What Is Conversational Commerce & Why You Should Care
March 9, 2022
As a self-proclaimed Ecommerce shopaholic, I know there’s one part of the shopping experience that brands haven’t been able to figure out: a way to build a meaningful connection with me.
Sure, technology has made it possible to reach customers in more ways than ever before, but it’s how you use that technology to provide value that makes it successful.
No, customers don’t want to get spammed with meaningless emails, pop-ups, and text messages. But if you’re giving value, being empathetic, and approaching conversations with a human-first mindset, you’re well ahead of everyone else in this industry.
Out of all the tools and apps available to online stores today, a solution that stands out to me is conversational commerce technology. In my humble opinion, it’s the best tool for building long-term relationships.
The dynamic conversations between a customer and a brand feel as real as any other human conversation—that’s what makes conversational commerce so powerful.
And with all the noise online shopping has brought—to peoples’ inboxes, social media pages, and mobile phones—the brands that stand out are the ones building a real connection with customers.
In this article, I’ll dive into conversational commerce technology, how to use it, its benefits and challenges, and share an example from a brand doing it well.
What is conversational commerce?
Conversational commerce technology is a way for businesses and customers to communicate back and forth through artificial intelligence or live representatives. With it, shoppers can ask questions, browse products, or even make purchases on channels like SMS, MMS, live chat, and voice chat.
Now is the time for you to add conversational commerce technology to your business because the industry is rapidly growing. In fact, there will be $290 billion spent on conversational commerce by 2025, according to Juniper Research.
And if data isn’t enough to persuade you, even experts are talking about the importance of this technology for brands today: “Conversational commerce has become more popular as shoppers look for new ways to engage with their favorite brands and brands look for ways to develop more personal relationships with their customers,” said Kristy McCown, Commercial Director at Klarna.
It sounds advanced, but the technology is easier to use than it seems. Besides, PWC says 65% of 25-49-year-olds already speak to their devices at least once per day.
Types of Conversational Commerce channels
Now that you know what conversational commerce is and how it works, which channels can you use it with? There are four main types: messaging, live chat, chatbots, and voice chat.
Under each umbrella are more specific channels. Here are the main ones to consider for your business:
- Facebook Messenger
- Instagram Chat
- Help desk
- Customer support
- Artificially intelligent chatbots (Ada, Heyday)
- Voice chat
You don’t necessarily need to have this technology available for all channels, but at first you may not know right away which channel will have the biggest impact. This is where testing is helpful, so you can discover the best one to use for your business.
Just like everything else in the Ecommerce world, there are headwinds and tailwinds to using this technology. Let me share a few next, including how to overcome some of the challenges that brands face.
Benefits of conversational commerce
The great part of conversational commerce is it allows you to easily meet customers at every stage of the shopping journey to support them—all in real-time.
No matter where shoppers are at in their journey, they can easily initiate a conversation with a business on the channel they prefer. Whether it’s through AI or from an actual person behind the screen, the business is able to provide personalized information immediately, and customers can quickly make an informed decision about the products they’re browsing.
You can take this one step further by offering a concierge-type experience through Checkout by Link technology. This is a Bolt feature where the brand helps shoppers create an order based on the conversation, and it sends shoppers a link they can click to securely check out the products in one easy step.
Keep in mind, data shows that 86% of customers are willing to pay more for a better shopping experience, and these days more customers are expecting personalization from online brands.
“Customers have come to expect a personalized shopping experience in-store from some of their favorite brands, and we’re just now starting to see a shift in this type of personalized experience online,” said Kristy McCown of Klarna.
In addition to the personalized approach conversational commerce offers, its ease-of-use and speed are what make it so powerful for both brands and consumers.
I asked Lisa Popovici what benefits she’s seen since co-founding Cartloop, a conversational SMS platform for Shopify brands, and she shared several:
“Brands using conversational channels are increasing retention, loyalty, average order value, and ROI—while also lowering shoppers’ inbox anxiety, returns, support tickets, and costs. But the biggest benefit is being able to provide consumers that human-to-human experience they usually get while shopping in physical locations.”
