Marketing, social media experts and other thought leaders from the across the hospitality industry came together at the inaugural H&C EXPO to discuss the latest developments in social media – with the rapidly increasing use of ‘chatBots’ leading the debate.
The lively debate, hosted by sponsors Armourcoat and Artis, tackled the key issues surrounding the use of bots, privacy and how companies such as WeChat are improving operational performance through the use of digital media.
The discussion opened with a presentation by Adrian Defta from Glad People, a tech company focused purely on chatbots for Facebook Messenger that recently launched The Social Code in partnership with Arriba Systems. Defta offered his take on how the Chinese market is now leading the US with its digital developments and citing Facebook Messenger as the platform to watch in the coming years.
Defta explained how WeChat – an instant messaging platform similar to WhatsApp – is now giving people the opportunity to manage all activity through the one application. He shared his insights on how Chinese consumers can perform a multitude of activities such as booking taxis, purchasing travel tickets, and ordering food – all via one process and all in one place.
The development, he argued, was an indication of where UK consumers could also see the direction of travel. Significantly, Defta explained that Facebook Messenger is the most likely platform to follow in the footsteps of WeChat and is the medium that businesses in hospitality and beyond should be focusing on.
He said: “In the Western World, 35% of the time we spend on our mobiles is on social media and we check our phones every nine minutes on average. In China, almost four years ago, WeChat become the messaging platform where everybody spends more than 50% of their time. What are people doing? In a nutshell, everything. From searching and buying cinema tickets, to hailing a cab; from managing their personal finance to group buying.”
The monetisation of WeChat is impressive. Initially, it was formed to sit behind a Chinese Firewall ‘protecting’ Chinese consumers from Facebook. It now has 100 million users outside of China and is growing at an unprecedented rate. And according to Forbes, WeChat is now estimated to be worth $100bn.
WeChat has been the direct driver for $35.2m of food and beverage spending, not to mention significant spend in other industries.
Defta added that Facebook is now eyeing this. The company recently opened up Facebook Messenger for businesses in May 2016 (four years after WeChat did), allowing for the so called chatbots – software programs capable of understanding human language and engaging in a conversation – to tap into this space.
Defta suggested that there are currently 65 million businesses on Facebook, 20 million of which are responding to messages manually, while 300,000 chatbots are replying automatically. There is clearly great scope for further utilisation.
He said: “The Facebook Messenger channel has three major benefits for a business. It has higher post visit engagement (90% open rates on follow up messages vs 15% to 30% for emails; 35% to 45% click through rate vs 2% to 3% for emails).
“It offers the best personalisation opportunities (a chatbot will remember all the conversations and should act on this knowledge by tailoring the customer journey accordingly), and substantially lower production and running costs (20% to 30% of the cost of a similar app).
Significantly, Defta argues, is that all of this is possible without paying Facebook a penny.
One of the basic reasons behind the chatbot expansion is ‘app fatigue’. Consumers are annoyed by the need to install special applications to their mobile devices, so they prefer to interact via one they already have.
So much so, that the surge in chatbots has led global research firm Gartner to predict that more than 85% of customer interactions will be managed without a human by 2020.
Defta also stated that an intelligent chatbot powered by a good artificial intelligence (AI) engine will have a number of key features.
He said: “A good chatbot needs to reply to the most frequently questions being asked, but in human language. It needs to allow people to self-serve with different information in a more playful tone than websites, such as ‘when will my order be delivered?’ And it needs to be smart enough to recognise when it can’t handle the conversation and pass it over to a human.”
Julie Barker, formerly a director at the University of Brighton, said: “I recently took a trip to China and I was blown away by the use of codes in almost every establishment you went to. That coupled with the fact that 18 to 25-year olds are captivated by visuals, which means the landscape is changing very quickly. They’ve adopted this so quickly, so you can see why bots are already widely used.”
Neil Sheth, digital strategist from Only Way Online, explained that the pace of movement with bots is largely driven by where we started. He says: “First we had websites to sell services, then social media helped with transparency, and now we are moving to another phase.
He added: “We need to remember that patience has slowed, and people expect things on demand. Chatbots are the next step and will help cater for this. Email is perceived to be slow and clunky, but bots can deliver this.”
Hospitality, it seems has also been slow to embrace the pace of change. Defta added: “Not every restaurant will need a chat bot to help it function, however, there are hospitality brands that could make better use of bots.
Danielle Sensier, sales and marketing director at TM Electronics, pointed out that while the marketing benefits for consumers were clearer, this was less obvious in the B2B space.
Defta agreed and explained that if bots were not appropriate for marketing due to a lack of volume or mass access, it can potentially have operational benefits such as customer care, or supplier relationships.
He said: “There may not be enough scope to target lots of people in marketing terms, but you will be able to use bots to help manage customer services. If you are a business that manufactures equipment, you can use these channels to help deal with all manner of customer queries.”
Neil Behan, new business manager from iZettle, which provides point-of-sale systems, explained that they are already trialling bots in parts of their business. He said: “We are experimenting with chatbots already as we feel it can help to address the issue of resource. As a busy team, we can use the additional support to help us. While it is too early to say whether this is a long-term move, we are keen to explore it further.”
Yet the term ‘bots’, it seems, has actually hindered the pace of change and adoption. Sheth explained: “The term itself isn’t helpful as it suggests that robots are taking over. Bots are simply another form of instant marketing and a replacement for email.”
Defta agreed: “The very fact that people have used this terminology has delayed its rollout. It isn’t helpful as it’s a tool we should all being making the most of.”
Data storage and privacy was also a key consideration for contributors. Pervin Todiwala, co-founder of Café Spice Namaste, expressed concern about how apps and bots will house their information, particularly in light of recent developments around General Data Protection Regulation (GDPR).
Daniel Nevitt, marketing director, Armourcoat, said: “It’s really important to understand that companies like Facebook can delete all the data they want so, while it’s unlikely, you need to be mindful of this. You need to own your data. We’ve worked hard to collect ours, so we need to keep it safe.”
On the subject of privacy, he added: “I know many people are moving their conversation onto WhatsApp because it is encrypted. People can vote with their feet if they wish.”
Sheth also urged caution. He said: “Risk exists on every platform we use. You need to go through your own process of looking after your data and platforms. Use whichever platform you feel is most relevant to your customers, just make sure you are able to make a transition if the data is compromised or deleted altogether.”
As with any new development, there are risks, but early adopters in the hospitality space could reap significant rewards. The bots aren’t coming; they are already here.
Piers Zangana, Director, Susa Comms
H&C EXPO would like to thank Armourcoat and Artis for enabling this roundtable