The next time a consumer asks one of Square's merchants about the price of a product or requests information about a pickup, the answer may come not from the merchant but from Square itself, which is digitally helping businesses engage with consumers.
"It helps sellers get back to buyers quickly," said Willem Ave, head of conversations and appointments at Square. "Since the onset of COVID, consumers expect fast and efficient interactions with businesses they purchase from."
The company's merchant services unit, which still carries the Square brand, last week debuted new features on Square Messages app, using updated artificial intelligence to tailor responses based on context and data accrual. The new Suggested Replies feature gives the merchant potential responses to a customer service message, while Suggested Actions gives businesses a menu of one-click responses to customer queries, such as sending an invoice or payment link.
As rivals like PayPal and Stripe add a greater range of financial services, Square is also diversifying beyond payments to build a "two-sided" market that services merchants and consumers with products such as credit, enterprise resource planning and merchant support.
Square recently bundled several of its
Square is advancing its use of AI to drive engagement with its merchants and their customers, as more merchants look to adopt conversational commerce. Definitions vary, but conversational commerce usually refers to the intersection of shopping and messaging apps. These apps increasingly use virtual assistants to help businesses avoid long phone calls or text chats between staff and consumers. Square's competitors in banking and in the card industry are getting more aggressive with using virtual assistants to aid customer service and sales.
"The ability for sellers to quickly and effectively communicate is a key differentiator," Ave said, adding Square is trying to "level the field" for its core audience. While Square has added larger merchants in recent years, most of its sellers are small businesses that may not be able to easily access chat bots or conversational commerce technology on an enterprise scale.
"Merchants and their customers can communicate about upcoming orders, appointments, resolve customer complaints, accept payments and exchange photos, among other commerce interactions," Ave said.
In another update, Square Messages integrated with social media platforms in an attempt to centralize customer engagement for small businesses. Square found 40% of inbound messages from social media platforms are related to commerce actions, such as fulfillment or pricing.
"Merchants can remove having to manually check different platforms, and can instead operate through a single platform," Ave said.
Square says there is a technology gap that can be addressed by offering these tools via mobile devices. About 40% of businesses are not using mobile commerce, according to a survey on conversational commerce of 500 businesses and 1,000 consumers that Square conducted in collaboration with
At the same time, 98% of consumers want to connect with businesses via their mobile device, with appointment reminders (66%) and order notifications (65%) being the most common interactions.
There is also a difference in usage between new and older businesses, potentially creating pressure on more mature merchants. Businesses that were founded less than 10 years ago are 68% more likely to use mobile commerce than not, a rate that drops to 51% for companies founded before 2012.
Younger consumers are also more interested in mobile commerce. Wakefield found 82% of millennials, 73% of Generation Z, 63% of Generation X and 39% of baby boomers use mobile as a preferred channel for shopping. "Mobile usage for consumers has only continued to grow over the years," Ave said.
Other firms are increasing their investment in virtual assistants and conversational commerce as the underlying technology improves, making the language and recommendations closer to a personal conversation.
BankSouth and Westpac Banking Corp., for example, in August invested more than $15 million in
"I have conversations every day with digital businesses that are thinking about how to leverage technology to create a better user experience, and conversational commerce has been coming up more. The financial services market is talking about it," said Emily Pfieffer, a principal analyst at Forrester.
While the technology behind conversational commerce has gotten better, there is still room for improvement, according to Pfieffer. "The technology varies and can still be inconsistent, which causes the user experience to suffer," Pfieffer said.
As such, the deployments at payment companies are more forward-looking and anticipatory of a future need.
"Making it available downmarket to small businesses is interesting," Pfieffer said, adding the key to success will be determining how to produce the language that is used for the automated recommendations. "The words you would use on one website may not be the same as the next," she said.
