Five reasons why live chat is radically changing the face of e-commerce

With live chat, businesses can unlock the power of one-to-one conversation to leverage contextual data and create bespoke shopping experiences.

The biggest criticisms of e-commerce stem from the overall lack of personalization in the online shopping experience. The proof is in sky-high cart abandonment rates and return rates showing that e-commerce has a long way to go before it matches the level of in-store personalization that customers are increasingly expecting online. And yet, according to Gartner, less than 10% of Tier 1 retailers believe they are highly effective at personalization.

Online traffic is not slowing down, in fact, it’s actually accelerating exponentially, especially with the emergence of mobile as the new preferred customer interface. Customers are browsing products online all the time, even in-store. In fact, 82% of smartphone users say they consult their phones for purchases they’re about to make in-store. The good news for brands is that they can leverage these micro-moments to capture intent and turn them into transactions. But for that opportunity to open up, brands and their customer service teams need to have real-time visibility of customers needs, wants, questions and potential objections or barriers to a purchase. Enter live chat.

The power of conversation is immense. At Heyday, we’ve seen sales lifts from 30% to 800% between consumers who engage with chat versus those who don’t.

After surveying a few select e-commerce pioneers who sell their products on Shopify & BigCommerce we identified 5 ways live chat is redefining the e-commerce playbook, and how they leverage the power of conversation to delight customers at every step, from product discovery to purchase to customer care.

1. Messaging is your new storefront

The new customer is savvy, hyper-connected, and text hungry. To make better-educated decisions, people are increasingly researching products and services before buying. As a result, most of the decision-making happens online before they even show up at the store. This is true for any product or service that’s financially- or emotionally-driven but especially so for high-involvement retail products where the entire transaction traditionally happened in person (e.g. cars, travel, furniture, home appliances, etc.). These transactions require a lot of education and information gathering beforehand, and live chat can help accelerate the sales cycle and put customers at ease.

In many ways, live chat is the bridge between the physical and digital worlds. In the words of Brandon Chatham, CEO of NatoMounts:

“You need to look at your website like it’s your physical store. Facebook chat is the most powerful for us. Thanks to its chat widget embedded on our website, we can have feature-rich conversations and engage with customers on a whole new level. Email is dying, in my honest opinion. Messaging is just so much more powerful.”

As we move from window shopping to chat window shopping, recent studies prove him right. According to Facebook IQ and Nielsen, 53 % say they are more likely to shop with a business they can contact via a chat app, and the main reason is convenience.

2. Always on. Always on-demand.

Instant gratification is a table stake for the new customer experience. In our fast-paced, always-on digital world, the most adaptable and responsive companies are the ones who will win the hearts of customers who expect brands to be accessible 24-7 and deliver value on demand. Wayne Ainsworth, Director of E-Commerce at AwesomeGTI, the leading UK auto parts online reseller, sums up this new paradigm nicely:

“People know what they want and they want it right now. We need to design our businesses to respect the new customer mindset and the pace of play of modern-day shoppers.”

That being said, the rapid rise of messaging and live chat is no surprise. It has become a very strong vector of communication for many companies. Its asynchronous nature is a big plus for customers who want to avoid interruptions in their day-to-day and control their interactions with businesses on their terms. With a growing number of people expecting a direct line of communication with businesses, the most forward-thinking companies are taking notes and are starting to fully embrace it.

Plus, with AI and automation, live chat can finally fulfill the promises of an effective, self-serve, first-line service. Conversational AI-enhanced customer experience platforms like Heyday.ai not only help brands unlock 24/7 customer support availability but they also free up their agents from repetitive work so they can focus on high-value interactions. The frustrating days of waiting on the phone for basic service are over, something both customers and businesses alike can be happy about.

3. Conversation helps build trusting relationships

Too often, e-commerce feels somewhat impersonal, but live chat can help bring a human dimension and create more engaging interactions for only shoppers. At the end of the day, e-commerce needs to go beyond convenience to become more caring and customer-centric. Conversation is the cornerstone of any relationship; it’s how we connect with each other, communicate emotion and build trust. As Joe Alexander, CEO of Nest Bedding puts it:

“Our goal is to bring back the one-to-one conversation to cold e-commerce, infusing as much emotion and humanity into it. And there’s no better way to do it than with live chat.”

Sure, focusing on transactions is great for the bottom line and revenue but focusing on conversations goes a step further: it puts the emphasis on the customer relationship. In the end, it’s about turning a customer into a loyal fan and brand ambassador. Live chat raises the level of trust, and if you get their trust, you get their purchase. Customers are human beings before they are customers and dollars in a spreadsheet. The more they feel heard and important, the better and more tailored the customer experience becomes.

4. Text sells

Focusing on building trusting relationships doesn’t mean it should hinder sales. In fact, the data proves quite the opposite. According to Paul Watson, co-founder of Ledbury, a high-end online men’s fashion brand, the sales uplift is spectacular:

“Conversion rates are significantly higher for those who engage with chat. We’re talking about an 800% sales uplift”.

The conversion increase goes beyond the mere “those who chat” VS “those who don’t chat” comparison. Live chat and messaging also surpass other traditional channels like email and phone. At the writing of this post, we are preparing to enter retailers’ and e-commerce merchants’ busiest season: the holidays. To get ready, many successful online businesses will bolster their staff to meet the increasing flow of incoming messages. Fun.com’s CMO Mark Bietz explains:

“During our busy season, we have 20 people dedicated to live chat. This part of our customer service team experiences much higher conversion rates and customer satisfaction than areas that use email and phone.”

But with any opportunity comes challenges. The fluctuating volume of messages is definitely a challenge for e-commerce and customer service managers. Scaling a team can be difficult, especially when you’re dealing with the operational puzzle of managing both full-time and part-time teams. With the rise of Conversational AI, it will become much easier to scale teams on demand and give them a virtual helping hand to handle the influx of messages. AI-augmented live chat is the next frontier that will help businesses provide a scalable and consistent level of service across the board, 24/7/365.

5. Live chat: the cornerstone of customization

Technology is spoiling us. As a result, our expectations keep mounting. Customer centricity is no longer a nice thought on an executive slide – it’s a core pillar of every interaction we design. Personalization at scale is the holy grail for marketers and customer service teams alike. With live chat, businesses can unlock the power of one-to-one conversation to listen to people’s needs and leverage contextual data to create bespoke shopping experiences. Thanks to technology, VIP service is about to get democratized.

It’s true across the spectrum: from commodity products to once-in-a-lifetime purchases like diamond rings. Just ask Slisha Kankariya, the founder of Four Mine, an upscale diamond ring e-commerce merchant:

“The beauty of technology is the level of customization you can provide, especially in such an emotionally and financially-driven purchase. Live chat helps us deliver the 3Cs of our online strategy: Convenience, Comfort, Customization.”

The past was all about mass marketing. The future of retail is about mass customization: the ability to tailor messages and offerings to each and every customer.

Striking a balance between man and machine

There’s an ongoing debate among brand executives and customer service teams. Every day at Heyday, we process millions of customer conversations and we feel like we’ve found the sweet spot: letting AI do the dirty work and answer repetitive questions while freeing up time for human agents and letting them focus on the most sensitive, complex and personal inquiries.

Simon Jauvin, Director of Customer Service at Altitude Sports, a fast-growing Canadian sportswear e-tailer, confirms our hunch:

“There’s room for automation in customer experience to automate redundant questions. But the human is still very important to create better relationships and a higher level of personalization.”

At the end of the day, technology should always be put at the service of people, not the other way around. And if it can help both customers and the customer support teams dedicated to them, it’ll be a significant leap forward.

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