There were markets, there were shops and then the internet happened. In all its briefness, that is the story of commerce. The internet changed everything. E-commerce has and is growing tremendously. The classical shop model is under extreme pressure to find ways to stay competitive as online takes an increasing amount of market share.
While E-Commerce revenue was 1.3 billion € in 2000, it was already 20.2 billion € in 2010 and is predicted to be over 48 billion € in 2017. The buying experience online is - in most cases - unbeatable. Price, convenience, and selection are the most dominant arguments. Things can be bought on-demand and same-day. This efficiency is hard to keep up with, especially by traditional brick & mortar stores.
However, somewhere along the line intimacy between shops and customers as such went missing. From very personal relationships between a shop owner and a customer based on conversations to interaction within, often very similar, online interfaces. Online shops are exchangeable in that matter that it is increasingly irrelevant whether you buy a new pair of running shoes from Amazon, Zalando, Nike itself or an unknown retailer, that has what you need.
Consequently, customers decide upon price, delivery, and convenience. To stay ahead among competition brands need to differentiate and live up to customers high expectations.
Amazon as such is making a pretty compelling case, offering almost any item that you could possibly imagine for often the best price and with the most convenient delivery. Intimacy between Amazon and the customer, however, is almost non-existent and the risk of someone using a different online shop omnipresent.
What is missing is that personal connection that simply cannot be established through occasional e-mails notifying about order status or a hotline that allows the customer to hang in line for several minutes only to talk to some call center agent. Especially not in today’s digitally driven communication that is characterized by intuitive, bidirectional and personal interaction.
This is exactly where conversational commerce comes into place. In basic words, the concept describes any kind of digitally occurring conversation between a user and a business regardless of channel. Conversational commerce is relevant for establishing strong customer relationships with the help of messaging structures.
Moving from a scattered landscape of communication channels such as social media, phone, and e-mail to one consistent and synchronized messaging thread. Predominantly this enables intuitive, personal and digital communication. Additionally time, location, and context-based recommendations are easily integrated and can be used to influence a customer's buying decision.
With the rise of mobile, messaging started making its way to become the preferred way of communication for users. The number of smartphone and tablet purchases increased from 68 million in 2006 to 1.729 million in 2016. In the same time, PC purchases moved from 239 million to 269 million. If we take a look at what differentiates smartphones and tablets from PC’s there are two obvious remarks to be made: the ability to take them wherever you want to go and the messaging aspect that was always mobile first.
People spend more than 80% of their time on a smartphone with messaging. The biggest 4 messaging apps have more monthly active users than the 4 biggest social networking apps. WhatsApp alone has over 900 million users, Facebook Messenger over 700 million. No surprise that when people prefer messaging for private communication they would also prefer messaging for communication with businesses - not at least stated by 88% millennials.
This paradigm shift is driven by user experience. Messaging allows conversations to fit into the way I organize my communication rather than the other way around. The language of messaging is much more accessible to a broader audience, even more so as users advance on a technical level. Every three year old intuitively knows how to use Apple’s iPhone. If brands adapt to this paradigm of communication - digital, informal and personal - it results in rewards from consumers.
The key benefits for users and businesses alike appear to be:
While conversational commerce is a rather new concept to most western businesses, it appears to be almost standard in Japan or China. The Chinese messaging app WeChat and the Japanese Line both with extremely high numbers of users have adapted the concept for a variety of business interactions. They have implemented features for business to talk and sell to users right within the messenger.
Opportunities are endless and user and business acceptance is highly advanced: An increasing amount of Chinese businesses set up a webshop on WeChat way before they build their own website. Some do not even create their own website at all. In Germany however, there is only a small number of businesses that have started experimenting with commerce in messaging structures. However, with Apple's announced of business chat, Facebook Messenger's features for businesses and Google's RCS the topic is one not to dismiss in the future.
After all, success will be determined by usability and convenience. Not only in the most common messengers, but also outside those chat apps. Businesses can use the great potential that messaging apps are showcasing and transfer these into their own structures and set-ups. Mapping the entire customer journey within a single interface like a messenger fosters a holistic understanding of customers and consequently significantly better insights and learnings.