Conversational commerce - what's up?

Once hailed as a game-changer, conversational commerce promised to revolutionise digital interactions through AI-powered chat and voice tools. However, as it often happens, the hype faded when it was noticed that the technology was not mature enough, and in some cases, customer experience suffered as a result.

Because of the rate at which AI tools develop in natural language processing, conversational commerce is making a strong comeback. Whether it's using on-site or in-app chats, conversational search, or established messaging apps such as WhatsApp, developments in AI are making conversational commerce a reality. 

Why should you converse with your customers?

Let's recap a bit and revisit the core question: why did conversational commerce become such a buzzword? And why should merchants converse with their customers?

The obvious answer – at least with chatbots – was cost savings. When you let AI handle the routine questions, it eases the workload of the humans and increases their job satisfaction. Companies are, for example, able to hire fewer seasonal support agents because AI helps them efficiently deal with customers' routine questions.

But the benefits extend far beyond cost savings. Conversational commerce is a great way to learn more about your customers. After countless discussions with different online retailers and close collaboration with the leading ecommerce companies, we've heard inspiring stories and use cases. For example, a leading retailer experimented with human chat support and uncovered surprising insights into customer pain points along the purchase journey and gaps in product information. This experiment not only improved the customer experience but also led to better business results. Today, they have a dedicated team of chat operators assisting customers throughout their shopping journey, with the help of AI, of course.

Conversational commerce also excels at providing support for complex purchases. When products or processes can't be simplified further, offering tailored assistance can ensure customers make the right decisions the first time. This reduces return and complaint rates while improving overall customer satisfaction. Adding features like enabling support agents or bots to place items directly into a customer's basket can further enhance the buying experience.

What's next?

Two key areas where conversational commerce advances rapidly are AI assistants and conversational search. While they tackle similar problems from different angles, these tracks may merge at some point in the future.

• AI Assistants

The AI revolution has done wonders for conversational commerce and bots are more and more capable of handling customer queries. There are a number of conversational shopping assistants available from both industry heavyweights and smaller players.

Some examples for retail are Zalando Assistant (video), Amazon Rufus (video) and Klevu’s Asklo (site). Google Shopping also recently introduced a roll-out for their assistant (blog).

These assistants help the customer find answers to queries like “What are good gifts for my 2-year-old niece?” or “I’m going to a wedding in Stockholm in July, can you suggest some outfits for me?”

The assistants can ask follow-up questions to better understand what the customer wants and then make targeted recommendations. They also learn from customer feedback, continually improving their performance.

• Conversational search

Chat has been at the forefront of conversational commerce, but one interesting topic is conversational search. This topic also sparked lively discussions with digital sales leaders at one of Columbia Road’s popular breakfast roundtable events.

As AI tools continue to evolve and refine their understanding of natural language, many search technologies are also becoming more intuitive. They can serve as the primary interface for customers engaging with your digital sales channel. For instance, rather than typing “black cardigan” into a search bar and manually applying filters, a customer could simply write “Black cardigan with a zip, size M, less than €100, available for pick-up.” Or, in the case of groceries, “Give me a vegetarian taco party recipe and add ingredients for eight people to my shopping basket.”

This approach streamlines the customer experience, particularly on platforms with extensive product categories and filtering options, while addressing screen space limitations.

Human vs. AI

As with all things, it is best to clarify your current status and goals before jumping into a technology project.

Setting up a chatbot or one of these new AI assistants could be pretty straightforward, but if you don't know what kind of support your customers need, it might actually make more sense to start with a human agent.

For example, provide the possibility to get help from a human being by giving a chat on product detail pages of one or two of your most complex products or places where you see the most drops in your sales funnel. This would allow you to quickly learn about what your customers need.

Whether you use human agents or AI, equipping them with comprehensive customer and product data is critical. This enables personalised assistance and ensures the helper, human or bot, can effectively meet the customer's goals. It's also an excellent opportunity to ensure your data is well-organised and up-to-date.

When introducing AI tools, consider starting with a hybrid approach: give human agents access to AI tools to test their effectiveness in real-world scenarios. Once the AI proves reliable, you can deploy it directly to customers.

Final words: embracing the future of conversational commerce

Conversational commerce has cemented itself as a key component of modern digital commerce. With AI advancing rapidly, now is the time to explore the latest developments and assess how they can benefit your business. If your customers heavily use search functionality, innovations in conversational search could be particularly impactful.

Start experimenting, see what kind of results you get and then scale.