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Q&A: Linc Bets on Chatbots as Key to Differentiating From Amazon

In an age when the customer is both always right and seemingly on every new channel out there, it’s increasingly important for brands and retailers to be where shoppers are and offer top-notch service and interactions. But how they enter and maintain a presence in new channels can make or break a customer relationship.

You might be tired of hearing the terms “chatbot” and “automation” but these advancements are here to stay—and can be useful tools on the road to building stronger bonds with shoppers.

Customer care automation platform Linc wants to revolutionize how brands tackle the strategic challenges of customer loyalty, automating more than 70 percent of essential shopper needs using real-time services and bi-directional interactions across channels including e-commerce, email, SMS, and emerging channels like Facebook Messenger and voice.

Linc serves more than 80 brands, including Hugo Boss, GoPro, eBags and Oshkosh, and more than 20 million unique shoppers. Sourcing Journal caught up with CEO Fang Cheng to learn how brands and retailers are using chatbots to better serve customers.

Sourcing Journal: It seems like everyone is talking about chatbots. Why the sudden interest?

Fang Cheng: In the past few years the consumer has evolved tremendously, and they’re gravitating toward new channels like Facebook Messenger and voice platforms. Brands want to chase where their shoppers like to be. They want to be able to make their brands accessible and provide all sorts of meaningful services that add value for the consumer.

SJ: What are the essential building blocks that brands need to have to even deploy bots in new emerging media channels?

FC: We largely developed in house our own algorithm and technology but we do use some of the state of the art open-source functionality that’s out there. Generic algorithms don’t deliver meaningful results, especially for specialized use cases. In our case we’re very focused on serving the commerce industry, which has a much more specialized set of topics and specific challenges around natural language interactions.

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Verticals in very competitive shopper experience-centric type of brands, such as fashion, lifestyle and cosmetics, are showing interest. Not only do they need to have great product and a great price point, today for the brands to win loyalty and to win profitability and longevity of their brands they need to go beyond that.

When a shopper thinks of the brand, they perceive it together with the brand’s expertise and services all as one, and that drives the differentiation. Brands are investing in ways to offer convenience, and chatbots and emerging media overall are just one piece of the puzzle.

SJ: Is this focus on customer centricity really just how brands are reacting to Amazon’s dominance in online commerce?

FC: Amazon’s winning strategy is customer-centricity, focusing on three areas. Assortment—this is very hard for individual brands or other retailers to compete with against Amazon, which has the biggest catalogue out there. Number two is the platform, which is tied to the game of scale, and also very difficult for others to compete on that. They can play catch-up but it’s very hard to beat Amazon on that. The third piece is about the convenience Amazon offers. They’re all about delivering convenience and value to the consumer.

Think about the Glossier type of brands. The reason they grew so fast and attract a large number of followers is because they offer beauty tips, a community feeling—people can have discussions on what they like and share. That’s that unique brand expertise they have in beauty and personal care, a specialized domain expertise that’s difficult for mass retailers like Amazon to really have.

If you’re a fashion designer, your style, your eye to build a design outlook–all of those are expertise that your brand uniquely has. The question is how to deliver that expertise and package it for customer and make it more accessible.

It’s hard for you to differentiate through e-commerce alone, since websites are fairly uniform and standardized. Now, conversational commerce is opening up a big opportunity for brands given that you can have one-to-one two-way conversations with customers.

I think the really savvy brands and retailers will start to build e-commerce a little bit differently than even just five years ago. Now you hear “digital commerce” more than just “e-commerce,” which is about all kinds of digital interaction that may happen on my site or outside my site, or through any digital touchpoint with customers. I think that’s a new definition of digital commerce—“beyond the website.” The interesting part when you think about customer-centricity: when a shopper is thinking about purchasing something, what comes to mind? The journey starts far earlier than when they come to your site. And they also didn’t “finish” at the point when they left your site, regardless of whether they made a transaction.

The act of shopping or the “transaction moment” happening on the website is a very small portion of the overall relevance that your brand can have in your shopper’s mind.

How do you materialize all of the other moments when your brand is on your shopper’s mind, when they need help or they need expertise? How do you make yourself available? The more channels in which you could make yourself accessible and the more scalable ways you have to actually have meaningful interactions with your customers, the more effective your brand will be.

When a customer shows up on a channel like Facebook Messenger, we don’t always know you. You may be a very loyal customer, but just looking at your Facebook profile we don’t know the person we’re actually transacting with. The identity of who you are was never connected across systems before. All of this starts to break down.

SJ: Who is involved in decision-making on the brand and retailer side?

FC: We typically work with stakeholders who see both sides of the equation.  The back line of the business thinks about cost and efficiency, and then there’s the part of the business that generates revenue. How do I retain customers, drive lifetime value, acquire customers and do it all with better ROI on my marketing budget?

SJ: How does conversion factor into the chatbot equation?

FC: The first wave of bot applications was “come talk to our bots and we’ll help you to find the right product and you’ll buy from a chatbot.”

That first wave kind of got underwhelming reviews and prompted questions about the readiness of the chatbot industry. We have so much data on each piece of the chatbot strategy, what you can do without and what you absolutely need.

Closing out 2017, the conversation with brands and retailers has changed. Now stakeholders are focused on KPIs, they understand that chatbots can make a very meaningful impact at scale for their business.

SJ: After talking with Linc, do some brands/retailers discover that their data isn’t in good shape to properly execute a chatbot?

FC: Without going into detail, we have an innovative way of doing the integration that allows brands and retailers to feed to us all of the data so we understand who the shopper is and what she has been buying, down to the size and color variation, and start forming an understanding of that customer preference. But it also helps us understand: has she needed service lately, what’s her sentiment, is she happy? Then we can be engaging and inspiring her with a new product. If she had an underwhelming experience, we’ll be less focused on upselling and more on earning back her loyalty.

That information is already on the platform. There’s additional functionality that, for example, helps to translate a fashion brand’s outfit-making expertise into a bot. You can build those chatbots on our platform and from the very first interaction it already understands your regular size, what you have been buying and go straight to giving you assistance rather than having you fill out a very lengthy form and simply reconstruct the CRM data.

Often a brand’s CRM data is stored in architecture that is not accessible for interactions with chatbots. Brands have to be able to support very fast access to the data repository so chatbots can make informed, real-time decisions.