Today we’re going to talk about trends in conversational commerce and why retailers need to rethink the customer experience when it comes to messaging apps.
To help me discuss this topic, I’d like to welcome Stefanos Loukakos, Co-Founder and CEO of Connectly, who was previously Facebook’s Head of Messenger Business.
RESOURCES
Connectly website: https://www.connectly.ai/
Connect with Greg Kihlström on LinkedIn: https://www.linkedin.com/in/gregkihlstrom
Headed to MAICON 24 – the premier marketing and AI conference? Use our discount code AGILE150 for $150 off your registration code. Register here: http://tinyurl.com/5jpwhycv
Don’t miss a thing: get the latest episodes, sign up for our newsletter and more: https://www.theagilebrand.show
Check out The Agile Brand Guide website with articles, insights, and Martechipedia, the wiki for marketing technology: https://www.agilebrandguide.com
The Agile Brand podcast is brought to you by TEKsystems. Learn more here: https://www.teksystems.com/versionnextnow
The Agile Brand is produced by Missing Link—a Latina-owned strategy-driven, creatively fueled production co-op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. https://www.missinglink.company
Transcript
Note: This was AI-generated and only lightly edited
Greg Kihlstrom:
Today we’re going to talk about trends in conversational commerce and why retailers need to rethink the customer experience when it comes to messaging apps. To help me discuss this topic, I’d like to welcome Stephanos Loukakos, co-founder and CEO of Connectly, who was previously Facebook’s head of messenger business. Stephanos, welcome to the show.
Stefanos Loukakos: Thank you very much, Greg. Very nice to be here.
Greg Kihlstrom: Yeah, absolutely. Looking forward to talking about this topic with you. Why don’t we get started with you giving a little background on yourself and what you’re currently doing?
Stefanos Loukakos: Absolutely. So I’m the CEO and co-founder of Connectly, which is a three year old startup. So we’re in the AI space and we help brands communicate with our customers with AI and especially e-commerce and retailers. So we help them build meaningful connection with our customers and sell the right product to the right person at the right time. By the way, before Connectly, I used to work at Facing and I was running the business side of the messenger app. So I know messaging really well. And before that, I was at Google for another five years. And before that, I was in the telecom world in finance.
Greg Kihlstrom: Great, great. Well, yeah, let’s dive in here. And we’re going to talk about a few things, but let’s start with the retail customer experience. And you’ve said that the retail consumer experience is broken, and to fix it end-to-end, two-way conversations are critical. So first, can you explain a little bit about why you say that the retail consumer experience is broken?
Stefanos Loukakos: Yeah, well, broken might be a big word, but I think it’s static, right? So if you think how we shop today, we go to a personal website and we search for items, we add to cart and we just buy things. And compare this to an experience that you have when you go in person to a nice shop and you have an amazing assistant that knows exactly what fits fits you correctly and can help you buy the right things and recommends things that you might not have seen in front of you. And she makes you buy stuff that you really like and makes more revenue for the business. So we want to replicate the same experience for retail customers. And the amazing thing now is that we don’t have to have people actually do that. We can have AI do exactly the same job, and I would say even better, because the AI can really understand what customers want. They have all the data, so all the different products, colors, items, they know exactly what is installed, what isn’t installed, and all that stuff. And if you train the models correctly, as we do it correctly, you’re able to really sell the right product to the right person. And what’s the result of that? An amazing experience for the end customer. And more sales and more revenue for the business. So I’m not saying that the retail experience is broken, but it can be way better. It can be way more personalized. And the future of retail buying would be for businesses to have one-to-one personalized conversation with their customers. So if I know that you’ve been here before, I should know what you like, what you have bought in the past, and I should use all this information to actually sell you products that fit you better. And this doesn’t exist online today.
Greg Kihlstrom: Yeah, yeah, definitely. And, you know, definitely agree. There’s there’s lots of room for improvement in that retail consumer experience. One of the other things is, you know, this idea of end to end two way conversations. Can you define a little bit, you know, what what do you mean when when using that term end to end?
