Published Jul 05, 2022

Conversational Commerce: The Secret To 10X Your Customer Experience

Table of contents

Looking for ways to refresh the customer experience that you offer, and foster a more intimate customer-and-business connection? Have a conversation with conversational commerce.

This article delves into the topic of conversational commerce for e-commerce, including what it is, how it works, benefits and types of conversational commerce. We’ll also look into examples of conversational commerce, helping you get a grasp of how chat commerce works in practice.

Ready to take your customer experience to the next level? Read on to learn more!

  • What is conversational commerce?
  • How does conversational commerce work?
  • Benefits of conversational commerce
  • Types of conversational commerce
  • Conversational commerce examples
  • Some last words

What is conversational commerce?

Conversational commerce refers to the intersection of customer conversations and shopping. It is also known as conversational marketing or chat commerce.

The term “conversational commerce” was first coined by Uber’s Chris Messina, in his 2015 article published on Medium. Broadly speaking, the concept of conversational commerce points towards the convergence of retail, marketing and instant communication.

In more particular terms, digital merchants stay in touch with potential or existing customers through online conversations and interactions, attending to customers’ needs in a personalized manner.

“Conversational commerce is about delivering convenience, personalization, and decision support while people are on the go with only partial attention to spare.” — Chris Messina 

With more advanced messaging and voice technology, the modes of conversational marketing are evolving over time.

Messenger apps, such as WhatsApp, Facebook Messenger, KakaoTalk and WeChat are common tools for enabling meaningful customer conversations. Chatbots and voice assistants are also becoming popular methods used to communicate with customers throughout their purchase journeys. Approach more potential customers using the whatsapp broadcast system.

The powerful presence of messaging apps and social networks offer immense possibilities for conversational commerce. WhatsApp now has some 2 billion monthly active users, Messenger has 1.3 billion, and China-based WeChat has more than 1.2 billion.

These tools may be invented initially for the purpose of texting and socializing, but their present-day applications are much wider than that. They’re the “bridge” that connects you to valuable customers.

Source: Statista

How does conversational commerce work?

The purpose of conversational commerce is to compensate for the lack of interactions in an e-commerce setting, hence guiding customers efficiently through the sales funnel.

In other words, chat commerce is closely tied with the customer journey. 

But how can you make use of and magnify the effects of each customer touchpoint? That’s the question, and Choco Up compiles possible answers to each key element.

1. Awareness 

When individuals realize that they face problems, and those problems could be solved by your products or services, they become more aware of and interested in your brand.

In simpler terms, awareness is the stage in which people discover your brand and develop the idea that your business offers customer-centric solutions. 

Conversational marketing tools, such as chatbots, allow digital merchants to establish closer connections with customers.

For example, by asking the simple question of “how can we help?”, you can sprinkle a little human touch to the online shopping experience. It gives customers the impression that you are ready to tune into their issues, and have the expertise to solve their queries.

2. Consideration

After brief research on your products, services and company background, potential customers become “warmer” leads.

At the consideration stage, consumers’ appetite for information on possible solutions to their problems continues to grow. They may look into your competitors’ information and compare different options, also they may refer to user reviews as a hint of service quality. 

Conversational commerce is one way to clear the ambiguity of what you offer and provide more product details. You may recommend products that cater for users’ needs — it’s more likely to win you a sale than letting visitors randomly browse on their own.

On top of improving e-commerce conversion, conversational commerce is also a technique for showcasing your “hospitality” and friendliness while conversing. After all, who doesn’t like an amiable shopping assistant?

3. Decision

We arrive at the crucial stage when the deal between your customers and you are ready to be set. In this phase, what you can offer is essentially guaranteeing your customers that they have landed on the perfect choice.

Conversational commerce aids your understanding towards consumers’ decision-making process and resolves any questions or difficulties that pop up along the way. All of these interactive efforts substantiate the customers’ decisions.

4. Retention

The sales funnel doesn’t end after customers buy what they need from you. Rather, you can engage with them and continue to deliver your best services with chat commerce.

