Conversational Commerce Explained: What Retailers Should Know11 min read04/12/2018
Conversational commerce is the next big thing in the Ecommerce industry. With the rise of virtual assistants, voice control features, and instant messaging, social platforms become new full-fledged sales platforms.
Users move from websites to instant messaging applications like Facebook or Slack. eMarketer reports that the number of mobile messaging app users increased from 1.58 billion in 2016 to 2.01 billion in 2018. Conversational commerce is an extremely promising marketing channel since this is the way how today’s customers prefer to reach brands. According to Twilio’s data, 9 of 10 consumers want to communicate with companies via text messages.
This opens new marketing opportunities for retailers, especially for those companies that automate the communication with their customers.
What is conversational commerce?
The сonversational commerce term created in 2015 by Chris Messina, Developer Experience Lead at Uber. It means direct sales made through live communication with consumers rather than typical Ecommerce where Internet users make purchases online by putting orders in online stores.
The conversational commerce meaning refers to the personal assistance provided by a human, bot, or both. Unlike a typical online order making process where users add items to a virtual card and then enter their credit or debit card details to pay for a product, in conversational commerce, these are bots or customer support representatives who receive an order in real-time via text messages or voice from consumers and enter all the necessary details like payment card information or delivery date.
In other words, consumers can think of conversational commerce definition as the process of having a real-time, one-to-one conversation with a company’s representative or bot. For retailers, this is a direct, personalized, dialog-driven approach to nurturing long-term relationships with customers, collecting their data, and increasing sales. Unlike traditional digital marketing, conversational E-commerce is listening to customers rather than making them say something.
Marketing specialists usually associate conversational commerce with automated communication channels like chatbots and voice assistants. So retailers can implement this practice specific platforms that include:
- Facebook Messenger
- Amazon Alexa
- Google Home
- Apple Business Chat
However, conversational commerce platforms also refer to specialized tools that enable brands to create their own chatbots. Below, we will review those platforms requiring no coding to develop an Ecommerce virtual assistant.
ChattyPeople is a conversational commerce platform that allows retailers to develop a chatbot for Facebook Messenger. The main advantage of this tool is it’s extremely easy-to-use. Its user-friendly interface makes ChattyPeople a perfect platform for small businesses that need an instrument to quickly answer customers’ simple and repetitive questions. Furthermore, you can integrate your chatbot created with ChattyPeople into Shopify to enable your customers to make purchases right on your Facebook page.
One of the conversational commerce companies called Botsify offers a tool that allows you to create simple text-based virtual assistants for Facebook Messenger. Instead of writing a code, you can set keywords that will trigger your predefined answers. This is unlike chatbots based on artificial intelligence (AI) that can “understand” what users are talking about by using neural networks. Botsify offers a free package that allows you to create a bot able to answer up to 100 unique questions. If you need more, then you will have to pay $20 monthly.
Another conversational commerce platform called Chatfuel that requires no coding skills to work with enables your to create a chatbot for both Facebook Messenger and Telegram. The platform provides a set of templates you can edit to empower your bot to answer frequently asked questions or help customers choose a product. For custom solutions, you will have to pay $15 per month. In addition, Chatfuel requires no registration. Instead, you can sign in with your existing personal Facebook account set as an administrator of the public page you need to create a chatbot for.
Flow XO is an advanced platform that enables users to create chatbots for a wide range of popular messaging apps like Facebook Messenger, Slack, and Telegram. It provides a user-friendly interface that requires no coding skills to develop a virtual assistant. Flow XO offers a free package that supports up to 500 conversations in total regardless of the number of questions asked. For more interactions with customers, you will have to pay $20 per month. The main advantage of this platform is that it supports in-chat payments via Stripe.
With the growing popularity of messaging mobile apps, more and more consumers turn towards making purchases via text messages. According to a study conducted by Mastercard and Future Agenda, 87% of Americans are aware of voice assistants and chatbots while 66% have already used them. In Europe, the awareness of conversational commerce is significantly lower. 21% of Europeans have ever tried to buy something using a voice or text assistant. Therefore, this is no longer a new technology that, by the way, provide many benefits for both retailers and consumers.
The conversational commerce market size will continuously grow over the next few years and more brands will implement virtual assistants including voice-based ones to optimize the workflow of their customer support departments. The international consulting company OC&C calculated that the total revenue from sales made through voice services would reach $40 billion across the U.S. and $5 billion in the U.K. by 2022. These numbers equal 6% and 3% of the overall sales in the mentioned countries, respectively.
Virtual assistants are more than just communication with customers. In fact, they can have a wide range of use cases that provide retailers with opportunities that help them save their budgets and increase income. Further, we will consider conversational commerce examples and purposes Ecommerce companies use chatbots for.
Simplifying a payment process
One of the most significant expenses for retailers is paychecks for customer support department representatives. These specialists often help customers choose a suitable item and make a purchase. Even though online payments are a simple and well-known process for most consumers, there still happen cases that require human assistance in processing customer orders.
That’s why brands use AI-based chatbots that can significantly reduce the need for alive assistants. With the rise of human text recognition technologies, today’s bots can recognize what users say instead of just relying on keywords. The latter method can lead to misunderstanding in the cases where customers use a specific keyword in their text messages but actually mean something different what has been predefined for a keyword-based bot.
