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Will 2018 be the year of conversational commerce? It should.

This text thread resembles a typical conversation between customer and sales associate. Are you feeling envious, wishing your favorite brand offered such an experience? I know I am. The product was requested, paid for and delivery was arranged in less than two minutes. The consumer was able to click on a link directly from the messaging screen and the item was rush delivered.

It’s a prime example of the seamless commerce process, where evolving technology allows stores to engage and serve the customer completely via messaging. This beats having to steer them to a native mobile app, or progressive web. People are so accustomed and familiar with texting. It is one of the most popular activities among smartphone users worldwide. Whether it’s through the smartphone's native text messaging app, or one of the many available apps like Kik or WhatsApp, billions of messages fly from phone to phone every second.

Social technologies designer Chris Messina, inventor of the hashtag, predicted 2016 would become the “Year of Conversational Commerce”. According to Messina, “conversational commerce largely pertains to utilizing chat, messaging, or other natural language interfaces (i.e. voice) to interact with people, brands, or services and bots that heretofore have had no real place in the bidirectional, asynchronous messaging context.”

The world's largest messaging company, China's WeChat, claims to have upward of 945 million monthly users. Capturing this channel and building it into an interactive commerce medium represents a tremendous new opportunity for retailers.

Conversational commerce uses two significant assets to shore up the retailers' side of the texting conversation – sales associates armed with a mobile device and chatbots – automated programs that pick up cues from a customer's syntax and respond in a natural language.

The conversation I used as an example in this article could have been delivered by either a human or a bot. How would you know? That is exactly the point. One of the objectives behind conversational commerce is that customers need never know or care whether they are talking to a person or a machine. The need is answered regardless, and the sale is made. Of course, I’m a proponent for actual live people on the other side of the conversation, but it can happen either way.

Leading edge fashion brands like Sephora and H&M have started moving down this path, building chatbots to assist consumers who wish to talk about their shopping needs rather than browse a collection online. Social media giants like Facebook are heavily promoting their own mobile messaging system, and many come complete with proprietary electronic payment systems.

When a customer engages with the brand through its native mobile app, the limited screen size makes it difficult to present a variety of targeted offers. The look needs to be sleek and easy to navigate. This is where conversational commerce comes in. A customer can text a store associate for help.

Inside the store, conversational commerce offers retailers a unique opportunity to use customer data in support of a better interaction. The retailer's primary goal should be to provide store associates with vital information such as name, past purchases, frequently browsed or favorited products, etc. This rich data, delivered to the sales associate's phone or tablet, helps with the decision on how to approach the customer, how to engage them, and what to recommend.

Retailers who embrace conversational commerce sooner than later develop another edge over online-only merchants like Amazon who do not currently use this service model, and frankly it wouldn’t be the same experience if they did. Amazon's reach in the fashion marketplace continues to grow, and they have been using data to recommend products for a long time, making it very difficult for other brands to keep up. But Amazon staff are not experts in the individual brands they carry. The experience of purchasing clothing on Amazon is a complete 180 from interacting with a knowledgeable sales associate, online or offline.

In-store traffic may have declined, but with conversational commerce becoming a reality for more and more retailers, each store visit has the potential to become three times as valuable. 

Factoring conversational commerce into the overall mobile commerce strategy - using sales associates, bots, or both - adds another layer of personalization and positive engagement to the transaction, giving brick-and-mortar retailers yet another distinctive competitive edge.

This article originally appeared in Luxury Daily.


Stephan Schambach, Founder & CEO

Stephan is a serial entrepreneur with a proven track record of creating and growing successful tech companies in the United States and Europe. Under his leadership and vision, he brought Intershop and Demandware to IPO's with multi-billion dollar market caps. As Founder and Chief Executive Officer of NewStore, Stephan is setting out to change the market once again. This time by solving the omnichannel problem facing so many retailers and brands.

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