How Magalu drives conversion with Twilio Flex and WhatsApp

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increase in sales volume

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vendors with businesses on the platform

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sellers onboarding conversion rate

Magazine Luiza is, today, the largest Brazilian retail chain and one of the largest companies in the world, with several business fronts. The company was created as a physical store, in Franca, in the interior of São Paulo, in 1957, and with its growth, years later, it was one of the first Brazilian companies to embrace e-commerce as part of its sales strategy.

Over time, Magalu founded LuizaLabs, a technology and innovation laboratory that is located within the research and development center of Magalu, and which has the objective of creating products and services with a focus on retail, offering customers more benefits and a better shopping experience. Magalu has moved towards becoming a digital sales platform that also had physical service points focused on developing customer relationships by showing human warmth to each customer. As an evolution of its digital platform, in 2022, the company launched its Marketplace, in order to allow other stores to sell their products through the Magalu platform.

The Marketplace has successfully grown to support 200,000 sellers this year alone. However, to achieve this, the challenge was to keep the strategy of demonstrating human warmth in customer service alive, even on a digital platform. It was then that the company developed a strategy focused on improving four points of contact with the customer: attraction, onboarding, relationship and retention.

The first step was to attract new customers through Click to WhatsApp ads on Magalu’s social networks including Facebook and Instagram, which exposed the benefits of the Marketplace to the consumer. Potential sellers could click the ad to start a message with Magalu on WhatsApp and begin to onboard into the Marketplace. In the past, the click to WhatsApp directed the sellers to register on the Magalu Marketplace, but it didn’t have much context about the platform and not even a channel to ask questions, something they have today, thanks to the improvements applied.

After the audience interacted with the attraction messages, they needed to finish registering on the platform, following some steps sent by email. But 79% of those emails were ignored. When the company sought to understand why, it found that this was not the best means of communication it could use, as many people simply ignored or missed emails in crowded inboxes.

Thus, the company changed the communication of the next steps of the registration to a message sent over WhatsApp, which would allow them onboard new sellers more quickly because this communication platform is already preferred by the Brazilian public, given that WhatsApp is already installed on 98% of Brazilian cell phones. With the help of Twilio and the implementation of the WhatsApp Business Platform, the entire registration and communication structure was changed in just 2 months. In addition, Magalu currently has two types of service via Twilio Flex: questions about onboarding and financial contracting.

“Flex helps us with personalization, so when the seller enters for a service, we are able to map the journey made and correctly direct him to an adequate solution, improving his satisfaction and the efficiency of the entire process.”

Aline La Motta Product Manager

As a key result of this partnership, the percentage of people who signed up for Marketplace and were ready to sell more than doubled, from 21% (when converting via email) to 46%.

The second result, this time linked to the relationship that would be maintained between the company and the customer, was that the use of WhatsApp guaranteed 19.8% more sales volume. Through the relationship initiated via WhatsApp, the company can send promotions and news about Magalu. WhatsApp is easily accessed and familiar to sellers, ensuring they return to the platform to register new products and adhere to new promotions.This has led to an increase in sales volumes for them and for the platform.

To ensure retention, Magalu has developed a chatbot within WhatsApp  that can respond to sellers’ frequently asked questions by allowing them to select from several buttons. The chatbot can also direct them to a live Magalu agent with whom they have a relationship. Sellers can access explanatory videos or be directed to specialists to help them in a personalized way. The use of WhatsApp for retention is something that is constantly evolving on the Magalu Marketplace, and, in the future, Magalu would like to offer the ability to hire personalized services within WhatsApp itself.

“Through this work carried out in partnership with Twilio, we believe that we have managed to improve our infrastructure, keeping in mind, above all, the human warmth that we consider so important in Magalu, and that makes all the difference!”

Aline La Motta Product Manager

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