How Conversational Commerce Transforms The Shopping Experience

October 20, 2021
Indira Srinivasan
Reports

Commerce, be it in its conventional form or electronic mode, keeps conversation central to its activities. Traditionally, most of these conversations used to take place within the retail outlet, where the sales team engaged customers face-to-face. In-store retail sales fell dramatically worldwide during the pandemic spurred shutdowns and isolation. There was a 25.7% surge in retail eCommerce in 2020, reaching $4.213 trillion and it is expected to grow further 16.8% in 2021, to $4.921 trillion and conversational commerce emerged as a relatively new, interactive digital medium to engage customers more meaningfully, providing a unique shopping experience to them throughout their shopping journey.

Defining Conversational Commerce

Conversational commerce is entirely different from a purely commercial, sales, or business-oriented talk, where the sales personnel try to provide product details and try to convince the customer to buy. Conversational commerce varies from a targeted ad, and personalized email, as it is an interactive communication medium that provides live and instant information. It is a combination of chatbots, artificial intelligence, and shopping to create personalized one-to-one transactional experiences with consumers. It does not demand customers to check emails or download apps. It rather engages customers using existing and preferred communication channels, like a chatbot, SMS, or Facebook Messenger. In total, conversational commerce is a combination of technology that enables live, two-way customer interaction, and shopping.

Why should Brands Consider Conversational Commerce

Consumers are shopping online and offline today and they are demanding more personalized information on discounts, offers, product updates, and availability, instantly regularly, as they want to save money and time. According to Business Insider, only 22% of the customers are getting such personalized information and a vast majority is not happy with the way they purchased a product or a service. 44% of customers that received personalized product information are revisiting the brand for repeated purchases and conversational commerce is successfully leading to enhanced brand loyalty.

How do Conversational Commerce Engage Customers

Conversational commerce provides a seamless user experience by capturing a shopper’s attention, before planning a shopping trip. Right from creating brand awareness, it walks the customer through various stages of shopping experiences. It takes up product research for the customer and offers information on product size, price, color, utilities, and product/service qualities, features, and availability of various alternative products. It encourages customers towards conversion, leading to a purchase, and offers post-purchasing services.

Brands can equally employ these apps for sending product information, recommendations; establish an intimate conversational channel to attend to their queries, complaints, and grievances. While interacting with the customer, businesses can cross-sell, and upsell, by placing the best products that match the customer’s expectations and become personal shopping assistance like in a brick and mortar shopping.

Best Conversational Tools

Conversational tools are used to circulate product-related information constantly to create a need in customers to buy it.

Awareness

Brands that have realized the importance of personalized messages have invested in technologies to scale such as one-to-one consumer conversations to send product recommendations, updates on discounts, waivers, and offers. Brands must consider providing multiple consumer touchpoints to ensure the brand’s reach to the target audience at the perfect moment in their consumer’s shopping journey.

Research

Customers generally like to know about a wide range of product choices and would like to compare their features, including pricing, utility, warranty period, product installation, and other services. Companies can engage machine learning tools that process language in natural ways to provide texting or voice assistance. These technologies create a feeling that you are interacting with a human being. Both chatbots and voice assistants fall within the conversational UI category and create a lasting purchasing experience. Online shopping platforms are adding innovations constantly to provide a unique shopping experience to the customers. Adoro, an online fashion network, for example, engages a chatbot that assists customers’ search needs instantly. It responds to customers’ commands, looks for a product, and places multiple alternatives to choose from. If a customer places a command to search for classic Wedding wear for women, it places several options for the customer to select.

Considering a product/ service for Purchase

When customers have a wide range of product options to choose from, they seek assistance in finalizing them.

An SME looking for funding to expand its business may have several institutional options. Yet, it would generally look for loyal banking services that facilitate speedy and timely services with competitive interest rates. There may be challenges like products with insufficient or no insurance coverage, huge processing charges, hidden fee, legal implications, and sharp payment deadlines. Conversational commerce is handy in placing various alternatives that suit customers’ specialized personal needs. JD.com, China’s largest eCommerce retailer has developed a conversational commerce platform on WeChat, a Chinese conversational app that lets customers borrow, lend, invest, shop, and transfer money online.

Purchasing Decisions

Since most of the conversational commerce takes place through automated tools, brands that deployed omnichannel strategies to engage customers have made 102% progress in their conversion rates in 2020. By 2021, mobile commerce rose to prominence and over 50% of the web traffic is routed through mobile. As a result, many companies have launched SMS marketing, texting, and email marketing strategies because responses to the text messages are highly effective, and more instant when compared to answering emails, which is generally taking 3-4days. Instead, chatbots can send instant messages to the customer on their mobile phones to get responses within 3 minutes.

