The Economist - USA (2021-07-10)

The Economist July 10th 2021 Business 61

TheJassyage

It wasn’ta badstartforAndyJassy,whoonJuly5thsucceededJeffBezosasbossof

Amazon.Thenextdaythesharepriceofthedigitalempire,whichMrBezoshadled

sincefoundingitasanonlinebookshopin1994,rosebynearly5%,anditsmarketvalue

jumpedabove$1.8trn.MrJassy’sundoubtedmanagerialvirtuesprobablyweren’tthe

reason.ThelikeliercauseisthePentagon’sdecisiontobina cloud­computingdealwith

Microsoft.The$10bncontract,whichAmazonhadchallenged,arguingitwasunfairly

awardedtoitsrival,isinsteadtobesharedbythetwotechgiantsandpossiblyothers.

Still,ifthenewceoistomaintainMrBezos’ssterlingrecord,a littleluckwon’thurt.

Primemover

Amazon,$trn

Sources:Bloomberg;TheEconomist *Alsoreported as April

Jul

1995*

First

book

sold

May 1997

Initial

public

oering

Sep 1997

One-click

shopping

launch

Mar 2000

Dotcombubble

bursts

Oct 1998 Launchoffirstinternational

sitesinBritainandGermany

Nov 2000

Marketplace

launch

Mar 2006

AmazonWebServices

(AWS)launch

Feb 2005 Prime

memberships

open

Aug 2007 AmazonFresh

grocerylaunchinSeattle

Nov 2007

FirstKindle

e-reader

Nov 2010 Launchof“price

check”barcode-readerapp

Sep 2011 KindleFire

tabletgoesonsale

Mar 2012 BuysKivaSystems,

a warehouse-roboticscompany

Jun 2014 Firephonelaunch

Aug 2014 Twitch(video

streamingplatform)acquired

Jun 2017 BuysWholeFoods

Oct 2018 RaisesminimumwagesinUSandBritain

Annual

netprofit

Annual

revenues

191715131109070503200199971995 21

Jul 5th 2021 Je Bezos steps down as CEO

2.0

1.5

1.0

0.5

0

Market

capitalisation

Conversationalcommerce

Chat-up lines

M

essagingisanintimatemediumfor
sharing  private  views  and  senti­
ments. It is a cocktail­party whisper in dig­
ital  form,  as  one  user  of  WhatsApp,  a  ser­
vice owned by Facebook, put it. Now some
of the world’s biggest brands are venturing
into this personal realm. Aware of the limi­
tations  of  conventional  communication
channels like call centres and email, a few
years  ago  firms  started  using  WhatsApp
and its sister app, Facebook Messenger, as
well as Apple’s iMessage and independent
apps such as Line.
The  pandemic  gave  all  such  apps  a  fil­
lip.  Messaging  on  Instagram,  Facebook’s
photo­sharing app, and on Messenger rose
by 40%. Four­fifths of mobile­device time
is now spent on chat apps. Companies can
usually be relied upon to go where custom­
ers are, so messaging has become vital for
business, not just experimental, says Javier
Mata,  founder  of  Yalo,  a  startup  whose
technology  connects  firms  to  messaging
platforms.  Firms  once  used  them  chiefly
for customer service. Now they want to get
people to buy stuff via chat, as hundreds of
millions of Chinese do on WeChat, owned
by Tencent, China’s mightiest tech giant.
Because many popular messaging plat­
forms are encrypted, data on transactions
are  hard  to  come  by.  But  growth  is  un­
doubtedly  happening.  Over  1bn  people
now interact with businesses via chat, not
counting  China.  Each  day  175m  people
send a message to WhatsApp business ac­
counts  (WhatsApp  channels  designed  for
companies). Yalo’s customers include con­
sumer­goods  giants  such  as  Coca­Cola,
Nestlé,  PepsiCo  and  Unilever,  as  well  as
Walmart,  the  world’s  biggest  retailer.  Ap­
ple Business Chat, which started in 2017, is
used by Home Depot diystores, Hilton ho­
tels  and  Burberry,  a  fashion  brand.  Face­
book’s  roster  includes  Sephora,  a  cosmet­
ics  retailer,  and  ikea,  a  furniture  giant.
lvmh,  a  French  luxury­goods  conglomer­
ate, is testing out messaging, according to
Jeroen  van  Glabbeek,  chief  executive  of
cm.com,  a  Dutch  conversational­com­
merce platform. 
“C­commerce” is already entrenched in
Asia  and  Latin  America,  where  spotty  ac­
cess  to  broadband  and  high­quality  de­
vices puts e­commerce and company­spe­
cific apps out of reach for many. Now West­
ern  consumers  are  beginning  to  embrace
the  ease,  speed,  personalisation  and  con­
venience  of  messaging.  For  firms,  the  re­

turnoninvestmentseemshigherformes­

saging  than  for  call­centre  exchanges  or

email  chains,  says  Emile  Litvak,  head  of

business messaging at Facebook. 

Boosters  of  business  messaging  claim

that  c­commerce  will  displace  e­com­

merce within a decade or two. But messag­

ing is best understood as a refinement of e­

commerce,  and  a  sibling  of  “social  com­

merce”  (shopping  on  social  media).  Most

messaging  conversations  between  large

firms and consumers start from corporate

e­commerce  websites  equipped  with  a

“click to message” button. Plenty begin on

social networks.

In  some  ways  c­commerce  is  a  throw­

back to the past. Apart from mail order and

its  modern  guise,  online  shopping,  trade

has  relied  on  conversation  for  millennia.

Yet business messaging does have new ele­

ments.  It  is  more  personalised  than  sms

marketing, which has itself had success in

recent years in America and Europe. Auto­

matic  messaging  is  moving  beyond  rudi­

mentary  chatbots,  which  have  been

around  since  the  mid­2010s.  Artificial  in­

telligence (ai) is getting better at unstruc­

tured  exchanges  that  shoppers  used  to

have with expertretail assistants.

For  now,  says  Marc  Lore,  who  led  Wal­

mart’s digital efforts, a lot of business mes­

saging  has  humans  in  the  loop.  In  future,

he  reckons,  aiwill  be  able  to  answer  cus­

tomer requests as fuzzy as “get me a birth­

day  toy  for  a  five­year­old  around  science

education  for  roughly  $40”,  suggesting

choices and completing the transaction in

seconds. And when aigets better at natural

dialogue, as it will after learning from hu­

man  interactions,  consumer­to­business

messaging  may  sound  if  not  exactly  like

J.A.R.V.I.S, Tony Stark’s digital butler in the

Marvel comics, then close enough.

Until  that  time,  firms  must  tread  deli­

cately. Full of family and friends, chat apps

are emotional spaces, says Robert Bennett,

ceoof Rehab, an agency that helps brands

reach  consumers  digitally.  Try  to  sell

someone  yoga  leggings  after  an  exchange

with  their  mother,  he  says,  and  your  firm

might find itself deleted faster than an ex.

But  get  it  right—think  gentle  reminderof

evening  meditation  from  a  purveyor of

herbal teas—and the rewards look tasty.n

Companies are getting up close and personal with consumers in messaging apps