There are over 7.5 billion people globally, 1.5 billion websites on the world wide web, 2.9 million apps on the Play Store, and 2.2 million on the Apple Store. So how can some businesses cut through and pop up everywhere a customer goes in this noise?
Contextual Commerce is a game-changing design that enables sellers to seamlessly create multiple opportunities to sell their products to customers while performing their routine activities. As a result, people now will be able to buy their desired products anytime, anywhere, with just a click of a button or even by simple voice commands.
In an ideal platform developed by a retailer, returning customers should enjoy a personalized and contextual shopping experience. That means the customer receives the relevant information, offers, and recommendations based on the type of products they like and want, the type of environments they are part of, as well as past purchasing patterns with the retailer. Therefore, it is obvious that a commerce player aims for higher control on the entire customer journey – from product discovery to payments and delivery. However, the scope is not limited to the retail business.
Recent strategic moves by FinTech players indicate FinTechs are actively pursuing the opportunity. E.g., PayPal’s acquisition of Honey – a browser extension that plugs in coupon codes at checkout, which currently has a revenue of $100 million – for $4 billion. In addition, finTech players have started to move upstream by integrating capabilities such as product discovery, automating discount coupon plugins, and other areas of the customer journey to tap as many customer touchpoints as possible.
Traditionally, providing a personalized experience to the customer meant sending a generic email with an individual customer’s name in it. However, some retailers have gone beyond such strategies and are using artificial intelligence (AI) & data analytics to monitor the customers’ usage of their smart devices, i.e., smartphones, tablet computers, laptops, smart speakers, etc. They also keep track of the customers’ past purchase trends or past searches of the products. Then, using artificial intelligence & data analytics on the customers’ data and their past trends, they provide them suggestions or recommend them the products they like or regularly buy or have searched for in the past via modern ad technologies, targeted emails, and personalized marketing.
To make the personalized experience smoother, new features are constantly added to aid the purchases, make the purchase interactive, and reduce the number of steps between the search of the product and payment. It uses modern technologies such as voice commands, facial recognition, and even eye movement features. Additionally, virtual reality (VR) & augmented reality (AR) technologies are being used to make purchases more immersive.
Some companies invest their time and resources to understand customers based on voice-related data. Voice commerce technology is becoming the next frontier in shopping nowadays. Hence, the retailers have set their sights on various voice recognition technologies. Automatic speech recognition (ASR) works in sync with the natural language understanding to convert the spoken words to text and then process the same further to understand the meaning. Companies such as Apple, Microsoft, and Google can achieve 65% accuracy even in noisy environments with voice technology. Baidu, a China-based search engine, has developed a new deep speech artificial intelligence by feeding large amounts of natural speech and background noise to detect speech with 81 % accuracy in noisy environments.
Even after these developments in voice commerce technology, it is still in an early stage. However, according to a survey done by Voicebot.ai and Voicify, almost 25% of Americans use voice commands on their smart speakers to make purchases. In addition, virtual assistants, such as Amazon’s Alexa, can perform product searches and place orders solely based on the customer’s voice command.
As discussed above, retailers are using consumer data to track the customer’s journey from the search of the product to the payment page. Providing a personalized experience will do three things for the customers: firstly, it makes them feel special and will also make them feel that the retailer understands their needs. Secondly, it will show the retailers’ values, culture, and personalities. And thirdly, it will make the customer aware of the new products and innovations launched by the retailer. Also, according to an ad-tech firm named Criteo, “returning customers can account for two-thirds of a retailer’s profit.”
Here are a few examples of how the data generated is used to provide a personalized experience to the customers:
Starbucks uses the data collected from its in-house loyalty program and customers’ purchase history to offer them various offers based on the same via mobile applications and emails.
Neiman Marcus, a department store, remembers the size of the products that customers have searched in the past and uses the same to make suggestions in their future searches. It also geolocates the item with the right size and suggests the nearest store in which the product is available.
Amazon’s Alexa does it all – from placing an order on the Amazon website and refilling your groceries to booking Uber and ordering your favorite Pizza.
PayPal announced its partnership with Instagram in 2019 to enable a novel checkout function on the social media platform for US users. It allows you to buy from merchants in Instagram posts and track purchases in the app. So imagine this: a user can engage with a Kardashian’s Instagram story, find a similar dress from a merchant in another post and buy it without ever having to leave the app to search for it or switch to another app for payment.
Sellers want to attract buyers to their portals/shops, shorten the time, and reduce the clicks required to checkout, while payment service providers make sure that the experience is as convenient or invisible as possible. E.g., Mastercard’s efforts on conversational bots for merchant and bank partners to facilitate the unique customer experience. According to Mastercard, “the bot enables consumers to start a simple conversation with a merchant and complete a transaction without opening their wallets, visiting the merchant’s app, or waiting in line.”
The other approach is the WeChat way of doing business: by being present at every nook and corner of the physical and the online world. So there is no way you would miss WeChat Pay in China, no matter how small the transaction amount.
Hence, on account of increasing consumer needs to buy whatever, whenever. However, they want retailers to continually evolve to stay in this highly competitive market and grow. Let’s not forget about the legacy banks that are nowhere to be seen in this game. While FinTechs are focusing on the entire customer journey, banks need to figure out how to think beyond customer onboarding and underwriting.
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