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Conversational commerce: How smartphones and startups are driving a revolution

Remember a hundred years ago when nobody owned a smartphone? On the periphery of the industrial revolution, interactive carousels meant fun at a county fair and rich messaging was a letter delivered by a butler. We’ve come a long way, but one thing that hasn’t changed is innovation for convenience’s sake.

Today the world is in constant conversation, thanks to technological innovations like voice assistants and messaging apps. In the last few years messaging apps have superseded traditional social networks in popularity. 2018 was a big year for messaging and entrepreneurial spirits have taken note, both in the startup trenches and in the offices of Facebook, Apple, and Google, because messaging is changing the way people spend money.

When asking your smart speaker to order a pizza feels as natural as messaging your roommate to ask what they want for dinner, wouldn’t you expect more businesses to be open for conversation?

Conversational commerce: People using chatbots to make purchases

Coined by Chris Messina in 2016, the term “conversational commerce” has been used to refer to everything from customer service chatbots to buying stuff with the help of voice assistants, to communicating with businesses via messaging apps.

What’s clear is that, over the past year, more businesses have accepted it as a reality. Chatbots, for example, are becoming a common part of the customer experience, with 44 percent of consumers using them to make purchases. That’s not happening in isolation, because according to data collected by Facebook, 75 percent of consumers are messaging businesses to make purchases.

But while many old-stock brands are scrambling to meet the demand and figure out how to message with customers at scale, a new breed of millennial-focused startups have woven the concept into their DNA.

Convenience and speed as key to conversational commerce

Imagine the convenience of having a personal shopper. Next, imagine being able to text nearly any shopping request and have it delivered ASAP.

That’s exactly what Jetblack aims to do. Incubated by Walmart and headed by Rent the Runway founder Jenny Fleiss, Jetblack allows customers to text with a personal shopper that’s part AI-chatbot, part real-life courier. The $50-a-month service promises its deliveries will arrive at the customer’s doorstep between 24 to 48 hours.

“We can’t forget that convenience and speed are the key value drivers of conversational commerce,”

Fleiss says, in Smooch’s State of Messaging 2019 report.

Convenience is absolutely key for busy, urban, affluent moms who don’t have time to stop by Bergdorf’s (or Walmart, of which there are approximately none in New York City).

The only things Jetblack doesn’t service? Perishables and booze — but leave those to your real assistant.

Examples of conversational commerce in action

Threads is a similar shopping service that exists solely over messaging apps, connecting buyers to designer clothing. Clients message a single personal shopper rather than a bot integrated into the platform.

Personalizing the experience is key, and the luxury niche suits conversational commerce well. Threads’ CEO Sophie Hill told TechCrunch,

“The idea behind Threads is curation and convenience. It’s a customer-centric business and it’s built on chat because that is where the customers wanted to be and transact.”

SnapTravel, another business engaging its customers uniquely through chat, uses an AI-powered chatbot to connect its customers to reduced-rate hotel rooms. While Threads relies on humans entirely, Jetblack, and SnapTravel’s reliance on bots demonstrates that personalized messaging can be broadly executed.

SnapTravel’s chatbot is a great example of how NLP (natural language processing) and AI can be seamlessly integrated into conversational commerce to offer a personalized experience while betting on the convenience of messaging. In the Smooch report, CEO Hussein Fazal predicts that brands will shift their marketing and customer experience efforts from their own properties to chat apps.

“In 2019 we expect customers to start searching for brands over messaging first, before looking up their website for customer support,” he says.

Dirty Lemon, which operates a cashier-less store in Manhattan uses a chatbot to tender its transactions. It’s a simple process, pop into the drug store, grab a bottle of CBD-infused lemonade (discontinued until further notice), and text Dirty Lemon so they can put the $11 charge on your account. They also deliver.

While Dirty Lemon’s approach is certainly experimental, it works for open-minded customers accustomed to messaging and convenience. As Jetblack’s Fleiss understands it,

“As the technology to enable text shopping becomes more widely available, and those experiences become more ubiquitous, it forces a change in how customers interact with incumbent channels such as brick-and-mortar retail and mobile apps.”

Building brands on messaging

Jetblack, SnapTravel, Dirty Lemon and Threads have built their brands on messaging from the ground up.

Small businesses have been able to engage customers on popular consumer messaging channels like Facebook and WhatsApp (since the release of the WhatsApp Business app in January 2018). And most recently, Google My Business, which allows mobile users searching for a business to text them, much like how they would initiate a phone call.

But these apps aren’t quite the solution big brands need. High volumes of messages need to be routed through helpdesk software, and brands looking to provide an omnichannel messaging experience can’t sit in one app. That’s why the major messaging players are now making their APIs available to enterprises.

The WhatsApp Business API rolled out in August 2018 to a small pool of companies like Uber, Wish, and KLM Royal Dutch Airlines.

No word on whether or not KLM responds with clever GIFs — but they will send you your boarding pass.

Likewise, Apple launched an early access program for Business Chat, which allows brands like West Elm and Burberry to message with the much-desired Apple user segment through iMessage.

Google, for its part, is working with global carriers to champion RCS (Rich Communication Services), the successor to SMS, so that businesses can set up verified business profiles and engage customers through old fashioned text messaging.

2019 will see all these beta programs become widely available

Fine timing for conversational commerce startups, but for legacy brands, this is a chance to figure out how to manage these changes before the floodgates open.

One legacy brand that seems to be getting the message is Subway, delicatessen of the masses. The sandwich chain allows customers to place and pay for orders ahead of time on Messenger with a chatbot.

Subway’s main product is totally customizable and widely available, making it an ideal candidate to promote this sort of customer engagement.

It’s the same spirit of personalization and convenience that works for personal shopping and travel startups. Meet the customer where they are, let them tell you exactly what they want, then deliver the experience seamlessly. But conversational commerce doesn’t end with messaging apps.

Alexa, can you predict the future of business messaging?

Smart speakers are taking the world by storm, with estimates suggesting that by 2022, 55 percent of American homes will have one. People are already using voice assistants to order pizza or groceries, but they’re more commonly using them to seek information about the weather or play music.

Jetblack’s Fleiss contends that visual imagery is critical for most purchases and suggests a workaround is to include a tie-in to “some sort of visual reference, whether it be through images or augmented reality.” Manufacturers have taken this into account. Amazon Echos have models with built-in screens and app integrations, and while the experience might be clunky, customers will ultimately iron out the kinks with their feedback and engagement.

This isn’t to say that smart speakers will replace the Great American shopping mall (although those are dying), but conversational commerce is another avenue paved by their convenience.

Jetblack, SnapTravel, and Subway are able to operate at different scales with the help of AI-driven chatbots, human agents, and enterprise software. Starbucks has used chatbots in messenger for publicity stunts and incorporated them into their app. But who’s to say they won’t follow Subway’s model for ordering?

A brand can die two deaths, one when they lose relevance and another when they lose touch. Share your thoughts in the comments.

Jesse Martin is a Trends Analyst at Smooch. 

The post Conversational commerce: How smartphones and startups are driving a revolution appeared first on ClickZ.

Reblogged 1 week ago from www.clickz.com

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