Conversational Commerce

What is Conversational Commerce?

Conversational commerce refers to the intersection of messaging apps and shopping. Meaning, the trend toward interacting with businesses through messaging and chat apps like Facebook Messenger, WhatsApp, Talk, and WeChat. Or through voice technology, like Amazon’s Echo product, which interfaces with companies through voice commands.

Consumers can chat with company representatives, get customer support, ask questions, get personalized recommendations, read reviews, and click to purchase all from within messaging apps. With conversational commerce, the consumer engages in this interaction with a human representative, chatbot, or a mix of both.

On the business side, companies can use chatbots to automate customer service messages. It’s how companies are enabling consumers to buy from them without ever leaving the messaging app they are using. Now companies can send order confirmations in Facebook Messenger, as well as shipping and delivery notifications. Using chatbots, businesses can resolve customer service issues, provide recommendations, create wishlists, and interact with buyers in real-time.

The Market Shift

Consumers are increasingly relying on messaging apps for all forms of communication, whether personal, business, or commerce. Increasingly, consumers are using chat to find and select products and services, and to complete the payment process, all without having to call, email, or even visit a brand’s website. Everything is happening within the messaging app.

Research firm Juniper reported that more than 94 trillion digital messages were sent in 2015, with the bulk being through email. However, instant messaging has just about reached its tipping point, with the total number of instant messages sent overtaking emails by mid-2016.

Messaging apps are becoming the preferred means of communication. According to eMarketer, 1.4 billion consumers used messaging apps in 2015, which is up 31.6% from 2014, and that number is expected to hit 2 billion by 2018.

What That Means for Consumers

Chat companies are now partnering with brands to make it simpler for customers to buy from them. Facebook Messenger, for example, has partnered with Uber to make it possible for customers to order an Uber driver without leaving the messaging app – the conversation. Amazon’s Echo – a voice activated tool – has partnered with Capital One so that the bank’s customers can inquire about their balance, make a payment, or check recent transactions, all through Echo.

Not only is conversational commerce simpler for consumers who, thanks to messaging apps, no longer need to toggle back and forth between text conversations and websites to gather information and make purchases, but it’s also a step closer to the attention you might get from a sales associate in the store. When ordering from a website, you can read reviews to get a sense of whether a product will work for you, but using chat you can ask for help comparing your options – more like the advice you would receive in-store.

Reducing the steps required, and the number of information sources consumers need to turn to, shortens the distance between prospect and purchase.

Why Brands Should Opt For Targeted Communication

Brands today actively leverage mobile-friendly channels like Facebook, Instagram and SMS to communicate with customers. They create blogs/vlogs to improve engagement, go for SEO to ensure better reach and maintain a strong presence on social media to grab eyeballs. Many have adopted smart technologies to push newsletter subscriptions to keep people aware of attractive deals and discounts.  

But the problem is that too much data is available on many channels, which may lead to irrelevance and trigger consumer backlash instead of bringing desired results. 

Here’s how we explain it. “Imagine you have bought a pair of sneakers from a brand, did not like them and shared negative feedback with the company. But the very next day, you get an SMS from the brand asking you to check out its new collection. The customer is bound to get annoyed as the marketing communication is not meant for him.”

To counter this issue, brands need to part ways with spray-and-pray marketing tactics, said Borkar. Instead, they should opt for a targeted, personalised approach so that their communication reaches the right audience. 

Interestingly, specific customer data platform (CDP) allows brands to do just that. First, it collects all user data stored across various touchpoints throughout a customer’s buying cycle. The platform then breaks the data silos using big data analytics and obtains actionable insights from the input.

How AI Drives Sales, Converts Prospects 

AI tools like chatbots powered by natural language processing (NLP) and AR/VR have recently gained popularity as they provide a better user experience. Chatbots are especially becoming widely used and accepted. Consider this data from Zendesk’s CX Trends 2022: Around 69% of users say they are willing to interact with a bot for product recommendations and enquiries, a 23% jump from last year. 

“A chatbot is a great tool to engage with customers, on-site or through their preferred communication channel. It personalises the experience and eliminates the need for human intervention when queries are simple and can be easily resolved,” said Borkar.

AI chatbots can transform how businesses manage CX. Its Mobile Service Cloud (MSC) is a unique offering that enables brands to integrate the company’s chatbot with their websites and communication channels. 

While most customer interactions happen through the chatbot, complex queries are sent to a centralised system operated by a human employee. When the employee at the backend resolves the same, it is communicated to consumers via their preferred messaging channels. 

Moreover, to accommodate the new Bharat users who prefer to communicate in vernacular languages, the company helps brands build their chatbots in Indian languages. “Most of our clients in India want to have their chatbots in Hindi (after English). However, we can do that in other languages, too,” said Borkar.

The Tech Stack For CX Success

Today, nearly 80% of shoppers say they are more likely to purchase when brands offer them a personalised and seamless experience. This majority mindset proves how crucial CX is for a brand’s acceptance and sustainable growth.

Companies wishing to succeed in the long run should quickly respond to up-and-coming consumer trends. According to Zendesk, two upcoming trends will shape customer experience in the coming years – AI and automation and conversational customer service. 

The CX SaaS firm’s report has further stated that more than 70% of customers expect conversational experiences when they engage with brands. 

“Customers seek seamless, on-demand experiences with the brands. That’s why conversational commerce is so important in the digital world,” concurred Borkar. 

Businesses in India are pretty optimistic about the future of conversational commerce. According to the CX Maturity Report, 79% of domestic companies think chat and social channels are most used by customers today, and all of them predict that this will remain the case in the future. 

Consumers seem equally confident about AI’s potential to transform experiences. According to Pegasystems, 84% of Indian consumers agree that AI can provide better customer experiences, improve brand reputation, and increase customer loyalty.

The adoption of AI in all spheres of business has also grown significantly since the onset of the pandemic. According to the findings by Brookings, India is among the global top 10 in terms of tech advancements and funding in AI companies. 

Even then, AI/ML adoption across marketing functions globally is a paltry 17%, suggests Gartner. This shows a massive gap between what is expected from brands and what is delivered. 

AI, automation and conversational commerce will continue to play a crucial role in reimagining CX in the coming years, and brands must take note of these trends to future-proof their business. Of course, companies will go a long way if they can adopt, implement and utilise the right tech stack for targeted and sticky CX.