Conversational Commerce: The Driving Force for Retail Brands in the Contactless Economy

By
Bhavya Sharma
July 2, 2020

Before the current crisis hit, traditional retailers and ecommerce merchants considered phone and email support as adequate means of customer support and service. Their customer service team, working from 9 am to 5 pm, five days a week, would resolve incoming tickets or their on-floor staff would.

Now, in this six-feet economy, customers are price-sensitive, overwhelmed, and less willing to make buying decisions if they cannot see the value in real-time. The post-COVID customer expects more from your brand than just a “customer support representative will respond to your query within 48 hours.”

Boston Consulting Group reports that even in China, where cases have dwindled to zero since mid-March and recovery is underway, 37% of consumers expect to spend less in the next month than they did before the pandemic struck.

As such, conversational commerce cannot be an afterthought for retailers and ecommerce merchants. Instead, conversational commerce should be at the forefront of industry leaders' minds, driving brand equity and business. 

Before we jump into why conversational commerce is the new way for brands to reinvent their support and sales ecosystem, let’s dig into the definition of conversational commerce, its components and how you can use it for your business.

What is conversational commerce?


In 2015, Chris Messina, a developer experience lead at Uber, coined the term—conversational commerce—in a post on Medium. In his article, he draws attention to the convergence of messaging apps and shopping. 

Today, popular chat and messaging apps like Facebook Messenger, WhatsApp and Instagram have become the new way to interact with businesses. Each month on Facebook Messenger, 20 billion messages are exchanged between businesses and customers.

In fact,  Google Business Messages just launched and now multi-location retailers and ecommerce merchants can connect with customers directly within Google Maps and Search via Google My Business listings. With this launch, brands are empowered to drive last-mile shoppers directly to nearby brick-and-mortar stores through personalized, 1-1 communications.

Evolution in customer touchpoints_Heyday

Conversational commerce is the use of messaging apps as the preferred medium of communication between buyers and sellers.

Let me share an example: I often connect with businesses on Facebook Messenger when I am looking for an update on my order status—“is it on the way?” is a question I frequently ask. Businesses respond to my query via a customer support agent or chatbot. 

Keep in mind that while the earlier example is only for an order status, customers and merchants can both use conversational commerce to exchange information regarding a product or service, store location, shipping status, FAQs and more. Embracing conversational commerce, and considering each key customer messaging channel as a way fuel to sales and support, is critical to building a cohesive customer experience.

And, if conversational commerce is boosting sales and augmenting support via chat channels everywhere, conversational AI, conversational AI is the technology that fuels it.

Gartner projects that by the end of this year, conversational AI a.k.a. chatbots will handle 25% of exchanges pertaining to shopping and financial services. However, with the COVID-19 crisis and its long-term effects, businesses are embracing digital transformation at an accelerated pace to handle the increase in support queries and provide online sales assistance.

Why consumers message a business_Heyday


Understanding the conversational landscape

Dotting the conversational commerce landscape are words like chatbots, conversational AI (artificial intelligence), conversational agent, virtual customer assistant, customer concierge, voice assistant, and live chat.  

These buzzwords are all fairly new terms and can often seem interchangeable. But, that’s not the case. These technologies are unique, so let’s define them to give you more context on what is the most suitable technology for your business:

1. Live chat

This is a real-time engagement tool available on an app, website or platform that visitors can use to speak directly with an available customer service representative. When people land on a live-chat-enabled website, they’ll see a small chat box (or live chat widget) that they can click on to get immediate service from a chat agent.


2. Chatbot or virtual assistants

Unlike live chat, chatbots are computer software programs or artificial intelligence (AI) designed to simulate conversation with a human user over the internet via websites, messaging platforms and apps. Chatbots are becoming increasingly popular since they automate repetitive tasks, are available 24-7-365, and reduce the operating cost of a business.

3. Voice assistant 

These digital assistants are voice-activated, the likes of Alexa, Siri, OK Google. These assistants use natural language processing (NLP) to understand and execute your request. They are now accessible in more than 30 million U.S. households via smart speakers like Amazon Echo or Google Home.

4. Conversational AI

Conversational AI is the use of messaging apps and chatbots to automate communication and create personalized customer experiences at scale. Conversational AI apps facilitate two-way interaction with customers using text or voice using the most intuitive interface—natural language. Natural language processing (NLP) allows computers to interact with humans in their own words, just like a friend would.


5. Messaging apps

Messaging apps allow you to send direct messages to other people. Though these have traditionally been associated with social media platforms, they’ve been branching out of late and becoming a ubiquitous form of communication. 

