How Conversational Commerce will Revolutionize Online Sales
How Conversational Commerce will Revolutionize Online Sales
Conversational Commerce has been gaining traction across retail and marketing over the last five years. As messaging and retail apps dovetail or become a single entity, and AI and chatbots become a stronger part of the marketing landscape, here’s how conversational commerce will change how everyone does business, and change what shoppers expect from their digital interactions.
What is Conversational Commerce?
Back in 2015, open-source advocate Chris Messina broached the term when talking about how “concierge-style services may become the primary way in which people transact on their mobile devices. No more tapping and swiping — it’s easier to just hand-off to someone with a computer that’s set up for complex information tasks like online shopping or research.”
The world and technology have changed a lot since then, from early SMS chatbots to today’s AI-powered multifunctional tools. And as Chris went on to work for Uber, there’s evidence of their strong line on how conversations can drive business engagement. Just one example, “When two people are talking about meeting up — enhance the conversation with the ability to contextually request a ride inline with Uber Ride Requests. Whenever someone mentions going to a specific location, offer the ability to get a ride there. Provide trip status and notifications in the chat context to keep everyone informed of the journey.”
By 2017, one in 10 consumers had already used chatbots in e-commerce, according to Statista, with Facebook showing by 2020 that 64% of travelers were happy to message businesses, and when COVID hit, Facebook Messenger traffic soared by 50%. Those figures alone suggest that every business should be looking at chatbot and conversational app engagement for retail.
Facebook suggests, “By combining chat with automated and AI-driven systems, brands can target information and offers precisely to individual travelers. This increases relevance, which is exactly what people want: 91% of consumers say they are more likely to buy from brands that remember who they are and that provide relevant recommendations.”
Whatever your line of business, eCommerce and conversational commerce is proving its worth, and messenger tools and chatbots are now pumping out the data and results that demonstrate their value. Indian conversational commerce platform Niki reporting a 50% increase in revenue in the first three months during the COVID pandemic.
That’s the business angle, but for customers, take a look at how they shop in-store. Often in groups, talking and discussing what they are buying. That conversation often continues as they shop online using messaging apps to share links, discussing them with friends and family. So, it is natural for the brand or store to join in and be a part of that conversation, smartly diving in with suggestions and recommendations, helping people reach a decision without being overly salesy.
Benefits and Limitations of Conversational Commerce
The obvious benefits of conversational commerce mirror those of commerce chatbots. There’s the 24/7 availability, the ability to talk to huge numbers of customers at once during spikes in demand, the power to translate conversations for a global audience, and the ability to quickly update the conversation for changes in products, styles and so on.
Then there are is the huge audience waiting on Facebook Messenger with over a billion users and others like Line Messenger, popular in Asia with over 200 million users, and voice platforms like Alexa and Siri, increasingly used for ordering pizza, adding to grocery lists and completing orders by voice. When it comes to voice conversations, there are plenty of ways for retailers and consumers to engage.
Counting against conversational commerce are issues like scale, a small business won’t see the value until it is growing fast. But without the option, it might not win customers compared to platforms that have them, so there’s a double-edged sword aspect to adoption.
Then there are some lines of business with high levels of complexity where a bot just isn’t subtle or flexible enough to help deliver a successful outcome, consider a cabling/wiring retail with thousands of highlight similar product lines in different lengths with heavily product-code based systems, the chances of getting a message-based order wrong are high for customers used to a typical form-based solution.
Finally, there are some businesses where the human aspect outweighs the digital benefits, even if your messenger bot can link to a person, there is always a demographic and some products where the individual touch will always come first.
Examples of conversational commerce success
Retailers spent £160 billion on technology in 2019, across a variety of areas to deliver customer success and engagement, including voice recognition and AI. When it comes to the shop floor, many brands are trying various approaches to hitting the conversational commerce sweet spot.
- Fashion: Brands such as H&M, Burberry, Tommy Hilfiger, and others are always pushing the boundaries when it comes to engaging with their younger demographic. From video advert chatbots to augmented reality try-on apps, they are free to experiment and find what works.
- Food and Drinks: Competing in these businesses against the major brands requires major effort. Take the likes of high-end water brand Dirty Lemon that uses SMS conversational commerce to drive customers to its hard-to-find beverages and gain information. This led Coca-Cola to make a major investment in the brand’s parent company.
- Hotels: Any store can have a chatbot, but hotel visitors are used to a concierge providing a range of services and low-key information. Take Rose, the virtual temptress at the Las Vegas Cosmopolitan, she helped the hotel generate 30% more revenue (PDF) from customers who engaged with her than those who didn’t.
- Travel: Dutch airline KLM represents that state of the art when it comes to conversational commerce. Since 2017, it has delivered some 65% of flight updates, 40% of boarding passes, and 20% of booking confirmations using messaging services. And during COVID, it was able to respond to changing events and rules quickly, while its human operators were swamped with queries, the share of handling service volumes by a bot hugely increased in March & April from 8.1% to 22%.
- Real Estate: There’s a lot to know about buying a property, and Trulia is one bot that can provide much on the information in one blast. From local area demographics to the quality of schools, crime rates, and so on, it can answer a lot of those upfront questions to speed up the buying process or rule out one area over another.
Choosing A Conversational Commerce Platform
Businesses of any size can get involved in conversational commerce, major brands may develop their own platform with a big-name tech partner, while others will adopt off-the-peg solutions from AI vendors that can be tweaked to their line of business. SMBs can adopt chatbots that are easily adaptable to the role.
The key to success is knowing the customer through data to be able to address their needs and make the conversation worth having.
Artificial Intelligence and Conversational Commerce
The use of AI can boost conversational commerce in several ways. For a start, natural language processing (NLP) can broaden the conversation from a boring script, allowing the bot to understand a broader range of queries or inputs. AI can also provide suitable suggestions such as accessories or matching clothes for one item, or options for a car or new-build property, based on the customer’s buying history.
The Opportunities for Business
The primary opportunities for companies using conversational commerce efforts are:
- Increased sales: Through upselling, reminding about consumables, providing updates on ranges and new products, offers and so on that all relate to the existing buying conversation, creating a better relationship with the customer.
- Customer loyalty: Once these conversations take root, customers will expect and use them as an extended part of their digital family, regular shoppers will love the little extra treats or offers they provide, while careful reminders will prevent abandoned carts and lost customers.
The Future for Conversational Commerce
As marketers talk about a 360-degree relationship with the customer, a strong conversation will help expand knowledge and create actionable insights, during and beyond purchasing. And it isn’t too hard to imagine bots that talk to each other in a joined-up relationship as brands, stores and customers exist in a more virtual shopping store world.
Conversational commerce also gives large and small companies the chance to redefine how areas like customer service and digital experience work. Bots can introduce customers to other new technologies as they come along, while taking much of the workload for services, returns, and upgrades.
Voice will also play a greater part as people talk to their smart home devices, car computers, and phones, ordering everything from the mundane to the luxury as they become used to bot-based engagement and a relationship with AI personas. Imagine a virtual store host running on and Amazon Echo, Google Home, or Facebook Messenger that knows everything about the store and the customer, or on-screens or in kiosks for future retail outlets, their power will be huge in delivering benefits for both store and consumer.
To make a start in conversational commerce with a voice chatbot, just register with SnatchBot for free and try our conversational commerce template.