Coined by Chris Messina (the creator of the hashtag) in a 2015 post, conversational commerce, or cCommerce, is the evolution of the traditional e-commerce experience focused on providing consumers with personalized convenience and decision support on the go. Conversational Commerce allows customers to interact with merchants through chat interfaces such as Facebook Messenger and WhatsApp. Unlike traditional e-commerce, conversational commerce allows customers to complete purchases without ever leaving the messaging interface. At the time, Messina predicted that these “concierge-style services could become the primary way people do business with their mobile devices.”
But despite the prediction, we haven’t actually seen this approach take full shape. The mismatch between consumer behavior and an immature shopping environment prevented adoption. Until now.
Why conversational commerce is not (yet) successful
The use of chatbots and other messaging platforms such as WhatsApp, Facebook Messenger and Twitter DM can make conversational commerce appear as an attainable strong contender to consumers and businesses. However, despite the excitement surrounding the technology, it has yet to fully take off due to a few critical factors.
Mobile and SMS marketing have not been well used by D2C brands.
In 2015, most of the traffic still came from desktops. Direct-to-consumer brands focused on their website and email reach instead of expanding to SMS to engage with their audience. Since then, mobile traffic attribution has increased, with nearly three out of four online purchases now being made on mobile.
D2C has only caught on in the last five years.
E-commerce was growing steadily before the pandemic, but subsequent lockdowns accelerated industry growth. In response, brands’ success in digital transformation accelerated their adoption of D2C as they began exploring other ways to market and sell their products online. Big logos like Pepsi, Sephora, and Hyatt Hotels have taken over popular ecommerce platforms like Shopify to engage with customers where they spend most of their time.
Confusion around use cases related to customer service and sales.
In conversational commerce, the term “commerce” implies a conversion event that would traditionally be a purchase. But the concierge style of “conversational” term also implies a level of customer service and clouds cCommerce’s goals. Now more than ever, brands understand that the customer experience, including customer service, supports long-term conversions and the value of the customer’s lifetime. Due to the previous separation of driving conversions and customer service, overtime has mixed more naturally.
cCommerce was not a priority or core business model for platforms that had the opportunity.
Social media platforms like Facebook have the advantage of knowing the interests, hobbies and activities of their users. Although they have built marketplaces, the primary business model for these platforms has been advertising, not commerce. And while chatbots were introduced on these platforms to support more customer service-oriented use cases, the effort and strategic direction necessary to integrate with other platforms in the technology stack to drive a holistic c-commerce experience was probably too prohibitive.
SMS solutions were API-oriented for developers, not marketers.
Ecommerce marketers are trying to increase sales. Developers typically try to create technology or technology-enabled solutions. SMS solutions like Twilio were previously designed with a focus on API documentation for developers to build SMS communication solutions, rather than with marketers as the core person in mind. Turnkey interfaces and out-of-the-box integrations are critical to setting up a new marketing channel and marketers embracing it.
With the advent of low-code and no-code, SMS marketing has been more easily embraced, but the communication style comes with its own set of challenges. It’s a whole new world for brands to approach real-time deliverability and direct two-way communication, which requires a user-friendly guide for the marketer’s end-user.
Previous cCommerce approaches prioritized AI and chatbots for reasons of technology rather than product value.
AI and chatbots helped develop the communication, but they lack the intended value for customers that cCommerce aspires to. Purely automated chatbots are very linear and often turn off consumers because they lack the flexibility for authentic, personalized engagement. Truly effective cCommerce requires a combination of automation and AI, but with a human-powered interaction layer to top it off.
Why c-commerce makes more sense now than ever
With 86% of customers willing to pay more for better customer experiences, brands are ripe for the opportunity to go full-on conversational commerce today. Among the different forms of customer support, live chat has the highest satisfaction rate at 75%, followed by email (61%) and phone (44%). The D2C ecosystem and consumer behavior have evolved enough to support cCommerce.
The right ecommerce ecosystem
The e-commerce ecosystem has evolved in leaps and bounds since 2015, with data ingestion and transmission being possible across relevant technology platforms. Not only is the customer better understood with richer, higher-quality data on their preferences and behavior, but market demand for an open API ecosystem has also increased the focus on user experience and the pool of end-to-end touchpoint opportunities extended for the customer journey.
Where previous ecommerce platforms were cumbersome, turnkey platform development like BigCommerce and Shopify is arming D2C brands with more agile and standardized tech stacks to deliver enhanced customer experiences.
Reduced conversion friction
With a focus on user experience, new tools aimed at making shopping easier have expanded c-commerce possibilities. Shop Pay installments like Affirm and digital wallets combined with click-to-buy technology have reduced customer journey pain points and lubricated the purchase funnel for smoother conversions.
With these tool improvements, an external platform that integrates with messaging channels is compelling. SMS is a universal messaging medium, with carriers (Verizon, AT&T) and native SMS publishers/device manufacturers (Apple, Google) being the only proverbial gatekeepers. Strict regulations surrounding SMS marketing (Application-to-Person or A2P) force the channel to deliver higher quality engagement than other conversational channels. Customers are far more likely to engage if they volunteer to sign up than if they’re pinged by passively browsing a dedicated social platform.
If the ecosystem and technology are aligned with customer behavior, where does that leave us with cCommerce?
Full-fledged conversational commerce requires people
Getting back to the heart of c-commerce, it focuses on providing concierge-style commerce services. For brands to fully offer this level of customer-facing transactions on mobile, they MUST offer more than just chatbots — human agents will be a critical enabler of c-commerce success stories.
People want a human connection in their online interactions and SMS is, of course, the most personal channel willing to support that demand. By bringing live agents into the SMS channel, brands can fully develop their c-commerce strategy and deliver convenient, personalized, customer-centric experiences.