Case in point: the top four messaging apps (Messenger, WhatsApp, Instagram, and WeChat) have a combined user base of 4.9 billion users, which is nearly 65% of the world’s population.

Popular messaging apps by country_Heyday


How businesses use conversational AI 

Businesses can use conversational AI for support, sales, or both to establish a two-way communication channel with the customer. By using conversational AI, you ensure that every customer interaction is

  • Omnichannel: If a customer writes to your business on Messenger, then drops and email, you will log that as one conversation and respond with context.
  • Logged: You have full visibility into the number of customer queries that are received, resolved and open.
  • Enhanced: The chatbot learns from every conversation, turning your dataset from an “order number” to “customer preference.

Consider this: A customer is looking for black running shoes on your website, finds a pair that they like, but it is out of stock. So, they drop off your website and start their search all over again. With conversational AI, you can ensure this doesn’t happen. You can send automated restock notifications inside Messenger, driving that sale home.

If you’re wondering “why do I need conversational AI, I can do that via email,” this stat might change your mind: Open rate for Messenger notifications is 90-95% customers and the click-through rate (CTR) is 20-25%, which is way higher than email which stands at 30% average open rate and 3-5% CTR.

Open and click-through rate for Messenger Bots in lead generation_Heyday
Source: Viral Loops


Businesses are using chatbots to enhance the shopping experience for customers with immediacy and convenience, right from purchase to delivery.

how consumers use chatbots in ecommerce and retail_Heyday

Part of the beauty of conversational AI is its flexibility and multi-purpose capacities. Currently, this technology is mainly used for sales and support automation.

Conversational AI in Sales Automation

With conversational AI, you can capture more leads, qualify them before engaging your sales team and boost the conversion rate.

You need chatbots to automate sales if any of all of the following ring true: 

  • Not even 50% of customer queries escalated to the sales team have resulted in a sale
  • Your abandonment rate is higher than the industry average
  • You’re selling high-ticket products 
  • Your shipping costs are high
  • Most of your sales (online and/or offline) are through assisted-selling

Customer service automation includes:

Proactive chat triggers

With proactive chats, you can capture leads with contextual messages based on which page they are browsing and how much time they’ve spent on it.

Cart recovery notifications

Revive leads with a gentle nudge and recover carts to boost sales automatically.

Dynamic cart creation 

Fetch products from your database to create and share carts on the fly directly inside the chat.

In-chat checkout

Remove any friction in the customer journey by allowing customers to check out directly in the chat.

Click-and-collect

Unlock the key to omnichannel sales by bridging the gap between your digital and physical stores.

Conversational AI in Customer Service Automation

Conversational AI is your best bet if you’re looking to reduce the workload of your support team, improve SLAs, and provide instant service to your customers. A top-notch customer support solution works in tandem with your human team. If you’re a one-man team or lack a dedicated support team, you could continue to provide email support and implement chatbots to provide automated real-time support to customers.

Conversational bots in ecommerce are widely used for customer service as chatbots can resolve a basic issue or query instantly and even retrieve information from existing databases to provide relevant answers. Chatbots deliver faster responses, handle multiple requests simultaneously and are easily scalable.

Customer service automation includes:

FAQ automation

Automate up to 80% of all customer queries with an FAQ automation chatbot. That way, your team can focus on high-value interactions that require a human touch.

Order tracking management

Keep customers updated with their order status to avoid getting flooded with order tracking related questions and free your support team for value-added interactions.

Seamless agent handoff

Upon request or when the context requires a human touch, the virtual customer assistant escalates conversations to your team so they can take over and close the loop.

Instant service

If you love your customers, don’t keep them waiting? With a chatbot, you can now offer immediate assistance to customers at every step of their journey.

Retail-specific NLP library

By analyzing customer FAQs, you can enrich and build a world-leading retail-specific Natural Language Processing library and make your bot smarter every day.

Multilingual AI

Turn your chatbot into a polyglot to meet the demands of your global customers and offer a culturally-relevant customer experience tailored for local markets.

Automated customer surveys

Track agent performance and CSAT scores with automated surveys sent to your customers after their interactions with your team.

Let’s get started

As a brand operating in this new reality, if you don’t meet your customers on the channels they care about, your competitors will. You have to assuage concerns, communicate value, and do it all while remaining profitable. Automation through chatbots is a sustainable and scalable business model that can guarantee profitability and stability for your ecommerce or retail business. 

Looking to kickstart your conversational AI strategy? Find the next steps here