What Is Conversational Commerce? Guide to excel in 2024

What Is Conversational Commerce? Guide to excel in 2024

Conversational commerce can allow brands to compensate for the lack of a personal touch in their online stores, interacting with their customers through messaging apps like WhatsApp, live chat, chatbots and voice assistants.
What Is Conversational Commerce? Guide to excel in 2024
Riccardo Russo | CEO
Riccardo Russo | CEO
November 20, 2023

Imagine walking into a store only to find there’s nobody to greet you and you can’t find any product or information easily. 
You have some questions about the products you’re interested in, but no one is there to answer them.
You leave sad, frustrated and empty-handed.

Without conversational commerce, this happens in online stores all the time.

Nowadays, more customers are shopping online than offline.

That’s no excuse for skipping out on high quality customer experience. Learn how to make your customer service digital thanks to conversational commerce.

In the ever-evolving landscape of e-commerce, staying ahead of the curve is not just an advantage, but a necessity to keep your online business alive. 

What is Conversational Commerce

One of the latest trends reshaping the way businesses interact with consumers is Conversational Commerce. 

This innovative approach seamlessly blends technology and personalized communication to enhance the overall shopping experience. 

The Essence of Conversational Commerce

Conversational Commerce, is not just a trend but a transformative shift in the e-commerce paradigm. 

It leverages real-time, one-on-one connections between brands and consumers through messaging apps and chatbots, creating a personalized and interactive shopping journey.

Conversational Commerce enables your customers to interact with businesses through messaging and chat apps like Facebook Messenger, WhatsApp, and WeChat. Or through voice technology, like Google Assistant or Siri, which interfaces with clients through voice commands.

Increasingly, consumers are using conversational commerce to find and select products and services, and to complete the payment process, all without having to call, email, or even visit a brand’s website.

In fact, according to Statista, global spending over conversational commerce channels is expected to reach $290 billion by 2025.

Data about conversation commerce

The Future of Customer Experience Survey by PwC shows customers are looking for speed, convenience, and friendliness when shopping. The survey also found:

  • 73% of customers consider experience an important part of their buying decision. But, only 49% of customers say companies provide good customer service.
  • 1 in 3 customers (32%) will leave a brand forever with 1 bad customer experience.
  • 65% of customers say a positive experience is more influential than great advertising.

Moreover, according to recent statistics, businesses that use conversational commerce see:

  • A 10% increase in revenue in the first 6 months.
  • An average of 30% in savings on customer service costs.
  • Automation of up to 80% of the most common customer interactions. In particular, AI chatbots can increase efficiency and accuracy in conversations with customers.

Increasingly, online consumers are using chat to find and select products and services, and to complete the payment process, all without having to call, email, or even visit a brand’s website.

Types of Conversational Commerce 

In the context of conversational commerce, consumers engage with human representatives, chatbots, or a mix of both.

In the following section, we will analyze several types of conversational commerce interactions.

1. Chatbots

Chatbots are computer programs that use natural language processing and artificial intelligence to simulate customer conversations.  They are used to provide customer service, provide product recommendations, and answer questions throughout the customer journey.

These technologies enable businesses to scale their interactions, providing instant responses and tailored suggestions through automations.  AI-powered chatbots contribute to a more efficient and personalized shopping process, ultimately boosting conversions. An AI chatbot is a robot Shopping-Assistant active 24/7 on your website to help convert more visitors into buyers.

When people think of personalized service, a friendly robot may not come to mind. 

But, AI chatbots like TextYess, use machine learning to give personal responses to your customers. These responses become more accurate and effective over time. AI Chatbots like TextYess can also answer all the FAQs coming in and collect data, saving your team valuable time and resources.

2. Voice commerce

Voice commerce is a form of conversational commerce that allows your customers to make purchases through voice-activated services like Amazon Alexa, Google Home, and Apple Siri.

Conversational commerce also includes using voice assistants to answer questions (and so they are especially useful for FAQs). Remember that it’s much easier, for a customer, to ask Alexa or Siri to order something than to click through your product pages. According to recent data, about online shoppers belonging to the “millennials” generation, found out that almost half (47%) used a voice assistant to make a purchase.

