How Magalu drives conversion with Twilio Flex and WhatsApp

Magazine Luiza is currently the largest Brazilian retail chain and one of the largest companies worldwide, with diverse business fronts. The company was founded as a brick-and-mortar store in Franca, in the interior of São Paulo, in 1957. As it grew, years later, it became one of the first Brazilian companies to adopt ecommerce as part of its sales strategy.

Over time, Magalu founded LuizaLabs, a technology and innovation laboratory located within Magalu’s research and development center, which aims to create retail-focused products and services, offering customers more benefits and a better shopping experience. Magalu evolved to become a digital sales platform that also had physical service points focused on developing customer relationships, treating each customer with warmth and humanity. As part of the evolution of its digital platform, in 2016, the company launched its Marketplace, allowing other stores to sell their products through the Magalu platform.

The Marketplace was so successful that it reached 200,000 sellers in its launch year alone, in 2022. However, to achieve this, the challenge was to maintain the strategy of treating customers with a human touch, even on a digital platform. With that in mind, the company developed a strategy focused on improving four touchpoints with the customer: attraction, onboarding, relationship and retention.

The first step was to attract new retailers through “click to WhatsApp” ads on Magalu’s social media channels, including Facebook and Instagram, which highlighted the benefits of the Marketplace to new retailers (sellers within the Marketplace). Potential sellers can click on the ad to start a message with Magalu on WhatsApp and begin integrating the Marketplace. Before, sellers clicking on WhatsApp would be taken to Magalu’s marketplace registration page, but they had no information or context about what the platform was, nor did they have access to a direct, live channel to ask questions, which is now available thanks to the improvements made.

After clicking on the ads, new marketplace retailers had to complete their registration on the platform by following a few steps sent to them by email. However, 79% of these emails were ignored. Upon investigating why this was the case, the company discovered that email was not the best channel for communicating with its audience, as many of them did not respond to attempts to contact them via email.

As a result, the company changed the communication of the next steps in the registration process to a message sent via WhatsApp, which allowed new retailers to be added to the marketplace more quickly. Since WhatsApp is already installed on 98% of cell phones, this communication channel is already the preferred choice of the Brazilian public. With the help of Twilio and the implementation of the WhatsApp Business Platform, the entire registration and communication framework was changed in just two months.

Furthermore, Magalu now uses Twilio Flex to create an integrated communication flow between its agents and new retailers. For example, the platform is used to answer retailers’ questions about onboarding and financial contracts. “Flex helps us personalize our customers’ journey. When retailers contact our Magalu support agents, we can map their journey up to that point and direct them to the right solution, raising satisfaction levels and streamlining the entire process,” explains Aline La Motta, Product Manager at Magalu.

The main result of this partnership was that the percentage of new retailers who registered on the marketplace and were ready to sell more than doubled, from 21% (when email was used as a communication channel) to 46%—with the new communication channel via WhatsApp within Twilio Flex.

The other result, this time linked to the relationship between the company and the customer, was that using WhatsApp led to a 19.8% increase in sales volume. Once the relationship has been established via WhatsApp, the company can send promotions and news about Magalu. WhatsApp is easily accessible and familiar to sellers, making them more likely to return to the platform to register new products and sign up for new promotions. This led to an increase in sales volume for them and for the platform.

To ensure retention, Magalu developed a chatbot within WhatsApp that can answer seller’s FAQs, allowing them to select from several buttons. The chatbot can also direct them to a live Magalu agent who takes care of their account. Retailers can access explanatory videos or be referred to specialists for personalized assistance. WhatsApp for customer retention is constantly evolving at Magalu Marketplace, and in the future, Magalu would like to offer the possibility of purchasing personalized services within WhatsApp itself.

“Through our partnership with Twilio, we believe we have improved our stack to create a conversational communication strategy with our retailers, preserving the human touch that we consider so important at Magalu, and that makes all the difference!” concludes Aline.