Will conversational commerce be the next big thing in online shopping?
MTRYING IS A intimate way to share private opinions and feelings. It’s a whisper of a cocktail in digital form, as one user of WhatsApp, a service owned by Facebook, puts it. Today, some of the world’s biggest brands are venturing into this personal realm. Recognizing the limitations of conventional communication channels such as call centers and email, a few years ago, companies started using WhatsApp and its sister app, Facebook Messenger, as well as Apple’s iMessage and independent applications such as Line.
The pandemic has given a boost to all of these applications. Messages on Instagram, Facebook’s photo-sharing app and Messenger increased by 40%. Four-fifths of the time spent on mobile devices is now spent on chat applications. Businesses can usually be relied on to get to where customers are. Messaging has therefore become vital for businesses, not just experimental, says Javier Mata, founder of Yalo, a startup whose technology connects businesses to messaging platforms. Companies used to use them primarily for customer service. Now they want to get people to buy stuff through chat, like hundreds of millions of Chinese do on WeChat, owned by Tencent, China’s most powerful tech giant.
Since many popular messaging platforms are encrypted, transaction data is hard to come by. But growth is definitely happening. Over a billion people now interact with businesses via chat, not counting China. Every day, 175 million people send a message to WhatsApp work accounts (WhatsApp channels designed for business). Yalo’s customers include consumer goods giants such as Coca-Cola, Nestle, PepsiCo and Unilever, as well as Walmart, the world’s largest retailer. Apple Business Chat, launched in 2017, is used by Home Depot DIY stores, Hilton hotels and Burberry, a fashion brand. Facebook’s list includes Sephora, a cosmetics retailer, and IKEA, a furniture giant. LVMH, a French luxury goods conglomerate, is testing messaging, according to Jeroen van Glabbeek, CEO of CM.com, a Dutch conversational commerce platform.
C-commerce is already well established in Asia and Latin America, where inconsistent access to high-speed, high-quality devices puts e-commerce and business-specific applications beyond the reach of many. Now, Western consumers are starting to appreciate the ease, speed, personalization, and convenience of messaging. For businesses, the return on investment seems higher for messaging than for call center exchanges or messaging channels, says Emile Litvak, head of corporate messaging at Facebook.
Promoters of commercial messaging say c-commerce will replace e-commerce within a decade or two. But messaging is best understood as a refinement of e-commerce and a sibling of âsocial commerceâ (social media shopping). Most messaging conversations between large businesses and consumers start from corporate e-commerce websites that have a “click to send” button. Many start on social media.
In some ways, c-commerce is a throwback to the past. Besides mail order and its modern look, online shopping, commerce has been built on conversation for millennia. However, there are new elements in corporate messaging. It’s more personalized than SMS marketing, which itself has been successful in recent years in America and Europe. Automatic messaging goes beyond rudimentary chatbots, which have been around since the mid-2010s. Artificial intelligence (AI) improves in the unstructured interactions that buyers had with expert retail assistants.
For now, says Marc Lore, who led Walmart’s digital efforts, a lot of commercial messages have humans in the loop. In the future, he believes, AI will be able to meet hazy customer requests such as “give me a birthday toy for a five year old around science education for about $ 40” by suggesting choices and completing the transaction by a few seconds. And when AI improves in natural dialogue, as it will after learning about human interactions, consumer-to-business messaging can look like JARVIS, Tony Stark’s digital butler in the Marvel comics, then pretty close.
Until then, companies must move forward with delicacy. Filled with family and friends, chat apps are emotional spaces, says Robert Bennett, CEO from Rehab, an agency that helps brands reach consumers digitally. Try selling some yoga leggings to someone after a trade with their mom, he says, and your business could end up going down faster than an ex. But get it right – think of a sweet reminder of an herbal tea vendor’s evening meditation – and the rewards look tasty. â
This article appeared in the Business section of the print edition under the title “Lines of Discussion”