There are benefits for both businesses and consumers.
Benefits for customers:
- More personalized customer support
- Quicker customer support
- Less time researching products
- More touchpoints for customers to connect with a brand
- Ability to purchase products from the chat
Benefits for brands:
- More efficient customer support process
- Increased conversions with easier discovery and shopping
- More customer data to leverage later on
- Enhanced customer relationships to drive retention
- Increased customer engagement
Despite the benefits, there will be challenges with using this new technology.
Challenges—and how to overcome them
There are two main challenges with using conversational commerce: siloed data and a lack of humanization.
Now, don’t get me wrong, this technology gives businesses a big advantage to be more empathetic with customers—if it’s done well.
I’m sure everyone has had the experience of typing to a chatbot that does not understand what you’re saying and responding with generic answers that aren’t helpful.
It’s frustrating and dehumanizing.
To overcome this challenge, make sure you’re using a powerful AI tool that can properly pick up on keywords when people are messaging with your brand. If you don’t want to go with the chatbot approach, hiring someone to manage these channels will always give your brand a way to be more human.
Another challenge is that multi-channel conversations can stay siloed.
By this, I mean the qualitative and quantitative data is spread out between all of these different channels but not connecting in one place.
What if a customer comes back and decides to message you on a different channel than before? If your conversation from Facebook Messenger isn’t synced up with your SMS, you won’t be able to help the customer properly.
When choosing a tool, pick one that’s well integrated. Gorgias is a good example.
Shopping in DMs: best practices for conversational commerce
Let’s say you’re ready to start using conversational commerce—where do you begin?
Of course, you want to be successful, so I asked Lisa at Cartloop and Elton Graham, GM of ecommerce at Los Angeles Apparel, for their top tips. Here are the five they shared:
Test the tools available and meet customers where they are
Step one before investing in any conversational commerce technology is to research your vertical and customer segments. This will help you understand which tools drive the highest engagement.
Even after you choose your channels, the testing doesn’t stop. Run A/B tests with different messaging to see what performs best. Additionally, figure out which type of customers spend the most and which channels they spend the most on.
If your audience spends more time on their phones, text them. If they spend time on social media, double down your efforts and open your DMs. Just be present and offer options. You have to meet customers where they are.
“Having the ability to pivot from channels that are not working towards the one that are bringing the best results and get into action is key to a brand’s long-term success,” explained Lisa.
Invest in reliable technology
The conversational commerce shopping experience has to be seamless. If you want to go multichannel, you need to have a brilliant strategy in place, and all of your channels need to speak to each other in order to create that holistic experience.
Conversational commerce is great in theory, but if a customer is trying to purchase something from you via SMS and they get confused, then you’re not doing your shoppers—or yourself—any favors.
Invest in reliable technology that can do what you need.
For example, giving shoppers on these channels the option to check out in just one click is one way to make the experience worthwhile.
Always add value in every interaction
According to Elton, “Every time you use conversational commerce, you should use it to add value by giving the consumer something when they choose to engage.”
This can come in the form of a personalized recommendation based on your conversation, an option to opt-in to emails for a discount, or simply following up with the customer later to see if they still need help.
Keep it personal—and personalized
Elton shared an SMS example, saying how brands can send an automated message to customers who bounce from the website without purchasing. Beyond the standard “browse abandonment SMS,” Elton said you can introduce your support agent and let the shopper know you’re available to chat online right now. Then ask the customer if there’s anything you can help with.
Based on what the customer was viewing, the agent can follow up with specific recommendations that the customer may not have noticed before, such as color options, materials, and product benefits.
Elton said brands can even offer a free add-on item to complement the user’s first purchase—a great incentive to get the customer to respond to your DMs and make the purchase.
“What’s great about this example is that it flows very much like an in-person conversation would between a physical store associate and a shopper. Additionally, the brand may learn valuable feedback from consumers on why they didn’t first purchase the item when they were on the website,” said Elton.
Pay attention to what customers share
The conversations you have with customers are the perfect way to collect qualitative data. More than that, you can learn about any roadblocks customers come across during your checkout process.
