Is This The Age of Conversational Commerce?
‘Conversational commerce’ is an underwhelming name, isn’t it?
It’s vague, but when you get to grips with its connotations, disappointing too.
It sucks the fun out of both dialogue and shopping.
But I don’t make these names up; not yet, anyway. I’ve been toying with Con-Com, although that’s probably a comic-book event.
So, thanks for clicking.
There are jazzier article titles out there and you’ve given this one a chance.
And now you’re here, buckle up for some insights. Because although the name is uninspiring, a number of fascinating topics reside under the umbrella of e-commerce.
We’ll start with a look at what conversational commerce really means, and why it will or won’t take off in the near future.
Then, we’ll move on to the latest c-commerce news from Amazon, Apple, and Facebook, with a particular focus on the latter.
This week, Facebook released a new report on c-commerce and announced Facebook Horizon, a virtual reality version of the social network. The timing is unlikely to be an accident.
At the heart of this discussion lie two key questions:
After so many cycles of hype, why might people engage with c-commerce now?
How can companies play the role of assistant, rather than irritant?
Let’s take a look.
Remember the bad old days of SMS marketing? Companies would send out mass messages containing OFFER CODES and the like, to anyone with a phone. Some of them still do it.
The underlying rationale is sound enough.
A text message is cheap, quick, and easy to understand. If written with a little imagination, it could pique the attention of a small-but-significant minority.
If the customer doesn’t engage with the message, little has been lost. I was always more annoyed with the medium than the specific message.
The limitations of the technology revealed themselves in the execution of SMS campaigns. It was never intended to be conversational; the onus was always on conveying information.
Some of those limitations are lowered in 2019, raising optimism that we are entering the age of conversational commerce.
Conversational commerce sits at the center of a number of technological developments:
Digital assistants: The popularity of smart home devices and software like the Google Assistant has normalized the idea of speaking to technology.
Natural language processing: The technology is better at understand not only what we say, but also what we mean.
AI language generation: Some chatbots can respond without recourse to limited, rules-based systems.
Smartphone adoption: The smartphone is the first Internet-enabled device many global users will access. By 2021, there will be an additional 500 million smartphone users, making a total of 3.8 billion devices.
Cheaper mobile data: The cheapest mobile data is now available in India, which means always-on digital communication is more accessible in one of the fastest-growing markets.
Better data management: Companies are starting to organize and process customer data in a way that leads to simpler shopping. The best assistants operate in the background; companies do this by making efficient use of their data.
Messenger apps: There are 100 billion messages every day on Facebook products alone. Amidst the chatter, a few brand messages will be acceptable to most people.
This all creates an environment in which companies can, potentially, personalize their messages, develop a connection with their audience, and simplify the shopping experience.
Intuitively, it makes sense for shoppers and sellers, as well as the intermediary.
For example, the FT reports that “Apple is prompting users on its iPhones who attempt to make a call to companies such as Burberry, Hilton and Verizon to “start a Business Chat instead, so you can interact with a business from a text instead of waiting on hold.””
This week, Amazon announced a whole newsletter’s worth of voice-activated products, including an oven, some glasses, and a hideous ring. You can see the full list here.
It is a heavy-handed approach, but it might just work.
After all, people require assistance to find the right products, just as they always have when shopping offline.
However, in the digital world, the “endless shelf” of e-commerce sites makes the whole enterprise of shopping an effort in persistence.
Connected, conversational devices can pick up on signals in our language to shape the service we receive.
Amazon even wants Alexa to infer our frustrations from our tone, which is only the beginning of what they want to know about us. (One for a hi, tech. in the near future.)
All of this can alter the typical online shopping journey in a number of important ways.
How People Use Conversational Commerce
Apparently, 54% of people have abandoned a particular site because it was too difficult to find the right product. Most (71%) will switch to a competitor that makes finding and choosing the right product easier.
Conversational commerce should focus on what makes dialogue such a fundamental component of our lives.
In particular, they need to listen and respond with an additive point. It is unlikely that we want to chat with a company because we think they’re our friend, so the exchange will always be functional.
If people really do start chatting to brands like they’re their pals, I’m saving up for one of those tickets to the Moon. This planet is no longer my home.
We have our preconceptions that younger “consumers” (or people, if you prefer) are more likely to engage with anything new.
However, the messaging interface is the homepage of the smartphone age.
Often, we don’t even unlock to read them; they are there, on our phones, laptop screens, or watch faces. Somebody always has something to say and they want to say it in a text.
“Intuition would say that millennials like our text service most, but I will tell you that our core customers are just as engaged as the younger demographic who might be more tech-savvy.”
— Tori Forbes-Roberts
Delta Airlines
That holds true for all demographics and looks unlikely to change.
As more people get online around the world, they are introduced to data-lite messaging apps like Facebook Messenger and WhatsApp.
Companies can now make use of more advanced and interesting creative formats through messaging apps, too.
This opens a host of use cases that could benefit the user. They can get an instant response, on their terms, and could even negotiate prices based on their specific needs.
Put simply, conversational commerce can reduce the friction that our brains are always so keen to avoid.
Other challenges remain steadfast, however.
