This article was last updated on July 15th, 2024

In this article, you’ll learn:

• Early conversational commerce
• Conversational commerce plus AI
• Benefits of conversational commerce
• Examples of conversational commerce
• How to get started with conversational commerce
• Conversations of the future

Conversational commerce is shoppers’ use of chat (with either bots or live agents), social messaging apps, and voice assistants to shop and get assistance in online stores. They can ask questions, receive relevant product recommendations, make smart purchase decisions, complete transactions, and even get shipping updates, all while conversing electronically.

Early conversational commerce

Conversational commerce started out being fairly rudimentary, with the introduction of Eliza and other bots limited to spouting predefined responses. For years, chatbots followed pre-written scripts, making them an entertaining if not-quite-ready phenomenon. With the rise of ecommerce, they began to gain a functional foothold but didn’t generate much excitement.

With the release of Chat GPT3.5, chatbots emerged into the limelight as superstars of sorts. Now, AI-powered conversational commerce makes online chat seem smarter, personalized, and more intuitive to shoppers, which is nothing short of a game-changer for retail.

In this blog post, we’ll look at the latest developments in conversational commerce and how your organization can start benefiting from this cutting-edge technology.

Conversational commerce plus AI

With the advent of generative AI, conversational commerce (not to be confused with conversational AI) is taking on an astounding new status. These are some of the ways smarter conversational commerce is impacting customer journeys in ways that can lead to better revenue for ecommerce businesses:

Dynamic conversations

Unlike with old-style chatbots, generative AI has unleashed the ability to provide contextually relevant, personalized replies on the fly. Chatbots can instantly answer questions, recommend products, and assist with buying. And companies can text AI-generated personalized offers and recommendations, confirmations of orders, and delivery updates for shoppers’ quick viewing and response. For consumers, this can make interactions feel infinitely more natural and engaging.

Conversational checkout

With conversational commerce aided by AI, a shopper can be guided all the way through buying without ending a chatbot session or leaving the web page. They can get details (such as how a size should fit), add items to their online cart, apply any relevant discounts, and pay for their order.

Actionable insights

AI can be used to analyze customer conversations and gauge sentiment. By understanding the tone and context of messages, an online retailer can gain insights into customer preferences and pain points. For example, if multiple shoppers express frustration about a particular product feature, management can be informed in a timely way and have an opportunity to take corrective action before the situation gets out of hand.

Benefits of conversational commerce

Conversational commerce can deliver an array of outstanding benefits for an organization, including:

24/7 support

With the help of conversational AI solutions, online shoppers can get support day or night. If a shopper is a night owl and needs help at 3 a.m., whether they’re on your site or a social media platform, your AI assistant can be ready, willing, and able to answer questions. The shopper won’t have to wait until 9 a.m. to finally get help; they can get their issue resolved and head straight to checkout. Using round-the-clock bots also reduces late-night staffing expenses.

Saving time (and money)

Conversational commerce workflow automation makes it possible for a company to address the customer needs of hundreds — even thousands — of shoppers simultaneously. This saves both time and operational costs, enabling human agents to devote more time to addressing critical support issues. When shoppers need straightforward support, a capable bot programmed to handle simple conversational commerce use cases can be invaluable. In fact, according to Salesforce, 64% of customer service agents that have AI chatbots are freed up to solve complex problems.

Better engagement

Before conversational AI, customer engagement with a human on a sales floor was the gold standard. Conversational commerce offers different advantages, such as the ability to get one-to-one help 24/7 from anywhere in the world. It can deliver interactive experiences by offering personalized recommendations and pointing out promotions. It can provide multilingual chatbots to support shoppers in their preferred language. When a company can understand and respond in the same language to a shopper question such as “¿Me quedará bien el vestido de la talla mediana?” (“Will the medium dress fit me?”), the customer experience is improved.

An improved customer experience

An AI assistant can also provide your team with data and feedback that can be analyzed in order to better meet customers’ needs. Data such as multisession browsing history, purchase history, demographics, and feedback yield rich insights into shoppers’ preferences. When a company has these types of details from various touchpoints, marketers can effectively tailor messaging to resonate with customers. This can have a ripple effect, too: by providing personalized customer service, a company can strengthen its customer loyalty and retention.

