Why Conversational Commerce Makes Sense Now More Than Ever

This post was originally published on AIthority.

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How the Delayed Adoption of Conversational Commerce is Actually a Good Thing

By Rev Reddy, CEO

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Coined by Chris Messina (the creator of the hashtag) in a post he wrote back in 2015, Conversational Commerce, or cCommerce, is the evolution of the traditional eCommerce experience, focused on natively delivering personalized convenience and decision support for consumers on the go. Conversational commerce allows customers to interact with merchants through chat interfaces like Facebook Messenger and WhatsApp. Unlike traditional eCommerce, conversational commerce lets customers complete purchases without ever leaving the messaging interface. Then, Messina had predicted that these “concierge-style services may become the primary way in which people transact on their mobile devices.”

But despite the prediction, we haven’t truly seen this approach take complete shape. The mismatch between consumer behavior and an immature shopping environment stalled the adoption. Until now.

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Why Conversational Commerce Hasn’t Taken Off (Yet)

The use of chatbots and other messaging platforms like WhatsApp, Facebook Messenger, and Twitter DM can make conversational commerce seem like an achievable strong contender among consumers and businesses. However, despite the excitement around the technology, it has yet to fully take off because of some critical attributing factors.

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Mobile and SMS Marketing Weren’t Well Utilized by D2C brands

Traffic was still predominantly on desktops in 2015. Direct-to-consumer brands focused on their website and email outreach, rather than expanding to SMS to communicate with their audiences. Mobile traffic attribution has since increased, with nearly three out of four online purchases now happening on mobile.

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D2C Has Only Taken Off in the Past Five Years

eCcommerce was steadily rising before the pandemic, but ensuing lockdowns accelerated industry growth. In response, the digital transformation success of brands sped up D2C adoption as they started exploring other ways to market and sell their products online. Big logos including Pepsi, Sephora, and Hyatt Hotels adopted popular eCommerce platforms like Shopify to interact with customers where they spend their time most.

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Confusion Around Customer Service Versus Sales Use Cases

With Conversational Commerce, the term “commerce” implies a conversion event, which traditionally would be a purchase. But the concierge-style of the “conversational” term also implies a level of customer service, muddying the waters of what cCommerce’s goals should be. Now more than ever, brands are understanding that customer experience, including customer service, supports long-term conversions and customer lifetime value. The previous separation of driving conversions and customer service have overtime blended more naturally.

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cCommerce Wasn’t a Priority or Core Business Model for Platforms That Have Had the Opportunity

Social media platforms like Facebook have the advantage of knowing the interests, hobbies, and activities of their users. However, while they built out marketplaces, the primary business model for these platforms was advertising and not commerce. And, although Chatbots on these platforms have been adopted to support more customer service-oriented use cases, the level of effort and necessary strategic alignment to integrate with other platforms in the technology stack to drive a holistic cCommerce experience have likely been too prohibitive.

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SMS Solutions Have Been API-Oriented for Developers, Not Marketers

eCcommerce marketers seek to drive revenue. Developers typically seek to build technology or tech-enabled solutions. SMS solutions like Twilio were previously designed with a focus on API documentation for developers to build SMS communication solutions, not with marketers as a core persona in mind. Turnkey interfaces and out-of-the-box integrations are critical for getting a new marketing channel spun up and marketers utilizing it.

With the emergence of low-code and no-code, SMS marketing has become more easily adopted, but the communication style comes with its own challenges. It’s a whole new world for brands to approach real-time deliverability and direct two-way communication, requiring a user-friendly guide for the marketer end-user.

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Prior cCommerce Approaches Prioritized AI and Chatbots for the Sake of Technology and Not Product Value

AI and Chatbots helped evolve communications, but lack the intended value to customers that cCommerce is striving for. Purely automated chatbots are highly linear, and often a turn-off to consumers, lacking flexibility for authentic, personalized engagement. Truly effective cCommerce requires a combination of automation and AI, but with a human-powered engagement layer to round it out.

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Why cCommerce Makes Sense Now More Than Ever

With 86% of customers willing to pay more for better customer experiences, brands are ripe with the opportunity to fully lean into Conversational Commerce today.  Among the different forms of customer support, live chat has the highest satisfaction level at 75% followed by email (61%) and phone (44%). The D2C ecosystem and consumer behavior have evolved far enough to support cCommerce.

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The Right eCommerce Ecosystem

The eCommerce ecosystem has evolved leaps and bounds since 2015, with data ingestion and transfer possible across relevant technology platforms. Not only is the customer better understood with richer, quality data on their preferences and behavior, but market demand for an open API ecosystem has also heightened the focus on user experience and expanded the pool of end-to-end customer journey touchpoint opportunities.

Where earlier eCommerce platforms were cumbersome, the evolution of turnkey platforms like BigCommerce and Shopify are arming D2C brands with more agile and standardized tech stacks to deliver enhanced customer experiences.

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Lowered Conversion Friction

With a focus on user experience, new tools focused on making purchasing easier have broadened cCommerce opportunities. Shop Pay Installments like Affirm and digital wallets, combined with click-to-buy technology, have lessened customer journey pain points and greased the shopping funnel for smoother conversions.

With these tooling improvements, an external platform that integrates with messaging channels is compelling. SMS is a universal messaging medium, with the only proverbial gatekeepers being the carriers (Verizon, AT&T) and native SMS publishers/device makers (Apple, Google). Stringent regulation around SMS marketing (application-to-person or A2P) enforces the channel to deliver higher quality engagement than other conversational channels. Customers are much more likely to engage if they voluntarily opt-in versus getting pinged by passively browsing on an owned social platform.

With the ecosystem and technology aligning with customer behavior, where does that leave us with cCommerce?

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Fully Developed Conversational Commerce Requires Humans

Going back to the heart of cCommerce, it focuses on delivering concierge-style commerce services. For brands to fully offer this level of customer-centric transactions on mobile devices, they MUST provide more than chatbots – human agents will be a pivotal driver in cCommerce success stories.

People want human connection in their online interactions – SMS is naturally the most personal channel poised to support this demand. Incorporating live agents into the SMS channel allows brands to fully develop their cCommerce strategy and provide convenient, personalized customer-centric experiences.

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Want to learn more about adding a human-in-the-loop with SMS? Read how leading brands are using SMS + Live Agents to recover thousands in revenue here.

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