Conversational Commerce: Game-Changer or Passing Fancy

The term ‘conversational commerce’ is not exactly news. Yet, it has become much harder to ignore in recent months, stirring the business waters with tales of uncanny success. 

It’s not so long ago messaging was viewed purely as a medium to communicate with your friends and family. Back then, even having your boss on WhatsApp seemed a bit intrusive. However, today, messaging apps offer an indiscriminate space for communication, personal and professional, with more and more brands bypassing conventional channels in favor of one-on-one conversations via WhatsApp, Messenger, WeChat, iMessage, Telegram, and others. 

This article looks into the hidden potential and opportunities your business can draw from conversational commerce, offering real examples and expert opinions. 

What is Conversational Commerce?

Conversational commerce was first addressed head-on by Chris Messina in his Medium publication as far back as 2015. He described it as a way of “delivering convenience, personalization, and decision support while people are on the go, with only partial attention to spare.”

Chris underlined his advocacy and growing relevance of the trend in a conversation with our CEO, Jiaqi Pan, back in 2020. He explained that the pandemic pushed businesses and organizations to realize that the conventional web experience is no longer enough. Consumers “expect to be able to access services through SMS or through social media or through Facebook or Instagram or whatever and they are used to a different level of experience. And, I think that that also translates into a more conversational paradigm. Specifically, if anyone has ever purchased an item on Instagram, you know. They are able to go through the entire flow within the context of Instagram and then get follow-up messages within the messaging experience.”

To put it quite simply, conversational commerce is the virtual intersection bringing together shopping and messaging apps. It allows consumers to interact with brands through chat apps like WhatsApp, Facebook Messenger, or Talk or voice assistants like Amazon’s Echo or Apple’s Siri. Via live or automated conversations, shoppers can offer feedback, get support, receive personalized recommendations, complete transactions, etc. All of this can be done asynchronously while people go on about their lives. 

How Does it Relate to M-Commerce?

M-Commerce or mobile commerce has been the thing since the invention of the smartphone. It’s all about bringing shopping to wireless devices like smartphones and tablets. It might be tempting to put conversational commerce into the same category, but that’s not quite the case. 

Mobile commerce is more about making your business accessible via smart devices by either optimizing for mobile and tablets or creating an app. 

Conversational commerce is all about — you guessed it — the conversation. That conversation can take place on a smartphone, tablet, or even the web (for instance, when using WhatsApp desktop) or rely on voice AI to expand beyond the usual devices to smartwatches and home assistants.

Why is Conversational Commerce Important?

Conversational commerce is becoming more and more important because the numbers and results are getting harder and harder to ignore. 

The number of people using messaging apps to communicate is growing every year:

The more important aspect of the increased usage is the accompanying change in consumer behavior. According to the 2020 Consumer Preferences for Conversational Commerce report by LivePerson, people of all ages worldwide increasingly express their preference for messaging with brands which went up from 65% in 2019 to 85% in 2020.

When you look at it from a regional perspective, you might see even more compelling shifts. For instance, in the US, the interest in using messaging to interact with brands grew more significantly, from 62% in 2019 to 86% in 2020. Or, interestingly, some European countries showed the highest average demand for messaging, with France's percentage going above 90%!

Indeed, the companies that bet on messaging are reporting various benefits, including greater customer satisfaction, more efficient customer support, increased customer loyalty, and even higher sales. 

The main selling point from a consumer perspective? 

Convenience and speed. 

For example, one of Landbot’s customers, Plum, an employee benefits platform providing group medical cover for organizations in India, implemented WhatsApp to improve customer experience and streamline claims processing using an automated WhatsApp bot.

Since the Launch of the conversational service, 80% of all claims have been processed via WhatsApp, leading to improved user experience, team efficiency, and reduced costs.

From a more eCommerce note, Antony Chacko, founder of Alpha Marketer, an agency specializing in WhatsApp conversational marketing, emphasizes the power of messaging apps as a way of providing continuity. He argues that most eCommerce businesses experience an 85% cart abandonment rate because people have doubts and don’t have a shop assistant at hand to resolve them. Abandoned cart often means closed browser tab. However, “if you have a platform like WhatsApp, you will start a conversation. And the conversation, even if people abandoned the website, you can carry over [to] their phone.”

A web chatbot can’t quite solve the issue as a mobile bot, as once that webpage is closed, it’s difficult to get the person back and revive the conversation, even if you have obtained their e-mail. On the other hand, “with WhatsApp, the beauty is it's 24/7, and you have the phone number to follow up the next day or next week or next month.”

That said, mobile chat platforms offer businesses communication opportunities between you and your existing/potential customer that aren’t quite possible with any other channel, such as continual one-on-one personalization and asynchronous communication at the convenience of the consumer. 