Customers can get a wholesome shopping experience, including payments to purchase a product, using their mobile, without ever leaving the platform.

Post-Purchasing Experiences

Customers do ponder about their purchasing decisions, by carefully weighing every single penny they have spent on the product or service. Interactive commerce tools can clarify the shopper’s apprehensions, if any at any stage of their shopping journey, including after the product purchase.

Major Communication Channels Used for Conversational Commerce

Conversational commerce primarily relies on voice or text-based chats. Hence, automated communicational apps and tools are frequently used for this purpose.

Chatbots

Chatbots are automated throughout and they can engage multiple customers at a time, rendering a relentless job throughout the day. What the enterprises need to do is to make a thorough and elaborate exercise of possible challenges the consumers may face across their shopping journey and be ready with suitable answers. Companies generally provide frequently asked questions as Q & A tabs on websites. They are not interactive sessions. Yet, based on such questions, companies can prepare content for a live chat. Chatbots, unlike web messages, engage customers with warmth, wit, and humor with great spontaneity. They are adding emotions through emojis, music, and sounds to make it more attractive. It is always desirable for companies to place these services under the supervision of back-end service staff to react immediately, in cases when chatbots are unable to react to a question that is not included in their memory.

Messaging Apps

It is difficult to judge whether messaging apps have changed the way customers shop or conversational commerce has turned messaging apps pivotal to their operations, as they are integral to modern-day eCommerce operations. Facebook’s Messenger, Whatsapp, and Snapchat are the earliest platforms to embrace these features. While brands like Walmart and Alibaba have partnered with messaging application Tango, shopping app like Shopify has a deal with Facebook Messenger to promote interactive commerce. Live interaction via apps is driving more customer satisfaction as, 73% of customers are happy interacting through a messaging app when compared to 61% of customers, who preferred checking mails, and 44% of customers, receiving telephonic messages.

Messaging apps are meeting the shopping needs of customers in the below-mentioned ways.

A communication channel to engage customers with a business in private.
To make payments once the product purchasing completes ( E.g Facebook Messenger for Business and Snapchat’s Snapcash).
Acting as a virtual personal assistant to serve customer needs
Collects customers’ shipping addresses, personalized customer interests, streamlines payments, monitors delivery process, and maintains customer relations.
Facebook M, for example, assists customers, right from product discovery to Payments through Facebook Payments.
Acts as a virtual employee for small business that operates with minimal staff in accomplishing several time-consuming tasks, like delivering campaigns.
Meet the content needs of the brands and customers. E.g., Snapchat has added search features, along with photo-share and Buzzfeed added a Whatsapp button on mobile to attract more clicks.
Quartz’s interactive app, ‘A Tidbit of News’ lets users read news on conversational mode, an innovative experience for readers where a bot responds to a customer’s request for news. It replies to their comments, and the chat interface will offer an exciting interactive user experience.
Brands can exploit its potentialities to deliver more personalized content to users.
Messaging/chatting apps for diverse audience needs

With 1.25 billion active monthly users, WeChat allows its users to perform various tasks through its app, including, but not limited to, booking a taxi, ordering food, making payments, buying flight or movie tickets, playing games, making investments (e-wallet), meeting people and many more.

Voice-Based Conversational Commerce

Marketers can provide customers with a seamless shopping journey across the channels by deploying automated ML and AI tools to connect with consumers. Companies have started using Amazon’s Echo, Google Assistant, Cortana, Siri, or Alexa to promote voice-based search, sales, and purchase. Linc’s voice assistant, Shopify Plus, and BigCommerce are some of the prominent examples of voice-based commerce. 128 million people in the US used a voice assistant at least monthly in 2020, up 11.1% from 115.2 million in 2019. Apart from smartphones, and smart speakers, conversational devices are present in cars and homes as smart TVs, wearables, appliances, and smart home components. It is part of the US mainstream commerce today, and people of all ages, including children, millennials, elders, and Gen Z are using them for work, play, education, entertainment, and business.

Brands and Platforms Integrated With Conversational Commerce

Shopify offers a wide range of conversational commerce services from product discovery to purchase and delivery.
Shopify plus for business is meant for enterprises that earn revenue of more than $2000, offer advanced online shopping features for customers, designed for higher volume stores.
Omnisend, a platform integrated with conversation commerce tools handles the entire customer shopping journey and performs tasks, including marketing strategies.
prAna is a brand that sells sustainable clothing has made conversational commerce an integral part of its marketing strategy.
eBay deployed voice-assisted conversational commerce. It uses Google Assistant for its eBay Shopping Assistant program.

