Mobile Payments Today interviewed Hannes Van Rensburg, chief commercial officer for Clickatell’s on the subject of chat commerce. Hannes shares his thoughts regarding this unique type of commerce and what it could mean to the mobile payments industry moving forward.
Mobile Payments Today spoke to Clickatell’s Hannes Van Rensburg, chief commercial officer for the company regarding “chat commerce” a strategic and innovative way to enhance a customer’s experience through active engagement and offer a more “human” and seamless experience to online shopping.
How did this unique process start and how can it benefit retailers as well as the mobile payments industry moving forward?
“Chat commerce happened pretty much as a result of the prevalence of smartphones, the growth of chat apps, and the advancement of other technologies, such as automation, and open APIs, that enable consumers to interact and transact (i.e., make purchases) via chat apps. In that sense, it was a natural evolution,” Hannes Van Rensburg said in an interview with Mobile Payments Today.
Van Rensburg explained that out the rise of on-demand business models (e.g., Uber, Airbnb) has led lots of consumers to expect more convenience and immediacy in the way they are served with goods and services. Also, consumers want to engage with brands on the every-day chat platforms they already use. “Companies are trying to respond by building their own apps, improving websites, and launching web chat. However, U.S. app users spend 90% of their time in the top five apps, one of which includes WhatsApp. Brands need to go where customers are spending time, (i.e., on chat), or they will lose market share to digital-only disruptors,” said Van Rensburg.
Go where the customers are
Communicating via chat has become the preferred way that consumers interact digitally (compared to telephone, web or mobile apps.). This has led to chat fatigue, where consumers are getting more and more exhausted to download applications, remember passwords and finding the right information, Van Rensburg said.
But isn’t chat commerce like using social media? Apparently yes, and no according to Rensburg.
“Chat commerce enables brands to connect, interact, and transact with their customers the same way their customers do with friends and family – i.e., through chat,” said Van Rensburg. “Chat commerce is interactive – it’s not just a blast that goes from the brand to a broad audience. With chat commerce, brands communicate personalized information with customers who can then, right there in the app, interact and make purchases.”
While it’s primarily happening outside the U.S. at this point, there is a rise of ‘chat banking’ through WhatsApp.
“Customers initiate a chat through their preferred app. Automated menus guide the customers through common banking tasks, such as paying bills, transferring funds, finding branches, and viewing a full or mini statement,” said Van Rensburg.
“Most interactions are 100% automated, but customers also have a live chat option,” said Van Rensburg. “Customers can get 24/7 digital engagement with their banks in a mobile-first experience within the same app they use to connect with friends and family.”
According to Van Rensburg, a similar scenario is playing out in retail. Consumers use chat commerce to buy and return retail goods, or receive a chat from their utility and pay the bill, right there, with one click and not have to log into an account on a website. Chat commerce and mobile messaging affords on-the-go, on-demand convenience.
And what about Apple and Google? Have they moved into this sector? According to Van Rensburg, the answer is yes, but the two heavy hitters are cautiously testing the waters.
“Both have stepped up business chat. Apple Business Chat, which brings businesses into Apple’s Messages app, enables businesses to connect with customers on their preferred channel,” said Van Rensburg. “Google Business Message is further evidence that customers are craving the convenience of chat in channels they’re already using. It allows businesses to communicate with customers using live agents or bots.”
According to Van Rensburg, there is a reason that chat commerce is focused on retail, financial services/banking/payments and insurance sectors: it has to do with security.
“These sectors are all transaction heavy, a task perfect for chat commerce,” said Van Rensburg. “In retail, consumers can browse and buy via their favorite chat app—and then track orders and deal with returns if need be, all from the same app. These industries require high levels of security and confidentiality, areas in which Clickatell excel.
“Chat banking, meanwhile, offers a new way to reach and retain mobile-first consumers, especially younger ones who’re quick to pick up digital payment technologies. Insurance lags other industries in adoption of digital channels, but we see a lot of potential there. Chat commerce provides a quick path to opening a thriving digital channel,” Van Rensburg said.
How secure is chat banking and chat commerce?
With all this engagement through digital channels is there a way that this process could backfire and instead of reaching out to the customer, is it possible they would see it as invasive?
“It’s an interesting thought, but, properly managed, we don’t see it as major concern for most people. In almost every study, consumers choose chat as their preferred method of communication (e.g., text, Instagram, Facebook Messenger, WhatsApp) and expect a high degree of convenience in the way they are served with goods and services,” said Van Rensburg.
Unlike other channels, according to Van Rensburg, chat is both convenient and pervasive. A telephone call just goes away if unanswered and an email goes into an inbox and customers have to log on and taken action. With chat commerce, an offer is pushed to the customer directly. It can stay there and the customer can respond easily whenever it’s convenient, without pressure.
Slow start in US
Looking at the commerce landscape, why hasn’t chat commerce taken off in the U.S. as opposed to other countries?
“Chat commerce exploded in popularity in nations wherein people tended to have mobile phones as their primary, and possibly only, telecommunications device – e.g., ‘mobile-first’ users,” said Van Rensburg. “For example, let’s look at chat banking in Africa. It took off in there because business leaders prioritize mobile-first digital experiences. That’s because so many customers are mobile only.
“While, obviously, there is now near total market penetration by mobile devices in the U.S., America is not a ‘mobile first’ nation. It has a working app economy so, at the outset, chat commerce wasn’t quite as intuitive for most organizations, let alone consumers. That said, consumers are now tiring of a different app for everything. Many spend a lot of time in chat. As a result, we believe chat commerce in the U.S. will start first in customer service, replacing long waits on hold and slow websites. Then, it’ll move to other commerce, such as chat banking,” said Van Rensburg.