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What is Conversational Commerce: How brands are using it to meet consumer demand
Conversational commerce and the AI chatbot market are expected to grow 470% between 2024 and 2028.
November 04, 2024 • 5 minutes
[Updated] Originally posted on May 11, 2022
As of last year, Juniper Research confirmed that retail spend into AI chatbots would reach $12bn globally in 2023 and $72bn in 2028. Conversational AI platforms are crucial in increasing the adoption of AI chatbot solutions and omnichannel messaging platforms to meet this consumer demand.
So what is Conversational Commerce?
Conversational commerce refers to a conversational marketing and ecommerce strategy that leverages artificial intelligence — from AI chatbots to voice assistants — to engage customers and automate transactions and payments through popular channels. Along with websites and in-app messaging, these channels include text messaging, social messaging apps like Apple Messages for Business, WhatsApp, Google RCS Business Messaging, Facebook Messenger, LINE, and KakaoTalk.
Such opportunities for customer engagement via conversational chatbots can happen throughout the entire purchasing process. That’s why this strategy can open additional paths to grow your business, increase customer satisfaction, and drive revenue through channels that you may not have thought possible.
What is the difference between conversational commerce and ecommerce?
Conversational commerce is a part of a larger ecommerce strategy. It takes traditional ecommerce practices one step further by incorporating conversational marketing practices to build stronger relationships with customers and invite them to purchase through digital conversation channels. A conversational commerce platform should use conversational AI and automation tools to streamline the sales process — increasing sales and reducing abandoned shopping carts.
Conversational commerce is a key component of omnichannel retail strategies
Since 2020, 75% of customers have explored new online shopping behaviors, especially in trying new brands, and will continue to do so. Another shopping trend around the world is the expectation that conversational interfaces should be quick and relatively easy to engage. For example, research tells us that 53% of consumers are more likely to abandon their online purchase if they can’t find an answer to their question about the product or service.
Practically overnight, retail brands shifted from brick-and-mortar exclusivity to adopting ecommerce website services to remain profitable, competitive, and to keep up with rising demand for contactless purchases. Now that conversational commerce has become more commonplace, businesses can interact with customers throughout their entire purchasing journey, from marketing messages to first browse and confirmation of sale, directly through conversational commerce channels of the customers’ choice. This type of customer communication isn’t only a powerful tool for gaining new customers, but it helps with improving customer satisfaction, brand loyalty, and customer retention.
Examples of conversational commerce: Eliminate extra clicks and improve conversions
Delivering convenience is one of the big benefits of conversational commerce tools. Consider that one of our clients, a popular American bridal retailer, went from storefront to ecommerce superstar practically overnight during the height of the pandemic. The retailer saw $30,000 in sales within the first few weeks of supporting purchasing through AI chatbots and messaging apps.
Here are a few ideas on how to integrate conversational commerce into customer interactions throughout your buyer’s journey:
Accelerate the discovery and consideration phases
Use conversational commerce to speed up these early phases by actively engaging with customers right away instead of sending them to a passive landing page and losing their attention (and, probably loyalty) in the unnecessarily lengthy process. For example, consumers can initiate chatbot interactions directly from digital ads and even offline ads via a QR code. And those customer conversations can then stimulate new or repeat business.
Offer a seamless checkout experience
You can seamlessly offer an experience where your customers never need to leave the conversation, even as they are prompted to submit payment at the point of purchase. With the ability to integrate secure payments right inside the messaging app conversation, you can reduce shopping cart abandonment and increase conversion rates in no time.
Leverage the Conversational Cloud®
Our Conversational AI platform is a powerful conversational commerce tool that can help you embrace this type of customer experience throughout the customer journey. The end result? A competitive advantage.
- For example, we have quick, out-of-the-box intent detection starter packs specific to the buying journey. These packs can reduce time-to-market deployment for AI to scale commerce-related instant messages. Understanding customer intent through natural language processing is one of the key components in deploying a successful a conversational commerce strategy.
- Want to re-engage existing customers for upselling and cross-selling opportunities…without feeling spammy? Proactive messaging conversations help you do so in a personalized way, keeping customers in a channel where they can complete purchases. Personalized recommendations based on customer preferences are a great way to boost customer satisfaction and drive customer loyalty.
- Protect customer data by providing secure, compliant digital messages and transactions, with quick and efficient support for transmitting credit cards or custom integrations to your payment processing system. LivePerson is PCI DSS L1 certified, the most comprehensive independent security audit and international compliance program in the industry.
- While security is a top priority for our tools and technology, the Conversational Cloud also offers top-notch conversational intelligence to help measure the impact of your program with AI and messaging with real human sentiment analysis, dashboard reporting, integrations, and more. Conversation data provides key metrics for building conversational commerce strategies that increase sales while still promoting a positive customer experience and improving customer relationships. (After all, LivePerson technology is specifically designed to understand customers’ intents, leading to a higher conversion of sales to accelerate ROI.)
So what are you waiting for, commerce leaders?
Unlock incremental revenue through personalized experiences powered by conversational AI. Set your brand apart by helping both potential customers and loyal customers proactively discover your products, get instant responses to common customer queries, and make purchases in the messaging apps and channels they use every day. Customer conversations that can be unified across social, voice, and email — throughout the entire customer journey. And the next time someone asks, “Just what is Conversational Commerce?” maybe you’ll be able to point to your own purchasing process.