Here you can find some data about virtual assistants, from a survey of +1000 online shoppers:

Voice Shopping Assistant usage
% of voice shoppers using each Virtual Assistant

Lastly, according to Capgemini, 40% of consumers will use a voice assistant instead of a mobile app or a website, 3 years from now.

3. Social messaging apps

Messaging apps such as WhatsApp, Facebook Messenger, and WeChat are increasingly being used on ecommerce websites. Your customers can use these platforms to ask questions, make purchases, and receive product recommendations. 

Sometimes it’s possible that customers are deciding what to buy before visiting a company’s website. In fact, you should consider that more and more people are now using social messaging apps more like search engines. 

You should also remember that nowadays, people use social messaging apps more than social media.
As a matter of fact, the user base of the top 4 messaging apps is larger than the user base of the top 4 social media platforms, as you can see in the graph below:

Messaging Apps usage surpass Social networks
Messaging Apps have surpassed social networks

Day by day, more and more questions are coming through your company’s Facebook Messenger or WhatsApp. So make sure someone, or something, is there to answer them!

4. Text message marketing

Text message marketing allows businesses to send messages to customers via SMS. These messages can be used to promote products, offer discounts, and provide customer service. SMS is a channel that although might seem “old” it is revamping since the surge of conversational commerce. 

The phone number is becoming the unique customer identifier instead of emails and SMS act as a fantastic retargeting channel in a word where other marketing channels like Facebook and Instagram are saturated.

SMS marketing messages also act as a channel to open a real time conversation with customers that might need advice in completing the purchase after they receive the promotion via text message.

As a matter of fact, recent data shows that 63% of users who subscribe to at least one brand’s text marketing program, reported having made a purchase from a text message within the last 3 months.

According to Facebook data, 64% of customers would prefer to use a chat app than call customer service.

Benefits of Conversational Commerce 

When customers seek speed, friendliness, and helpfulness as the top features for online shopping experiences, it’s necessary to enable conversational commerce solutions.

As a matter of fact, conversational commerce facilitates direct communication, enabling your business to understand your customer needs, address concerns and provide personalized recommendations. This not only enhances the customer experience but also fosters brand loyalty, increasing the LTV.

Here are our top six benefits of conversational commerce

1. Give 24/7 customer support

Customers want answers to their questions right away. Offering a high level of 24/7 customer support is impossible without it.

Through chatbots, your business can respond to customers faster - the average response time is 10 seconds - and in different languages. 

AI Chatbots like TextYess, are available 24/7/365 days, allowing your customers to get instant assistance at any time, even outside regular business hours.
This accommodates potential customers in different time zones or people shopping during the evening and weekends, increasing the conversion rate of your website.

2. Drive sales through chats and relationships

Customers reaching out via messenger or chat provide valuable information because they are showing interest in our products. Chatbots or live agents can suggest products based on the customer’s needs and even create up-selling or cross-selling strategies.

For example, the perfume e-commerce Olimpia Home, has generated 132 orders from 797 conversations by using TextYess, reaching a ROAS of 72.

Of course, adding a personal touch sells more products. Through chatbots, your brand can also learn more about your customers and build relationships online. Like in physical stores, customers are far more likely to buy and return when the brand seems willing and happy to help.

3. Reduce abandoned shopping carts

If you have an e-commerce, you know that abandoned shopping carts are a huge issue and that you are potentially losing a lot of money because of them.
Globally ecommerce websites lose $18 billion a year from abandoned shopping cart orders.

A conversational commerce tool can help reduce that number by:

  • Sending your potential customers, who abandon shopping carts, personalized reminders or nudges (like discounts) to complete their orders.
  • Disclosing what has prevented your potential customers from buying and gaining valuable info to improve the conversion rate in the following interactions.
  • Sending to your customers, looking for certain products (like a new basketball shoe), an automated link to the product within the chat.

