Understanding Conversational Commerce

Ever since businesses started using social media to interact with target audiences, it’s given birth to a large number of different trends in marketing, sales, and the world of business in general. Among them, the latest one is conversational commerce which has changed not just the way businesses interact with their consumers but also revolutionized the way we constantly use social media and other messaging apps to interact with businesses.

What is Conversational Commerce?

Conversational commerce is the intersection of messaging apps and shopping. It refers to the trend toward interacting with businesses through messaging and chat apps like Facebook Messenger, WhatsApp, Talk, and others. This could be to ask questions, get recommendations, or even make purchases directly within the conversation.

Conversational commerce can also involve other technologies such as voice assistants (like Amazon’s Alexa, Google Assistant, or Apple’s Siri), chatbots, and virtual shopping assistants. The goal is to enhance the user experience, offering a more personalized and efficient customer journey.

The main advantages are:

  1. Convenience: Customers can make a purchase from anywhere without needing to navigate a complex website or app.
  2. Speed: Conversations can happen in real time, resolving issues or making sales more quickly.
  3. Personalisation: Through AI, businesses can better understand customers’ needs and provide tailored recommendations.
  4. Engagement: Interactive and conversational interfaces tend to engage customers more than traditional methods, creating a better relationship between brand and consumer.

By 2023, conversational commerce has grown significantly, as more and more businesses adopt these technologies to provide better customer service and improve sales. However, there are also challenges related to data privacy and security, as these conversations often involve sharing sensitive personal information.

History

A simple term, coined in 2015 by Chris Messina, Developer Experience at Uber, conversational commerce refers to the act of using messaging apps such as Facebook Messenger, Whatsapp, Instagram DM’s, WeChat and more by businesses to interact with their target audience. This is done to facilitate communication with clientele for certain platforms and one can expect to take advantage of a vast number of services through it as well.

For example, if a business has a social media page on Facebook where they announce sales or latest offerings, it is more natural for the target audience to simply click on the message button of the page and ask for more details or place an order.

Facebook Messenger not only allows one to coordinate with the page, it also allows users to mark dates in their calendars. This feature enhances the usability of Facebook Messenger since you can order and mark the dates of delivery with one tap of your smartphone.

Nowadays, various businesses have even adjusted their marketing strategies by including a call-to-action that says ‘Inbox Us to Place an Order’ or ‘Inbox Us for More Details,’ as well as including a number that is specifically meant to be used with Whatsapp.

The Success Behind Conversational Commerce

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Understanding Conversational Commerce 4

In hindsight, this trend should have been predicted with ease and many businesses did pick up on this factor, offering these services before the term even got coined in the first place. Conversational commerce doesn’t always mean one making a sale. It could be anything, including the use of platforms like Slack or even the chat box with an AI attached on the other end.

Facebook-owned Whatsapp made their services completely free removing their annual charges of a fee of $1 for their users. While there are many who wonder how sound this decision is, keep in mind that Whatsapp has an unfailing 900 million users across the globe.

Questioned on this decision, WhatsApp made a statement further explaining the decision by stating that:

“Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from. That could mean communicating with your bank about whether a recent transaction was fraudulent, or with an airline about a delayed flight. We all get these messages elsewhere today — through text messages and phone calls — so we want to test new tools to make this easier to do on WhatsApp, while still giving you an experience without third-party ads and spam.”

The success behind conversational commerce has reached to such a large scale that businesses are willing to invest and nurture this trend. With so much progress made in just a year, it’s interesting to see how this will develop, given more time and room to grow.

Current state

By 2021, conversational commerce had gained significant traction and become an essential part of many business strategies. The use of artificial intelligence (AI) for automating customer interactions had advanced significantly, making the interactions more natural and personalised. Companies use chatbots and voice assistants to provide round-the-clock customer service, answer frequently asked questions, and even process transactions.

Moreover, the COVID-19 pandemic, which started in 2020, accelerated the digital transformation of businesses. The restrictions and lockdowns led to an increase in online shopping, and businesses had to find ways to engage customers remotely. Conversational commerce became an effective tool for this, offering customers a convenient and personalized shopping experience from the safety of their homes.

By 2021, advancements were being made in AI and natural language processing, making chatbots and voice assistants even more sophisticated. They were becoming capable of understanding and responding to more complex queries, providing more personalized recommendations, and even detecting and adapting to a user’s mood.

The integration of conversational commerce with social media platforms was also increasing. Social media platforms like Facebook and Instagram integrated shopping features, enabling users to make purchases directly within the platform.

However, there were challenges too. Privacy and security were significant concerns as these interactions often involve the sharing of sensitive personal information. The misuse or mishandling of such data can lead to serious consequences. Furthermore, while AI had advanced considerably, there were still instances where it failed to understand and respond appropriately to user queries, leading to frustration and dissatisfaction.

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