For increasingly privacy-centric consumers, consolidating their interactions with a brand into one conversation thread can be an appealing prospect.
“If I were able to have a private one-to-one thread with a brand where everything is happening — right from me discovering the brand to me getting inspiration and recommendations to making the purchase to receiving order confirmation, to getting loyalty offers, getting upsell offers that are most relevant to me — why would I go somewhere else?” says Ränke.
“If I have that messaging thread at my fingertips I can always just message the brand like I would a friend or family member,” adds Ränke. “So why would I go through the hassle of creating different accounts on the website or clicking through different ads and landing pages instead of just having this in this one-to-one thread with the brand where I know everything is tailored to me personally?”
By tailoring the experience to the customer, the direct-message shopping experience even improves on the in-store model.
Conversational commerce takes the personal, in-store experience of a one-to-one dialogue and moves it to a digital platform, helping build lasting relationships between the customer and the brand. But unlike traditional one-to-one experiences, conversational commerce can achieve a level of scale that is not possible in brick-and-mortar retail — enabling brands to unlock data and insights they can use to optimize customer journeys or personalize experiences.
“If you think about traditional store retailing, at best you were left to the conversations of the frontline employee to get insights about your customers,” says Walton. “By communicating via DM, you get an exact sense of what people are shopping for. You can provide assistive experiences within that conversation, you can provide follow-up information or up-sell ideas at a scale you can’t achieve in-store. All kinds of different value can flow out of that.”
Communicating via DM also improves on traditional e-commerce. By gathering preference information and understanding customers’ intents with conversational AI, for example, brands can better meet those customers’ needs and expectations. They can personalize offers at high intent moments. Rather than chasing customers around the internet, retargeting them with generic ads, they can act on that customer data to personally engage them with the right message, at the right time.
Communicating with customers via Instagram Direct Messages generates the kind of declared data (or “zero-party” data) brands can use to better understand their customers and what they want.
At a time when big ad players like Apple and Google are tightening their rules on what data brands can access, communicating directly with customers via DM helps put control back in the hands of brands — giving them the ability to capture customer preference information that can be applied to personalize recommendations in real-time and offer a better customer experience.
“Privacy regulations, updates to iOS, and browsers deprecating cookies are all restricting the amount of data that advertisers have. They’re not able to send the same degree of conversion data back into the ad platforms, which has a huge impact on their campaign performance,” says Gibert. “It limits the targeting audiences that brands can reach. Less conversion data and less specific targeting audiences means less efficient remarketing and prospecting activities. This is a major challenge for digital marketers.”
These major regulatory and technological changes are already “hampering the ability for retailers to triangulate third-party data with their first-party data,” says Walton. “Those actions taken by Google and Apple just put more of an onus on brands each and every day to get good data from their customers. That means they have to create digital experiences people want to engage with.”
Acquiring zero-party data —and using it to personalize the customer experience — is essential to success in the future of retail and e-commerce.
90% of marketing leaders agree personalization significantly increases profitability, and marketers who implement 1:1 personalization earn an average ROI of 47%. Yet 84% of marketers are concerned
about the challenge of implementing ad personalization. Even back in 2019, 45% of marketers said they didn’t have the data and insights they need to power effective personalization, and 48% of marketers cited data quality as a leading roadblock to effective personalization.
With cookie deprecation coming in 2022, the challenges will grow even more significant unless brands start communicating directly with their customers at scale. Conversational marketing not only addresses the data gap by gathering insights through direct communication, it also provides a way to act on the data instantly — right in the moment that matters most.