Chatbots vs conversational commerce: What's the difference?

9th Feb 2017

The connected consumer and multichannel shopper are terms that have been widely discussed by the retail industry, and are now commonplace when speaking about current customer behaviour.

Recognising this shift towards the on-demand economy is a significant step forwards, and retailers and brands now need to accommodate consumer expectations and deliver on promises in an increasingly competitive and uncertain marketplace.

Many retailers have invested heavily in ecommerce in recent years to ensure that they are able to support customers’ purchasing journeys online, whether this is the researching of a specific product, eyeing up competitive prices, or completing a transaction.

But with predictions suggesting that ecommerce growth will continue at double figure rates through to 2020, as sales top an estimated $4 trillion worldwide, it is clear that a competitive edge is needed. Not only does the product or service need to stand out to consumers in the saturated marketplace, but these customers need to be nurtured, assured and aided towards an effortless and confident purchase.

Conversational commerce

Conversational commerce isn’t a particularly new concept for online retail, but as the on-demand economy approaches ever closer, the technology around conversational commerce and its capabilities are developing rapidly – and are now far removed from the likes of simple, standardised chatbots.  

Consumers shop around the clock, on a device of their choosing, and across a channel that is most convenient to them at that moment in time, making it essential for brands and retailers to be able to pick up conversations with these engaged customers anywhere, at any time. These interactions with the customer should enhance their purchasing journey, rather than hinder it, and in a time when convenience has become somewhat of a holy grail for retail, brands and retailers need to ensure that conversations are in keeping with individual customer needs.

The benefit of online chat solutions is that the brand and retailer is always available to the consumer. Many shoppers work full-time and can feel restricted when faced with closure times, both in terms of physical store opening times and phone line operating hours. By implementing chat, the consumer is able to engage with the brand or retailer directly and can progress with their purchase as necessary.

To ensure that conversations are convenient to the customer, retailers and brands should consider the balance between bot and human during assistance. Using bots as part of the mix can prove cost effective and successful in terms of return on investment, as simple queries can be answered without human intervention, freeing up their time to concentrate on more complex issues.

Chatbot frustration

Automated chatbots are designed to answer questions with a standardised response, and can offer a quick answer to simple queries, such as office open times or returns policies. This can be effective for customers who want an instant response, without the need for a lengthy discussion. However, for customers looking to seek advice or opinion online, a standardised response is likely to feel limited and, at times, frustrating. 

To overcome this and to accommodate consumers who are looking for an intelligent conversation with an expert, retailers such as House of Fraser, are implementing conversational commerce strategies to maintain customer engagement and encourage conversion.

Conversational commerce uses a chat UI to connect customers with live assistance, and not just assistance from a mere agent, but from a subject expert, who can guide and advise the shopper. 

By using conversational commerce, House of Fraser found that 29% of people who chat with an online expert finalise their purchase, and on average 20,000 chat contacts take place on their website every month.

House of Fraser chat

It is important to emphasise here the need for the right person to engage with the customer during this time of heightened interest. These conversations can often take different forms – such as queries about sizes, or a recent delivery issue, or perhaps they’re in need of inspiration – and so it is necessary for employees behind the chat to be industry and product experts, knowledgeable in their area and equipped to deal with any queries.

House of Fraser found that 29% of people who chat with an online expert finalise their purchase, and on average 20,000 chat contacts take place on their website every month.

It is also important that all chat agents are fine-tuned on the company’s messaging and ethos, as well as the company’s tone of voice to ensure that all customer exposure to the brand is consistent and in keeping with guidelines.

By incorporating expert knowledge and advice from trusted agents, retailers and brands are able to communicate with customers on a one-to-one basis, hearing their feedback first hand and react in real-time to correct any issues.

The wealth of data available through these interactions should not be underestimated. Using these insights, retailers and brands are equipped to not only analyse typical paths to purchase, but review common queries or obstacles that customers are experiencing. They are also in an informed position to rectify potential issues to ensure all future sales are completed efficiently without any mistakes being repeated.

Dealing with connected customers who shop anywhere, on any device, through any channel of their choosing is not plain sailing and retailers and brands have a tough job to maintain customer interest as well as encouraging an increase in conversions. But by implementing conversational commerce, they are able to invest time valuable in customers and engage with them on a personal and customised level. The nurturing and advice provided will, in turn, ensure that these customers become not just product purchasers, but regular brand ambassadors.

Julien Hervouet is CEO of iAdvize.

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