Deploying AI to facilitate dialogue with your customers adds the missing human element, providing a more personalized experience.
3 min read
Opinions expressed by Entrepreneur contributors are their own.
Chris Messina, the innovator behind social media hashtags, coined the term “conversational commerce” in 2015, describing it as “utilizing chat, messaging or other natural language interfaces to interact with people, brands or services.” As the number of brands offering undifferentiated products increased, it gave rise to the paradox of choices wherein consumers are unsure what to choose. As consumers become more aware of their needs and are exposed to more products, it has become imperative that companies adopt more creative marketing strategies to outshine the competition.
In a nutshell, conversational commerce uses AI such as chatbots, RPA, and personalized push notifications for brands to facilitate sales and increase average revenue per user. An interactive environment compensates for the missing human touch typical of a physical brick-and-mortar store. Through this piece, I’ll attempt to explain what conversational commerce is about, and how you can make it work for your business.
Why choose conversational commerce?
Interaction with customers has forever been crucial to effective marketing, but with the advent of ecommerce, this facet of business development was difficult to attain. Nevertheless, the customers’ use of conversational ecommerce has been well received. It provides personalized responses for each purchase made possible due to readily available data repository, i.e. product reviews, inquiries, structured product information and pricing information.
With an added advantage of being a customer-service outlet, this method allows conversation with customers through chats to ultimately provide a wholesome shopping experience.
The success of conversational commerce
According to a 2020 eMarketer study, 38.5% of the U.S. population use voice assistants to connect with their smartphones or other gadgets, double-digit growth over the last year attributed to increased stay-at-home behavior. The trend spurred major ecommerce portals to develop chatbots or use existing voice-based integrations to increase sales.
Fortunately, many tools have emerged to meet the needs of businesses and brands to help them become more conversational at scale. These products are now possible thanks to improvements in machine-learning quality and affordability, artificial intelligence, voice computing technologies and conversation-automation tools. This trend — accelerating due to increasing consumer expectations and customer sophistication — will determine which brands thrive in the era of social media and which ones gradually lose touch with their customers. For instance, WeChat, a Chinese messaging app, offers a range of services from ordering food and booking movie tickets to making doctor appointments. Facebook is also working on a voice assistant to establish its foothold within the market, an effort to counter incumbents like Amazon‘s Alexa, Apple‘s Siri and Google Assistant.
Conversational commerce within ecommerce
Sephora‘s virtual artist, a chatbot integrating augmented reality, allows customers to have a realistic makeup try-on experience using selfies. The tool requires users to fill in a basic questionnaire fed as input to their recommendation engine. Kik bot, developed by H&M, is a digital stylist that uses customer’s history to personalized recommendations based on their interests.
Although the current crisis has accelerated the shift towards ecommerce, consumers are still missing the brick-and-mortar experience, and retailers are evolving to keep up. According to a recent McKinsey survey, consumers continue to shift to online shopping across different categories, with half of Americans planning to spend more online than in-store for the upcoming holiday season. Nearly 80 percent of U.S. consumers have also changed brands, stores or the way they shop.
Improving the overall consumer experience is an excellent path toward customer retention. And in recent years, and especially months, having a conversational commerce strategy to account for missing human interaction has become all the more important.