What Is Conversational Commerce?

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Filed under - Industry Insights,

Monica Maria of Freshworks introduces us to conversational commerce and how the concept can be applied to your contact centre.

A Definition of Conversational Commerce

Dan Miller, the Lead Analyst and Founder of Opus Research, Inc., coined the term “conversational commerce” in 2013.

Back then, conversational commerce was defined as a way in which phones and computers can be utilized to answer customer questions. The personalization that businesses hoped for then is now a reality.

Today, this definition of conversation commerce is extended to an online business that is carried out using various messaging tools and modern technology, such as messenger apps, chatbots, artificial intelligence (AI), and NLP (natural language processing).

Poundit.com, for example, a leading gadget store in the Philippines, uses conversational commerce to assist and engage with customers throughout the customer journey.

With the implementation of Freshchat’s conversational AI platform, Poundit.com was able to improve conversion rates and engage in context-rich and proactive communication in no time.

4 Business Advantages of Using Conversational Commerce

Conversational commerce represents a paradigm shift in how brands and customers interact and has a huge impact on every touchpoint in the customer journey.

Using conversational commerce has a lot of advantages, including:

1. Humanizing Commerce

While ecommerce has revolutionized the way people shop today, it can be quite a trying experience for customers because what it makes up for in efficiency, it lacks in personalization. Conversational commerce changes that for your online brand.

For example, Freshchat’s AI-powered chat solution captures leads, looks for intent, and connects the prospect to the right sales or support expert.

As an online business, you can leverage good conversations to your advantage by truly engaging with customers and move the personalized in-store shopping experience online.

2. Increased Capacity, Speed and Availability

Chatbots can exponentially scale your support capabilities. Unlike humans, chatbots can hold hundreds of conversations simultaneously so that customers don’t have to wait in line for a response.

Not just that, they can also provide 24/7 support, and even offer support in multiple languages, with the right plug-ins.

And chatbots can be trained to be more than just the first line of deflection, handling repetitive queries. They can be trained to understand the customer’s intent and respond with appropriate responses.

What’s more, this frees up your support team’s time so they can focus on complex issues that only live agents can solve.

3. Increased Sales

Most often ecommerce brands make the mistake of using live chat or in-app messaging platforms solely for the purpose of addressing traditional customer service functions.

At other times, chatbots are seen as mere branding experiments.

While that’s a good thing, brands are missing out on the opportunity to cross-sell or upsell to customers.

Conversational commerce opens up these opportunities to increase revenue, reduce costs and mitigate returns.

4. Happier Customers

In recent years, customer expectations have steadily increased. They now seek simple, instant, and 360-degree support from businesses.

Quite understandably, this has turned customer experience into the new battleground for ecommerce brands.

Conversational commerce allows you to proactively engage with customers and use data to provide well-timed recommendations that create a positive and happy customer experience.

4 Types of Conversational Commerce Channels

There are four different conversational commerce tools in the market today that allow customers to interact with brands from anywhere and at any time.

Most of them seamlessly integrate with your existing ecommerce tools, enabling you to provide an omnichannel customer experience.

1. Messaging Apps

Conversational commerce through different messaging apps such as WhatsApp, Facebook Messenger, Slack, etc. enables you to engage in personalized conversations with customers without having to navigate to a website or toggle between different apps.

Geared with easy access and a familiar UI, messaging apps are growing in popularity among both customers and businesses.

2. Live Chat

Live chat is one of the fastest channels of conversational commerce. In fact, many customers prefer live chat to other customer-facing channels because frustrated customers want quick answers and live chat enables you to provide them.

Moreover, it isn’t just a simple chat tool but also a robust ecommerce solution. 44% of customers say that it’s important to have a live person answer their questions during their online purchase – according to Oxnia.

3. Chatbots

Chatbots as a mode of conversational commerce allow your brand to cater to customers’ needs with the speed and efficiency your customers expect.

Also, they make it convenient, secure, and flexible for your customers to interact and make an online purchase.

Freshchat’s chatbots are powered by AI. They come packed with two key technological components.

IQ – Freddy Answer Bot uses machine learning (ML) technology to analyse customer conversations on email and chat to generate a list of questions that need better answers.

EQ – Our bots are also trained on NLP models to detect the intent of your customers. This enables them to either engage in small talk with customers or hand over the chat to a human agent.

4. Voice Assistants

Voice assistant(s), also known as voice commerce, is a technology that is powered by NLP and enables interaction between your brand and customers using voice commands.

Simply put, it’s an alternative to using a keyboard and a mouse to make an online purchase.

Voice assistant helps you find, order, and purchase a product online, as long as the voice assistant can hear you.

Should Your Ecommerce Business Use Conversational Commerce?

If you are an ecommerce brand that’s wondering whether or not conversational commerce is the way to go for your business, here’s a little advice.

I’d like you to consider and answer three questions:

  • Does your brand have an online presence or are you looking to take your brand online?
  • Does your business see a high volume of sales and you are unable to manage it?
  • Are your customers digitally inclined like your brand?

If the answer to one or more of the questions is yes, then it’s time to implement conversational commerce into your customer engagement strategy.

How to Implement Conversation Commerce

Now that you are ready to dip your toes into conversational commerce, here are two things you need to think about when it comes to choosing the solution.

1. What do you want to achieve?

There are various purposes that you can use conversational commerce for:

  • Collecting order information or updating it
  • Handling pre-purchase questions from customers
  • Offering discounts, cross-selling, and upselling
  • Sending shipping information
  • Collecting customer feedback

2. What is the best way to achieve it?

There are different ways in which you can set up the solution:

  • Automation based on the history of customer actions and interactions
  • Automation triggered based on customer action
  • Manual – based on customer segmentation
  • Manual – responding to a query from a single customer

Choose Your Channel Mix

The ideal solution depends on the purpose of using conversational commerce.

Once you have that figured out, here are some of the approaches to implementing the solution. (Remember, it isn’t necessary to use only one of the conversational commerce channels.)

  • Use instant messaging apps like Facebook Messenger or WhatsApp to chat with your customers and resolve common queries. Integrate it with your existing live chat software so that you have all the queries logged and responded to from one place.
  • Use an AI chatbot platform to build chatbots. Freshchat is one such platform that allows you to create and deploy chatbots without prior coding experience.
  • Implement pre-existing Alexa Skill or Google Action for your customers.

Pro tip: Always test, take feedback, and roll out only the best version that works for your ecommerce business.

Measuring Success

After you’ve implemented the conversational commerce solution, you want to know if it’s working, don’t you?

Apart from looking at the ROI and customer satisfaction (which are definitely important metrics), here are a few other customer service metrics you need to track closely to establish the success of the solution:

  • Sessions per user
  • Average session duration
  • Number of interactions per user
  • Confusion triggers
  • Response time
  • Conversion rate
  • Retention rate


Conversation commerce has become more important than ever because its conversational style of communication compensates for the lack of personalization and warmth in the online shopping experience.

Now that you know everything you need to know to implement conversational commerce, what are you waiting for? (If you are looking for a conversational commerce solution, you know where to find us.)

Author: Robyn Coppell

Published On: 12th Jun 2020 - Last modified: 16th Jun 2020
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