Grocers Increasingly Adopt Conversational Commerce

Randy Hofbauer
Digital and Technology Editor
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Since their debut more than three years ago with the launch of the Amazon Echo, smart speakers have often been seen as more novelty than valuable resource. This reality is changing, however, as companies partner with the devices to make consumers’ lives more convenient. Increasingly, this is becoming the case in the grocery industry: Consumers who do their grocery shopping online are more likely to see the value in these devices, according to new research from London-based technology company GlobalWebIndex.

Some 56 percent of online grocery shoppers worldwide said that they either currently use a voice-controlled smart speaker or plan to purchase one within the next six months, the research shows. Although the research involved consumers across the globe, results were consistent across regions.

“Voice assistants took off in 2017, and retailer investment in this technology will only continue to grow,” says Dan Farmer, VP of retail solutions with Toronto-based ecommerce platform provider Unata, which was recently acquired by third-party grocery delivery service Instacart.

Food retailers are catching on and introducing smart speakers and similar technology into their ecommerce operations, with several operators leading the charge for conversational commerce in grocery. For instance:

  • Minneapolis-based mass-merchandiser Target plans to expand voice-activated shopping nationwide – which also allows for using the Target Redcard on purchases – through a partnership with Google. The Google Express voice assistant can be used via its app as well as through the Google Home voice-activated device and Android TV.
  • Bentonville, Ark.-based mega-retailer Walmart has debuted voice shopping via Google Assistant and offers hundreds of thousands of items that can be purchased by speaking to the Google Home smart speaker or on the Google Express website or mobile app.
  • Online grocer Peapod, a division of Carlisle, Pa.-based Ahold Delhaize USA, has launched Ask Peapod, its Alexa skill for hands-free voice ordering, to enable immediate, in-the-moment additions to shoppers’ weekly grocery carts. Moreover, the service now allows patrons to build and update their orders for pickup and delivery via text messages with a new Chat-to-Cart platform powered by StorePower. Users can even build orders using emojis.
  • Austin, Texas-based natural grocer Whole Foods has partnered with Conversable, a developer of conversational intelligence platforms that's also based in Austin, to create a Facebook Messenger chatbot that acts as a recipe concierge, allowing users to input products, cuisines and even emojis to get recipe suggestions while shopping in-store or trying to get ideas on the way home from work.
  • Boxed, an online club store concept based in New York, recently added Bulky, a chatbot which, through Facebook Messenger, lets users interact like they’re chatting with another human online to track orders, build baskets and find new products. It’s integrated with Boxed’s artificial-intelligence-enabled feature, Smart StockUp, so it also can tell which items a user is low on and assist with easy reordering.

Experiment With Multiple Providers

From startups to industry leaders, technology providers in the area of conversational commerce vary in size and capabilities. Ken Fenyo, head of consumer markets for New York-based consulting firm McKinsey Fast Growth, who was previously VP of loyalty at the Cincinnati-based Kroger Co., recommends that grocers experiment with a range of technology partners to see which solutions and partners most appeal to their shoppers and fit their operating model.

“As with grocery in general, it will be critical for retailers to leverage their data and ability to personalize the shopping experience to capture share of wallet,” he says, also adding that retailers also need to “find partners to help them tap into the various text-messaging platforms to ensure they reach every one of their shoppers when they want to order.”

In structuring these relationships, grocers must be sure they don’t get disintermediated along the way, by retaining control of their customer data as well as key consumer touchpoints such as delivery and pickup or product selection. One way to do this is to partner with multiple tech innovators to ensure broad coverage and test emerging capabilities.

Go Beyond Just Ordering Products

While the clearest use of voice-assistant technology and chatbots is for building lists and adding to baskets, it’s not the only way grocers can employ them. Fenyo observes that although they might be more prevalent in such channels as beauty, chatbots, for instance, can also do such things as recommend recipes or new products to try. Additionally, on the back end, chatbots can help automate and streamline customer-service calls.

Know Your Platforms …

When it comes to ordering groceries, every platform has its own context and purpose – some are better for the quick out-of-coffee situations, while others work best when there’s time to plan out the week, according to Cat De Merode, VP of product at Chicago-based Peapod.

For instance, Ask Peapod is suitable for use in the kitchen – a room where many place their voice-activated smart speakers – when someone might have his hands full while cooking. Meanwhile, texting is a good way to add something quickly before it’s forgotten, or for coordinating requests across family members through a medium that they already use.

For chatbots in particular, the best platform is whatever one a grocer’s customers are currently using, advises Conversable CEO Ben Lamm. There are some considerations in terms of privacy and regulation around certain industries that may influence the ultimate decision, but overall, the choice of platform should be based on consumer demographics and preferences.

… But Be Unique on Each One

However, grocers still need to design for each platform fairly uniquely, Lamm says. What may be a useful style of serving users on one platform might be a nuisance on another.

For instance, Conversable has developed chatbots for restaurants that can list all offerings on a menu through a voice interaction that a client might want on the internet or, even more thoroughly, through text-based conversations. The problem is, the experience would be exhausting, Lamm cautions. Grocers must design for the various interaction mediums and conversion channels.

Don’t Confuse Capability With Usefulness

Innovation is supposed to provide value that didn’t previously exist, notes Boxed CTO Will Fong. The good news is that a lot of these technologies are still in their infancy, so understanding where each has its strengths and applicable-use cases is, and will continue to be, key to unlocking that value.

“The grocers that understand this and continue to adapt their implementation will have a competitive advantage,” Fong says.

Don’t Try to Outsmart Customers

In the end, conversational commerce is all about trusting customers. De Merode notes that if a grocer, through conversational commerce, can’t find what a user is seeking, it should admit the truth and not just give a dead end.

“Give them another way to try what they’re looking for,” she explains. “If you can come across as simple and humble, it will make your misses more forgivable and your wins that much sweeter.”