Stefanos Loukakos: So end to end for us is if you see something that you like and let’s say the AI assistant gives you a product that really fits you and you really like it. Why can’t you just buy it. Right now, why do you have to go to a cart where you need to sign up again, and you don’t remember your password, and you need to do all that stuff that takes time and energy, and we do know that people drop out all the time during the process. Why can’t we just buy it there and now? How can we make this process faster, easier for the consumer to buy stuff, and without the need to really go to a website or a mobile site. So if you’re chatting with an agent, you should be able to buy something inside the chat. So that’s the end-to-end experience. I can give you an example from an industry that we don’t… It’s not retail, but you’ll understand the idea. It’s like when you get your mobile pass, right? when you travel, you get mobile pass, boarding pass. Can you change your seat in this SMS conversation that you’re having with the airline? Can you just upgrade inside there? Probably not. You have to make a phone call or go to a website. It’s almost impossible. It seems like such a difficult endeavor to do that. Why couldn’t you just reply back and say, oh, I want to upgrade to a Windows seat? It should happen automatically inside the messaging thread. The same thing applies for retailers. We believe that if you find the right product and you can say, oh, do you have this in large? And do you have it in blood? Yes, we do. Can I buy it? Yes. And you pay inside the messaging thread. So this is the end-to-end experience that we’re envisioning and we’re deploying right now with customers.
Greg Kihlstrom: Yeah. Yeah. I mean, it definitely sounds like it’s capturing people, you know, when and where they’re, when they’re thinking about making that purchase, you know, from a, from a brand and retailer perspective, what does this approach mean for them? You know, is it a mindset shift in, you know, how they think about the customer experience? Is it operational? Is it technical or, you know, is it all of the above?
Stefanos Loukakos: I think it’s a bit of all of them, Bob, but it shouldn’t be something complicated. I think they should be complementary to what they already do. We never say that businesses or retailers should have websites or mobile apps or mobile sites or whatever, right? Or even retail shops. What we’re saying is that The retailers need to own their customers. They need to be able to personalize the conversation with their customers. And there should be a very easy way to do so. They shouldn’t need to allocate engineering resources to make it happen and build their own models and all that stuff. So a very simple solution that just works is what retailers need. And one thing that is really important for retailers, and I think this is like a game changer for them, is that through these conversations, they get a ton of data, right? Data that they can use to, you know, retarget or, you know, continue the conversation with a customer. They can get their age, their budget, you know, it’s a male, female, you know, what they like, what colors they like, what sizes they wear, right? So all this information, all this data can be used for retailers to retarget the conversation and be able to, again, you know, personalize interaction with customers. I mean, if you think about it today, advertising, which is like a huge, huge business, is one-to-many. The same message or like kind of the same message to everybody, right? And whoever is interested, you know, clicks and does it. We believe that the future is one-to-one. You know, a different message to you, different message to me, a different message to another customer. Businesses should know exactly who their customers are. even if there are lots of them, and they should be able to personalize the message with them. And I think that can be a game changer for businesses. And the most important thing, an amazing experience for their customers. I would love if I go to a retailer and they know what sizes I work.
Greg Kihlstrom: So how do you, how do you recommend that brands measure their success here? You know, is it, is it with, you know, traditional like CX or customer satisfaction metrics? Is it, you know, traditional retail, like, you know, order value and things like that? Or are there other ways to measure success here in addition to those?
Stefanos Loukakos: I think this is a really good question. So it’s definitely customer satisfaction, NPS scores, and all that stuff, but it’s also engagement. Can you have a long conversation with customers? conversions are actually buying. Remember the end-to-end experience? We know what customers like. Are they actually buying stuff? So it’s a combination of all those. And it depends, of course, on the retailer and what KPIs they want to measure and what is important to them. But in the end, I think engagement, happy customers is what really matters to them. And we know that a happy customer is the returning customer. I mean, that’s like fundamental truth. And every, every retailer, every business wants to have happy customers and personalizing the conversation with customers, giving them exactly what they want in a really nice and intuitive way. You know, it is a recipe for success, right? They’re going to come back.
Greg Kihlstrom: Yeah, yeah, absolutely. So wanted to switch topics a little bit here and, you know, Connectly recently got a Series A funding. And so, you know, wanted to talk a little bit about that. I mean, first, you know, congrats on getting that. Definitely, you know, not an easy lift, but, you know, in addition to… Thank you. Yeah, of course. Yeah. And, you know, just curious, you know, sounds like you have a good product already. What is this funding going to allow you to do?
Stefanos Loukakos: So two things. First of all, it allows us to continue to grow. We have more than 300 customers today, a lot of big retailers, and it allows us also to really train our own AI and build models that actually solve and are optimized for specific use cases. My view on AI is that there’s not going to be one AI that’s going to do everything. because you cannot optimize for too many use cases at the same time. So there’s going to be an AI for selling for retailers, a different AI for healthcare, et cetera, et cetera. So we are trying to build the best and most advanced sales assistant for retailers out there. And we are using a ton of data that we already have, conversations on how many questions we should ask before we recommend a product, what type of products we recommend, and all that stuff, and optimize for amazing customer experience, sales, conversions, engagement, and all that stuff. So building our own models and optimizing and training our own AI on our own data to optimize for these use cases is the number one. It’s a costly endeavor, right? It’s not easy, but it will allow us to really build the best sales assistant out there.