Why We Can’t Have Nice Stuff
Companies have a history of abusing such tools and, frankly, ruining it for everyone.
They do so under the guise of “improving the customer experience”, unaware or uncaring that every single, similar company under the sun is saying similar things in similar rooms, in similar suits.
This is an Opportunity with a capital ‘O’, something to pursue until the customer says no.
Sure, Burberry will see c-commerce as a “big bet”, but so too will Prada and Fendi and Gucci and Dior.
Those audience lists will overlap not just with each other, but with thousands of others.
Add in other retail verticals like groceries or homeware, and the same customer could receive a overwhelming number of messages from brands, all aiming to “improve the customer experience.”
I am frequently struck by the self-serving logical fallacies that arise in such meetings.
Yes, your audience may well send a lot of messages online. They may follow your company Twitter account or have bought a few pairs of your jeans.
However, these dots are joined in a cavalier fashion normally the reserve of toddlers, under the auspices of “data-driven strategy”.
The addition of ‘Customers use messaging apps’ to ‘We can message them’ needn’t always equate to ‘Let’s message them’.
Unfortunately, our approach to online measurement often depends on reaching the point of frustration. This is our signal that the creative has begun to “fatigue”, a euphemism of comforting, Francophone root for “We’re really pushing our luck here, guys.”
Until that point, keep pushin’ on.
The companies that reap the rewards of this approach will take an honest appraisal of their audience’s preferences, with an empathy that extends beyond the brand bubble.
Focus on allowing the audience to customize the interaction, rather than going for presumptuous personalization based on data they didn’t even know you had.
That said, for all its potential pitfalls, it does appear that conversational commerce is starting to break through.
In the introduction, I mentioned a new report from Facebook this week.
It found that 40% of c-commerce buyers say that was how they first started shopping online.
Facebook wants to encourage brand-customer conversation on Messenger, of course. It also has some exciting and/or terrifying visions of where this all might lead.
FACEBOOK HORIZON
“Last holiday season, 2 in 3 people surveyed globally told us they had messaged a business.”
Facebook commissioned Boston Consulting Group to carry out some research into conversational commerce. BCG asked about 9,000 people across 9 countries to detail their expectations of c-commerce exchanges.
You can see the findings here. As you’d expect, they found that people like technology, but brands are under-performing today.
If only there were a messenger platform that could help companies perform better, eh?
Earthy realism aside, the report did uncover some intriguing points.
For example, some users found that over Messenger, a seller can send more honest photos of a product. Rather than going by the glossy on-site images, the buyer can see what they’re really getting before it arrives.
The cultural dimension of conversational commerce also came to the fore in this report:
“Consumers in the Asia-Pacific region are 1.26x more likely than the global average to use messaging for product research. And in Latin America, people use WhatsApp at levels 1.43x higher and Messenger 1.28x than the global average in general.”
There is no doubt that Facebook has cast its eyes to China for inspiration. I have written before about Zuckerberg’s plans to ape the strategy of WeChat, so I’ll keep it brief here.
Brand messages fit into the WeChat aesthetic rather neatly; many of their creative campaigns make the current Messenger ads look very subdued. It’s an altogether flashier affair, with cars and handbags popping up all over the place.
Given Facebook’s commercial clout and grand ambitions, it seems unlikely that they will be satisfied simply to bring SMS marketing into the digital age.
And so, we turn to another Facebook announcement this week.
Facebook Horizon (video here), set for launch in early 2020, is a virtual reality world where users can meet and chat.
Facebook Horizon is an infernal phantom of a world we don’t deserve but will likely get, populated by legless avatars spouting bromides about how “awesome” it is to be a legless avatar.
It is The Lego Movie without the whimsy, Black Mirror without the imagination.
It is the sort of announcement you Google and then Google and then Google again, to make sure it really happened before you commit it to a newsletter.
It makes you look at the date, even though you know it’s September, in case it is somehow April 1. Yes, I did actually do that.
To showcase just how much freedom this virtual world provides, in the video a woman asks for — and immediately has — a moustache.
Facebook: delivering the equality we’ve all been craving.
To be fair, they do also say you can sip your boutique coffee through a curly straw. Cool.
In pragmatic terms, Horizon will replace Facebook’s VR hangouts products and it will allow users to walk about a cartoon world, chatting to each other.
There will be games, once more taking the lead from WeChat’s huge commercial success with online gaming.
However, it seems inevitable that Facebook will allow brands to create stores, personalities, and advertising campaigns in this virtual world.
Whether that takes off or not (this newsletter-er is skeptical, in case you missed it), our direction of travel is still clear.
The idea is to encourage users to bring their whole selves into the online world, rather than just the data points we can collect through their actions.
The same ambition underpins Facebook’s move into conversational commerce on Messenger.
Customers will eventually warm to conversational commerce, too.
After all, anything that reduces the cognitive effort required on our part will always be welcomed.
For example, I had feedback on this newsletter that I should replace the text with images that make the same points, to make it easier to read.
Soon, the world be just one big, grinning emoji if we get our way, a high-five writ global.
Businesses will be all too happy to smile back if it encourages us to share our data.
Such changes are gradual, but all the signs suggest they are in motion already.
Conversational commerce, executed with care, could be the prime beneficiary.