Instant service: Advantages of real-time messages

As an increasing number of people are choosing to shop online and new dot-com merchants are cropping up every day, the competition for business is hotter than ever. But at this point in the evolution of e-commerce, the cyberbattle is no longer focusing just on the basics, like product selection, breadth of product offerings, and pricing. Today the war is also encompassing the loyalty and relationship fronts – which likely means more marketers will be investing in Website enhancements that help engender a warm and friendly relationship with the customer.

“There’s a trend in e-tailing that includes enhancing product information, enhancing content on the site, and improving the ability to answer any customer service-related questions,” says Jill Frankel, director of retail e-commerce for Gomez Advisors, a firm specializing in e-commerce analysis.

Those enhanced offerings are increasingly including some form of real-time text messaging. Often called instant messages, or chat, the technology allows online merchants to interact with Website customers faster and more personally than ever before.

One of the first marketers to offer such a service was Dodgeville, WI-based casual apparel cataloger/Web retailer Lands’ End. The company launched its real-time shopper’s help system, Lands’ End Live, in September 1999 with a major media blitz. “It has been hugely successful. People are really enjoying it,” says Anna Schryver, a company spokeswoman.

Lands’ End Live provides shoppers at the Lands’ End site with real-time access to customer service representatives 24 hours a day, seven days a week. The system uses the Cisco Collaboration Server, a part of the Cisco Customer Interaction Suite. Originally developed by WebLine Communications Corp. (purchased by Cisco in late 1999), the Collaboration Server allows customers to either engage in a text chat or work with a customer service representative on the telephone, while the representative assists the customer by pushing online content to the customer’s browser.

“For us, the way to replicate the shopping experience of a retail store is to make it so that you can just turn around and ask someone a question and immediately get a real, live person,” Schryver says. About 1,000 customers used the Lands’ End Live feature each day during the holiday season, she says.

Pricing models for the various types of instant messaging services vary. Some vendors, like, are simply charging a fee based on use, in much the same way a telephone company would bill for service. But most suppliers charge by the number of units of software purchased. Gomez Advisors’ Frankel suggests that online merchants could expect to spend from $10,000 to $100,000 to add this functionality to their operations.

Pushing the high-tech envelope

About 10%-20% of all online merchants now use some form of text chat on their Websites, says Frankel. She hastens to add, however, that the technology is still evolving. “The ideal solution would be voice functionality in which the quality of the audio is good and there’s no time delay,” she says. “We’re not quite there yet because of the bandwidth issue. The instant messaging is what I would call an interim solution.”

One supplier is already moving beyond this interim solution by adding video capability to instant messaging. In March, Foster City, CA-based technology provider FaceTime Communications, which now offers instant messaging via an alliance with AOL, added a video-enabled instant messaging capability for its Instant Customer product. The product allows e-tailers to conduct visual communications over instant-message networks. At present there are three such networks, owned by AOL, Yahoo!, and Microsoft, with an estimated 120 million users.

“We agree that we’re probably a little early to market with this product,” says Kelly Trammell, CEO of FaceTime. “But we think once broadband capability to the customer’s home takes hold, that’s going to drive e-retailers to provide some sort of video solution.”

Of course, Trammell doesn’t expect every online shopper’s computer to have video capability. He believes businesses will use the video capabilities primarily to push images to the customer. “We don’t really see it as two-way video,” he says. “We see it as a more asynchronous situation. I think it’s going to be text going up from the consumer side, but video coming down, as they make use of the broadband cable coming into the customer’s house.”

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