What is Conversational Commerce? Examples, Benefits, Strategies of Chat Commerce [2024]

A substantial 73% of consumers emphasize the significance of customer experience when making purchasing decisions. Engaging customers through personalized conversations for their shopping needs can significantly enhance brand presence. A conversational commerce strategy is imperative for establishing robust customer engagement.

Conversational Commerce enables customers to interact with a dedicated representative from your company, fostering a personal connection and cultivating brand loyalty. Businesses can elevate their lead-to-conversion ratio by up to 2.5 times by offering tailored recommendations and guidance. 

But what is conversational commerce? What are its benefits? What are some of the best strategies for conversational commerce? Let's explore!

What Is Conversational Commerce? 

Conversational Commerce, in straightforward terms, refers to businesses engaging with customers through conversations using conversational AI– be it chat, messaging apps, or voice interactions. It's like having a virtual assistant for your shopping needs, where you can chat with a bot to get product recommendations or even order a pizza by sending a pizza emoji.

This concept gained momentum thanks to former Uber lead Chris Messina, who, in 2015, predicted that services resembling a personal concierge would become the primary mode of mobile transactions. This foresight was concurrent with major industry shifts, such as Facebook acquiring WhatsApp and the introduction of voice assistants like Amazon's Alexa and Apple's Siri.

Now, chat commerce stands as a dynamic and integral part of modern customer-business interactions. Predictions indicate that global spending through conversational channels will soar to $290 billion by 2025. 

How Does Conversational Commerce Differ from Social Commerce?

Conversational commerce and social commerce, though related, differ in several key aspects, shaping distinct online shopping experiences.

Conversational commerce distinguishes itself through real-time shopping interactions facilitated by text-based conversations and chatbots.This approach prioritizes immediate engagement, allowing customers to place orders seamlessly via messaging apps, voice assistants, or live agent support. The emphasis here is on leveraging conversation to enhance the overall shopping experience.

On the other hand, Social Commerce integrates shopping directly into social media platforms, blending the social aspect with transactions. Unlike conversational commerce, the purchase process unfolds within the confines of social networks, enabling users to buy and sell goods or services without leaving their preferred social media platform.

The modes of interaction diverge significantly; chat commerce leverages messaging apps, voice assistants, and chatbots for shopping and customer service, while social commerce unfolds within the framework of online transactions on social networks. 

Furthermore, chat commerce extends 24/7 customer support through chatbots, ensuring a seamless shopping experience. In contrast, social commerce may not consistently offer this level of customer support. 

Types of Conversational Commerce 

Below listed are the various channels of conversational commerce.

1. Chatbots

Chatbots are artificial intelligence-powered virtual assistants that converse in real time and provide immediate information and support. They make interactions seem human by using natural language processing to comprehend and react to user input.

Whether it's helping you find the right product, answering FAQs, or guiding users through the checkout process, chatbots streamline customer experiences. Furthermore, they operate 24/7, providing uninterrupted service to users globally. 

2. Live Chat 

Live Chat serves as a virtual bridge between businesses and customers, allowing instant communication for inquiries, assistance, or issue resolution. Unlike automated chatbots, Live Chat involves real-time conversations with human agents, offering a personalized touch to customer support and engagement. 

3. Messaging Apps

Messaging apps like WhatsApp, Facebook Messenger, and Telegram facilitate real-time conversations, enabling customers to engage with brands effortlessly. From resolving queries to making purchases, these platforms create a direct line of communication, transcending traditional boundaries.

This type of conversational commerce transcends offers a more intimate and immediate connection. With the simplicity of the text, customers can navigate product catalogues, track orders, and seek assistance anytime and anywhere.

4. Voice Assistants

Voice assistants, such as Amazon's Alexa or Google Assistant, are intelligent systems powered by advanced speech recognition and natural language processing, which enable seamless communication through spoken commands. 

Unlike traditional interfaces, voice assistants rely on verbal interactions. Users can ask questions, issue commands, or even make purchases using their voice. This hands-free approach enhances accessibility and convenience, especially when manual input is challenging.

They learn from user preferences over time, tailoring responses and recommendations accordingly. Whether it's checking the weather, setting reminders, or initiating online transactions, these virtual assistants streamline tasks, making daily life more efficient.

