What is conversational commerce?
‘Conversational commerce’ has become an increasingly familiar buzzword within eCommerce over the last ~5 years. As a term it was coined by Uber’s Chris Messina in a 2015 Medium post, who thought it would become the “primary way in which people transact on their mobile devices.”
Citing Facebook’s $22bn purchase of Whatsapp andthe rise of tech giant-manufactured voice assistants (Apple’s Siri, Microsoft’s Cortana, Amazon’s Echo), Messina heralded the dawn of new era defined by “convenience, personalisation and decision support while people are on the go”.
At its heart, conversational commerce is about the intersection (and blurred lines) between communication and shopping. Real world use cases include brands speaking to their audience through channels like SMS, WhatsApp, social DMs or voice - and customers being able to ask a question, leave a review, check order status or make a purchases via these platforms.
And because such channels are where consumer audiences already tend to hang out in their droves, the opportunity to leverage them to build relationships with customers, and ultimately sell to them over a long period of time is potentially huge.
It’s a money maker early adopters have tried to capture, with varying degrees of success. Luxury fashion brand Burberry was among the first to use Facebook Messenger to share content, build brand engagement and drive revenue.
The value here is obvious, but it’s not quite as simple as just picking up the phone and messaging all of your customers. For conversational commerce to fulfil it’s true potential, brand-consumer interactions have to be just that - conversational, which by its very definition demands a two-way dialogue.
How does conversational commerce work at scale?
If a customer has a query about the product they’re interested in buying, for example, a vendor must have some means of replying and moving them towards purchase. Naturally, that is tough to do at scale, and that’s where bots have come into play.
Automated chatbots that detect customer intent, like a customer asking a particular query, then providing a reply to solve the issue without human intervention had great potential.
Like any disruptive tech, there are trailblazers in the space that break down the door for everyone else. Domino’s Pizza launched their delivery order bot via SMS in 2016, quickly followed by the likes of Taco Bell on Slack and 1-800 Flowers through Facebook Messenger.
These early movers sparked an arms race for consumer brands dashing to exploit with this new frontier of bot-driven customer interaction. A year after his original piece coining conversational commerce as a phrase, Messina argued the following:
“The net result is that you and I will be talking to brands and companies over Facebook Messenger, WhatsApp, Telegram, Slack, and elsewhere before year’s end, and will find it normal.” - Chris Messina (2016)
From the perspective of 2021 that statement looks a little premature - so what happened? Why didn’t the ecosystem evolve as envisioned? Why haven’t customers been regularly chatting with their favourite brands via the same social platforms they speak to their friends on?
Chatbot conversations fall short
Firstly, the reality was that chatbot technology wasn’t good enough during the mid-2010s. Their capability to field a wide range of customer queries was limited, meaning they still relied heavily on human interaction to perform. Once dialogue went beyond the small number of possible scenarios that a bot could handle, a human had to jump in to guide the conversation back onto a specific flow.
The experience for the customer was also poor, and you immediately knew you weren’t talking to a real person. The little tells like full stops out of place, lack of colloquialism, personalised language and reactions to your inputs being rigid all distanced the customer from the seamless experience they were after. Automated bots couldn’t deliver the same sophistication of experience that a human CX rep could, and therefore, conversations became costly as they scaled. The ROI’s couldn’t keep up and the hype started to wain.
Customer utility found wanting
Secondly, the actual utility to the customer (ability to purchase, ask questions one-to-one, share reviews etc) was good - but not great. You could ask a question about a product and get a good response, but when you wanted to purchase it from your favourite store you were redirected back to the eCommerce site to complete the transaction.
Whilst you could receive order tracking details via SMS or WhatsApp, leaving a review meant logging in to a separate online portal, or sending an email. This friction-filled user experience meant conversational commerce has failed to become a mainstay in consumer lives as rapidly as many thought.
This has been reflected with the adoption curve for the technology. The innovators (~2.5%) who used a conversational channel to speak to customers created a novel experience, but not one that had widespread appeal. There was an influx of press, investment and hype in the space, which had largely died down towards the end of 2016/17. Which begs the question, what next?
The present and future of conversational commerce
Although progress has been slower than once expected, things have really moved on in recent years. Natural language processing has developed significantly, to the point where chatbots can handle increasingly complex interactions with less human intervention.
Custom automated flows sent to specific customer segments or individuals now add a sense of personalization to previously stale bot flows. Brands can send order confirmations, abandoned cart flows, cross sell and replenishment requests in their own colloquial tone of voice, enabling retention and revenue-building conversations to take place at scale.
User experience stumbling blocks have also been addressed and slowly overcome. Innovative payment models have evolved to integrate more seamlessly into conversational channels, removing the friction that had plagued the buying journey.
Multiple repeat payments can now be taken either in-channel, or in one-click via a pre-populated checkout link, whilst reviews can be collected with a simple reply from the customer side. Qualitative and quantitative insights taken from all of these high quality customer interactions are also being fed back into eCommerce stores, enabling them to iterate and improve their offerings.
All this means that the early promise of conversational commerce is starting to be realised. Brands are now driving real, tangible ROI through increased conversion and retention metrics via two-way conversations at scale. Interactive channels like SMS, WhatsApp, social media DMs and Slack communities are increasingly being added to the eCommerce Manager’s tech stack, alongside more traditional methods of communication like email and social ads.
Blueprint is transforming the future of eCommerce by empowering brands to scale businesses with authentic, two-way conversations with customers at scale. If you’re a scaling eCommerce store looking to supercharge your retention and revenue, check out what we’re building.