What is conversational commerce
Conversational commerce enables consumers to make shopping decisions, purchases and transactions through conversational technology such as messaging apps or voice technology. It involves one-on-one conversations relevant to customers across their buying journey. It’s interactive and feels more personal, making customers feel heard and fostering brand loyalty.
In essence, conversational commerce delivers customers convenience, personalization, and decision support, changing the way of shopping, transforming the customer experience within the context of messaging apps, in order to build conversational channels with their prospects and customers. Ultimately, brands see the opportunity to gain competitive advantage and increase CLV.
Conversational services and technology have transformed the way people shop. Today, consumers can do everything from discovering products, to purchasing and paying through chatbots, messaging apps and voice assistants.
Conversational commerce vs conversational marketing, what’s the difference
While conversational commerce refers to businesses interacting with customers through the use of messaging and chat, conversational marketing focuses more on brand positioning, attention and awareness.
Why is conversational commerce important for retail companies?
Online shoppers will no longer wait 2 days for an email or get on the phone to a call center. They want questions answered and purchases completed in real-time. Live chat is faster, more personal, more engaging and cheaper than any other method of communication. And it gets the highest satisfaction ratings from customers.
Customer satisfaction, by channels:
A survey by Bold Software found that of the weekly shoppers who used live chat:
- 65% were more likely to purchase from the retailer again
- 61% received better service than over the phone
- 44% purchased as a result of the chat session
- 35% purchased more than they intended
Interestingly, Asian shoppers are particularly influenced by social media and word-of-mouth product recommendations.
As a result, countries such as China, Taiwan and Malaysia is strong in conversational commerce. The pandemic accelerated the use of live chat apps to make sales, with local merchants using the apps to advertise, build customer relationships and complete and process transactions.
More benefits of conversational commerce
Attracting customers of younger generations.
Gen-Z and millenial customers expect more from brand than 1-way messaging where there’s no room for dialog. Conversational channels allow 2-way messaging where customers can initiate conversations or respond to brands whenever they choose to.
Tapping into a greater market of mobile users.
With shopping tools specifically built for mobile users, consumers can make purchases without leaving their conversations, closing their apps or logging into a desktop.
Increasing conversion rates and lowering abandoned cart ratios.
Buyers are able to order what they want in an instant in a simple message or voice command, cutting out steps like driving to the store, locating a product or even pulling out a credit card.
Automating conversations for more efficient customer service.
Brands use automated conversational workflows to assist customers and achieve quicker outcomes in resolving problems and answering questions.
Getting valuable data and insights.
One on one interactions with customers allow brands to understand what they are looking for and cater to those needs in real-time. Conversational platforms enable companies to collect feedback, analyze customer data, and gain strategic insights that can improve business outcomes.
How to implement conversational commerce
Some examples of conversational commerce are:
- Offering personal shopping assistance, for example using a chatbot to get help selecting the right product
- adding items to an online shopping cart with a voice command
- responding to direct messages on social media about services and prices
- Customer support and order tracking
- Offering gift suggestions
Today, there are several proven conversational commerce tools, and retail companies are often implementing a combination of them to deliver the best possible customer service.
1. Messaging Apps
Messenger, WhatsApp, WeChat and Snapchat are some of the top messaging platforms being used by buyers, letting them exchange messages, memes and emojis with companies they are interested in. These social messaging apps provide brands with an avenue for communicating with customers and boosting engagement, which usually leads to higher conversion rates.
2. Live Chat
Offering a channel designed to improve response time and customer service, live chat allows users to initiate a chat session when they type a message into a pop-up window on a brand’s website. It’s typically monitored by staff who work behind the scenes to answer questions and provide support to customers, offering a less expensive option than phone-based assistance.
As an alternative to live chat, which requires physical employees to respond to customers, many companies have instead decided to use chatbots. Using artificial intelligence (AI), chatbots are computer programs designed to understand customer questions and automate appropriate responses to them. The exchange that takes place simulates human conversation, making it easy for users to find the information they need by responding to the chatbot’s questions and requests.
