Tech giving online shopping the ‘personal’ touch

Merchants are increasingly turning to chat platforms such as WhatsApp to engage with their customers.

PETALING JAYA: Nothing beats visiting the mall to check out a new handbag or to put a new smartphone through its paces before parting with a large sum of money for it.

But the Covid-19 lockdown made that impossible, so shoppers settled for the next best thing – online shopping. Unfortunately, this is not as fulfilling.

Now, there is a new concept that comes close to giving shoppers that personal touch that they so crave and that will help the virtual shop assistant clinch the sale.

It involves the use of a chat interface to communicate with the customers, a process called “conversational commerce”. It answers questions on the product, offers recommendations and facilitates payment at the same time.

It basically comes down to having a chat with a sales assistant on WhatsApp or have your questions fielded by a chatbot.

Data from omni-channel communications services provider Infobip shows that 99% of the conversation is on WhatsApp.

Conversational commerce has proven its worth. According to Velid Begović, vice-president for the Asia-Pacific region at Infobip, it has helped businesses achieve a 39% conversion rate.

The impact is expected to be phenomenal. According to provider of essential data and market intelligence Juniper Research, conversational commerce could help raise spending by consumers to US$290 billion (RM1.26 trillion) in 2025 from US$41 billion (RM177.9 billion) in 2021.

Southeast Asia has caught on. Between 20% and 40% of total e-commerce transactions in the region is now enhanced through conversational commerce.

Success depends on how well the brand engages with the customer, Begović said.

As psychologist Victor Goh pointed out to FMT Business, traditional online sales platforms are informational but it is the delivery that makes the sale.

A retailer’s perspective

Malaysian Retail Chain Association (MRCA) president Sharan Valiram stressed that a successful business requires engagement at the emotional and electronic levels.

“One is not a threat to the other. They must co-exist symbiotically,” he told FMT Business.

“While the penetration rate of conversational commerce is still low, the rate of adoption by local investors is likely to grow.”

Malaysian retailers still mostly depend on traditional e-commerce platforms but they are getting more adaptive.

Sharan said that once consumers take to a different platform, retailers will be agile enough to switch.

Going the extra mile against fraud

However, online fraud remains a problem. Most people would have become used to receiving messages with unbelievable offers.

The commercial crimes investigation department (CCID) of the police received 71,833 reports of scams involving RM5.2 billion in losses from 2020 to May 2022.

The problem is likely to grow with the increasing use of e-commerce to engage customers.

A survey by data analytics and consumer credit reporting company Experian shows that one in four consumers in the Asia-Pacific has been a victim of online fraud.

At the same time, four in five of these consumers expect businesses to take steps to protect them online, especially from threats that are too complex for them to handle.

Therefore, businesses must rise to the occasion or risk disappointing their customers.

There are measures that they can take. For instance, businesses can use SMS firewalls to automatically block malicious numbers and URLs. Additionally, SIM box detection methods can identify fake numbers.

Begović said more advanced security measures, such as two-factor authentication and a firewall to track and protect each channel, are necessary.

Preventive measures are a must in today’s digital world. If they are implemented, conversational commerce will be a trusted channel for customers to engage businesses.

“The key is to combine the implementation of mobile app messaging and traditional channels to ensure all touch-points are covered,” he added.