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Introducing conversational commerce – a powerful driver for businesses

By Ian Darby | journalist

December 7, 2022 | 8 min read

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Conversational commerce is reshaping how businesses and consumers engage with each other. Here are four opportunities for businesses to get to grips with now.

Shopping trolley with conversational bubble

Conversational commerce will reshape how businesses and customers engage with each other

Marketers are putting a brave face on it but, by the end of 2024, most of the signals from third-party tracking will no longer exist. In the absence of data derived from browsers and devices, businesses must find other means to target customer experiences, and to deliver the right messaging to their consumers across channels.

But there is reason for optimism, because the loss of this data needn't lead to a crisis. Businesses now have the chance to change how they engage with their customers, and to make that engagement better, richer and more customer-driven.

This new approach is known as ‘conversational commerce’, and will reshape how businesses and customers engage with each other. Put simply, conversational commerce describes the process of selling products and acquiring customers directly on messaging channels. Its successful implementation has the potential to address far more than the issue with the demise of third-party cookie data. For instance, to also improve the customer experience across physical stores, websites, and apps.

Rachel Thornton, chief marketing officer at MessageBird, a business that help brands transition to conversational marketing and conversational commerce, says that its adoption provides “a new way forward that involves using personalization and channel preference from the customer.”

First-party data, two-way dialog

This approach enables businesses to gather first-party data through a two-way dialog that empowers customers and puts them in charge of what they share with the brand, what they opt-in to, and the next actions they want to take. “The new way of working with customers enables the delivery of exceptional service right from first interaction,” adds Thornton.

And businesses can get to grips with the basics of conversational commerce by understanding four initial opportunities.

First, to benefit from major consumer applications, such as WhatsApp, iMessage and Instagram, becoming business messaging channels. There's significant potential here because consumers are already interacting with businesses and brands on these platforms. For instance, over 74% of consumers are already messaging businesses – doing so at every stage of the customer journey – and 85% agree that its helps build a relationship with a business.

Secondly, conversational commerce is an opportunity to provide rich, embedded experiences to customers. Channels are rapidly launching new interactive media formats such as ‘like’ buttons, lists, and video. Using these options, a tool such as MessageBird’s Flow Builder allows businesses to streamline investment by creating entire journeys that used to take place through websites or owned applications.

For example, MessageBird worked with a major Indonesian on-demand company to recreate the entire flow of ordering a ride inside of WhatsApp. Users send a location and a ride comes to pick them up. And it recently partnered with Adyen, the Amsterdam-based payment provider, to build entire checkout flows in any channel.

Thirdly, conversational commerce helps businesses to break down silos between teams. Its adoption has the potential to open access to customer data and the ability to engage with customers to all people in the organization, while providing service teams, which were traditionally seen as a cost center, with the tools to generate revenue. Electronics retailer Expert, for example, discovered that customers were getting stuck before checkout, but allowing them to ask questions at this stage removed a last element of friction, and resulted in an 80% conversion rate to sales.

A seamless customer journey

This case highlights a significant strength of conversational commerce in that it takes the customer on a seamless journey through awareness, consideration, purchase, retention and advocacy. Within this, it addresses high abandonment rates of close to 70% in the traditional ecommerce exchange as it takes customers directly from conversation to payment. That's powerful for any business.

And, finally, conversational commerce offers the chance for businesses to integrate chatbots and AI into internal systems, providing the ability to replace entire processes that would otherwise have required a human. Companies can then deploy chatbots and automation to answer the most common questions quickly and easily without needing a customer service or sales rep.

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MessageBird's Thornton says: “Conversational AI has improved significantly over the last few years and companies leveraging this kind of technology can build out great chatbot interactions that help customers get answers their questions quickly. The key, though, is to build in escalation points in the chatbot experience so that if a customer needs to engage with a live support rep, there is a path for that.”

But what does this transition require from a business, especially when it comes to the marketing attribution model? Thornton says: “We’re going to see a heavy investment in what has been traditionally called CRM.”

She argues that, in the past, CRM received a smaller proportion of the budget than advertising. However, this balance is likely to shift due to the collection and management of first-party data derived from conversational commerce. This information will then enable businesses to provide better customer experiences and ongoing communications across channels.

To deliver this, businesses will need to invest in CRM and data teams, in terms of both technology and talent. But it’s a price worth paying because, as Thornton concludes, “losing customers after third-party cookies deprecation will be much more costly than it was in the past.”

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