The megatrends are aligning to drive the next iteration of digital commerce to the new arena of chat commerce — meaning consumers not only talk to brands via chat and access customer service, but they make purchases on chat, too.
Think of chat commerce as the simple act of using your favorite chat app—such as WhatsApp or Facebook Messenger—on your mobile phone to make a purchase, get a service, or request support. You simply send a message to query a bill, explore a product, or service or buy something.
Megatrend one driving the evolution: More than six billion people worldwide already use chat apps, with 2 billion on WhatsApp and 1.3 billion on Facebook Messenger alone. Add in Apple iMessage, Instagram and others, and you’ve got a ton people talking to friends and family via chat apps.
Megatrend two: A full 77% of US consumers are already open to making purchases via those same chat apps, new research shows.
The solution: in-chat transactions via the chat apps that consumers already know and love. No more downloading dozens of different company apps. Instead, say “hi,” buy and say “bye” all in the same place.
This level of chat commerce is already widely happening in China, where WeChat is a behemoth, and in slices of mobile-first Africa where telecom companies use WhatsApp to enable people to manage accounts, receive balance notifications, and make purchases like data and airtime.
Next Up? Chat Commerce in US
Chat commerce is still in its infancy in the US, but leading brands are experimenting, especially in terms of customer service, messaging and influencing purchases. With chat, consumers can interact and transact with brands from anywhere. If the chat occurs in a chat app they already use, they don’t have to download a different app for each company.
Brands are following consumers, who clearly want to do business via chat, especially in a COVID-19 changed world where digital commerce and contactless payments rapidly expanded.
Walmart, for instance, enables consumers to message it via a third-party platform. Domino’s Pizza lets consumers message it through its Facebook page. In a recent State of Chat in Retail webinar conducted by Forrester Research, Forrester revealed survey statistics indicating that 42% of US adults in 2020 indicated that it’s important for retailers to offer live online chat. That was up from just 27% in 2019. ROI of In-Chat Transactions
Innovative retailers are also pursuing in-chat transactions — the next logical step in the chat commerce evolution. Eyeglass retailer Warby Parker, for instance, offers an efficient, seamless checkout experience in chat. Once consumers choose an item to purchase and provide the agent with contact info, a payment button pops open a window for payment information—within the chat itself. Personal care and beauty products retailer, Sephora, also lets consumers transact in chat but only if they already have an account with the retailer.
That is just the beginning of what’s proving to be an effective channel for commerce. New research from Aberdeen Research, in partnership with Clickatell, found that two-thirds of firms globally use chat and that those that use chat in commerce achieve a:
75% improvement in annual revenue growth
48% bump in customer retention rates
27% improvement in ability to reduce service costs.
One recent telecom deployment of Clickatell’s Chat Commerce Platform using WhatsApp led to 55% of first-time users returning for future engagement and a 30% month-on-month customer adoption growth rate.
If China and Africa are any example, the potential for in-chat transactions is massive. Worldwide, there’s an estimated 3.8 billion smartphone users. That means a huge portion of consumers have devices that enable chat. In the US, almost one-third of consumers use mobile chat apps daily, Forrester data shows.
Younger consumers—who grew up with chat and who will account for more of spending as time goes are—are especially prone to chat, and to do business via chat.
Clickatell’s second Chat Commerce Trends Report found that 82% of US millennials want to make purchases via chat apps, such as WhatsApp, and 88% already use chat to communicate with businesses, underscoring chat as a channel of choice.
The report, based on a survey of more than 1,000 US millennials conducted by Dimensional Research in partnership with Clickatell, also found that 93% of millennials have identified significant benefits to doing business on chat, including that they save time, easily get quick responses, can respond to a chat when it is convenient for them and keep conversations in one place to reduce lost information and having to repeat themselves.
Many millennials have also participated with in-chat transactions. A full 38% of the more than 1000 millennials surveyed said they’d already had the experience of receiving a link via chat to make a payment.
Businesses Getting the Message
Some business leaders are seeing the dots line up for chat commerce. Forrester data shows that almost 72% of executives recently surveyed are using or piloting chat on mobile websites or apps, and almost 48% are doing so on third-party platforms, like Messenger or Apple Business chat.
But more work remains. Only 10% of millennials in the second Consumer Trends Report said brands always offer them their channel of choice— including chat, social media and phone.
Brands that meet consumers where they are will lead in-chat transaction growth. Chat enables brands to connect, engage, and transact with customers in their chat channel of choice. Customers can easily learn about products, place orders, make purchases, return, and track deliveries, engage with live agents, resolve issues, and provide feedback in a seamless process, anytime, anywhere.
To help companies succeed in this emerging space, Clickatell offers a complete digital distribution and payments acceptance platform built for growth– in chat—enabling safe and secure transactions. Along with increased revenue and engagement, brands can also achieve improved payment management with Clickatell’s pre-defined commerce templates and more control with transaction management.
Making payments and transactions through chat apps is convenient and extremely secure, and it’s what consumers in the US and around the world desire.