Texting them from time to time and acting on their replies — especially the negative but constructive feedback — would help maintain trusting customer-and-business connections. It’s also useful for demonstrating your sincerity in improving your products in the future.

5. Advocacy

Advocacy may be the final stage of the customer journey, but it’s certainly not the finale in your relationship with customers.

A well-executed advocacy phase can spark a brand new cycle of customer journey, with repeat and new customers joining the club based on reviews or referrals.

Because past purchasers have first-hand experiences with your online store, they’re the best and most relatable group of brand ambassadors.

Besides, requesting product or service reviews would engage customers in the process of upgrading your services, and give a boost to their sense of community and belonging to your business.

Benefits of conversational commerce

The benefits of conversational marketing come in many forms: increased conversion rates, higher average order values, effective feedback collection and better customer loyalty. Let’s take a look at each of them.

1. Convert more customers

In the context of online shopping, some 70% of shopping carts are abandoned, but you can reduce that number with conversational commerce.

Source: Baymard Institute

One way that chat commerce helps increase your e-commerce conversion rate is through understanding the reason for cart abandonment. For example, when “do you offer free shipping” is a question asked frequently by customers, you’ll know that delivery fees are an obstacle to closing a deal.

Checkout reminders are also helpful for improving e-commerce conversion. Oftentimes, customers use their shopping carts as some kind of “wishlists”. They add products to their carts to bookmark what they want to buy, but they need a little nudge to hit the “BUY” button.

In these circumstances, your live chat assistants can send a friendly reminder to potential customers, asking if they need any help completing their orders. A limited time offer or special discount may also be given to appeal to the visitors — the sense of urgency is a time-tested technique to drive sales.

2. Upsell and cross-sell

Conversing with leads during the consideration stage doesn’t only bring improvements to your conversion rate. It has the potential benefit of increasing your average order value (AOV), too.

This is because conversational commerce gives you the opportunity to upsell and cross-sell related items. Unlike run-of-the-mill pop-up banners, promotional messages inserted in conversations tend to be more personalized and effective, as you’ve got a grasp of what customers like or want.

In fact, 75% of consumers say they’re more likely to make a purchase based on tailored recommendations. See? Personalization is powerful.

3. Collect feedback

Conversational marketing isn’t just a means to guide customers towards purchase decisions. Consider it your feedback form, the responses of which are extremely helpful for improving your products or services.

For instance, post-chat surveys are common in live chats. They collect customer feedback right after they’ve finished speaking with a customer support representative, letting you know how well your shop assistants are doing.

Sephora’s post-chat survey in a live chat inbox

Customer conversations are also excellent sources of feedback for your brand’s products. Statistics show that a whopping 96% of dissatisfied customers won’t file a complaint, and 91% of them simply won’t buy from the same store again.

Instead of waiting for unhappy customers to reach out to you and vent their anger, sending follow-up messages to ask for their opinion would help you better understand customers’ views of your products. This way, you’ll know what and how to create better offerings in the future. Your action also shows that you care about customers’ experience.

4. Build customer loyalty

From consumers’ point of view, personalized and timely assistance makes them feel valued and that their needs are being taken care of. This strengthens their level of satisfaction and loyalty in the long run.

Types of conversational commerce

There are different modes of chats and applications that facilitate conversational marketing. Check out the list of widely used communication types below and see which of them suit your e-commerce needs.

1. Chatbots

A chatbot is built-in software that allows visitors to navigate through a website, mobile app or product options.

As the rather intelligent chatbot can be integrated to different applications easily, lower costs of communication and maintenance are incurred during the process. Whether your customers have questions about shipping fees or the location of the nearest pick-up point, chatbots can promptly resolve customers’ queries.

The best part is that they can attend to multiple customers simultaneously, and work efficiently all year round.

2. Live chat

Live chat is another popular communication method used at online stores.

The tempting features of live chat include ease of access, intuitive usage and instant answers to questions asked on e-commerce websites or in apps. For eager customers, it provides more timely responses than their traditional counterparts like phone calls or email.