Greg Kihlstrom: Yeah, yeah. And also, in addition to the Series A, you’ve entered the U.S. market and just curious what your biggest insight there as you’ve entered the market and just curious what your biggest insight is.
Stefanos Loukakos: So every market is kind of different on the way customers interact with businesses, right? To give you an example, the messaging channels that customers are talking to businesses, for example, chains. In Latin America, where we do a lot of business, WhatsApp is the main channel. In the US, it’s less WhatsApp and it’s a lot of web chat and SMS and iMessage and this type of channels. The channels don’t change our technology, right? We are indifferent of what channels customers use, but you need to optimize the experience for different channels. Also, the US has bigger retailers, way more. It’s a big SMS market. Marketing messages on SMS, which if you think about it, they’re all one way. You get a message and you need to click a link and do something. We believe the future, especially for the US, is two-way messaging. send a message and you communicate with the business and you have a conversation with the business. So every market is a bit different. The U.S. is, I think it’s messaging for businesses in the U.S. is going to grow substantially. It already does. So we feel very optimistic about the prospect of entering and continue to grow in this market.
Greg Kihlstrom: Yeah, yeah, that’s really exciting. Well, you know, last thing I wanted to talk with you about is, you recently made some predictions for the industry over the next year. And I realize we’re, you know, we’re partway through the year here, at least, but still wanted to talk through this. And, you know, one of those was the rise of super apps. And I wanted to get your take on this. And Maybe for those listening as well, what exactly are super apps and why are they going to be important to retailers?
Stefanos Loukakos: Yes. So super apps is more like, uh, and, you know, I think Elon Musk and Twitter have an idea of building a super app or he said, so I don’t know if they’re, they’re actually doing it. So the idea of the super app is kind of to, uh, let’s say replicate what’s happening in Asia. And I would, I would, I would point out to WeChat in China, for example, where is a message started as a messaging app, but then it became a place where brands are showcasing the products and you will have payments there and do everything inside the messaging thread. So we never had this in the Western world, in the US, and there was a big reason why not. The messaging apps weren’t able and didn’t have the capabilities to allow that stuff. So you couldn’t pay inside Messenger or you couldn’t pay inside, well, Messenger had a payment option, but inside WhatsApp or SMS, right? So now all these platforms are becoming increasingly more advanced. They allow buttons and pictures and carousel pictures and all that stuff. So the experience is getting way better for end customers and retailers. So I believe we probably, I don’t know if we’re going to see exactly the same super apps they have in Asia, but we’re going to go close, right? So we’re going to see apps like WhatsApp or even iMessage or even on SMS, you’re going to see tools that are going to allow people to buy stuff, do payments, and do everything that allows an end-to-end experience inside the messaging thread. So I believe these are going to be very close to the shore apps they have in Asia, and we already see this happening. And there’s a reason why. Businesses need to target the customers exactly where the customers are, right? The customer doesn’t have the time and the energy to sign up to new websites and visit websites and do all that stuff. You know, they want to do something. They want to do it wherever they are. So I believe this is going to happen and we see signs that this is already happening.
Greg Kihlstrom: Yeah. Yeah. Any other predictions for us?
Stefanos Loukakos: I think the removal of cookies is an important element of.
Stefanos Loukakos: how businesses are going to continue to target the right customers. So it’s going to make the need for businesses to have one-to-one conversation with a customer more important than it was before. You need a quickie-less world. So we see this as a very positive sign for our business and for the messaging channel in general to become more mainstream for retailers.
Greg Kihlstrom: Yeah, great. Well, Stephanos, thanks so much for joining the show. One last question before we wrap up here. You’ve given a lot of great advice and insights already, but what’s one recommendation that you would have for retail marketers to stay agile in the months ahead? That’s a really good question.
Stefanos Loukakos: So I would say to retailers that they need to start experimenting with new technologies, especially with AI. They shouldn’t be afraid of it. If AI is is installed and works well, it can really bring amazing results to customers and at the way lower cost of how they’re doing business today. So start experimenting with AI and understanding the limitations and the opportunity of AI is going to be huge for retailers. And I think the ones that are going to start early It’s going to be a real game changer for that. So I would advise retailers just experiment with AI. There’s a huge opportunity for you, for your business to improve.
