Insights

Conversational commerce is about to revolutionize retail

Retail Practice Lead, Canada
Valtech

April 19, 2016

2016 will be the dawning of the year of conversational commerce; and it’s going to change the way we interact with brands forever.  Chatbots, a new add-on for instant messaging apps, are poised to disrupt retail apps within the next year or so.

Chatbots, a new add-on for instant messaging apps, are poised to disrupt retail apps within the next year or so. By integrating artificial intelligence directly with instant message conversations, there will no longer be a need to switch to a retail app to buy a product, request a service or order lunch. You can now order a pizza, a Uber, or reserve a movie ticket all through instant messaging using natural language.

Take the following instant messaging conversation, for example:

  • You: What time does the birthday party start?
  • Friend: Try to be here in the next 30 minutes.
  • You to Uber: "I need a ride."
  • Uber: From your current location?
  • You to Uber: OK
  • UBER: Your ride will be there in about 5 minutes.
  • You to Bakery: I need a cake.
  • LOCAL BAKERY: Chocolate or Gluten-free?

And so on…

It’s that simple. Within the flow of a conversation, you place your order and make payment. Whether you're talking to your mom, your best friend, a colleague or a brand / service, use natural language to get the job done.

More active instant messaging users every day

According to the Pew research group, 97% of smart phone owners use text and 257 billion text messages are sent per day, creating a huge opportunity to engage audiences where they are spending most of their time. The Economist calls Messenger Apps “arguably the most successful smartphone apps,” adding that the 10 biggest, including What’s App, Facebook Messenger, We Chat and Viber, collectively boasted 3 billion accounts as of last year.

People love to talk to each other using messaging Apps. As a cheap alternative (and a richer experience) to operator-based text messaging via SMS, it's attracted millions of users, and growing. As of January 2016, there were 900 million active users on WhatsApp, 800 million on Facebook Messenger, 860 million on QQ mobile, 650 million on WeChat, and 300 million on Skype according to Statista. In addition, 212 million became active on LINE, acquired by Facebook for 19 billion U.S. dollars last year.

Chat bots and conversational commerce will be a major and revolutionary leap forward for MCommerce in 2016. It’s incredibly simple, and it’s going to catch on.

Mobile Commerce is Growing

According to eMarketer’s latest statistics, 95.1 million Americans ages 14 and older, or 51.2% of digital buyers, will make at least one purchase via a smartphone in 2017.

Facebook messenger is making sure they’re in on the action.

Last year, Facebook launched Messenger for Business, offering brands a developer toolkit including customizing colors, nicknames and emojis, the ability to send and receive money to friends through conversations, and making it easier to send photos and share your location.

This year, Facebook expanded its offering, by giving businesses the opportunity to develop chat bots for Messenger. This allows retailers to turn conversations into commerce. 1-800 Flowers, Shop Spring and CNN are some of the few brands that have already jumped on this new platform.

"It is so much easier to do everything in one place that has the context of your last interactions, as well as your identity – no need to ever login – rather than downloading apps that you’ll never use again and jumping around from one app to another," Facebook VP of Messaging David Marcus wrote in a Facebook blog post. "Our early tests in 2015 with brands are showing that interactions will happen more and more in your Messenger threads, so we’ll continue making it easy for you to engage with businesses, and we’ll also do more to enable additional businesses and services to build the right experience in conversations."

Facebook isn't the only one in on the action.

A new tool launched out of San Francisco called Assist is bringing conversational commerce to the masses ahead of the game, with its campaign tagline asking "Do you really need an entire app for that?"

Send flowers, order an Uber, Yello Taxi, City Mapper or Lyft or book a hotel, get a haircut or print and send a letter using the Assist Chatbot. It's available for SMS, Facebook Messenger, Slack, Telegram, and Kik.

Instant Messaging will be the next major retail commerce platform

Retailers will need to shift their digital marketing budgets, and go where the people are. Conversational commerce promises to make the experience of shopping online more fluid than ever thought possible. It is about delivering simple and direct convenience, with personalization and decision support while people are on the go.

We all text more than ever, so why not send payments, buy products, order on-demand services, pay bills, get the dog walked and order dinner through chat and messaging services?

Combining artificial intelligence bots and humans, there's a whole lot of potential for quicker sales, better customer relationships and much better customer service using natural language.

Proceed with caution: it’s personal

Today "there's an app for that." Tomorrow, "there's a bot for that." The difference? Bots are integrated to messaging apps you are already using, keeping the experience simple, fluid and hassle-free. Still, brands need to proceed with caution. Unlike other platforms, this is much more personal. The risk of being intrusive is much higher. Retailers cannot approach it like other digital platforms. It's important for retailers to only be in the right conversation at the right moment and be sure they really provide value.

I predict that consumers will welcome bots with open arms. Many of us experience “user fatigue”, as the apps on our devices have become far too numerous. People are tired of downloading and switching apps for each and every service.

Conversational commerce is here. This new paradigm will be a game-changer. Say hello to retail on instant messaging.