3. Messaging apps

Messaging apps like WhatsApp, Line and WeChat support instant messages and a wide variety of lively media, such as GIFs, emojis, photos, videos and audios in a private setting. This is a great chance for you to engage with customers and understand their current states.

For instance, a customer may want to replace their malfunctioning product with a new model that you offer. In this case, you could ask for photos or videos of their old product so as to accurately and professionally pinpoint the features that your customer wants to upgrade.

The cute GIFs, memes or your humor can emotionally engage your customers. Personal touch and a safe or private communication space contribute directly to customer loyalty.

4. Voice assistants

Voice assistants are activated by voice commands and attend to users’ questions, just like your Siri or Google Assistant. Other popular options among online retailers include Alexa or Cortana, and they are all highly compatible with different electronic gadgets. 

Thanks to artificial intelligence and natural language processing, voice assistants are highly adaptive and can learn about users’ interests or preferences and recommend solutions that match their behaviors accordingly, shaping personalized guidance and voice ads along their shopping journeys.

Conversational commerce examples

As chat commerce becomes marketers’ new favorite trick in moving consumers through the sales funnel, more e-commerce businesses are hopping on this useful trend.

Below are some examples of chat commerce in action. Let’s see what we can learn from them.

1. Sephora

Sephora, the French retailer of personal care and beauty products, has a handful of live chat assistants to answer visitors’ queries at their e-commerce site. These “Beauty Advisors”, as they call it, are quick to respond, kind and helpful.

While some customers ask for tailored product recommendations and advice, others may seek help from a Beauty Advisor to navigate the 40,000+ items available at their online shop. Either way, the conversation is real-time and as easy as texting a friend online.

What’s more, Sephora takes advantage of live chats to share special offers (e.g. free samples), and cross-sells related products based on what visitors have just asked.

At Sephora, the entire online shopping experience is just like that in a brick-and-mortar store. Shop assistants are always within reach to answer customers’ questions, help them out and even give out freebies. This is the kind of personalized experience that customers love.

Sephora Beauty Advisor offering personalized product recommendations

2. Domino's Pizza

As one of the first restaurants to provide online ordering, Domino’s has made great strides in digital transformation. The pizza expert, who deems themselves an e-commerce company that sells pizza, uses a variety of communication tools to reinvent the ordering experience.

One example is its Facebook Messenger chatbot. With options such as order tracking and online ordering, customers can easily find the support they need in the Messenger app. Despite being programmed responses, the bot talks very much like a human, with a lively tone of voice.

In its continued effort to revolutionize the food delivery industry, Domino’s has also rolled out a voice ordering feature in its own mobile app, enabling users to place orders hands-free and without hassle.

Source: Shorty Awards

3. American Leather

From the luxury furniture brand, American Leather, we can learn that conversational commerce isn’t just about closing a deal.

On the e-commerce site of American Leather, there’s a chatbot that provides post-purchase support to customers. From the list of pre-set options, one can track their orders, check repair and replacement information, apply for warranty, or request a copy of their order documents, such as invoice, credit memo or sales order acknowledgement.

Given that these information and procedures are rather factual, the strategy of leaving them to a chatbot is a wise one. Not only does it save costs for the retailer, but it also reduces response time and improves customer experience with the brand.

Source: American Leather

Some last words

Conversational commerce is growing, and it can help grow your business. Communication and connections that you are looking forward to are key to upscaling your online store.

For those looking to grow and scale your business to new heights, however, you’ll need much more than a friendly shop assistant.

To illustrate this, a complex checkout process would drive customers away, and online payment processing is pivotal to e-commerce conversion.

e-Commerce funding is another ingredient in the recipe for online success, as it would give you the resources to invest in inventory, marketing as well as other aspects of expansion.

With our smart-growth analytics tools, global payment solutions and funding for e-commerce, Choco Up is the go-to partner for growing your online business. Learn more through our clients’ success stories or apply for funding now.