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Examples of Conversational Commerce  

Below listed are some examples of conversational commerce. 

1. H&M's Chatbot Stylist

In 2016, H&M introduced a chatbot on the Canadian messaging platform Kik. This innovative tool functions as a personal shopping assistant, engaging customers through tailored inquiries, displaying real-time catalogue images to create personalized profiles, and providing fashion advice as a stylist. 

Kik successfully attained an impressive engagement rate of 86%, with users dedicating an average of four minutes to interactive sessions with the chatbot. The H&M chatbot enables customers to evaluate items and assumes the additional role of an influencer.

2. Four Seasons Chat

Four Seasons Hotels and Resorts features a chatbot that facilitates room bookings, reservations, and guest inquiries. The application facilitates 24-hour communication with Four Seasons personnel through a contactless chat interface. This enables guests to submit inquiries, make requests, and receive personalized assistance in more than 100 languages.

3. Starbucks Barista Bot

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Starbucks' Barista Bot, an AI chatbot, empowers customers to place orders using voice or messaging through the Starbucks mobile app. Supporting natural language, the bot seamlessly processes payments via linked credit cards or gift cards. 

Initially launched in iOS beta in 2016, this feature was progressively rolled out to all customers. Starbucks has further introduced a cutting-edge conversational ordering system, My Starbucks Barista, leveraging groundbreaking Artificial Intelligence (AI) within the Starbucks Mobile App.

4. "My Feeding Finder" by Gerber

Gerber's "My Feeding Finder" tool, crafted by nutrition experts, aids parents in selecting products for their baby's feeding journey. Accessible on Gerber's website and via the Formula Brand Switching Support page, this tool delivers personalized recommendations for babies, supporting parents engaged in breastfeeding, formula feeding, or a combination of both.

7 Benefits of Conversational Commerce 

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Below listed are the top 7 benefits of conversational commerce.

1. 24/7 Customer Support

In a digital landscape where time zones vary, and consumer needs are diverse, offering 24/7 assistance enhances accessibility and responsiveness. By leveraging automated chatbots or live agents, businesses can create an uninterrupted support system, leaving a lasting impression on users.

Regardless of location or the hour, customers can receive immediate answers to queries and prompt issue resolutions. This addresses concerns swiftly and builds trust in the brand's commitment to customer satisfaction. 

2. Upselling and Cross-selling Initiatives

By strategically integrating upselling and cross-selling, chat commerce transforms transactions into opportunities for proactive engagement, reinforcing customer relationships and contributing to sustained revenue growth.

Through personalized and real-time interactions, businesses can recommend complementary products, enhancing transaction value. This AI-driven approach, grounded in customer preferences, improves the overall shopping experience and fosters long-term satisfaction and loyalty. 

3. Elevate Customer Satisfaction 

By employing chatbots and real-time messaging, companies provide instant, personalized solutions, addressing customer queries promptly and leaving them feeling valued. This personalized approach, coupled with the convenience of messaging platforms, not only resolves issues effectively but also establishes a positive brand perception. 

Businesses prioritizing this aspect build lasting relationships and enhance customer loyalty through a seamless and efficient customer experience.

4. Foster Customer Loyalty

Conversational Commerce allows for proactive engagement, enabling businesses to anticipate customer requirements and provide timely assistance. This proactive approach, coupled with real-time problem-solving, establishes a trust that goes beyond mere satisfaction. This loyalty retains customers and amplifies the brand's impact through word-of-mouth recommendations.

5. Boost Conversion Rates

By seamlessly engaging with customers in real-time, businesses witness a notable surge in conversion metrics. A swift response to customer queries and personalized recommendations significantly enhances the likelihood of completing a purchase. In fact, studies show that businesses implementing conversational strategies experience a remarkable uptick in conversion rates by up to 30%.

The immediacy and tailored interactions foster a sense of urgency, propelling potential customers toward making informed decisions. This dynamic approach not only streamlines the buying process but also minimizes the chances of abandoned carts. 

6. Unified Service Across Channels 

Unified service across channels ensures a seamless and consistent customer experience across diverse touchpoints. Businesses foster operational efficiency and bolster brand credibility by integrating communication platforms across websites, social media, and messaging apps. 

