The conversational commerce opportunity

It’s 2016 and mobile users have overtaken desktop browsers. More text messages are sent than actual conversations had and the world in which we know how to communicate is changing faster than you can find your favourite emoji.

The ubiquity of social networks has turned us from ‘talkers’ to ‘texters’ and the line between ‘chat’ and ‘consume’ is starting to blur.

At its roots, conversational commerce is not a new concept. Stripping back its technological application, it can be understood as the way the art of conversation is used to persuade the buyer to purchase – think good ol’ customer service. That was then, this is now; today artificial intelligence is shaping the future of commerce-driven, customer-centric conversations.

To give the conversational commerce opportunity context, last year people worldwide sent more than 8.3 trillion text messages. That’s almost 23 billion messages per day or near on 16 million messages every minute. According to Business Insider, there are more active users on messaging apps than there are on social platforms: “The combined user base of the top four chat apps is larger than the combined user base of the top four social networks.”

Why care about chatbots?

Usually driven by artificial intelligence (AI) and defined by rules, a chatbot sits on the other side of an online chat interface. At face value, computer driven conversations seem to be completely counterintuitive in creating a better customer experience. Why would living, breathing humans find comfort in a learned, artificial response and why should we care?

We care because there are now more people using messenger apps than social networks. We care because if executed correctly, chatbots have the potential to cut through the clutter and create user-led conversations that send e-commerce conversions soaring.

We care because WeChat, a Chinese mobile messaging app, burst onto the scene three years ago and has recently blasted past 700 million monthly active users and estimated in-app revenues of US$550 billion ($728 billion) per year, almost double PayPal.

The conversational convenience

Say you were looking to buy a gift online. In a present day e-commerce scenario, you’d head to a website, browse for what you wanted and if you didn’t give into frustration or distraction, you’d eventually make your purchase. It’s a largely autonomous and impersonal process.

In the world of conversational commerce, instead of browsing online categories for what you want, you can essentially send the merchant a Facebook message telling them what you want and, using AI, they can respond with suggestions. If executed seamlessly, this interaction can replicate the in-store retail experience and create a casual, conversation-driven customer experience.

By centralising all your communication, in-app messaging has the potential to monetise your conversations by giving you what you want, when you want it. A simple “see you soon” could initiate an in-app Uber order. Asking “what’s for dinner?” could see food delivered to your door and telling a friend you need new shoes could see you chatting with Nike, all without switching between apps or messages.

The e-commerce effect

The uptake of mobile messaging apps is for the most part being fuelled by a tech-savvy, digitally-native generation who show no signs of slowing down. Think about the potential the ‘messenger generation’ have to not only engage with new technology, but also to embrace simpler ways to communicate with brands in the same way they communicate with friends.

When you realise that the paradigm of customer service has shifted with the generation and good ol’ customer service has been replaced by a quick text, swipe or click – the e-commerce opportunity becomes a lot clearer.

In essence, conversational commerce short circuits the brand-to-consumer loop, essentially rendering brands an extension of your social network and quite simply, another contact in your phone.

Casual in-app conversations hold the potential to provide the customer with faster, more personalised service which, from a conversion optimisation perspective, opens the floodgates of opportunity. It’s a little like transforming a food court into a private dining experience with one click, swipe or tap.

Like any new infiltration of technology, there are obstacles to adoption and potential for both privacy and security breaches.

It might take a while to strike a balance between conversation and creepy, but when the bugs are ironed out and bots get busy, in-app messaging will most definitely be a force to be reckoned with.

Nicole Kersh is the founder of 4Cabling, building the company to annual revenue of $10 million. Nicole has notched up awards and listings including AFR Young Women to Watch 2013, Eastern Region nominee for the 2013 Ernst & Young Entrepreneur Of The Year program and Deloitte ‘Technology Fast 500’ Asia Pacific Winner 2012. She recently sold 4Cabling and and now runs The Content Folk and consults in the area of e-commerce strategies.


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