The Ultimate Guide to Conversational Commerce: Everything you need to know

Conversational commerce is a marketing strategy that aims to integrate aspects of shopping with messaging to make the buying process easier for consumers. The concept gained widespread attention following a 2015 Medium article by Chris Messina, the inventor of the hashtag. In the article, Messina notes:

“Conversational commerce is about delivering convenience, personalization, and decision support while people are on the go, with only partial attention to spare.”

Essentially, conversational commerce takes advantage of customer service to make the buyer’s journey a two-way conversation instead of a one-way funnel. The integration of shopping and messaging enables consumers to effortlessly communicate with brands to assist with their purchase decisions.

Conversational commerce is more than support. It enables consumers to ask questions, request personalized recommendations, read reviews, and make purchases by communicating with human representatives or AI chatbots at every stage of the buyer’s journey. By making the buying process easier for consumers, brands can increase sales and customer satisfaction.

Conversational commerce comes in several forms and has evolved over time as new technologies have emerged and consumer preferences have changed. Here are some of the most common conversational commerce platforms.

Live chat enables consumers to communicate with brands in a manner that is faster and more convenient than traditional email or phone calls. Most brands use a combination of AI chatbots and human agents for their live chat service. Chatbots can be used to automatically answer common questions or provide information such as product pricing, offers, and reviews. Human agents can step in when consumers require hands-on care, such as personalized product recommendations.

Khoros Modern Chat combines AI-powered automation with an easy-to-use platform that lets agents assist multiple customers at once — request a demo today.

Messaging apps like Whatsapp and Facebook Messenger enable consumers to interact with brands and make purchases without navigating to another website they may be unfamiliar with. Allowing consumers to use a UI they already know and love helps to improve their experience and can lead to higher conversion rates because they are less likely to get lost or confused during the process. For brands that have their own mobile app, we found that 67% of consumers see value from messaging a brand through it.

We found that 52% of consumers are likely to text with a customer support agent, but beyond care brands can also ask consumers if they’d like to receive offers and product news by opting into SMS messages. According to EZTexting, text messages have a 98% open rate and 90% of all texts are read within three minutes. This ensures consumers will see brand communications including time-sensitive deals which may otherwise go unread with other platforms.

Voice assistants such as Siri, Alexa, and Google Assistant allow consumers to use voice commands to ask questions and make purchases without a screen interface. According to Review42, 43% of voice-enabled device owners use the technology to shop and 52% of people who search by voice are interested in receiving information about deals and promotions from brands.

We found that 68% of customers will spend more money with a brand that understands them and treats them like an individual. Conversational commerce achieves this by enabling brands to provide immediate, personalized care for each customer. In addition to helping consumers feel more connected with brands, conversational commerce also drives purchases by giving customers the information they need at every step of the buyer’s journey.

For context, we’ve outlined the five stages of the buyer’s journey with examples of how conversational commerce can be deployed at each step.

In the first stage of the buyer’s journey, the consumer recognizes they have a want or need for a product or service. Even if a consumer isn’t aware they have a need, brands can create awareness by showcasing their products or services. For example, seeing an advertisement for food can make you feel hungry. Brands can use conversational commerce to create awareness by advertising products and services through messages.

For example, restaurants like Papa John’s and Subway are utilizing SMS marketing to notify customers about current promotions in order to create awareness and evoke purchases.

After recognizing the desire for a product or service, consumers next move into the research stage, where they’ll search for potential solutions. This is typically the most complex and time consuming part of the buyer’s journey with the highest potential for drop off, but conversational commerce allows brands to do most of the work for consumers by filtering options and providing personalized recommendations.

For example, if you are looking to purchase a new shirt in a particular style — instead of browsing a large online catalog you could use messaging to ask something like “show me men’s t-shirts”. A chatbot could then showcase options that meet the customer’s criteria. In some cases, you may be able to cross-sell consumers by recommending products that are frequently purchased together such as the outfit suggestion in the example below from H&M.

Once the consumer has researched potential solutions, they’ll begin comparing each option to find which will best suit their needs. Even with only a handful of potential options, this process can be quite time consuming as the customer may want to compare pricing, reviews, or other criteria for each listing. Rather than manually comparing each listing on their own, consumers can let a chatbot do some of the work by asking it to remove products above their maximum price or offerings with low reviews. Furthermore, the consumer can also ask for an explanation of features and even a personalized recommendation to assist with their final decision.

In the conversion stage, the consumer has decided which product or service they’ll select and proceeds with the purchasing process. If the consumer has chosen you, it’s important to ensure purchasing the product or service is as easy as possible so they don’t change their mind. A complex purchase process involving an account creation and lots of steps may cause some people to drop off at the last minute.

Conversational commerce simplifies the buying process by enabling consumers to make purchases entirely through messaging bots or agents. For example, Domino’s pizza has a chatbot named “Dom” that lets consumers place orders through a messaging interface. Additionally, since 2014 they’ve also enabled users to order pizza through voice commands on smart devices.

In the last stage of the buyer’s journey, the consumer evaluates if they made the right choice and if they would recommend the product or service to others. This is important for building brand loyalty, so brands should make sure to follow up with the customer to see if they are satisfied with their purchase and if there are any areas for improvement. By utilizing conversational commerce, you can invite customers to fill out a post-purchase survey or even connect with an agent to provide feedback.

Once you know what conversational commerce is, your next question is likely how you can go about implementing it for your brand. The process is easier than you think, just follow these three steps.

What do you want to achieve by implementing conversational commerce? Beyond the broad goal of increasing sales, here are a few specific ways brands can use conversational commerce:

• Offer discounts and notifications about promotions

• Assist consumers with research for products/services

• Upsell and cross-sell

• Place orders through AI chatbots or agents

• Send order and shipping updates

• Collect customer feedback

You can implement conversational commerce on as many platforms and channels as you want. Will you restrict it to live chat on your website, or will you also consider social media platforms, messaging apps, SMS, and optimizing for voice assistants as well?

To answer these questions, think about where your customers are at and where adding conversational commerce can have the highest impact. For example, you may decide that you can save resources by only adding it to your most popular social media platforms rather than all of them. Once you decide where you’ll implement conversational commerce, determine if you’ll do a full-scale rollout or start small and expand over time.

The most important part of conversational commerce is the conversation aspect which requires the use of human agents and/or AI chatbots. When implementing conversational commerce, you’ll need to decide whether interactions will be led by humans, AI, or both.

Human agents provide personalized service with higher quality answers, but also require significant resources to operate. AI chatbots can be a cost-effective way to automatically handle simple requests, but are unable to handle complex issues. Our recommendation would be to use a combination of both for a well-rounded and cost-effective solution. You can opt for chatbots to handle basic requests while agents take on more complex situations, or use AI-powered agent assistants so that human agents can see suggested responses when chatting with customers.

While many brands are interested in conversational commerce, it can be intimidating to implement — which is why it’s best to work with a third-party expert. Whether you’re still deciding if you want to implement conversational commerce or you already have a vision in mind, Khoros Care can help you connect with customers the way they want through a unified engagement hub that’s easy for agents to use with increased efficiency from AI-powered automation.

Contact us to learn more about how we can help you get started with conversational commerce or schedule a demo to see our software in action.