Future of the Conversational Commerce

By 2025, a 590% surge in spending on conversational commerce is projected and the market for a chatbot is expected to reach $145 billion. Chatbot occupies 50% of conversational commerce spend in the years to come.

Conclusion

Conversational commerce has transformed the way consumers are shopping today and it is offering convenience and great flexibility, along with personalized feed on shopping. It is equally opening several avenues for the business to engage customers in more personalized ways by providing complete personal shopping assistance. There is a bright prospectus ahead for conversational commerce, as it is emerging as an effective tool to maintain customer relations using text and voice-based conversations in a more personalized manner.

Tags: conversational commerce ecommerce

Indira Srinivasan

I started my career as a program producer for women and children in AIR FM Radio as a freelancer and progressed for the past 27 years serving academia, industry, and research as faculty, communicator, author, and writer for digital media platforms. I have spent my past 8 years as Science Communicator, writing articles and blogs on social media platforms. I am an ardent book and music lover and fond of singing Indian classical music. My research interests are on ethnography and I love to write on topics including but not limited to climate change, environment, culture, and at present digital monetization.

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Digital Monetization Update – February 17, 2022

1. Google Has New Publisher Program For Post-Cookie Era (AdAge) In the post-cookie era, Google is launching Encrypted Signals for Publishers that allows websites to interact with online advertising identifiers in Google’s ad platform. Encrypted IDs, according to ad tech experts, might be a lifeline for publishers in programmatic advertising, which is how sites serve ads to users who do identify themselves. 2. Google Plans Privacy Changes, Promises Not To Be Disruptive (TheHill) To protect user privacy, Google has announced that it would begin deleting ad trackers from its Android operating system. The suggested changes include ultimately eliminating advertising ID, a unique identifier provided to each Android device that allows marketers to create customized profiles and offer targeted adverts. 3. Spotify Acquires Two Podcast Tech Firms Chartable And Podsights (TheVerge) Spotify has announced the acquisition of Chartable and Podsights, two of the most well-known podcast marketing and ad attribution firms. Podcasters and networks may utilize Podsights and Chartable to insert tags in their broadcasts that monitor who listened, if they heard an ad, and whether they took action after hearing it. 4. Twitter Lets Developers Add Labels To Bot Accounts (TechCrunch) Twitter announced a new label that would allow the service’s “good bots” to identify themselves. While the term “bot” has a bad connotation, Twitter observed that there were good bots that automatically sent out vital information. These “good bot” labels are now available to all automated account owners. 5. Discovery+ Ad-Lite Option To Launch In The UK And Ireland (CampaignUK) Following the introduction of the service in the United States, Discovery UK has announced an “Ad-lite” option for users in the United Kingdom and Ireland on its Discovery+ platform. The company claims to be the first subscription video-on-demand service in the UK, offering a lower membership rate in exchange for “limited” ad exposure. 6. India’s Biggest Short Video Platform: MX TakaTak Merge With Moj (Variety) MX TakaTak of Times Internet and Moj of ShareChat are merging to create India’s largest short-form video platform, in a country where TikTok remains banned. MX TakaTak-united Moj’s platform will have 100 million creators, over 300 million monthly active users, and nearly 250 billion monthly video views. The deal is worth $900 million in cash and stock. 7. Russia To Impose Advertising Ban On Foreign Tech Firms (Reuters) Russia warned it would begin enforcing advertising bans on huge international tech firms that do not have formal representation in the country by March, as Moscow seeks tighter control over the internet. Since July 2021, international social media firms with more than 500,000 daily users have been required by Russian law to open offices in Russia. 8. Canada Uses Emergency Act To Rein In ‘Freedom Convoy’ Crowdfunds (Engadget) After weeks of occupation paralyzing the nation’s capital, Prime Minister Justin Trudeau invoked Canada’s Emergencies Act in response to the “Freedom Convoy” rallies. Trudeau said he will utilize the Act to quell the protests in many ways, including expanding Canada’s money-laundering rules to cover crowdfunding sites and bitcoin transactions.
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Digital Monetization Update – February 10, 2022

