By: Sridhar B., Senior Consultant, LTIMindtree

The demand for e-commerce has grown exponentially in the post-pandemic world. With it, it has also brought in a few challenges for businesses to manage a large volume of customers in assisting them during the purchase as well as after-sale customer support.

According to a recent study, in the present times, a huge section of the population, especially the younger generation, spends at least 6 to 8 hours a day on messaging apps. Most of those users (around 80%) are willing to spend an additional cost on experiencing personalized shopping. This is where conversational commerce comes into play.

What is conversational commerce?

Conversational commerce enables companies to provide a personal touch to their customers and assist them in every step of their purchasing journey through various messaging apps, voice assistants, chatbots, etc. This personalized assistance helps in building a strong relationship with the customers.

A customer’s journey in terms of conversational commerce can be broadly classified into five different stages, i.e.:

• Awareness of a customer in terms of purchasing a product/service. This is the stage where a customer has identified the need to consume a product or service.
• Consideration of the product/service based on the details available. This is where companies reach out to customers with relevant information about their products and services.
• Decision on the product/services that they would like to purchase based on the consideration. The information provided by the companies through messaging apps comes in handy during this stage.
• Retention of customers by taking special care of them. After-sales service is an equally important step for retaining customers. Conversational commerce helps by providing the same kind of attention given to the customers during the sales process.
• Referring of the product/service to family/friends based on the customer experience. Remember, satisfied customers are always the best brand ambassadors of a product/service.

As per Statista, the increasing demand in this area of commerce is driving companies to spend over $290B by the year 2025.

Frequently used channels for conversational commerce

There are various channels used by businesses to reach out to their customers. Some of them are –

Text messaging

Essentially, this is a simple text message through which customers can contact the business. This can be a cost-effective way of interacting with the customer.

Social app messaging

It is estimated that over three billion people in 2021 were using social app messaging. The most used social apps were WhatsApp, Facebook, Instagram, etc.

In the current connected world, brands have an enormous number of followers on their Instagram/Facebook account pages. They send out direct messages to their followers with the list of ongoing offers and provide the ability for their customers to chat with their support agents and order products/services, which is quite an effective way of selling.

Chatbots

Chatbots are another popular medium for customers to reach out to the business. A chatbot is a type of software that automates responses using conversational artificial intelligence inputs and interacting with customers through messaging platforms.

Companies can customize chatbots based on the products that they offer to their customers. Chatbots help in reducing the load on customer agents to a large extent by responding to pre-configured, repetitive queries raised by the customers. It is a great way for businesses to reduce their operating costs.

It’s estimated that around 80% of customer questions are resolved through chatbots, thus ensuring that support agents concentrate on those who need real assistance.

Live chats

Live chats enable customers to easily access customer agents on most e-commerce sites for a hassle-free response. This also helps agents talk to multiple customers at a time, thereby reducing the waiting period.

Around 46% of customers prefer live chats to connect with companies, compared to other channels.

Voice assistants

Voice-assisted commerce is another form where a customer contacts the business through voice recognition technology. In traditional e-commerce, a user has to type in the search query or select by pointing and clicking. However, voice-assisted commerce works on audio commands by a user. The more the user interacts with the voice assistant, the better it will understand commands.

Around 83% of customers feel that talking directly to a person is the most effective way of customer support. It gives a personal touch to the communication. Voice assistance apps like Alexa, Siri, Google Assistant, etc. help assist businesses to give a personal touch to their customers.

Like the other channels of conversational commerce mentioned above, voice assistance channels can help businesses reduce their investments in customer support services if used effectively.

Why is conversational commerce critical in the changing world?

Wider reach
Based on a study, about 46% of the young generation prefer to use Text /social messaging when they interact with businesses. Hence, there is a wider reach to customers through conversational commerce.

Cost benefit
In today’s inflationary environment, it is important for businesses to reduce their operational costs to run their business. Conversational commerce plays a huge role in reducing operating costs by up to 30%, apart from ensuring improved customer service.

• It helps agents manage multiple customers (up to five-seven customers at a time) concurrently.
• It has no beginning and end points, unlike regular call center support models, thereby reducing telephone-related costs as well.

Enhanced services

The primary motto of any business is to provide the best services to its customers. Adapting to conversation commerce will help in enhancing the service to customers by reducing the turnaround time for responding to customer queries, improving accessibility, etc.

Personalized services

Through AI and chatbots, businesses can provide personalized experiences/suggestions to their customers based on their preferences as well as understanding the natural language, regionalisms, and even typos.

Lower rate of cart abandonments

In e-commerce, a key issue is cart abandonment. In many cases, customers visit a site but leave without making any purchases.

With conversational commerce, this can be reduced by 20 to 30% by sending follow up notifications and helping customers resolve their queries, and pursuing them to place orders.

Challenges with conversational commerce

Handling complex requests from customers is challenging at times, especially through channels like chatbots, for instance, given its various limits. While it follows a certain pattern to respond to customers, it may fail even with a slight change in the pattern.

In addition to this, the following are a few internal challenges faced by businesses

• Lack of digitalization within companies
• Educating the staff to adapt to new communication channels
• Educating the end users who are using the digital channels

Aspects to keep in mind

Though conversational commerce is a wonderful way to reach out to customers, it is also critical for companies to not push their customers too much (i.e. by sending too many information messages about the product and offers etc.), which may create a negative impact on them. Also, there is huge scope for improvement in this area. For example, in the case of chatbots, the conversations can be made more flexible to manage complex queries from the customers.

LTIMindtree capabilities in conversational commerce

LTIMindtree has built and implemented various solutions for its customers on conversational artificial intelligence. Learn more about our capabilities in the conversation commerce space.

Conclusion
To conclude, several research articles suggest that conversation commerce is the new trend. An increasing number of companies are adapting to this type of commerce to reach out to their customers. It is a wonderful opportunity for businesses to explore this type of selling to grow their business.