Messaging apps, once an intimate medium for sharing private views, are taking on a new role to drive sales and customer engagement. The latest retail buzzword, ‘conversational commerce’, a convergence of shopping and conversations, uses messaging tools within the chat to create a seamless shopping experience along with customer service. This meets the needs of today’s customers, who base their loyalty on good experiences above price or product.
While the use of messaging apps to connect with customers is not new, its functionalities have expanded, enabling consumers to chat with store associates, receive personalised recommendations and make purchases.
Asia has the highest messaging population worldwide, dominated by WhatsApp, Facebook Messenger, WeChat, Viber and LINE. In Southeast Asia (SEA), fast becoming the new global e-commerce powerhouse, conversational commerce is set to hit US$47 billion in 2023. This offers Asian retailers an extraordinary opportunity to level up their customer experience, a critical need to reach today’s digital consumers.
E-commerce surges in SEA
SEA will see robust growth in retail e-commerce sales this year of nearly US$90 billion, increasing more quickly than anywhere else worldwide. Next year the region will cross the US$100 billion mark, a long way from the US$37.22 billion seen in 2019.
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This surge in e-commerce has also led consumers to increase their use of messaging apps and social media to communicate with merchants and inquire about information instead of searching for them online. Globally, one in five consumers use live chat or in-app chat daily and three in five consumers video chat with a business more now than 18 months ago.
Regionally too, conversational commerce is booming. According to a Bain & Co report, SEA has a higher percentage of internet users who are online consumers, 79 per cent, surpassing India’s 20 per cent and roughly on a par with the US at 75 per cent.
A combination of social media, short videos and messaging was found to be consumers’ preferred online channels for discovering new brands and products. In addition, 88 per cent of SEA consumers cited online channels as their top source of brand engagement.
Customer expectations and their need to communicate with brands have certainly increased. According to Facebook, 48 per cent of holiday shoppers are more likely to buy if businesses are contactable through instant messaging. With the use of conversational commerce platforms, businesses can meet customer expectations, offer personalised experiences and improve sales conversion rates.
Benefits of conversational commerce
Conversational commerce enables retailers to meet customers’ existing and evolving needs. Businesses with embedded commerce capabilities can serve, connect with, and sell to their customers from anywhere, on any channel. Some of the benefits of embedding conversational commerce solutions include:
Personalised experience
Integration of messaging apps can enable retailers to offer a customer-centric shopping experience, emulating a sales assistant at a physical store who makes personalised recommendations and guides you through purchases.
Also Read: Why live commerce is here to stay in Asia
This gives the seller the opportunity to use 24/7 available AI-powered chatbots to cater to and respond to customer queries instantly. This also allows them to gain insight into customer requirements, suggest products and improve product offerings.
Enhanced convenience
Conversation commerce enables consumers to get instant and easy access to brands, their products and their sellers.
Additionally, with the power of AI, conversational commerce is able to provide visibility on a consumer’s online shopping journey, from product inquiry, and product information search, to placing an order, payment and delivery tracking, without any friction.
Improved marketing campaigns
Businesses can leverage AI to gain insight into the purchasing habits of customers based on conversations with them and eventually use that information to personalise ads and display automated marketing content.
Overall, conversational commerce can deliver retailers a higher conversion rate, higher average order value and higher customer loyalty.
Conversational commerce critical to a seamless e-commerce experience
As e-commerce surges and consumers shift to direct messaging for online shopping, conversational commerce looks set to dominate the industry for years to come.
By allowing consumers to engage with their preferred brands conveniently and have fun shopping, conversational commerce is leading the way for businesses to enhance user engagement and experience, and drive growth.
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