3 Ways WhatsApp Business is Used to Drive Retail Sales in Brazil
Brazil is one of WhatsApp’s strongest markets in terms of population penetration and daily usage (91% of internet users are on WhatsApp and of them, 97% admit to using it “all day long” or “almost all day long“). It should be no surprise then that tens of thousands of retail businesses, restaurants and other physical locations in Brazil have opted to engage with their customers via WhatsApp. And it’s not just small local businesses that are using WhatsApp Business in this way. Many of the country’s largest retail chains and even banks have rolled out WhatsApp Business solutions to improve customer engagement. If you’re asking yourself how to drive retail sales in your stores, it’s worth paying attention to what your Brazilian counterparts are doing.
Why Are Brazilian Retailers Using WhatsApp Business?
Struggling retailers in Europe and the US are scrambling to implement all sorts of expensive digital solutions like own-branded apps, click-and-collect ordering and digital clienteling tools as a result of the pandemic. Meanwhile, their counterparts in Brazil are being successful with comparatively small budgets and WhatsApp Business is playing a big part in that. Why have they chosen to use WhatsApp to connect consumers to their stores?
1. Consumer Adoption
The two major app stores (Apple’s App Store and Google’s Play Store) are littered with mobile apps created by retailers that have very low download numbers and even lower user engagement stats. Why? Because it’s hard to get consumers to download apps unless they get a high level of utility out of it. That’s why Starbuck’s and Tesco’s mobile apps, for example, have been successful but many fashion retailers’ apps have not (i.e. you buy coffee or groceries every day/week from the same place, whereas clothing is a less frequent purchase and you typically shop in lots of different stores looking for the right item).
Click-and-collect solutions often create more customer issues than they solve because they don’t involve in-store staff until a package arrives from a warehouse two days after it was ordered. Customers often show up at stores expecting the package to be available within an hour or two of ordering it, which is a huge letdown.
And live streaming tools usually require customers to book slots in advance, which can be inconvenient (particularly during working hours) and requires them to go to your website to find it.
Leveraging an app that consumers already have on their phones and love using, like WhatsApp, breaks down all the barriers to adoption on the consumer side. They’re used to adding numbers to their WhatsApp account while sending videos and messages is second nature to the majority of consumers. They also understand the asynchronous nature of messaging, which means in-store staff are afforded a whole lot more flexibility than with voice calls or live streaming appointments.
2. Staff Engagement
Any experienced retailer will testify that introducing new technology into a retail chain can be a huge headache in terms of getting staff to engage with it. Many products fall flat on their faces simply because front line staff weren’t able or willing to use it in the store.
The messaging medium makes life easy for in-store staff. They are most likely messaging all day long in a personal capacity already. That means there is no learning curve with messaging-based customer engagement tools, as far as the technology goes.
3. Lack of IT Involvement
Retailers in this part of the world often shudder at the thought of doing anything involving technology because budgets can be blown very quickly.
Very few, if any, Brazilian retailers have gone to the trouble of doing a complex integration with an eCommerce platform in terms of ordering via WhatsApp (note: WhatsApp is commonly used as a way to communicate order updates after a purchase is made but this is relatively straightforward to implement). For the most part, Brazil’s retailers treat WhatsApp just like they would a phone call. Staff members answer customers by sending a message rather than expecting everything to be done by technology. A lesson worth taking on board. After all, customer engagement in physical retail has always been a precursor to sales.
How Does WhatsApp Business Drive Retail Sales?
The way Brazilian retailers use WhatsApp Business to connect with consumers is worth studying, particularly in the context of social distancing and its impact on browsing and footfall. As you can see from the below table that was put together by LABS, WhatsApp really is driving sales and improving profitability with all sorts of commercial activity being conducted on it.
1. WhatsApp Business for Customer Service
Some of the largest companies in the world have been using WhatsApp for customer service since 2017 (e.g. KLM Airlines) and it has been very successful. Some retailers in Europe have recently started dabbling with WhatsApp solutions, such as Lidl’s bot that advises consumers when stores are typically busy. In Brazil, retailers are using WhatsApp Business to provide customer service at store-level, which I have not seen to the same extent elsewhere, with the exception of India.
As an example and referencing the above table, the top commercial WhatsApp use case is to “clear doubts or ask questions”. People want to know if a store has what they want before making the trip. This has always been the case (the data in the table dates from 2018) but the hassle of queues and the unpleasantness of social distancing means consumers are doing it even more during the pandemic. We have spoken with retailers who estimate phone calls have increased by 2000% (not a typo - 20 times more calls) since they reopened their stores, which is just unmanageable. Retailers in Europe and the US generally try to solve this problem with stock checking solutions on their website. These can be expensive and take time to implement. The customer also has to go find it on your website. Brazilian retailers are successfully using WhatsApp to manage this process and the interactions that take place between staff and customers in advance of the store visit are actually boosting in-store conversions.