4. Voice Assistants
Using voice recognition technology, AI and natural language processing, voice assistants allow customers to use voice commands through apps in order to make a purchase or get information.
The most popular conversational apps worldwide
In June 2022, mobile instant chat and WhatsApp was the most downloaded mobile messenger app worldwide, with almost 45 million downloads. Messenger and video chat app Snapchat ranked second with approximately 34.7 million downloads, while Telegram ranked third with approximately 31.8 million downloads.
Based on monthly downloads
Based on monthly active users
|% of users active daily||53.03||90.51||47.50||47.07|
|Sessions per user||9.94||22.97||8.7||6.82|
|Average session time (Mins)||1.54||2.35||2.24||2.1|
|Total session time (Mins)||18.53||59.32||20.56||14.48|
Conversational commerce examples from popular brands
H&M uses a chatbot on its messaging app Kik to introduce a unique level of personalization in conversational commerce and help shoppers find their perfect look. The chatbot is available to interact with customers 24×7. H&M focuses on delivering an experience similar to the in-store experience by offering stylist recommendations based on customer preferences and previous choices.
The chatbot enables ample customer engagement and allows the business to collect customer data that they can use in subsequent interactions to customise recommendations. The chatbot is designed to be user-friendly and allows customers to interact in a very casual language, thus giving them a human-like experience.
Nordstrom is a retail giant well-known for their customer service, and they’re continuing to innovate in ways that make shopping easier. They’ve introduced chatbots to help shoppers find the best clothes for their body type, and they’re using artificial intelligence to help them understand what customers need.
It can also recommend other products or categories based on the shopper’s preferences and make recommendations based on what other people have bought in the past. The chatbot is also able to take orders from customers who are shopping online and then connect them with a representative in the store who will be able to help them find their products more quickly.
Tommy Hilfiger has been at the top of the fashion industry for decades. But it’s not just their clothing that sets them apart—it’s also their use of chatbots to help customers find what they’re looking for and get an answer to any questions they have about a product.
Tommy Hilfiger offers customers a chatbot that guides them through the entire purchase process, from finding what they want to know where and when it will be delivered. The chatbot is available 24/7 on all major platforms, including Facebook Messenger and Twitter.
This type of engagement helps people get excited about shopping on the site because it feels more personal than just browsing through products without any interaction. It also allows users to ask questions about specific products or issues they may have with an item they purchased in the past to get better service from the company when making future purchases.
For Nike, live chat is not just a way to help visitors find the right products but also to build trust. Nike uses live chat agents to make product recommendations based on their personal experiences and preferences. They can advise on everything from sizing to product defects, and they’re always available via phone or email.
The result is that Nike customers feel more connected with the brand and are more likely to make purchases.
UK-based casual fashion brand Crew Clothing wanted to promote itself as an ideal choice for gifting in the run-up to Christmas.
Specifically, it hoped to target customers in the under-34 demographic. Given that usage of Facebook Messenger is higher among 25 to 34-year-olds than any other age group, it seemed like an obvious fit. So Crew Clothing ran a Facebook Ads campaign that directed users toward an automated Messenger conversation.
When customers struck up a conversation with the brand, they’d be guided through a series of questions designed to hone in on gifting options. That way, shoppers would be presented with the perfect gift for their friend or loved one, then click through and buy it.
It’s the sort of smooth, intuitive, convenient user journey that makes for a superb customer experience.
And the campaign clearly delivered results. Almost half of all Messenger conversations triggered by the ads ended up in a purchase, helping the campaign deliver a 5X return on ad spend.
