What Is Conversational Commerce?

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Conversational commerce has grabbed the attention of many retailers and ecommerce professionals, yet it can be difficult to ascertain its value for your business. Even though it uses existing chat and AI tools, figuring out the skills needed to get started can be challenging.

However, by understanding your conversational commerce options and how they work, you are able to have more genuine, informative, and compelling interactions with your customers and prospects. In this way, you foster the kinds of meaningful relationships that generate sales and keep consumers coming back.

This is your guide to understanding what conversational commerce is, how it works, and how you can start using it to grow your business.

What is conversational commerce?

Conversational commerce, sometimes referred to as chat commerce, involves using messaging apps, voice-based platforms, or chatbots to sell goods and services to customers or to provide support. For example, you can chat with customers over a live chat application, allow them to choose a product, then make a purchase—all without visiting your physical store—or even your website. Businesses also frequently use conversational commerce to help customers solve product issues or investigate features before purchasing.

While these are some of the most common examples of conversational commerce, there are many ways to benefit from a conversational business strategy, especially for small to midsize businesses (SMBs). By using chat apps to connect with customers, you invite them to interact with you on their own terms, using technology they’ve already integrated into their daily lives. If they have a question about your product or service, you can answer it right then and there instead of hoping they go to your website, place a time-consuming phone call, or send an email.

Why is conversational commerce important?

Conversational commerce makes it much easier to provide the answers customers need before making purchase decisions. This holds up whether you use humans or AI in your strategy, but the advent of generative AI has recently raised the bar when it comes to how businesses can interact with customers.

As Gartner’s Quick Answer: How GenAI Impacts Digital Commerce Search & Discovery Experience explains, “ChatGPT set the expectation that searches should understand natural language by default — and respond via a conversation. As generative AI (GenAI) use cases in digital commerce are explored, key user experience (UX) concepts are being piloted or are in production for digital commerce search and discovery platforms.” [1]

By incorporating conversational commerce in your marketing, sales, or support strategy, you empower your organization to keep up with the trend of using AI to interact with customers.

On the other hand, even if you don’t use AI, conversational commerce can give you an edge. For many customers, it’s easier to open a chat app and ask representative questions about a product than it would be for them to go to your website, navigate to your product page, click to see its specifications, and hope there’s enough data to answer their questions.

Types of conversational commerce

The kind of conversational commerce you choose may depend on the technology you and your target market are comfortable with and the kinds of interactions you’d like to have with customers. Your choices fall into one of two categories:

  • Messaging apps and chatbots. These use text-based conversations to answer queries, address usability issues, and facilitate purchases. Common examples include WeChat, Messenger, and WhatsApp.

  • Voice-based conversational commerce. This method uses an AI-powered voice platform to enable users to purchase by speaking—for instance, Apple’s Siri, Google Assistant, or Walmart Voice Order.

What are the benefits of conversational commerce?

Conversational commerce makes interactions with customers more convenient, substantive, and profitable. This is because it comes with the following benefits:

  1. Reduce your costs for marketing and content creation. For example, instead of paying someone to create ten videos about how your product works, you can use a human or AI to answer questions about how to best use your solution.

  2. Connect customers to their existing ecommerce portal—or replace it altogether. For example, you can use a shopping cart on a third-party app that allows customers to make purchases directly inside the app. If your product list exceeds the app’s limits, you can provide a link to your ecommerce site so the customer can complete their purchase there. 

  3. Simplify the customer service experience. Customers can reach out and get a live representative or AI and have their questions answered right away.

  4. Create a more efficient sales cycles. For instance, using generative AI, you can have the AI answer product queries, address customer concerns, and assist in processing their orders—automatically and, if you’d like, without human intervention.

Using generative AI, in particular, comes with a range of benefits, especially for businesses that want to spend less on their customer service systems. Gartner’s 3 Ways Generative AI Augments Digital Commerce predicts that by 2025, “GenAI will function as a virtual employee assistant to handle at least 10% of operational tasks in digital commerce.” [2]

This supports a more efficient sales system because a single AI model can service hundreds of customers at once—relieving much of the burden that often falls on the shoulders of human sales support staff.

How does conversational commerce work?

Conversational commerce works by providing a chat platform that acts as a link between your customers and the purchasing process. Customers reach out via the app, and they’re then guided through various elements of the purchasing process, either by a human, AI, or a combination of both.

The interaction may start with a question a customer has about a product or service. In some cases, they can access a catalog through the app, see pictures, ask about specs, and then make a purchase.

By implementing conversational commerce in your sales workflows, you can revolutionize the way you connect with customers. To get started, you should:

  • Assess the tools and platforms you’re already using in your business. For example, you may currently use social media platforms, such as Facebook or Instagram, that lend themselves to a conversational commerce strategy.

  • Explore ways of integrating chatbots into your current sales cycle. For instance, you can install a chatbot plugin on your existing website and use it to interact with customers.

  • Invest in software or platforms that allow you to build and deploy your customized chatbots.

Put it into practice

Let’s say you already have a business account with a chat app. Here are some additional step you can take:

  • Add a catalog to your business account that features your products.

  • Add payment features to enable instant purchases within your app.

  • Train one or more current staff members to use the app, help customers through the purchase process, and answer product questions. You can also hire a new employee to manage conversational sales ops.

  • Track the performance of your solution noting the number of sales generated through the platform, the overall revenue volume, the ratio of sales via the app to those made through traditional channels, and the average number of interactions that have to occur before a customer makes a purchase.

Conversational commerce best practices

To increase the chances of success as you implement conversational commerce, you can use the following best practices:

  • Personalize each customer’s interaction. This may involve setting up an AI-powered system to factor in customer details, such as their name and purchase history. Or you can train your staff to provide a more in-depth, personal experience.

  • Use the channels that your target customers prefer. This may involve adding one or two additional channels, such as social media chat apps, that customers may be more comfortable with.

  • If using AI, always make it easy to connect with a human. Talking with a human should never be more than a click, tap, or request away because some people prefer to interact with people—even for relatively simple transactions.

  • Always incorporate calls to action that lead customers through the buying process. This could involve a human or AI rep asking if they’re ready to make a purchase or providing a button that leads customers to your checkout system.

  • Follow up, and follow through. Following up involves checking back to see if you answered questions adequately or if customers need additional help. Following through involves making sure a human or AI takes all of the necessary steps to provide a rewarding user experience. For example, if a customer asks for price, size, color, and performance specifications, the rep or AI should provide all of this info.

  • Periodically review the performance of your program. By checking data involving sales volume, inquiries answered, and repeat customers, you can come up with benchmarks for improving or growing your system.

Start meeting customers where they are with conversational commerce

Armed with this guide, you now know how conversational commerce works, the different types, and how to use it to support your business’s sales. By referring to the best practices above, you can get the most out of your implementation and create a system that constantly improves over time.

Your next step is to look into tools you can use to implement a conversational commerce system. These resources are a good starting place: