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Retail businesses’ survival strategy might rely on chat commerce
This pandemic has forced many retail businesses, from big corporations to small and medium enterprises (SMEs), to rethink the use of chatting platforms as their main sales channel.
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Across Indonesia, chatbots and digital assistants are becoming a normal, everyday element of customer service solutions. (Shutterstock/NicoElNino)
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OVID-19 is bringing massive economic impacts and a possible recession that the International Monetary Fund predicts would be even worse than the Great Depression. In order to survive, businesses need to take drastic measures and respond with effective and efficient strategies.
The implementation of large-scale social restrictions (PSBB), first applied in the capital and now enforced in other cities, regencies and provinces across Indonesia, has caused a change in consumer behavior. While online shopping activities have spiked, retail businesses have seen a plunge in sales. Retail businesses are pressured to adjust their online presence in order to cope with the situation.
As Indonesia hits the wave caused by the pandemic, businesses throughout multiple industries start using WhatsApp as their primary sales channel. According to Gatra, 83 percent of 171 million internet users in Indonesia are active on WhatsApp daily, presenting a huge potential market for businesses to utilize the platform as their sales channel. The question is on their scaling ability: How quickly can they respond to customers' queries?
Hitherto, most businesses rely highly on human administrators to answer customer queries. However, as WhatsApp becomes more popular for sales, businesses are looking to have an automation system with artificial intelligence (AI) and natural language processing (NLP). Simply put, this translates into a smart chatbot to answer customer queries with good customer experience. Using chatbot or WhatsApp chatbot eases ordering through a simple chat-to-order process.
We have seen numerous brands shifting to WhatsApp as their main sales channel. Supermarket retail chains like Hypermart, traditional market Pasar Jaya, mobile retailers like Oppo and Erafone, food and beverage businesses, consumer goods firms and even state-owned oil company Pertamina’s delivery service have jumped onto the chat-to-order bandwagon. We are seeing more and more businesses use this solution as a form of survival to keep their sales figure on track during this pandemic.
While existing marketplaces and ride-hailing apps have a strong foothold and market share in the country, high commission for the platforms is one source of hesitation for business. Besides, big retail businesses want to utilize their idle resources and infrastructure during this pandemic by taking orders and deliveries directly to their customers.
As a real case, one of the fast-moving consumer goods companies in Indonesia has adjusted its sales channel to use a chat-based platform. Keeping their consumers in mind, they have decided to utilize chatbot technology for ordering on WhatsApp. This commonly used chatting platform is already installed in most Indonesians’ mobile devices, giving consumers the benefit of not having to install a new application. With a simple step of adding a new phone number, consumers can start chatting and ordering products. Also, bear in mind, the cost acquisition for WhatsApp chatbot is cheaper compared to installing apps.
This pandemic has forced many retail businesses from big corporations to small and medium enterprises (SMEs) to rethink the use of chatting platforms as their main sales channel. At first, they might be able to depend on human administrators, but when customers' demand grows and becomes harder to handle, businesses will need automation. Once the transaction volume is big enough, they need a scalable chatbot to increase sales and capacity. In the next one to three months, we are expecting more retail businesses to switch to chatbots as a result of an increase in demand and change in chatting behavior — where more customers are familiar with chatbots.
Using a chatbot on WhatsApp is targeted for mid to big retail businesses due to the cost. For small and medium retailers, there is a more affordable chatbot; try using a self-service platform with a monthly subscription. This platform offers a chatbot that is available in a URL that can be shared on any digital asset, such as Instagram, WhatsApp, LINE Messenger, as well as an embedded chat widget on websites.
The change of behavior to using chatbots as a chat-to-order system, loyalty points checker and customer service are the reasons it will not be a luxury feature for businesses after this pandemic ends. People will get more comfortable talking to a bot on WhatsApp because they are familiar with the interface and most importantly, they don’t need to install a new application that will reduce mobile phone storage.
This chat-to-order-with-bot behavior will be the new normal and it will turn retail businesses more effective and efficient. (dev/kes)
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Diatce "Ache" G Harahap graduated from Curtin University of Technology in Perth, Australia. He continued his postgraduate study in the University of Westminster, United Kingdom. Ache is the CEO of artificial intelligence company PT Jualan Online Indonesia and runs BJTech, which produces chatbot platforms for SMEs.
