Retailers shift their ad spending from TV, radio and print ads to digital ads.
Video and chat help e-retailers get personal with customers.
ITSRx is an online specialty pharmacy that dispenses drugs for serious and chronic diseases like cancer, hepatitis C and multiple sclerosis. Many of the medications have to be injected, which means the retailer's customer service agents often have to assuage the concerns of those new to the drugs.
For years the retailer handled those requests via e-mail, phone, mail or fax. But last September it launched both a webcam-based video chat and a text-based live chat program. The video chat service gives customers the option of scheduling one-on-one private consultations via webcam with ITSRx pharmacists. A customer, for example, can show the pharmacist how he is injecting the needle to see if he is doing it correctly. Or he can talk with the pharmacist about drug interactions or side effects.
"Customers can be 1,500 miles away from the pharmacist but video chat brings them together like they are in person," says Brian Smith, director of information technology at ITSRx. And the retailer's text-based chat lets consumers get order-related questions—such as scheduling delivery and refill requests—answered quickly.
Since adding the two chat options, ITSRx's call volume dropped, saving the company about 25% in call-related costs. Moreover, the pharmacy's web site conversion rate increased 20%.
The retailer is not alone in adding new technologies like video chat and more established methods like live chat to enhance customer service. A recent survey from market research firm Datamonitor shows 98% of companies offer phone support, 90% e-mail support and 25% live chat. Each additional service channel means more consumers can get the help they need, however they want it.
More web retailers are adding live chat as consumers become more comfortable with communicating by typing questions and comments into chat boxes on web sites. For instance, 58% of U.S. consumers say they've interacted with an e-retailer using live chat, up from 54% last year, according to a recent survey by retail consultancy The E-tailing Group Inc. Moreover, 20% of consumers say live chat is their preferred way to interact with a merchant.
"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."
Chat's effectiveness was particularly apparent during the 2010 holiday season when 77% of e-retailers who used live chat rated it a critical communication method, up from 69% a year earlier, according to a recent survey. In part that's because more than half, 54%, said customers who engaged in online chats with retailers over the holidays converted to a lead or sale 20% or more of the time.
The survey also found that proactive chat—when an e-retailer invites a consumer to chat based on her on-site behavior—yielded higher conversion rates than when consumers asked to chat with the e-retailer.
Chat is about building connections, says Joan Conlin, vice president of customer care services at Lands' End, which is a subsidiary of Sears Holdings Corp.
Fostering that relationship is important, she says. "Establishing personal connections with our customers has always been an important part of who we are at Lands' End," says Conlin. "Offering our LandsEnd.com users real-time, one-on-one personal shopper assistance makes online shopping even more efficient and enjoyable."
The retailer recently launched Lands' End Live, a new live video chat service that lets shoppers see and talk to a personal shopping assistant as they trade messages on LandsEnd.com. The retailer says the service is the first of its kind offered by an apparel retailer in the U.S.—making it a novelty that attracts consumers' attention.
It's a one-way video service: the customer can see the retailer's agent, but not the other way around. That way the consumer can be comfortable shopping in her pajamas. Meanwhile, the personal shopping assistants can navigate the site, provide product recommendations, compare merchandise, demonstrate product features and discuss details about merchandise colors and patterns.
Shoppers on LandsEnd.com access the online tool by clicking the Live Help button on the site's customer service pages. The site opens a brief welcome video, and shoppers can get more details by selecting the Find Out More option. They can launch the video chat by clicking the Help Me Now button at the bottom of the browser window.
Web site visitors who launch Lands' End Live video chat can communicate with the agent via voice using a headset or their computer's built-in microphone and speakers, or by typing in comments into a text message box. Lands' End personal shoppers can demonstrate product features and details, as well as help navigate the web site regardless of the chat option selected.
Serving the customer
Retailers have ample possibilities when it comes to deciding what customer service tools to offer—regardless of whether they outsource some or all of their customer service functions. But key to determining what tools a retailer needs is a thorough understanding of who its customers are, says Justin Christopher, marketing and sales director of Jenson USA, a retailer of bicycle and accessories.
For instance, because roughly 15% of Jenson USA's sales come from abroad, the retailer offers a language translator in its live chat. And because its high-end bicycles have long sales cycles, consumers—particularly those who will have to deal with an international shipment—want to ensure the product meets their expectations, he says.
Meanwhile, a retailer like Office Depot Inc. aims to speed up its customers' ordering process by using a customer relationship management system that determines whether the consumer has called the retailer before, the content of previous contacts with customer service, and, if he's a member of the retailer's Worklife Rewards program, nearly every item he's ordered in the past.