1. Tumblr Launches New Monetization Feature To Help Bloggers (TechCrunch) Tumblr Tips is Tumblr’s second effort at monetization, allowing bloggers to accept one-time payments from their fans. Tipping is available on the web, iOS, and Android; but Tumblr will not use Apple or Google’s own billing systems to allow mobile tips, and creators will not be charged additional fees of 30%. 2. Youth Spend More Time With Online Video, Gaming, Social Media (MediaPost) According to a new Hub Entertainment Research, young media consumers continue to spend more time with online video, gaming, and social media and less time with traditional screen-based TV shows and movies. Gaming (25%), online videos (19%), and social media (13%) account for nearly 60% of “screen-based leisure time” for 13- to 24-year-old viewers. 3. Peach Acquires Advalidation To Empower Online Publishers (AdTechDaily) Advalidation, a SaaS platform focused on enhancing ad experience and compliance, has been acquired by Peach, a global leader in video advertising workflow and delivery. It is a strategic effort to give online publishers and media owners more control over their ad workflows. 4. Yahoo’s Future As Private Company Backed By 900M Users (MediaPost) Yahoo’s content is available to more than 900 million global users monthly throughout Yahoo’s network of companies, providing it with a unique perspective on first-party data through products like search, connected television (CTV), and email. Last year, Yahoo’s demand-side platform (DSP) grew by 64% and supply-side platform grew by 40%. 5. Twitter Advancing The Conversation On Social Media (AdAge) Twitter is reimagining public conversation to be more healthy, useful, and accessible to all. It is adding the feature of proactive prompts, which will make users think twice about the language they use or read the articles they are posting carefully before sharing them. It is also removing misinformation from Twitter using labeled tweets. 6. WarnerMedia, Discovery Get US Nod To Create New Media Giant (TheVerge) According to a filing with the Securities and Exchange Commission, the merger of Discovery and WarnerMedia has cleared an antitrust assessment by US government agencies. Once finalized, the merged company will be one of the largest media conglomerates in the US, combining Warner Bros.’ TV and film holdings with Discovery’s vast library of TV programs. 7. Gaming Is Antitrust Regulator’s Blind Spot (Axios) Gaming has become one of the world’s major media industries, but it has yet to endure the scrutiny that other tech sectors do over how its business methods harm competition, customers, or workers. The biggest video game firms are devouring the competition quicker than ever before, despite substantial opposition from antitrust regulators. 8. Meta’s Stock Slide Highlights Tech Antitrust Bill Criteria (Bloomberg) Meta’s sliding stock price looked to provide it a silver lining, exempting it from the harsh antitrust sanctions under consideration in the US House of Representatives. On Tuesday, Meta was valued at $599 billion, following a stock price drop that began when the firm announced that its flagship app’s daily active users had dropped for the first time.
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Digital Monetization Update – February 3, 2022

1. Google Ad Revenue Surges 33% In 2021 Q4 (MediaPost) In the fourth quarter of 2021, Google’s overall ad revenue increased by 33% to $61.2 billion, above analysts’ expectations by 4%. Search advertising increased by 35% to $43 billion, and Google’s YouTube increased by 25% to $8.6 billion. YouTube’s ad dollar increases in the quarter eclipsed Netflix’s $7.7 billion in subscription revenue. 2. Meta Shares Plunge 20% As It Feels Heat From Apple And TikTok (AdAge) Apple’s recent privacy reforms and competition from firms like TikTok, might start to wear on Meta’s ad platform. Meta’s ad revenue in the first quarter of this year will be between $27 billion and $29 billion, representing a 3% to 11% growth year over year. In after-hours trading, Meta shares fell more than 20% due to the bleak forecast. 3. Gaming Companies Are Merging With Ad Tech For Real Reasons (AdExchanger) In the year 2021, there was tremendous consolidation in the ad tech industry. The combination of gaming companies with ad tech platforms is one especially noticeable little trend that is gaining traction. The objective behind the change is to replace old cookie-based technology with first-party data, which is the future of advertising. 4. Spotify Declares Itself To Be A Creator Company Now (TheVerge) Spotify announced its quarterly numbers at a particularly difficult period for the firm. Its monthly active users increased by 18% year on year to 406 million, while paid customers increased to 180 million. Spotify CEO Daniel Ek aspires to achieve 50 million creators who will profit from the platform. 5. Regulators Find Europe’s Ad Tech Industry Acted Unlawfully (Engadget) Data protection experts from throughout the European Union have determined that Europe’s ad tech business has been functioning unlawfully for years. The judgment, issued by Belgium’s APD (.PDF) and backed by authorities throughout the EU, determined that the industry’s underpinning system breached a number of GDPR standards. 6. NortonLifeLock Launches Feature To Protect Social Media Accounts (MediaPost) Norton LifeLock, a software and cybersecurity firm, announced a new feature to help users better safeguard their social media accounts against harmful attacks. In 2021, the number of people on social media has risen to 4.48 billion, accounting for more than half of the world’s population (56.8%). As the user increases, so will the number of threats. 7. Big Tech Boycotts Tend To Be Short-Lived (Axios) Boycotts of tech services have become increasingly common as political division and dissatisfaction with misinformation have grown. However, evidence shows that boycotts and the media attention they generate are usually short-lived. Even the most virulent boycotts have little influence beyond a single news cycle on Big Tech giants.
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