For example, if someone is having difficulty checking out on your website—it could be from a time delay, an error message, or another type of signal—you can trigger a conversational message to that customer to ask if they need help checking out.
Elton explained the benefit of this solution: “This works because it adds values at both ends. The consumer gets real-time help instead of vague checkout error messages, and the company may learn of obstacles during its checkout that have previously gone unnoticed.”
With these five tips from Elton and Lisa, you’ll start off using this technology the right way.
I know I’m teaching you a lot about conversational commerce, but before your brain explodes it’s time to put all of this advice into action. Let’s look at how one women’s wellness brand is leveraging conversational commerce.
A breakdown of Marea Wellness’ conversational commerce
Monica Grohne is the founder and CEO of Marea Wellness, a brand all about empowering people to take charge of their menstrual cycle with nutrition and lifestyle support.
As a bootstrapped brand just a few years old, Monica decided from the beginning that natural conversation with customers was going to be a key part of her growth strategy.
“We’ve had to do a lot of non-scalable things, as well as assure we fully understand our customer needs and how our product delivers on those needs before we put the budget into paid channels. We focused on building community through educational-first content and having conversations with our customers to make sure we’re hitting the mark with the benefits of our product and how we communicate it,” she said.
For Marea Wellness, Monica focuses on SMS, email, and organic social media to have two-way conversations with customers. She also invites customers for one-on-one interviews at certain points in their lifecycle so she can learn about their experiences at different stages.
Her goal? To make it clear to shoppers that there are actual humans behind the brand.
“Wouldn’t it be weird if you went into a store and a sales associate ignored you, didn’t look up, or say, ‘Hello, how are you today? Can I help you find anything?’ I truly believe we’re just getting back to that and learning how to have a more interactive sales experience on the internet.”Monica Grohne
And if you’re wondering about Monica’s results since investing in conversational commerce, she sees the benefits toward building community and developing deeper strategic relationships with customers.
I mean, how many brands can say they’ve hopped on a call with a customer like this?
“I see conversational commerce more as a platform where you build your brand rather than a channel that has key metrics. Because we aim to talk with our customers across all of our channels, I don’t think this is measurable outside of having really solid retention numbers and customers who trust us,” said Monica.
Monica says the key to successful conversational commerce is to forget that you’re a brand trying to sell something, and act like you’re having a conversation with a friend. She also said to enable your team to make decisions on your customer’s behalf:
“From customer service to social media, let your team know they have the ability to take action as they would for a friend. A customer got pregnant? Send them a card congratulating them. A customer lost their dog? Send them flowers.”
In Monica’s opinion, this is where the future of ecommerce is going, especially as customers come to expect these experiences from the brands they invest in.
And this leads me to our final question today, which is … Is conversational commerce the future of Ecommerce? The short answer is, yes.
Why? People want more humanized experiences, and conversational commerce is the perfect technology to be able to bridge that gap between customers and the brands they shop with.
Lisa Popovici explains it well: “In an era of DTC, remote, work from home, and safety first, brands have realized the importance of humanizing the customer journey by replicating the brick and mortar experience.”
Conversational commerce has clear benefits for customers, but don’t forget the pros it brings to businesses too. For example, over 80% of customers are willing to pay more for a better experience.
“Shoppers today are inundated with messaging, ads, and emails. Brands need to both stand out and develop strong connections with their customers to build loyalty. Things like SMS messaging, engagement on social platforms, and interactive onsite engagement enable brands to better understand their customers and offer repeat elevated experiences.”Kristy McCown, Commercial Director at Klarna
In case you’re still questioning the power of this technology, remember … 75% of customers will spend more with a brand they can message for support rather than call (Live Person).
In a study by Statista, 34% of respondents said they prefer to ask questions with AI by means of a chatbot or a virtual assistant in regard to ecommerce (Statista Questioning).
Over 56% of messaging-app users globally say they’ve messaged brands to get more information in all stages of the buyer’s journey (Facebook).
The numbers don’t lie—conversational commerce is the future.