4. Collect customer data and feedback

Your relationship with a customer doesn’t have to end once they buy a product. Your chatbot can follow up with the customer to receive reviews or feedback, increasing the LTV and overall efficiency of your “selling machine”.

You can also send automated follow-ups to customers to increase the chance of a review. According to PwC, 63% of customers are more willing to offer more personal information if they have a great experience.

5. More languages

Customers are now shopping all around the world, especially after 2020. Many companies miss out on the opportunity to engage with customers who don’t speak the same language, simply because they don’t have a chatbot. A multilingual chatbot breaks down language barriers for you, without the need for a live agent or translator. 

By doing so, you can use AI to answer questions and perform simple tasks in a customer’s preferred language. In fact, the first language by majority of traffic share is usually the language used to write the prompt (a.k.a. the instructions) to the AI.

Thanks to TextYess, you are able to answer FAQs or other questions,  in other languages, in real-time, without hiring a whole new team.

6. Personalization at scale

By harnessing data and AI, your brand can tailor conversations and recommendations to individual preferences, increasing the likelihood of conversion. The era of one-size-fits-all approaches is evolving into a more nuanced, customer-centric model.

For example, with TextYess, you can customize your AI chatbot by tailoring its “character” with prompts and files to match your brand's unique identity and tone of voice. Using a chatbot like TextYess, will enable your eCommerce businesses to increase sales with an average 20% in-chat conversion rate.

How to start with conversational commerce 

As the saying goes “Rome wasn’t built in a day”. So you shouldn’t expect to realize your conversational commerce strategy in 2 hours.

You can achieve great results and stand out from the crowd only if you plan and execute precisely your conversational commerce strategy.

How to do that? I’m here to explain it to you.  

Here are seven steps to help you take the first steps with conversational commerce:

1. Analyze your business needs

Before implementing your conversational tool, you should consider the problems your e-commerce and your customers are facing right now and how you would like to solve them.

Maybe you want to increase sales? Reducing shopping cart abandonment can help in achieving that.
Maybe you would like to deliver faster, more convenient customer support?
  A chatbot that answers FAQs in several languages can help you with that.

After you’ve identified the main issue you want to resolve, place the chat Call to Action in that position of the funnel. 

For example, for abandoned carts you can include a WhatsApp CTA saying “Doubts? We reply in 30 seconds”  in the product detail pages next to add to cart.  To provide timely customer support, you could insert a chat bubble in the bottom right corner of the website. 

2. Do your research

Once you decide how to implement conversational commerce in your customer journey, research how other companies in your industry utilize the potential of conversational commerce solutions and channels.

Do you want some examples? Here we are!

  • In the beauty industry Layla Cosmetics, Balato, and Mulac all use WhatsApp to communicate with customers. 
  • In the fashion industry, players like Speedd and TBD Eyewear opted for chat bubble always present in their websites to offer personal shopping assistants right away. 
  • Seemigly, in the Home Accessories industry, Dalfilo and Olimpia Home use WhatsApp shopping assistants to explain product details and benefits at best. 

3. Choose a conversational commerce platform 

Choosing a reliable conversational solution that easily integrates with your ecosystem will reduce a lot of “headaches” and give you a ton of benefits.
Pick a platform that:
1) your customers already use,
2) allows seamless integration with messaging apps and 
3) fits your business model.

This approach meets customers where they already are, creating a more natural and convenient shopping experience. In this way, WhatsApp, Facebook Messenger, and other platforms become key touchpoints for customer engagement.

One platform to try is TextYess. It’s an AI messaging platform that lets you chat with your customers as they shop online.

TextYess has many use cases: 

  • Turn on chat and track results with a seamless workflow within Shopify.
  • Manage endless conversations on WhatsApp.
  • Customize your AI Assistant with instructions, Q&A and files.

For example, consider that the average live chat response time is 2 minutes, and some customers get angry when they have to wait so long.
If you can’t offer a fast service, you might lose them, it may be better to use a chatbot platform.

4. Custom your conversational agent 

At this point, you have defined your conversational commerce tool, it is time to define what types of inquiries your bot will handle with Q&A, what inquiries will need a uniquely generated response, and tone it will use. 

