Messaging Apps: The Future of Social Shopping and Retail

Malls may not be dead, but there's no denying that the retail landscape has dramatically shifted — even within the past five years. Retailers are scrambling to adopt technologies that are necessary to maintain relevance and meet the demands of their increasingly digital customer bases.

Young consumers expect the brands they love to respond with the same speed, historical data and personalization they receive when texting their best friend. To accomplish this, retailers must re-evaluate their approach to the next generation of shoppers, specifically Gen Z, who currently hold $44 billion in buying power and represent 26 percent of the U.S. population. To engage this demographic, brands need to consider investing in tools that mirror and up level their customers’ technology preferences.

Cue messaging apps, which are spreading globally at an unprecedented rate. Indeed, research shows that messaging apps are expected reach 3.6 billion users this year — more than half the world’s population. For retailers, messaging apps offer a unique opportunity to transform the brand-customer relationship, build trust and create lifelong loyalty.

When in comes to driving messaging app return on investment — in the form of customer acquisition, engagement rates and, of course, sales — there are three key things brands need to keep in mind:

Social Connectivity

This is particularly important for Gen Z and millennial shoppers, as 61 percent of teens cite friends as the having the most influence on their buying decisions. Messaging apps enable users to share, discuss and recommend products from their favorite brands — or discover new ones — without having to oscillate back and forth between a flurry of apps across their screens.

Through messaging apps, brands have the opportunity to connect directly and authentically with key customer groups and make personalized product recommendations inspired by user chats.

The ROI: Messaging apps need to be a top priority for brands in 2018 if they want to be a part of the conversations their customers are having and maintain a competitive edge. This is especially critical as forecasts show that 20 percent of brands will abandon their mobile apps by 2019.

Always-On Customer Service

Research shows that consumers spend five hours per day on mobile devices. Millennials alone check their phones 150 times per day. What’s more, 49 percent of consumers who start shopping on mobile devices are now staying on mobile through the purchase, up significantly from 33 percent in 2016.

With these data points in mind, it’s evident that brands need to be investing in the technologies and platforms that are most preferred by their customers (all 3.6 billion of them!) in order to provide always-on customer service for our growing m-commerce economy.

The ROI: Brands that invest in 24/7 connectivity reap the benefits of customer retention, increased profits and word-of-mouth recommendations from return customers. Customers are likely to spend more (20 percent to 40 percent, on average) and recommend that brand to others (71 percent) when they receive exemplary customer service via digital platforms.

Enriching Experiences

Through messaging apps, brands have the opportunity to take customer experiences to the next level, whether it’s hosting live chat sessions in community groups to demo a new product or offering followers customized discounts or early access to new items to foster brand loyalty. Brands can also offer opportunities for customers to “give back” in a way that contributes to its mission statement — e.g., sharing videos to show how proceeds from customer purchases benefited communities in need.

Patagonia, for example, uses recycled and sustainable materials in its clothing and donates at least 1 percent of company sales to grassroots environmental groups around the world, allowing customers to feel good about the products they wear and the dollars they spend. Additionally, the company’s Worn Wear program ensures that products actually last and, hence, stay out of landfills longer. Here's one customer’s story about how Worn Wear enables him to live a more sustainable and happier life.

The ROI: Brands that create memorable experiences earn customers for life.

While the customer service pillars of friendly, personable service, keen responsiveness and meaningful messaging remain constant, the methods by which customers expect to communicate is shifting, driving reinvention and digital transformation. The brands that invest in these technologies will not only beat out their competition, but gain durable trust from their customers who recognize that the brands they love have the foresight and agility to adapt with the times.

Zephrin Lasker is the head of e-commerce at Rakuten Viber, an internet messaging and calling service.