This article about Conversational Commerce was co-authored with students from the Major in Digital Innovation and Acceleration of HEC Paris promo 2022. During the course, students have to learn how to optimize and create content to be published. For this, they dive into the trends impacting retail and e-commerce and only a select few are published in the blog.
We want to give our special thanks to Soyeong Lee & Nicolas Oulianov, the two students who co-authored this post.
Conversational commerce is an e-commerce trend that has gained lots of traction lately. Since 2015, when Chris Messina from Uber coined the term, it has become omnipresent. However, conversational commerce is no longer a trend but an industry standard.
As a retail professional, you may not know what conversational commerce is. But as a customer, you sure do. Today, this form of commerce is everywhere. And customers expect companies to use it both in standard and creative ways.
This article tells you what you need to know about the new standard of commerce. We also show you inspiring examples of companies using conversational commerce. Finally, learn how to get started with this new form of commerce right now.
What is Conversational Commerce?
Conversational commerce is when customers can chat directly with your brand from anywhere. For example, from a messaging app, like Whatsapp, Facebook Messenger, Wechat, KakaoTalk… Or through a voice assistant: Ok Google, Amazon Alexa, Siri.
Customers can initiate a conversation with a company via a real human or a robot to engage or complete a transaction:
- Ask questions about the product
- Get a custom pricing
- Order products and pay securely
- Follow their delivery
- Ask for help or customer support
And much more.
The exact format of conversational commerce varies from company to company. For example, a live chat on your website lets the customer talk to a salesperson.
But this form of commerce can also get very technical. For example, it can be a chatbot on Facebook Messenger, from which the customer can order and pay right away.
Chatbots understand users’ intentions with artificial intelligence, machine learning, and natural language processing. Then, with automated responses, chatbots offer quick responses to most queries.
For example, Pizza Hut developed a Facebook Messenger chatbot from which you can order food.
Facebook or Twitter users chat and order custom pizzas right from the Pizza Hut chatbot. The bot can remember their previous orders or customization for future purchases.
The Pizza Hut chatbot also keeps customers aware of their latest promotions and provides easy access to the FAQ.
Is Conversational Commerce a Fad?
The short answer is no, all the contrary.
Customers’ expectations of conversational commerce solutions are growing. This is because messaging apps are getting huge.
In China, people are already chatting with 1.5 billion businesses on the messaging app WeChat. Today, Whatsapp has 2 billion users, and Facebook Messenger has 1.2 billion.
The demand for conversational commerce is real. Customers expect to reach out to your brand like they do with anyone on the messaging apps they use daily. Not through contact forms or phone calls.
Messaging apps are more casual and convenient. 71% of consumers say they are willing to spend more time with a brand on messaging apps than on the phone.
Is Conversational Commerce a Threat to Retail?
This form of commerce increases personalization in the shopper’s experience. And Brick and mortar lose some of its key advantages. A customer noFor example, a longer has to go to the store to get the customized recommendations of a connoisseur.
Conversational commerce’s ubiquity sets new standards for the whole retail and e-commerce industry.
Customers are likely to complain if no instant messaging is available. They will publicly unleash their outcry on social media and destroy a brand’s reputation in a flash.
But conversational commerce is also an incredible opportunity for traditional retailers. For example, the popular clothing retailer H&M created a chatbot to promote its e-commerce and physical stores.
H&M sells many different clothes, and customers can quickly get lost on the website. So H&M developed the Kik chatbot, which recommends different clothes based on the user’s taste and preference.
The chatbot asks customers to choose photos of clothing they like and to describe their aesthetic with keywords, like Boho or Grunge. Then, the chatbot suggests articles to buy according to their style profile.
Notice H&M’s use of conversational commerce is much more visual. This sort of commerce doesn’t mean you’re limited to text. You can use visual cues like emojis, gifs, and pictures to engage with customers.
How Conversational Commerce Can Make E-commerce Websites Stand Out?
With conversational commerce, you can increase conversion rate, customer retention, and brand advocacy. Indeed, this sort of commerce provides highly desired customization of the whole shopping experience.
But you have to do it right.
Conversational commerce can improve and ease out any step of the customer’s journey. The most standard ones help customers get information about the product and handle customer support after the sale.
For example, L’Oréal, helped by Haravan, added an automated virtual assistant called Mr. Bones. The bot embodies its brand Kiehl’s Vietnam. On Facebook Messenger, the bot took care of customers’ inquiries, and shoppers could buy right from the chat.
L’Oréal Kiehl’s Vietnam solution to generate conversations increased revenue by 22%. As a result, it became the first conversational commerce retail channel in South East Asia.
Is Voice Commerce the Future of Conversational Commerce?
In the future, a transaction initiated via a conversation will be using voice commerce.
With voice commerce, everything is done with voice by talking to a voice assistant like Ok Google, Siri, or Alexa.
But this is not something for the future. It is a very real solution we have at our disposal, which is only waiting to become a mass adoption solution.
For example, with Amazon Echo, shoppers can track their delivery. Then, with a voice command, the voice assistant Alexa will reply by listing their ordered items. They can also order a Domino’s pizza without having to take out their credit card.
Voice commerce is relatively new. But it’s expected to grow as people use voice assistants more and more, especially since they are already available on any smartphone.
In 2020, 38,5% of the US population used a voice assistant at least monthly. It’s 12% more than the year before. This is the highest growth in the use rate ever, caused mainly by the lockdowns in the US.
The customer behavior is shifting. As a result, voice commerce will likely become very, very big.
How to Get Started?
You don’t have to be a big company to start doing commerce via automated conversations. Small e-commerce businesses can begin with conversational commerce right now. All they need is to create an account on social media and chat with customers.
But as you get more customers, tracking every conversation becomes near impossible. So instead, you can use more advanced solutions to reduce your workload and improve customer satisfaction.
These advanced solutions also let you be present on many channels. Like Facebook Messenger, Whatsapp, or voice assistants. Then, a bot or your salesperson replies to them from a single interface.
Here are six solutions to get started with conversational commerce as an e-commerce store:
- Zendesk: customer support and B2B sales
- Intercom: Facebook Messenger and bots for marketing & support
- Birdeye: customer feedbacks and reviews
- Tidio: enhanced and personalized live chat
- Botnation AI: DIY Facebook Messenger chatbot
Conversational Commerce is Not a Silver Bullet
To deploy a successful conversational strategy for commerce, you should first think of its purpose. For example, when and why would a customer want to talk to your brand? What is the level of service the customer would expect?
Once the purpose is clear, map out the existing communication channels you have. See how you can already improve existing touchpoints with your users or even remove them. But to be sure to succeed, you need solid fundamentals and an omnichannel strategy.
Likewise, don’t put poor conversational experience for the sake of it.
Everyone hates bad chatbots and no customer will buy more just for having a chatbot.
To prevent this outrage against your chatbot, be open about what the bot can and cannot do. If there is an issue, allow the customers to reach out to a human.
Conversational commerce solutions can make a good customer service experience even better. But it will not fix your internal operational issues.
Using chatbots and creating conversations with customers, you can create new opportunities for your business. But to be sure to succeed, you need strong fundamentals and an omnichannel strategy.
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