This unified approach not only meets customer expectations but also highlights adaptability and customer-centricity. Customers appreciate the convenience contributes to sustained growth and positive brand perception, solidifying relationships in an interconnected market.

7. Expand Customer Data Insights 

Through seamless interactions, companies gather data points that drive personalized marketing strategies, refine products, and enhance services. This wealth of insights not only ensures present adaptability but positions businesses as forward-thinking entities, anticipating and meeting future customer needs. Moreover, the expansion of customer data insights facilitates strategic decision-making. 

7 Best Practices for Implementing Conversational Commerce in 2024

Below listed are the top 7 conversational commerce best practices to empower businesses in fostering meaningful customer interactions.

1. Adopt AI and Automation

Embrace artificial intelligence (AI) and automation to enhance the efficiency and effectiveness of your chat commerce platform. Use virtual assistants and chatbots to process orders, answer common questions, and respond quickly. Cars24 achieved a notable reduction of over 70% in its customer service expenditures, which is attributable to the successful integration of chatbot technology.

2. Personalize Interaction

Tailor the conversational experience to individual users by leveraging data and insights. Use customer preferences, purchase history, and browsing behaviour to deliver personalized recommendations and responses. Companies experiencing accelerated growth derive 40% more revenue from personalized strategies compared to their slower-expanding counterparts. Personalization fosters a sense of connection, increases customer satisfaction, and can drive higher conversion rates.

3. Cross-channel Experiences

Make sure that all of the channels—such as voice interfaces, social media, messaging apps, and online chat—work together seamlessly. It should be possible for customers to initiate a conversation on one channel and move effortlessly to another without losing context. Consistency across channels enhances user experience and builds trust.

4. Proactive Messages

Initiate conversations with customers proactively by sending relevant and timely messages. A significant majority, comprising 70% of consumers, exhibit a pronounced inclination towards patronizing enterprises that provide streamlined and engaging conversational interactions. When clients initiate contact, they seek prompt assistance. Proactive messages encounter all the mediums and barriers and choose the best possible way to reach out to the customer before they initiate a dialogue.

5. Provide 24/7 Customer Support

With AI in customer service, businesses can provide continuous support by offering round-the-clock assistance through automated systems and live agents. Conversational commerce should be available whenever customers need assistance, regardless of the time zone or location. This ensures prompt problem resolution and enhances customer satisfaction.

6. Offer Seasonal Discounts and Expert Advice

Use conversational commerce to deliver timely promotions and expert advice, especially during peak seasons or events. Leverage chatbots to share information on promotions and product launches or provide guidance on product selection. This not only boosts sales during specific periods but also positions your brand as a valuable resource.

7. Monitor and Analyze Customer Interactions

Regularly monitor and analyze customer interactions to gather insights into user behaviour, preferences, and pain points. Use analytics tools to track conversation patterns, identify common queries, and measure the effectiveness of your chat commerce strategy. Your conversational experiences may be continuously optimised and improved with this data-driven approach.

Conclusion

Conversational Commerce, or Chat Commerce, represents a transformative shift in the way businesses interact with customers. This innovative approach leverages chat platforms, AI, and messaging apps to facilitate seamless transactions and personalized engagements. From streamlining customer support to driving sales, the benefits of Conversational Commerce are multifaceted, which is why businesses, especially E-commerce, must implement it.

Do you want to transform your business stats with conversational commerce? App0 is here to help you out. It is a next-gen communication platform powered by machine learning (ML) & large language models (LLM) that allows you to embed communication features directly into your product with simple no-code integrations that don't require additional developer bandwidth.

Here's why leading E-commerce giants trust App0 when it comes to conversational commerce. With App0, you can guide your customers to order their favourite products anytime, hassle-free, with just a simple text—no downloads, accounts, or logins required! Moreover, it also has a chat-driven Seamless Checkout feature, which facilitates checkout for customers without having them exit the conversation thread. 

Getting started is a breeze; connect your data for tailored AI training. As customers text their concierge, our AI adapts learning preferences and behaviors to provide timely reminders and product recommendations. Let App0 transform your shoppers into loyal customers. Experience the future of E-commerce Conversational commerce success—request a demo now and witness the impact firsthand!

Conversational Commerce: FAQs