Conversational commerce in retail

We’ve previously explained everything you need to know about conversational commerce. But that’s conversational commerce as a concept. And as a concept, it’s subject to slight variations across industry-specific implementations.

A simple example of this would be conducting a complete transaction over a chat app – instead of through your web store or shopping app. 

How is that even possible? What does conversational commerce look like for retailers and eCommerce companies? How can you build conversational customer journeys and know whether you’re doing it right? 

Learn this and more.

A few key factors fuel this growth.

Conversational commerce excels at common retail-specific use cases. Starting with: 

According to the Baymard Institute, the average documented online shopping cart abandonment rate is 70.19%. Brands lose around $18 billion in annual sales revenue to cart abandonment every year. Of this total, $260bn is recoverable.  

Conversational commerce reduces cart abandonment by essentially removing the cart. Customers complete purchases right within the app where their conversations begin.

Buyers don’t need to move from browsing windows toward carts and then going through all the steps needed to complete a transaction.  

Instead, transactions are quick and easy with the push of a button, getting around the typical customer journey sticking point that results in cart abandonment.  

Retailers and eCommerce companies can steer their conversational channels to re-target customers with products left in their carts.

Deliveries are a common customer service issue. The problem is that retailers don’t handle shipping, but they do handle unhappy customers who want to know when they can expect their package. 

With conversational commerce systems, retailers can integrate with shipping companies to pull data and provide customers with instant delivery status updates. 

This goes both ways, meaning returns. Customers can schedule a pickup and return via the same retailer-integrated delivery service by chat. 

This makes for a far smoother customer experience (CX) than dealing individually with the retailer and delivery services. 

Retailers can significantly improve the shopping experience by offering category-specific catalogs to customers through messaging platforms like Messenger and WhatsApp.

Shoppers can browse entire product catalogs without leaving the chat app – where they can even complete their purchase.

Whatever your transaction may be – from buying limited edition lipstick to booking an Uber – the ability to complete it within a messaging app defines conversational commerce. 

Some messaging channels directly access payment systems, such as WhatsApp and Apple. Other channels can integrate with third-party POS processors to facilitate quick and easy in-chat payments. 

This removes friction from the checkout process, reducing cart abandonment and ultimately increasing sales. It also improves CX, which results in heightened, longer-lasting loyalty.

Now that we’ve seen the benefits, let’s see how conversational commerce works in practice.

Chatbots and AI interfaces act as virtual personal shoppers, offering tailored recommendations and guidance. For example, ASOS uses chatbots to actively search for items on your behalf. The chatbot can:

Conversational commerce streamlines customer support by providing instant answers to frequently asked questions. Retailers can automate:

While human agents can focus on more complex issues.

For instance, Airport AI’s chatbot efficiently managed routine inquiries, including flight information, booking confirmations, and baggage inquiries, delivering instant and accurate responses 24/7.

Chatbots are extending support beyond the point of purchase, assisting with returns, tracking orders, and collecting valuable feedback. For example, Amazon’s chatbot helps customers track orders and manage returns. The chatbot provides:

Chatbots simplify the checkout process, guiding customers through each step, answering questions, and enabling secure transactions. Domino’s Pizza chatbot, known as “Dom,” simplifies the ordering process by allowing customers to:

Customers can place orders directly through messaging platforms like Facebook Messenger or WhatsApp, without visiting the website or app.

The underlying technology of conversational commerce facilitates hyper-personalized customer journeys. 

Conversational commerce technologies can quickly access and analyze customer data across various touchpoints to: 

Because conversational technology can instantly access and analyze customer data profiles, shoppers can enjoy hyper-personalized experiences that are quick and convenient.

Start by considering which conversational commerce platform offers the features you need to provide complete conversational customer journeys. 

Start by looking at what you already have integrated with your systems and whether these can be used with your conversational commerce platform.  

Specifically, consider whether your existing systems can “speak with” your new conversational commerce platform. Otherwise, you risk relying on incomplete customer data profiles that are not populated from other customer lifetime touchpoints. This results in poor CX. 

Be mindful of payment processing capabilities, as well. It doesn’t help to build complete automated conversational customer journeys just to find out you can’t accept payments in your jurisdiction. 

Retailers commonly focus on developing conversational commerce capability for the channels with the highest customer engagement.

Turns out this isn’t the best approach.  

While channel engagement is an otherwise important KPI, channel functionalities play a more important role in conversational commerce. 

The optimal approach is to strike a balance between customer habits and channel functionality. 

For example, developing conversational commerce capability for a channel that doesn’t facilitate product catalogs or simple in-app payments may not be an optimal use of resources.

By considering customer preferences and the specific functionalities of messaging apps and social media platforms, you can ensure an efficient shopping experience.

Consider what part of your retail business your conversational commerce system will cover and develop in that direction. 

This should factor in the basics like channel capabilities and tone of voice, as well as more complex issues, like how conversational commerce will work with your sales and marketing strategy. 

Will the role be more focused on resolving customer service issues? Is the idea to boost sales? Or guide customers through common sticking points in the customer journey? Or all the above? 

Design your conversational commerce strategy to complement your existing strategies. As your system learns from more interactions, it will be able to handle a wider range of tasks. 

This step involves understanding your customers’ journey with you.  

Identify at which stage of the customer journey conversational interaction begins. Start planning how your chatbot will interact from this point and the actions it takes. 

This results in a guided customer journey optimized to fit your strategy.

Start with a basic set of responses and actions will yield basic results. Conversational chatbots need to be trained to understand a broader sample of customer intents. 

This is achieved by programming chatbots to understand several phrase variations for each customer intent. 

Continuous training is aided by equipping AI with machine learning to understand new intents.

Monitoring interactions is also crucial since it helps identify and address any problematic areas where customers may drop off.

Before unleashing your conversational commerce solution, take a test drive of your solution as a customer. This will let you identify areas of improvement and shake out any bugs. 

It also gives you the unique opportunity to experience your customer journey from a shopper’s point of view. This is a valuable opportunity to evaluate and potentially further optimize parts of your customer journey. 

It can be difficult to know what impact your conversational commerce system has on your business when you’re starting. Here are some helpful KPIs to look for specific to conversational commerce in retail.

Several conversational commerce success KPIs need to take into account the purpose of your conversational chatbot within your sales strategy. What one business case may consider a success, another may see as a conversational system underperforming. Consider your case when gauging across these metrics. 

Trends show that commerce is moving towards messaging apps. Customers are looking for the personalized feel of an in-shop experience delivered over a single channel from the comfort of their own couch.  

Retailers and eCommerce companies sell more, faster, with comparatively lower overhead than it would require to staff teams around the clock. 

Getting started in conversational commerce isn’t even complicated.  

Retailers need to start developing their conversational channels to prepare for the shift towards more conversational commerce. The ideal starting point is to automate customer service inquiries with a machine learning AI conversational chatbot. 

This way, you’ll teach your chatbot how to understand the most common customer intents, while machine learning will help it understand more and broader intents over time. 

In time, your system will develop into a conversational commerce system capable of managing entire customer journeys, from entry to past conversions to customer service and back again.