile commerce startup ReplyBuy. Herrick expects that ReplyBuy and Airship will create a holistic ecosystem, allowing retailers to use its engagement technology to acquire customers and then use conversational commerce to retain them and grow their value.

The best way to describe the difference between voice commerce and conversational commerce, and tie it into the digital-first economy, is through a hypothetical example. Suppose a college student is in the market for new running shoes. The student starts by asking Alexa: “What kind of running shoes should I buy?” The voice activation may come back with one brand or a few, as well as suggested websites or stores. Say Alexa recommends a pair of Nike Flyknits, which are available at several eCommerce sites as well as at Sound Runner, a nearby brick-and-mortar specialty store. Now the voice commerce part is over and the conversation begins. If it is so enabled, Sound Runner can text the consumer to get more specifics about her running gait and stride idiosyncrasies. Color? Size? How will the item be paid for? How would the consumer like it delivered? To her home? Curbside? Or would she prefer to visit the store (mask required, of course) for a custom fitting?

“Text (SMS) is known for integrating well with other technologies,” Herrick noted. “But we're doing that through our investment in orchestration technology, so we can orchestrate a customer’s experience across app, email and SMS. With ReplyBuy, we'll operate in two-way conversations into that experience. So perhaps a brand wants to have a special offer for people who sign up for their app, but they want to offer a personalized version to people in a certain segment of a certain brand. With orchestration technology, they can send it out with an easy way to complete that purchase.”

GameStop has been a beneficiary of orchestration technology. The retailer attributes much of its success to highly personalized, targeted mobile messages using push notifications. Using the GameStop app, gamers can choose the types of notifications they would like to receive, including promotions and loyalty-related alerts. GameStop has used Airship’s push notifications to broaden its reach to its entire app audience. The technology was also a key factor in the success of GameStop’s mobile wallet loyalty card. So far, more than 339,000 customers have downloaded it, with a 90 percent retention rate month over month.

A “get, keep and grow” customer strategy is one of the killer applications for conversational commerce. So is curbside pickup. Numa, a call management-based solutions provider that plays in the conversational space, reports that many retailers are not only struggling to meet consumer demand, but also to adapt to the operational requirements of contactless solutions. According to statistics in the retail category, 98 percent of all text messages were opened and 95 percent were responded to within three minutes of being delivered. And new data points released by Numa show a 393 percent increase in contactless, text-to-order revenue and a 748 percent increase in curbside order check-ins through SMS.

“Before the pandemic, I think there were definitely the beginnings of momentum for conversational commerce,” noted Numa CEO Tasso Roumeliotis. “Retailers started to be introduced to the concept of messaging for their business, which is the start of it, but we didn't see a fully integrated system until the pandemic made it a necessity. The pandemic was definitely an accelerator.”

Herrick agrees. “Retailers need to make these channels grow much more quickly than before, when they could rely on people coming into stores,” he said. “That's where technology is increasingly important. I wouldn't say it’s the only way to grow digital channels, but customer engagement and conversational commerce have become even more important than before.”

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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