It has long been the case that both customers and shop owners place significant value on service with a genuine smile. So much of the commercial exchange is warmed by personal interaction; such is the power of the friendly and familiar face. Yet, despite 11% of retail sales in Q1 this year taking place online, we are yet to see any successful inroads into applying the all important sociable aspects of shopping into an online context.
It is here that we can begin to think of the value of Guanxi.
Guanxi describes the personal networks of influence and mutual support that have been central to Chinese business practice for decades. It is a term used more commonly in online scholarship to denote a genuine and meaningful rapport established between two parties, whether a business relationship or in a commercial exchange.
Guanxi describes the personal networks of influence and mutual support that have been central to Chinese business practice for decades.
It relies upon – and is generated through – face-to-face interaction with a customer service assistant say, or a brand’s employee. It is a central component of many of our day-to-day commercial interactions. Yet currently its online iterations are failing to capture the warmth, or inspire the loyalty, that Guanxi relationships promise to generate.
TaoBao is the largest and most established online store in China. It is the Chinese market’s equivalent of eBay and Amazon, yet it experiences more trade than both eBay and Amazon combined.
The platform places significant emphasis upon the connection between the individual small business owner and the customer. It does this by supporting live chat conversations which can be accessed throughout the purchase journey. According to company figures, on average live chat is used for 45 minutes per transaction, with a 71% return rate. There is no doubt that through inspiring a personal connection between seller and consumer – by building Guanxi – loyalty is generated and the chance of re-purchase elevated.
The online marketplace that we know is data driven. Much of the personalisation that we are familiar with is limited at best and inaccurate at worst. As these algorithms become ever more informed by the growing digital footprint associated with Big Data, is it likely that online exchange will become colder still? That consumers will be all too aware that the pseudo-personalisation that they are experiencing is mechanically driven and machine made?
Future Foundation research shows that just over 40% of consumers register interest in an online shop assistant that they could chat to for advice while browsing, increasing to almost two thirds among Generation Y.
It is apparent that a degree of warmth, personalisation and human interaction would be welcomed. And indeed, if we explore the connection between appetite for more traditional and established concierge services offline and the potential interest transferred into an online context, we see a strong relationship.
Among those who say that they would be interested in a supermarket chef showing them how to make better meals, 86% say that they strongly agree that they like being addressed by name online and 93% say that they would be very interested in an online shop assistant to support them through their purchase journey. Even as the platforms around us change, the social dimension of shopping remains as important as ever.
By bringing warmth and personal interaction into the online exchange, brands can successfully build relationships focused around anything other than price.
By bringing warmth and personal interaction into the online exchange, whether through live chat, video chat or even through social campaigns such as #ShopTheHangout and Bakespace’s online cookery classes, brands can successfully build relationships focused around anything other than price. This provides the means to build a genuine, authentic and meaningful connection with consumers.
Much of the emphasis here lies in the importance of human interaction between customer and brand employees. And this is where we see Guanxi sitting within an online commercial context in the short term – the all important video chat. In the long term however, as automated services develop in sophistication, gaining – through the use of biometric data – the ability to infer moods and emotions, it is likely that we will once again see such automated systems driving the majority of online customer service.
But to remain truly commercially competitive, both the use of data by automated systems and the data itself will have to be humanised. The exchange – customers feeling valued in return for brand loyalty – will represent significant value to brands attempting to generate meaningful interaction within an environment increasingly defined by low prices. And the result? All online brands will want to be a bit Guanxi.