So basically you have to decide how your chatbot will fit into your brand strategy and brand identity. 

For example, TextYess allows you to fully personalize your chatbot appearance and “personality”, you can decide the color, the position and the copy of your CTAs and the name and tone of voice of your agent. Layla Cosmetics, for instance, placed a black Whatsapp CTA to follow the brand color palette!

5. Launch your conversational commerce tool

At this point, you only need to implement and integrate your tool with your ecommerce platform (such as Shopify).
Sync information about your products and services and FAQs about your business so that the chatbot will be ready as soon as it is triggered by some events you have previously defined (for example click on the “Doubts? We reply in 10 seconds” button on a product page).

But that’s not all.

In fact, you can improve the conversational abilities of your chatbot over time, by leveraging AI and machine learning.
This will make your chatbot smarter and better at answering questions, so that its answers will be more and more personalized, precise and useful for your customers over time.

In the end, test your chatbot before launching it to make sure it works.
It should answer questions, provide relevant information to customers as well as pictures and links, and handle their orders and complaints in a fast and efficient way.

6. Measure success

Once you have selected your conversational tool, there's one thing left: measure its key performance indicators (KPIs).
Your KPIs will help you measure your success, by giving you info on which of the conversational flow brings you the best results and tell you which should be reconsidered or improved. 

You should track these key metrics: ROAS, Orders generated, Conversion rates, Cart abandonment rates, Customer satisfaction scores, Average response time of the chatbot and Average conversation length.

Quality, real-time metrics can help you evaluate your performance and improve your conversational activities at every stage of the buyer’s journey. Identify any areas where your chatbot needs improvement, and make sure it provides a positive customer experience.

7. Continuous Optimization

Remember that it is of paramount importance to create a continuous optimization process in conversational commerce. 

Monitoring customer interactions, analyzing data, and refining chatbot responses with prompt engineering (aka instruction updates) are ongoing processes that ensure the effectiveness of the conversational approach. 

This iterative approach allows businesses to adapt to changing consumer behaviors and preferences.

Problems and future trends

Remember that, before implementing your conversational commerce tool you should also consider 2 potential key problems.

1. Privacy Concerns

Before going “live” with your chatbot tool, you should take into consideration the potential privacy concerns associated with Conversational Commerce. 

Addressing these concerns through transparent communication with your customers and robust security measures is crucial to gain trust and approval from your customers. In fact, assuring customers that their data is handled professionally and with care, will increase engagement and positive participation in this new shopping experience.

2. Balancing Automation and Human Touch

You should also be careful about the delicate balance between automation and the human touch when communicating with your customers.

While automation streamlines processes, a human touch adds authenticity and addresses complex queries or requests. Find the right balance and you will be able to create a personalized yet efficient shopping journey for your customers.

The Future: conversation is the next “big thing”

As you keep navigating the evolving landscape of e-commerce, Conversational Commerce is emerging more and more as a game-changer. 

Here some interesting data bout the future of conversational commerce:

  • According to Statista, in 2025, more than 10% of all retail sales in the U.S. are expected to be generated through mobile commerce.
  • Sales made via conversational commerce channels like chatbots, digital voice assistants, and messaging will grow from $41 billion in 2021 to $290 billion by 2025, according to Juniper Research
  • According to Future Market Insights, global conversational commerce will grow at a CAGR (Compound Annual Growth Rate) of 15,6% from 2022 to 2032.

By embracing real-time interactions, personalization, and cutting-edge technologies, online businesses can redefine their relationships with customers, drive conversions, and set new standards for the future of online shopping.

In closing, I hope this article has helped you to understand the captivating panorama of Conversational Commerce and its incredible possibilities. By understanding its benefits, implementing key strategies, identifying the best channels and platforms, and proactively addressing challenges, your business can position itself at the forefront of this transformative wave, shaping the future of e-commerce.

Now it’s your turn. It’s time to embrace the conversational revolution and position your business as an outstanding performer in the evolving essence of e-commerce.