How does Conversational Commerce Really Work?

Conversational commerce and conversational commerce advertising can work for your business in a wide variety of ways. Its impact depends on the conversational format and use case you choose to pursue.

Live Chat vs. Messaging Chatbot

First and foremost, conversational commerce strategy is defined by the conversational format, which can rely on:

• Live chat
• Chatbot
• Combination of the two
  

Naturally, live chat allows you to provide a more personalized service, but it’s also more labor and resource-intensive. On the other hand, using a chatbot offers the relief that comes with automation and the 24/7-availability perk but requires a more technical application. 

Neither of the two choices is more right or wrong, and which one will fit you better largely depends on your intended use case. For instance, chatbots might be particularly useful for launching conversational marketing campaigns or answering FAQs. However, live agents are more suitable to handle more serious complaints or bigger purchases. That’s why many companies find the combination of chatbot and live support the best possible solutions as the bots take care of the simple and straightforward cases and free the support and sales agents’ time to deal with more complex issues. 

AI Chatbot vs. Rule-Based Messaging Chatbot

Another defining feature of a conversational commerce strategy is the type of automation you pursue. Your messaging bot can rely on artificial intelligence (AI) using natural language processing (NLP) or use the rule-based structure that guides users through a decision-tree type of conversational journey. 

When thinking of chatbots, most people jump straight on the AI line of thought. Sure, NLP allows for more natural conversation as the users can type their inputs freely. On the other hand, rule-based bots provide more structure. Choosing options might not feel completely natural within a chat, but it’s a great way to minimize confusion, doubts, or misunderstanding from the interaction and increase the task completion rate. 

Whichever way you decide to go, it’s important you don’t overthink and overdo it. From his experience working with many clients, Anthony Chacko warns: “Initially, many people make the mistake of building a super chatbot, which is like a hundred notes, and it ends up breaking. So rather, keep it short and observe how people are responding to it and closely monitor the chat. [Then] craft conversations based upon that — it’s an iterative process.”

The important thing to remember is to ask questions first and then offer the right recommendation. 

Use Cases and Examples

The term conversational commerce in itself implies the very much transactional and revenue intent in the use of messaging apps. Still, the ways you can use messaging apps to reach that goal vary greatly. 

The most common and perhaps the most spread of messaging app business use cases so far is customer support, where it consistently earns the highest CSAT scores from all the channels. 

However, messaging apps can be actively used to:

• Boost awareness and engagement through niche content, competitions, quizzes, etc.
• Nurture leads
• Introduce and promote products
• Offer personalized product or service recommendations
• Collect qualitative feedback
• Process transactions
• Delivery tracking
• Etc. 
  

For instance, as recently reported in Vogue, Triya, a Brazilian fashion and beachwear brand, grew annual sales five-fold on Whatsapp after using the messaging app to handle customer requests, send order information, receipts, and tracking numbers. 

Chacko mentions another great example of leveraging messaging app in business which his company creates for clients with a very niche and limited product offering (max. ten products) — building an entire e-commerce store on WhatsApp. They create a chatbot that brings their entire online store to the messaging, “and when people interact with the chatbot, for each product, we show a demo video, plus all the instructions, key FAQs, and we are able to support it with multimedia, both images, and videos.” 

With more and more messaging platforms opening to businesses and adding features that support conversational commerce, there are really no limits to the ways you can leverage your presence on the messaging app used by your target audience.  

Which Messaging Channel is Best for Your Business?

Well, it’s pretty obvious that WhatsApp and Messenger hold the majority of the overall market share. And WhatsApp is by far the leader: 

Furthermore, the pandemic gave all the messaging apps quite a push. Though, according to consulting firm Kantar, WhatsApp, once again, is the messaging app that experienced the most significant boost in usage during the pandemic — 40%. When looking at some regions separately, the growth in use is even more staggering. For instance, Spain experienced a 76% increase in time spent on WhatsApp.

When choosing the messaging app to launch your conversational commerce strategy, you need to look at regional preferences because the app popular in your target market might differ from the worldwide leaders. The most common examples are China which is ruled by WeChat, and Japan, where Line rules the messaging domain. 

What’s the Future of Conversational Commerce?

Sure, pandemic inflated usage numbers after locking us all in our homes. While the actual daily number of sent messages might never be as high as it was in quarantine, the adoption won’t go backward. People won’t rewind and forget. The pandemic simply served as a nudge for consumers of all ages to embrace the convenience, speed, and personalization messaging brings to their online shopping experience.

Conversational commerce is not a passing fancy and is likely not only to continue reshaping eCommerce but set new industry and marketing standards for years to come.

Want a glimpse of the future? Check out the trends and predictions about the future of conversational marketing.