What is Conversational Commerce? (Updated for 2023!)



November 5, 2022


Conversational Commerce

Bonus Material: Conversational Commerce eBook (15 page PDF)

Conversations are essential to building relationships and a successful business depends upon strong customer relationships.

Every time we meet someone new, we use our words to shape and craft the message we want to deliver. When you interact with your customers, the same narrative holds true. As our digital world continues to grow, how do we bridge our real world conversations into an online experience? Meet Conversational Commerce.

What is Conversational Commerce?

Truth be told, the term ‘Conversational Commerce’ isn’t new to the industry. 

It first gained popularity in a post on Medium published back in 2014 by Chris Messina, a product designer alum of both Google and Uber. In his words, the term was all about “delivering convenience, personalization and decision support while people are on the go, with only partial attention to spare”.

Simply put, Conversational Commerce is automated technology that allows consumers and brands to engage with each other through chat- or voice-based conversations. This technology is powered by rules and, in some cases, artificial intelligence (AI) and machine learning. 

Conversational Commerce can take place across any channels your customers like to use - on your website, in messaging platforms, on social media, or even on livestreaming platforms.

By creating a conversational commerce strategy and leveraging the right technology, brands have the power to improve the customer experience and buying journey by being there to assist their customers 24/7 and provide personalized recommendations.

Imagine what 24/7 real-time customer support can offer your customers - the convenience of quick access to answers on complex or simple questions on anything from product to order related topics.

The eCommerce customer journey is complex and online platforms aren't prepared for it

As of September 2022, the average conversion rate for an e-commerce site was just over 2%. That means only 1 out of 50 visits to a site lead to a sale. It’s only gotten more difficult to entice visitors to purchase as well. It costs more to acquire a customer in 2022 than in the year before.

From IRP

With online shopping, you have to find your own way around, and, typically, there's no one there to provide assistance in a timely manner. With brand interactions now happening across multiple channels such as social media, responsiveness becomes even more difficult. To no surprise, this results in lower conversion rates.

To make your eCommerce store more successful overall, you'll need to optimize for a better experience, one that goes beyond a typical set of nicely designed web pages and catchy images on your social media feed.

Conversational commerce tools ensure that you're always at the right place at the right time when it comes to the customer experience.

Consumers prefer to communicate via messaging, but which channels?

Chat messaging

Between 2019 and 2021, the average smartphone screen time increased by 50%. That's an average of 4 hours a day spent on the phone!

75% of the time consumers are texting and checking social media when on their mobile device, with a message being responded to in at most 2 minutes.

It's no surprise that 3 out of 4 consumers would much rather contact a business through social media or a messaging app, than pick up the phone to call them.

Brands have used WhatsApp Business, Facebook Messages, and Instagram DMs to talk to their audience as a form of conversational marketing.

Shoppable videos and livestream commerce

Live selling through social platforms first became a hit in China and is now picking up steam globally. While major networks like QVC have always sold through video, social media has made it accessible for even small businesses.

Selling through video is one of the biggest opportunities a brand has right now to grow a community that's easy to engage with. Live selling can be done on Facebook Live, Amazon Live, Instagram Stories and Tiktok Shop, among many others.

You can sell products directly through the platform and take questions while streaming live. These videos have links to the products and make it easy for your viewers to buy what they see while also getting a conversational experience.

Shoppable videos, on the other hand, tend to be static (hence, not live) and are pre-recorded, much like any other IG reel or Youtube video. Shoppable videos, however, usually have clickable elements like hashtags that take you to an e-commerce page for a product.

YouTube is rolling out two new ad types in order to help marketers  capitalize on the rise of online video. | Youtube ads, Youtube, Video ads

Voice messaging
We've even seen voice assistants being used for shopping - Amazon Echo users can use their devices to buy products from Amazon's website by speaking into the device instead of typing in what they want to buy.

However, as of December 2021, roughly 50% of US adults have never tried voice shopping, so there’s still a lot of room for consumer adoption.

Enterprise marketplaces are still betting big on voice-based shopping, with Walmart, Target, Carrefour, and Ocado having partnered with or acquired conversational AI platforms. We can expect voice messaging to be easier for even small brands to use in the future.

How are conversations impacting the way shoppers purchase online?

Conversations are empathetic, natural, authentic, and deep-rooted in emotion - and that's exactly what consumers look for when they're shopping online. 

In today's world, consumers are posting on social media, tagging products they love, and sending direct links to their friends or family group chat.

Most importantly, consumers now live in a world where they expect to engage with brands directly and in real-time.

Let's use an example:

Emily receives a Facebook Messenger message from one of her favorite fashion brands featuring a pair of shoes she absolutely adores. She shares this message with her friend Stephanie, adding the following message, "You have to see these shoes! They'll look amazing with your little black dress!". 

Stephanie clicks the link in the message and sends a question directly to the brand's Facebook Messenger bot, "Do you have these in size 8 in red?"

Stephanie has now engaged in conversation with the brand and expects a quick, friendly response. Unless brands are willing to staff these chat apps 24/7, they'll need to employ a chatbot to deal with these types of questions.

How does Conversational Commerce work?

There are four types of conversational experiences you can deliver:

  1. Proactive/Automated (e.g. welcoming returning customers, handling stock-outs). 
  2. Reactive/Automated (e.g. helping customers find products, preventing abandoned carts, providing pre-sales support).
  3. One-to-Many/Manual (e.g. sending message broadcasts to customers to announce a special promotion or event).
  4. One-to-One/Manual (e.g. engaging in conversation with an individual customer after they’ve had their order delivered).

Different conversational experiences can be offered at different stages of the customer journey. Steps in a typical buyer journey that can include conversational elements are:

It’s important to customize your messaging to suit the stage in the customer journey and to reflect your brand voice. Conversational Commerce platforms like Maisie enable you to customise pre-built, use case specific conversation templates to reflect your brand voice.

Chatbots enable conversations at scale

See the source image

Imagine what a technology that acts as a personal shopper for your customers - providing personalized recommendations and support and offering intelligent promotions and discounts - can do for eCommerce business.

Chatbots are automated software that can initiate conversations with and also respond to questions from customers on your website, social media channels, or in messaging apps like WhatsApp.

Chatbots empower retailers to engage with customers in real-time, across channels and at scale, both proactively (based on customer behaviour) and reactively (in response to customer queries).

In a competitive world, brands cannot afford to scale their staffing to support real-time customer engagement at the level that chatbots can perform. This makes chatbots both a time- and cost-effective solution. 

Chatbots also provide a great user experience - for example, consumers often prefer using online chat over picking up the phone to call customer support. Chatbots allow your business to efficiently address issues or find ways to upsell or cross-sell, while also using the channels that the customer prefers or is more comfortable with.

Chatbots can be used in a variety of ways to help retailers engage with consumers throughout their buying journey from product discovery to purchase to after-sales support.

Why you should have Conversational Commerce platform for your online store

In summary, conversational commerce is about providing a better experience for your customers, thereby enabling you to sell to them more effectively. Instead of forcing your customers to come to you, conversational commerce enables you to go to where they are and engage with them in the manner they prefer. The flow-on benefits for your online store are many:

  1. Increased sales revenue from higher conversion rates 
  2. Greater engagement with customers
  3. Higher customer satisfaction
  4. Improved customer retention, loyalty and word of mouth

Conversational commerce is here and is starting to take the ecommerce industry by storm. Make sure your business doesn’t get left behind!