WhatsApp also enables your store associates to send images and video files to customers, and vice versa, which can greatly enhance communication. For example, those video files could be an excellent alternative to live streaming solutions (i.e. you could be sending video files to customers who’ve messaged the store about a product rather than expecting customers to book a 30-minute slot).
2. Marketing - Broadcast Messages & Group Messages
The WhatsApp Business app has a broadcast feature in it which has proven very popular with retail businesses in Brazil. It allows businesses to send the same message on a one-to-one basis to all or a selection of the customers who have chosen to interact with them on WhatsApp (note: they must also add your business to their phone’s address book). This has created an effective and free way for businesses to notify customers of special events or promotions, which helps drive retail sales.
Group messaging works in a similar way but the communication is not one-to-one (it might be used in a situation where a team from an office is being asked for a lunch delivery order, for example, so all the orders are added to the same group conversation). Be warned. Using group messaging in a context where all the different members of the group do not know each and hadn’t expressly agreed to have their details shared could get you into serious difficulty from a data protection viewpoint.
The unfortunate thing for larger businesses is that neither of these features is available via the WhatsApp Business API (Group messaging was but it is being deprecated). However, that does not mean that there are no marketing benefits of using WhatsApp in your retail chain.
Using messaging channels like WhatsApp to engage with offline customers creates a golden opportunity to capture customer details like email addresses, which can boost the effectiveness of email marketing campaigns. The digital touchpoints also create opportunities to sign customers up for loyalty programmes or make it easy for them to download your mobile app.
The other benefit of using the WhatsApp Business API is that it instantly makes the application more GDPR compliant by removing access to customer names and phone numbers. This means you don’t have to worry about a store staff member taking a shine to a customer and contacting them uninvited in a personal context. That is a risk with the WhatsApp Business app (see the difference between the WhatsApp Business app and WhatsApp Business API here).
3. Real-Time Click-and-Collect/Curbside Pickup
Click-and-collect has seen a dramatic increase in adoption during the COVID-19 pandemic and the associated lockdowns. In many cases, it was the only way to shift store inventory without contravening lockdown rules.
Although stores were closed to consumers in Brazil, many of the large shopping centre operators set up drive-thru click-and-collect areas within their car parks. This enabled the stores within those shopping centres to continue selling the stock stored in their stores during the lockdown.
How WhatsApp was Used to Drive Retail Sales during Lockdown
The way they operated the system is the interesting part. Customers simply used WhatsApp to message the staff in the local outlet of the retail chain outlining what they wanted. Customers could send images or even videos of what they were looking for in case there was any confusion and staff could respond in a similar manner if clarification was needed. Staff operating from the store would then pick the requested items and get them ready for collection in the car park. Once ready, the customer would be sent another message to let them know. Finally, when the customer arrived outside the store they would send a final message to let the store staff know to come out and deposit the goods in the boot. Payment would be made via a portable terminal or cash, though that will not be necessary for long (see 4 below). This can all be done in real-time, so on a quiet day, it is possible for an order to be placed and collected within a matter of minutes. (We advocate using WhatsApp to take orders from people standing in the queue outside a store to improve people flow, which is the ultimate in real-time click-and-collect.)
Inquiries we’ve made suggest the majority of retailers who used this mechanism during the lockdowns are planning to keep using WhatsApp Business, as they believe it will be a key channel to help them increase retail sales long after the pandemic has passed. As it stands, WhatsApp ordering works better for smaller purchases such as a couple of items of clothing or books, rather than large weekly grocery shops. In the short term, it will be these types of retailers who get the most out of it. However, I have heard of instances of local grocery stores in Brazil taking sizeable orders on WhatsApp just like a shopping list and integrations are likely to improve that workflow in the future.
4. Coming Soon - A New Way to Accept Payments
The blog title only mentions “3 ways” WhatsApp is used to drive retail sales in Brazil because, up until recently, it wasn’t possible to accept payment from consumers via WhatsApp. That changed as of the 15th of June 2020. WhatsApp has announced that it has chosen Brazil as the market to launch WhatsApp Pay first (it was originally supposed to be India but red tape appears to have gotten in the way). This is the piece of the puzzle that will really set the gears into overdrive as far as driving revenue via WhatsApp is concerned. Integrating payments seamlessly into the customer journey moves WhatsApp a step closer to China’s WeChat, which handles many billions worth of transactions each year.
Why Should Retail Chains Consider Implementing WhatsApp Now?
The big change for retailers with more than a few stores has been the rollout of the WhatsApp Business API. Using a solution like ServiceDock, large retailers can easily manage a network of stores while retaining oversight of the interactions and building insight from them. This has moved WhatsApp into the realm of webchat and Twitter as a channel that retailers really shouldn’t be ignoring any longer.
Please get in touch if you would like to hear how you can get started with WhatsApp Business in your retail stores or check out this blog post for more information on what’s involved.