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EDITORIAL SMS versus OTT – it doesn’t matter, messaging is growing for all

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The rise of OTT messaging as part of the shift in customer service and engagement is a double-edged sword. For the OTT industry, it is a boon, offering up a $25bn bonanza for messaging companies as part of a conversational commerce play.

For MNOs, however, the rise of OTT use among consumers is set to given them a $2.5bn hit across the same time frame.

Interestingly, the ten-fold disparity between the OTT’s gain and the MNO’s loss shows just how much messaging is set to grow. While MNOs will lose out to OTT to some degree, with SMS still predicted to be the dominant messaging channel for some time to come, it ain’t over for the operators by any means.

This was backed up by the SMS Forum at World Telemedia Marbella in October, where SMS was demonstrably proven to be the leading messaging channel and that OTT, while popular, was just a small – albeit  growing – part of this.

The trouble for OTT messaging is that the market is increasingly fragmented – not just as a market in itself, but also from region to region. This, along with a growing array of preferred payment options in different regions, is going to be a barrier to growth for OTT-led conversational commerce.

For CPaaS providers there is a definite opportunity to deliver the right mix of messaging types and payment types in those regions. However, for these players, sticking to the complex, wide ranging and frequently changing rules in different countries is going to lead to challenges – and potentially regulatory infringements, even if they are by accident of omission.

The growing power of conversational commerce has also been brought sharply into focus with a study showing that consumers in the UK are rapidly turning to what it known as hybrid retail, whereby they shop in-person in stores, but use the tech available to them online –usually through mobile – to enhance that experience.

According to the study, 92% of consumers would message a chatbot to check if a product is in stock before making a trip to the store, while 73% want to visit a store and then make a final purchase on their mobile phones, often from within the store itself.

They also want to message the retailer about returns, delivery, complaints and, perhaps most surprisingly, to fill in customer satisfaction surveys.

How they want to do it is where the OTT versus SMS debate will soon heat up. While the majority are contacting retailers using SMS and email, they are increasingly wanting to use the channel most convenient to them – WhatsApp – to do it. Many retailers and brands aren’t there.

This is going to be a missed opportunity if they don’t act. The same study reveals that 54% of consumers have messaged a retailer on a social platform, believing it a faster path to answers than going to a store, sending an email or making a phone call. Yet only a quarter of the queries receive an instant response, while 75% of those messages take anywhere from several hours to more than a day — or, they go completely unanswered.

These delays carry real consequences — particularly as more consumers are making purchases directly through these social media channels after viewing products in store — driving the majority of them (54%) to shop elsewhere.

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