May 10, 2011, 1:53 PM

Live chat use is on the rise, survey says

20% of U.S. consumers prefer it over phone or e-mail, The E-tailing Group says.

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58% of U.S. consumers say they’ve interacted with an e-retailer using live chat, up from 54% last year, according to a new E-tailing Group study sponsored by Bold Software LLC, a live chat vendor. Additionally, 20% of consumers say live chat is their preferred way to interact with a merchant.

Live chat is a communication method in which a consumer and an agent type questions and answers into an instant message-type box that appears in the consumer’s web browser.

“Adoption is on the rise generally, and there is a significant population of web site visitors who prefer live chat as a contact method,” says Lauren Freedman, president of The E-tailing Group. “It’s only been a short time that consumers have truly been able to take advantage of live chat, and to see that it is almost equal in preference to the telephone is exciting and transformative.” E-mail (58%) remains the preferred communication method, followed by phone (22%).

The E-tailing Group conducted an online survey with 1,005 adults in the United States and United Kingdom who said they shopped several times a year online and spent in excess of $250 with web merchants annually. 75% of respondents lived in the United States and the remainder in the United Kingdom.

Consumer adoption of live chat in the United Kingdom is lower than in the United States. 42% of U.K. consumers say they’ve tried live chat and 10% say they prefer it over phone (the preferred contact method of 13%) and e-mail communication (preferred by 77%).

Across the entire sample, 18% of respondents say they prefer to use live chat over phone or e-mail to communicate with a merchant. A demographic profile of those consumers shows they are more likely to be male, fall in the age range of 31-50, have a higher-than-average household income, be college educated and spend more money online annually than shoppers who prefer other communication methods.

Respondents who say they prefer live chat most frequently cite getting their questions answered immediately (77%) and live chat’s efficiency as a communication method (52%) in explaining why they prefer chat.

The survey also revealed that merely having live chat as an option on a web site made 29% of consumers more likely to make a purchase, regardless of whether they used it. 63% say it has no effect on their likelihood to buy and 7% say it made them less likely to purchase.

The survey also fielded questions about proactive chat, where an e-retailer invites a chat with a customer based on his on-site behavior. 62% of respondents indicate they are receptive to invitations to chat, up from 52% a year ago. However, 21% of all respondents say they have left a web site because of a proactive invite. Of those consumers, 51% say the invitation interfered with their shopping, 46% that the web site repeatedly issued an invite and 45% that the invite came when they weren’t ready to ask a question.

Freedman says a merchant’s timing and approach to inviting a chat is essential to using proactive chat effectively. “When deployed correctly, proactive chat does not cause shoppers to abandon sites,” she says. “Execution here too is important, knowing that timing is of the essence when taking advantage of this powerful tool.”

Freedman will speak at the Internet Retailer Conference & Exhibition 2011 in a session entitled "The changing role of the online merchant: Art vs. science."

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