Going Beyond Transactions: ‘Conversational Commerce’ and Its Impact on the Travel and Hospitality Industry
February 6, 2019 11:13am
Coined by Uber’s Chris Messina, consumer demand for digital-centric interactions with hotel and travel brands is on the rise
By Alan E. Young, Puzzle Partner
It’s 2019, and I would argue that there have never been more marketing-related “buzzwords” battling it out for conversational real-estate across thought leadership articles, webinars, white papers and more. Whether it's agile marketing, catering to the ‘age of the consumer,’ hyper-personalization, or the mobile age — there are plenty of commerce-related silos to get lost in as industry leaders seek out the trends and methods which can best benefit their respective brand and industry. This brings us to one of the latest terms, which was coined by Uber’s Chris Messina in 2015 — conversational commerce.
In layman’s terms, conversational commerce is represented by consumers interacting with businesses through popular messaging and chat apps, such as Facebook Messenger, WhatsApp, WeChat, or even through voice-activated assistants such as Alexa or Google Echo. As we’ve watched the rapid growth of the mobile journey over the last few years, this market shift comes as no surprise. Modern consumers, while still expecting access to high-touch service models, have an evident penchant for digital communications and self-service. Simply put, mobile devices have become the predominant device of choice across generations, and represent an opportunity for instant, convenience-driven interactions with brands. The gradual evolution to text-based commerce seems like a natural step for hotels and travel brands, with modern consumers effectively leading the charge.
If you’re already feeling apprehensive of this digital-centric approach to modern commerce — consider the following:
- 78% of your customers would rather communicate with your business via text over any other method
- Text messages have a 98% open rate
- The average college student spends about 94 minutes per day texting, and the average adult spends 23 hours a week texting
- 32% of recipients respond to SMS offers, with texted coupons redeemed ten times more often than traditional coupons
- 29% of people who receive SMS marketing click on links in messages they receive and 47% of those go on to make a purchase (that’s almost a 14% conversion rate)
- 66% of all consumers surveyed rank messaging overall as their preferred channel for contacting a company
- 71% of consumers say that text messaging is very or extremely effective for engaging with a brand
Essentially, conversational commerce acts as an extension of the existing customer service model. For example, if your hotel or travel brand has only has one method of customer service and communication (i.e., via phone), you’re likely less equipped to respond (adequately) to an influx of customer queries, complaints/concerns, orders, etc. With the new inclusion of apps and chatbots, brands are broadening their net to ‘catch’ those interactions — prospective and current customers can engage via phone, email, website form, message app/text or, in some cases, in-person. Ultimately, their ‘path to engagement’ is up to them, giving customers increased autonomy over their experience. Considering 82% of consumers say that a poor customer service experience would significantly impact their future decision to continue to do business with a company, the ability to meet consumers where they are and exercise a hyper-responsive customer service approach becomes paramount.
Conversational commerce gives consumers a choice. Choice is precisely what today’s consumers are looking for. Not only regarding communications, but how, where and what they purchase. There is now a need to chat with staff, ask questions, get personalized recommendations and even click to purchase all within an app or mobile platform. On the business side of things, the messenger-based chat can be spearheaded by Artificial Intelligence (AI) and supported by Machine Learning (ML) for automated messages, or by a company representative — or in some cases, a seamless mix of both. By this, I mean a thoughtful hybrid of ‘bots’ and human agents to deliver a compelling, conversational e-commerce experience.
Companies can now cater to the entire path to purchase without ever leaving the messaging app — from initial queries, customer service issues and personalized recommendations, to order confirmations, payment details, shopping notifications and more. This allows for a more seamless and, more importantly, convenient consumer interaction. Further, we must remember that the less ‘perceived barriers’ to purchase, the more likely a consumer is to make that purchase.
In short, the easier a company makes it for a consumer to buy their product, the better. By conceptualizing the entire consumer conversation/relationship within one platform (in this case, a messaging solution) and not complicating that process with additional platforms, windows or touch-points, the more frictionless the purchase process becomes. Rather than ‘toggling’ back and forth between a message window, broken links, endless click-throughs and web pages, consumers can benefit from the level of instantaneous, attentive service that they would receive in person, from a dedicated sales associate. In this way, conversational commerce allows for brands to expand their online relationship with consumers beyond the transaction itself, to embody something more holistic, responsive and personalized.
Not only that - but through the ongoing implementation of a more digital-focused commerce experience, companies are helping to reduce their operational/administrative load on staff. Rather than being burdened with an influx of consumer inquiries across various platforms and touch-points, the process is simplified and further streamlined by AI technology. Like the benefit of a hotel property replacing its legacy PMS with a modern platform, innovative technology helps to reduce traditional customer service grievances and free up staff to create a more relevant, personalized experience. In fact, by 2020 at least 60% of organizations are predicted to use artificial intelligence to support digital commerce. Further, 30% of digital commerce revenue growth will be attributable to artificial intelligence technologies, such as those that power conversational commerce. Statistics like this help to make a rather compelling case for digital-centric conversational commerce in the hospitality and travel space, don’t you think?
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alan e. young,
Alan E. Young is the Co-Founder and President of Puzzle Partner, the leading agency specializing in hospitality and travel technology marketing. Previously, Alan has held executive level positions with start-up companies such as Newtrade Technologies, (acquired by Expedia), Hotel Booking Solutions (acquired by IBS Software) and TrustYou. Alan is past Chair of The Board of Directors of The OpenTravel Alliance and been very involved with other industry associations most notably AHLA, HEDNA, and HTNG. With over two decades of experience in the travel and hospitality technology world, Alan specializes in helping innovative companies achieve winning performance and dramatic growth. You can connect with Alan on LinkedIn.
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