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SMS is poised to get an upgrade – so what can retailers expect to get from Rich Communications Services (RCS) or SMS 2.0? Rob Malcolm, VP at CLX Communications takes a look

If only there was a universal rich messaging app – a cross between SMS and Facebook Messenger. Well, there soon will be. It’s called RCS. And it could change the way retailers talk to their customers forever.

Imagine sending a delivery alert to one of your customers. What will the message contain? Obviously, it will tell the recipient when the product will arrive. But what if it also give her a menu of options to change the date, edit the order or call a customer agent? How about a promo video featuring new products? And maybe a map to her nearest stockist?

This kind of amped-up messaging channel would be unrecognisable from plain old SMS. It would offer an app-like experience to every consumer inside a chat session – without the pain of downloading a native app.

Well, here’s the big news. This next-gen messaging experience is coming soon. It’s called RCS.

Yes, after 25 years, SMS is getting an upgrade. The world’s mobile operators, handset makers such as Samsung and Google are now working to make RCS (sometimes called SMS 2.0) the default messaging app on millions of phones.

RCS brings the functionality of OTT (over the top) apps like WhatsApp and Facebook Messenger to the standard messaging system operators use. Google is currently building RCS into its new Android Messages product, and carriers such as Sprint, Deutsche Telekom, Orange France, Vodafone have committed to making it their native messaging app.

Many experts believe RCS will upend the mobile customer care experience. Why? Because it gives retailers the tools to deliver an app-like experience without the cost and hassle of building a native app.

This is significant. For the last 10 years, a chorus of experts have told retailers one thing: you need an app. They argue that social habits dictate it: customers have switched attention from traditional media to mobile. They’re shopping on their smartphones too. Yes, you definitely need an app.

But there’s a problem. Consumers may be spending all their time in apps, but probably not in yours. A Forrester study found that only eight per cent of smartphone owners with at least one retail app used them daily, while 13 per cent said they never opened them.

Instead, they are using messaging apps. According to Flurry, time spent in apps like WhatsApp and Facebook Messenger grew by 394 per cent in 2016. But people are not just chatting inside these products. They’re also playing games, watching video, reading news.

To repeat, messenger apps are becoming ecosystems in themselves. For this reason, brands need to be in them.

Unfortunately, most people use messaging apps to stay in touch with friends, not brands. As a result, OTT apps still lack one important quality: ubiquity. Now, most consumers don’t care about ubiquity. But businesses do. They want one channel to reach everyone.

This explains why SMS use has fallen among consumers, but soared among companies. We’re all familiar with enterprise use cases: delivery alerts, PIN codes, marketing offers etc. They’re concise, direct and personal – and they save huge amounts of time and effort in customer care. According to analyst Ovum, businesses sent 1.16tn SMS messages in 2016 and will send 1.28tn texts by 2019.

As the next version of SMS, RCS now promises to be the universal channel that enterprises can use for an entirely new kind of mobile messaging.

Indeed, a 2017 survey by Ovum revealed many are ready. It found 36 per cent of organisations say they would be interested in using an enhanced SMS service, such as RCS. And more than half would be willing to pay between 1.5 times to three times the price of an ordinary per-message SMS.

The justification for the higher price is the probable return on investment. Many of the enhanced features of an RCS message could slash costs elsewhere. Consider the button that changes the date of a delivery. That single click would cost much less than when call centres and agents manage the process.

To go further, brands can even use AI-based bots inside chat sessions to converse with customers in natural language. These virtual agents can answer queries not just with text but with images, maps and interactive menus.

RCS also makes it easier to measure the effectiveness of mobile activity. It provides read receipts, so retailers can do A/B testing to compare the impact of different approaches.

Of course, it has to be easy for brands to create campaigns and send these communications. This is where ‘messaging as a service’ companies come in. They offer RCS platforms that connect directly into CRM systems, contact centres and custom backends. It means retailers can send millions of fully branded rich messages from a single dashboard.

In fact, Google is currently working with a number of brands including Virgin Trains, Subway and Sky on new use cases of RCS, alongside the mobile industry which is working towards a roll-out of RCS later this year.

The change won’t be instant. It will start with Android on selected carriers, and will take time for users to upgrade. RCS on iOS remains an unanswered question, though analysts believe it’s a matter of time before Apple supports RCS as a fallback, as it does with SMS.

Further ahead is the prospect of building secure card transactions into a chat session. That would genuinely change shopping forever. A session that starts: ’you have a new message’ could end up with ‘you have a new lawnmower’.

What RCS brings to retailers

RCS is the new SMS. It brings rich features to the default messaging channel on a phone.

With RCS retailers can…

* Brand messages with their own logos and colours

* Include interactive menus

* Send messages of unlimited length

* Include product pictures, GIFS, PDFS and videos

* Do A/B testing on marketing messages to see which is most approach is most effective

* Include maps to help customers find you. These can even be in-store maps

* Build bots that ’talk’ to customers inside rich chat sessions

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