Fewer abandoned carts

Statistics from Baymard Institute indicate that almost 70% of ecommerce shoppers abandon their filled shopping carts. The good news is that conversational commerce can help shoppers do less cart abandonment and more checking out. For example, a shopper may lose interest in their cart because they are distracted by a social media post. The company can follow up by having its chatbot provide a personalized note and real-time assistance through Facebook Messenger or WhatsApp. This personal attention may be just the nudge they need to complete the transaction.

Higher revenue

By making the online shopping process more convenient and personalizing interactions, conversational commerce can substantively help drive revenue. It can quickly turn into a revenue flywheel: as a chatbot becomes a trusted helper for shoppers, providing more value with every interaction, customers may become more open to hearing about recommendations and cross-sells.

Examples of conversational commerce

Sephora: proactive messaging

This beauty retailer uses in-app messaging to engage shoppers, providing tips, product recommendations, and exclusive offers. When a shopper shows interest in a particular item, the chat app sends advice or suggests complementary items.

American Leather and Dominos Pizza: customer support on websites

American Leather’s chatbot helps shoppers track down information such as their order status and warranty details; it can also point them to their nearest physical store. Not having to wait for a human representative makes for a satisfying customer experience with the retailer.

 

The Domino’s website chatbot is another good customer-support example, helping shoppers consider deals, customize and place orders, and track pizza delivery:

Burberry: ads in social media feeds

Burberry’s social media ads on Facebook and Instagram are a great example. Clicking leads to a chatbot offering fashion advice based on the shopper’s preferences and telling them about the latest collections. Plus, shoppers can easily make purchases directly from the chat interface.

How to get started with conversational commerce

Looking to integrate conversational commerce functionality on your site? Here’s how to do it efficiently:

Identify your objectives and use cases

• Set goals such as strengthening engagement, improving customer support, or streamlining the purchasing process.
• Choose use cases: You might focus on handling customer inquiries, providing personalized recommendations, facilitating order tracking, or sending in-app messages. It’s best to start with a single use case.

Choose channels and technology

• Identify the best communication channels: your website or mobile app, messaging apps, social media platforms.
• Choose the methods for rolling out your conversational commerce strategy. Options: chatbots, natural language processing (NLP) tools, and/or AI-powered virtual assistants that can be integrated with your existing CRM or ecommerce platform.

Develop and integrate

• Create scripts that your shopping assistant can adopt when talking with users. Review and refine the language so that it sounds completely natural.
• Integrate the functionality with your systems to allow for real-time information retrieval and transaction capabilities, such as checking product availability, updating order status, and processing payments.

Personalize customer interactions

• Apply data from your shoppers’ previous interactions, purchase histories, and browsing behavior to create personalized experiences, tailoring responses to reflect their preferences.
• Continuously improve personalization as the system uses machine learning to further refine content with each interaction.

Test and optimize

• Do a pilot test to evaluate the performance.
• Gather user feedback to identify areas for improvement.
• Adjust: Refine the conversational flows, response accuracy, and other aspects of the user experience.
• Continually monitor performance. Track key metrics such as user engagement, conversion rates, customer satisfaction, and response times.

Train staff

• Train your customer service team on how to use your conversational commerce tools.
• Outline how to escalate to human agents (if needed).

Ensure security and compliance

• Implement robust security to protect your data and maintain customer trust.
• Comply with regulations and ecommerce industry requirements.

Plan to expand

• Build in scalability so your business can handle more interactions.
• Explore expansion opportunities for new channels and markets.

Conversations of the future

Conversational commerce is on track to keep revolutionizing shopper interaction. AI-powered chatbots and virtual assistants are becoming ever more sophisticated, and that momentum shows no signs of slowing down.

Learn more

Want details on how you can better connect with your potential customers and increase sales? Check out this webinar on humanizing digital experiences with Algolia CEO Bernadette Nixon. You can also sign up for access to our Conversational AI Co-Creation program.