Conversational Commerce: The Driving Force for Retail Brands in the Contactless Economy
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. 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.
Understanding the conversational landscapeDotting 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 chatThis 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 assistantsUnlike 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 assistantThese 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 AIConversational 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 appsMessaging 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.
How businesses use conversational AIBusinesses 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.
Conversational AI in Sales AutomationWith 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