Here's why e-commerce retailers are embracing live chat customer service (TGT, M, KSS, JWN, BBY, COST)
BI Intelligence
This story was delivered to BI Intelligence "E-Commerce Industry Insider" subscribers. To learn more and subscribe, please click here.
E-commerce merchants are taking a new approach to assist consumers.
Smaller online-only retailers are rapidly adopting live chat customer service, according to Michael Kansky, CEO of live chat platform provider LiveHelpNow. Because these companies do not need to invest in brick-and-mortar stores, they can devote more energy toward operating a live chat service.
Merchants have been adopting LiveChatNow's services at an average annual rate of 84%, according to Kansky.
Live chat helps retailers because it allows the company to connect with the customer during the shopping process rather than after a purchase. This reduces the need for retailers to deal with customer service requests in the future and also allows them to cross-sell or upsell items.
Kansky notes retailers that use LiveHelpNow experience an order size increase between 100% and 300% when customers speak to a representative through live chat before making a purchase.
Larger retailers such as Nordstrom and Walmart have adopted a live chat service, but many of their peers (Best Buy, Costco, Macy's, Target) have not, likely because they want to avoid some of the pitfalls of live chat.
Live chat services could give consumers the impression that they can receive real-time assistance 24/7. This is true for Nordstrom, but other companies, such as Kohl's, specify the hours during which live chat is available. If a customer is not aware of this, though, it could create a problem between consumer and retailer.
Live chat can also slow down a website, and many retailers want to have the quickest load times possible.
Finally, retailers must dedicate resources to live chat service representatives and must ensure that they help customers quickly and effectively, which can be costly for the company.
The adoption of live chat services is another way that e-commerce retailers are adjusting their strategies to reach customers in new and innovative ways. Online and mobile shopping has given consumers more choice, flexibility, and often better service, and retailers are shifting their approaches to keep up.
Cooper Smith, senior research analyst at BI Intelligence, Business Insider's premium research service, has compiled a detailed report on new e-commerce strategies that looks at some of the top trends affecting retailers at each stage of the purchase funnel and how they're responding to those shifts.
Here are some of the key takeaways:
- Within digital, consumers are spreading out their retail purchasing across channels, forcing retailers to spread out their online marketing budgets. Paid search, affiliate marketing, and email all increased their share of e-commerce referrals last year, according to Custora.
- Paid search especially stood out as a major source of spending by retailers. Search ad spending grew 18% YoY in Q4 2015, according to IgnitionOne.
- Mobile continues to drive the most sales growth for retailers, but sales still aren't keeping up with retail traffic. IBM found that smartphone traffic beat both tablet and desktop, making up 53% of all online traffic. But mobile still only accounted for 29% of all online sales.
- Retailers only have themselves to blame for underperformance on mobile, as many still aren't using best practices for mobile websites and apps. Only 60% of the top 100 global retailers currently have a dedicated mobile website, according to The Search Agency.
- The increase in online shopping has put stress on the shipping and logistics industry. The number of UPS ground packages delivered on time during the holidays fell from 97% in 2014 to 91% in 2015, according to ShipMatrix.
- Retailers are beginning to explore alternative shipping options. Earlier this year Gilt Groupe switched its primary ground shipper from UPS to Newgistics.
- Retailers that can't afford to invest in alternative shipping options are offering consumers more fulfillment options using what many of them do have — brick-and-mortar stores. Buying online and picking up in-store, also called click and collect, made up about 30% of e-commerce sales at Sam's Club in 2015.
In full, the report:
- Looks at how retailers are shifting their ad spending and marketing efforts to keep up with online retail behavior
- Identifies which channels are top performers for referral traffic and new opportunities for reaching consumers
- Analyzes how retailers are responding to the rise of mobile purchasing and where they're falling short
- Examines the evolving delivery landscape and the aggressive moves retailers are making to become their own shipping carriers
To get your copy of this invaluable guide, choose one of these options:
- Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
- Purchase the report and download it immediately from our research store. >> BUY THE REPORT
The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of new e-commerce strategies.