A good example of conversational commerce is Baanraya, a small business in Thailand that makes healthy baby food. They pivoted their business to online in the last three years and built their entire business on chat. Baanraya have almost 200 different products made from natural ingredients that are nutritious for children. They get queries on Messenger from 200 to 300 customers daily – from mothers asking about what might suit a fussy eater to questions on catering for specific allergies. Messenger helps Baanraya reply at scale and provide information on the many products. This kind of utility has made one of our ad solutions – Click-to-Message ads – one of the fastest-growing in this region
What’s possible with a jar of Mayonnaise? – Apparently, remarkable customer engagement and amazingly positive reviews, thanks to a creative campaign by Hellmann’s in Brazil. The famous condiment brand ran a WhatsApp campaign where real chefs gave live instructions to customers to make delectable recipes.
Millions participated in the successful WhatsApp campaign ‘Whatscook’, which resulted in 99.5% approval and 13,000 signups. All customers had to do was share their number on Hellmann’s campaign page. Then, a real chef reached out to the customers and guided them to cook dishes based on what was in their refrigerators.
Participants spent more time with the brand, and the interactive campaign showed refreshing ways to use Mayonnaise in recipes. In addition, the chefs shared videos, drawings and images to help participants with the cooking process, making the process engaging.
Given the campaign’s phenomenal success, Hellmann’s introduced the promotion to other countries, including Argentina, Chile, and Uruguay.
The L’Oréal-owned skincare brand Kiehls is another conversational marketing example of a brand driving significant customer engagement through innovation and creativity. It implemented a conversational strategy where customers used a dedicated hashtag to initiate private conversations on Facebook Messenger.
State-of-the-art conversational tools enabled an end-to-end shopping experience where customers interacted with beauty consultants, placed orders and made payments all from the chat.The Kiehls campaign launched in Malaysia reached 2.6 million people and had a 12% post-engagement rate. With over 17,000 chats, the conversational campaign quadrupled sales.
Top conversational commerce platforms
Conversational commerce platforms try to create the connection and experience that consumers get from offline shopping in the online, social environment. They offer tools to design personalized conversation flows with relevant responses. They boost conversions by automating the process of qualifying leads and directing prospective customers to digital stores, sales professionals, or customer service teams.
What key features should retailers look out for when choosing a conversational commerce platform?
- An easy-to-use, intuitive interface
- Integrations with other software and chat platforms
- A pricing model that suits your business
- Good customer support available when you need it
- Analytics and reporting tools for on-going improvement
Drift combines chatbots, automated lead-gen sequences, and call-scheduling tools in one CRM to help businesses facilitate seamless team collaboration at scale. This company is a leader in live chat on a mission to eradicate forms and replace them with conversations.
When it comes to conversational commerce tools, Intercom has a remarkable reputation. Known for its suite of chat, messaging, management, and customer data tools, this platform allows businesses to master customer conversations and easily provide ongoing engagement and support.
LiveChat has a rich list of features for automating lead gen on landing and sales pages. The software offers every live chat tool plus advanced customization and white-labeling of chat windows. Other features include key integrations with Shopify and WooCommerce, and its own analytics and reporting tools.
Jumper’s sophisticated social commerce platform integrates with social media platforms, blogs, comments and more to enable automated conversational checkouts wherever customers are hanging out, in a concerted effort boost engagement and conversions.
Botsonic is a no-code custom AI ChatGPT chatbot builder that helps retailers build hyper-intelligent and conversational AI chatbots. It harnesses the power of GPT-4 and NLP to develop custom AI chatbots for online retail stores.
What is the future of Conversational Commerce?
With the rise of AI and ML, companies are able to create more sophisticated chatbots that can understand and respond to customers’ needs. These systems can help retail brands provide faster and more accurate customer service, as well as offer personalized product recommendations and promotional offers. This presents a significant opportunity for brands to elevate their customer experience by providing personalized product recommendations and streamlining customer support inquiries.
According to Business Wire, the conversational commerce industry is expected to grow steadily, recording a CAGR of 23.1% during 2022-2028. The global conversational commerce transaction value will increase from US$1,740.8 billion in 2023 to reach US$4,915.1 billion by 2028.
If you’re a retailer and you’d like to talk about any of the customer engagement strategies outlined in this article in more detail, then get in touch with our team – we’ll be happy to show you examples or talk through your brand’s unique challenges.