A Mexican food deliverer called Taco Bell uses an AI-based chatbot to allow their customers to order tacos as well as pay for them without the need for leaving the Slack messaging app. Thus, the company cares of their clients by simplifying the order placement process and helping them tell about their preferences in a natural way through the conversation.
Answering repetitive questions
Customer support departments spend much time to respond to customer inquiries most of which are simple and frequently asked. Therefore, Ecommerce company representatives often do the same work thus having less time for difficult cases that can’t be solved without human participation. That’s why a Philippines-based retailer called Argomall created a conversational commerce chatbot that can answer simple repetitive questions about a delivery date, working hours, payment options, etc. thus optimizing the workflow of customer support specialists and giving them a capability to focus on more complex tasks.
Providing a personal approach
The “smarter” a chatbot is, the more complex tasks it can solve. With artificial intelligence, virtual assistants can be much more than bots performing predefined actions in an automatic manner. Besides answering simple and repetitive questions, chatbots can behave like humans within the conversation and ensure a personal approach to each request. For example, H&M and Sephora use AI-based chatbots that can analyze user requests, offer related products, and even provide style and makeup tips as well as information on how to use a specific product.
Personalized content delivery
Traditional online stores just provide information about specific products and enable consumers to pay for them thus making the website visitors choose on their own what they want. However, we may not know for sure what we need: color, style, material, etc. We often only know the type of this product. A lingerie brand Aerie created a chatbot for the Kik messenger that offers user exactly what they may want using their preferences. To determine what consumers may like, the bot provides users with several choices between two images. By clicking on This or That, customers let Aerie understand what it should offer to meet their preferences.
Collecting consumer data
Ecommerce companies can use virtual assistants to collect user data in order to predict their shopping behavior and provide suitable recommendations. All data coming from consumers through the dialogue interface when it comes to chatbots or microphone in the case of voice assistance cab bring retailers significant benefits such as improved marketing capabilities. For example, Amazon Alexa, an AI-based voice assistant, integrated into smart speakers can analyze customer shopping behavior and facilitate the product picking process within the Amazon store in the future.
With the rise of new chatbot development tools, retailers can now build virtual assistants either from scratch by hiring conversational commerce startups and agencies or using online services that can greatly simplify this process. One way or another, Ecommerce businesses can get a wide range of benefits from chatbots or voice assistants.
By taking care of simple frequently asked questions, chatbots enable your sales managers to solve only problems requiring human participation. Therefore, by optimizing the workflow of customer support department representatives with the use of conversational commerce techniques, retailers can reduce the number of needed specialists thus spending less money on paychecks.
Retailers can build a virtual assistant for different business purposes. Furthermore, they can create a multifunctional AI-enabled Ecommerce chatbot that would be able to answer repetitive questions, help customers choose items, provide them with suitable recommendations, etc. Therefore, online store owners can replace a small team of employees with a single solution.
With more companies turning towards conversational commerce, offering customers to talk to virtual assistants rather than human experts has become a trend. Consumers feel a personal approach to their inquiries when communicating with a chatbot. At the same time, bots can’t be rude for purpose unless they’re meant to. Having a chatbot is like having a logo: this hardly influences the quality of your products or service but increases customer trust to your business.
Despite the benefits the conversational commerce, it still has its drawbacks when it comes to both text-based and voice-based personal assistants. In order to properly manage their communication with customers, retailers should always take in mind the concerns of chatbots and voice assistants.
Lack of autonomy
Even with machine learning technologies, virtual assistants are still far from being autonomous. AI-based chatbots can become “smarter” with each interaction with users and better understand customer needs by remembering their previous choices or using natural language processing (NLP), but they can’t fully replace a human. There always can be a situation only a real person can solve. That’s why Ecommerce chatbots should be able to timely connect to alive customer support department representatives in the case of emergency.
Lack of privacy
Voice assistants have an important advantage over chatbots. The former bots remain useful regardless of what messaging platforms a certain user prefers. While users with only Facebook Messenger can’t talk to a Slack-based chatbot, consumers can communicate with any voice assistants since the latter can’t be based on messaging apps.
However, voice-based bots have some problem with cybersecurity. Users may not trust them since these solutions can people’s private life. In May 2018, the Amazon Echo device recorded a private conversation and sent it to another user without any permission. The company explained that, in the background conversation, the device owner could say something sounding like “Alexa” which triggered the voice assistant. Amazon Echo couldn’t properly recognize a voice command rather than tried to spy on users, but now they should avoid having confidential conversations near this device.
Computing is crucial for how brands now communicate with customers since it enables them to automate many different tasks. Conversational commerce is unlikely to fully replace Ecommerce over the next few years but the former has already changed the way many consumers approach brands.
Virtual assistants are rather suitable for medium and large enterprises since small companies can deal with all inquiries with a few human specialists. However, small online stores also can create a simple chatbot and synchronize it with their content management system (CMS) like Shopify to allow customers to make purchases without leaving a mobile messaging app and answer their questions.
Regardless of a couple of concerns, the popularity of conversational commerce is continuously growing and a lot of consumers have already appreciated the benefits of chatbots and voice assistants. According to Capgemini’s report, 87% of those who regularly use voice-based bots to order meals or buy products are satisfied with the experience they have. This means that consumers are ready for the technology and retailers should embrace it to remain competitive in their niches in the close future.