For brands, engaging millennials is becoming harder and harder. Unfortunately, this is happening as millennials’ spending power is about to skyrocket.
It’s no wonder, then, why brands spend millions, even billions, of dollars developing apps and buying up mobile ad space to capture the attention of this young generation. However, most of this money is wasted on advertising and media that does not work with millennials.
To be successful, brands must engage millennials where they already are rather than invest in traditional marketing channels that have worked in the past. So where are millennials? Millennials spend more time messaging than any other form of communication. Messaging apps are now bigger than social networks, and this shift is largely being driven by millennials.
Conversational commerce — using messaging to market and sell — is a huge opportunity to use messaging apps and bots to drive revenue. The tech industry has united around the word “chatbots” to connote software that can mimic conversation with people, although terms like bots and messaging bots are also commonly used. While consumers may not be familiar with the term, many regularly interact with virtual assistants like Siri and Alexa that deliver these conversational experiences. The key takeaway is that chatbots directly align with millennial communication preferences and can help brands break through to this generation.
Here are the reasons why brands need to seriously consider chatbots:
- Bots provide fertile ground for brands to engage millennials via their preferred method of communication — messaging
Chatbots offer brands the powerful ability to fish where the fish are. Nearly 75 percent of the world’s internet users already use messaging services, and millennials make up the most dominant segment. As text-based communication rules among young people, tech leaders like Apple and Facebook are taking notice and investing in bots to help brands engage with millennials.
As big names enter the arena, millennials have grown more familiar with bots. Right now there are over 18,000 bots in Facebook Messenger, which lets users easily do things like call for a ride or check the weather. And it’s not just Facebook. There are countless bots in popular workplace communication tool Slack and in messaging application Kik, where users have collectively sent branded chatbots nearly 2 billion messages.
Chatbots’ success is grounded in the ability to circumvent the requirement of downloading an app, reducing friction and allowing brands to reach millennials in the channels where they’re already highly active, including SMS, Facebook Messenger, WhatsApp, and more.
- Brands’ mobile strategy must expand beyond apps to connect with millennials
The prevailing wisdom for reaching millennials on their smartphones is to build an app, and it’s easy to see why. Apps do have considerable clout with this generation; however, once they’re on the App Store, there’s no guarantee apps will be downloaded or retained. In fact, studies have shown anywhere from 80 to 90 percent of downloaded apps are used once and then deleted. That’s not even accounting for the countless apps that get lost in the shuffle and are never to be found. Luckily for brands, there’s still hope, thanks to chatbots.
Bots leverage the existing infrastructure of messaging apps, making them much less expensive to develop, maintain and deploy. Because bots seamlessly integrate with messaging platforms, developers can more easily push content directly to users without relying on them to manually check their app — saving money, time and friction.
Messaging apps have reached critical mass and if brands want to stay connected with millennials, they need to be right there with them. While we’ve all heard about app fatigue, messaging users actually want brands to interact with them. A recent survey found 79 percent of respondents said they would likely engage with brand categories within messaging apps. And unlike other apps, these messaging apps aren’t going anywhere; they boast 5.6 times higher 12-month retention.
Because bots exist within these popular messaging channels, users can easily interact with brands without having to search, download, or update an app. On top of the ease of adoption, conversations with chatbots can mimic human interaction, making it a more natural, fun, and engaging experience for users.
- Reaching millennial consumers continues to be a challenge for marketers, but it’s never been more important
There are more than 80 million millennials in the U.S., but most brands aren’t winning them over. In fact, millennials remain the least-engaged generation of consumers, but that’s definitely not for a lack of advertisers trying.
Navigating the digital landscape and catering to millennials’ continually changing preferences on these channels has largely hindered brands. As a result, they are missing out on a tremendous opportunity, as millennials have an estimated $200 billion in collective buying power — and will have more than any other generation by 2017.
In the next one to two years, brands that embrace messaging and chatbots to drive conversational commerce will enjoy a significant competitive advantage. For some brands, these bots will even drive more revenue than ecommerce.
VentureBeatVentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact. Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:
- up-to-date information on the subjects of interest to you
- our newsletters
- gated thought-leader content and discounted access to our prized events, such as Transform
- networking features, and more