“Conversational commerce” is known to be a type of commerce that involves brands communicating directly with customers via text or voice in real time.
Real-time communication has never been more crucial to a brand’s ability to satisfy customers, so conversational commerce is indeed vital for today’s businesses.
Brands need to respond quickly when customers have questions about their products or problems with their orders, or else they run the risk of giving customers a bad experience.
MARKETING Magazine had the chance to interview Velid Begovic on the emergence of conversational commerce.
Velid Begovic is the Vice President Revenue APAC at Infobip.
As VP Revenue, Velid aims to continue steering infobip business teams in building diverse range of customer experiences and engagements across the APAC region.
He is focused on achieving Infobip’s market leadership in CPaaS and SaaS industries across all markets, ensuring that the core strengths of the infobip platform becomes a primary utility for local and global enterprises for all their conversational and engagement digital journey implementation plans.
What is the growth potential of conversational commerce to businesses in APAC, surpassing traditional operations?
Digital consumption has now permeated into the lives of many in Southeast Asia, to the point of it becoming a way of life today.
Statistics have also shown that since the start of the pandemic, the APAC region has seen an addition of 60 million digital consumers who are here to stay.
Seeing the growth of digital consumers, it is not surprising that conversational commerce will become a source of revenue growth for businesses to engage a digital savvy audience.
In fact, China, Japan, and South Korea are expected to account for 90% of chatbot spend by 2025, echoing the impact that conversational commerce can bring to businesses hence the spike in investment spends.
Southeast Asia region has also surpassed countries such as the US, India, and Brazil in both awareness and adoption of conversational commerce.
A study by Facebook and Boston Consulting found that Thailand (40%) and Vietnam (36%) had the highest number of respondents who had undertaken a conversational commerce transaction, followed by Indonesia (29%), Malaysia (26%) and the Philippines (23%).
Juniper Research also reported that the total spend over conversational commerce channels will reach $290 billion by 2025; rising from $41 billion in 2021.
This represents a rise of 590% over the next four years and for businesses, a market growth potential to tap into.
What are the tools and technologies to deliver innovation for effective conversational commerce?
For starters, businesses can always begin with the most common types of conversational commerce which includes live chat software, chatbots, messaging apps, and voice assistance software.
Live chat and chatbots can help answer customer questions, while tools like messaging apps and voice assistants can help connect and direct customers.
Gartner research also estimates that in 2022, 70% of customer interactions will involve emerging technologies, such as machine learning (ML) applications, chatbots, and mobile messaging (up from 15% in 2018).
Juniper Research shared that global conversational commerce spend over RCS messaging will reach $27 billion by 2025, from less than $10 million in 2021.
RSC is a communications protocol providing businesses with various potential to innovate their service as this enables them to utilise rich media messaging services, including chatbots and in-app payments, over cellular networks.
Given the multiple channels available, conversational commerce can take place either on WhatsApp, Facebook Messenger, Instagram or even SMS.
When customers engage with a business, they expect a seamless experience as they switch from channel to channel.
This becomes tricky as businesses need to be present on different kinds of channels at the same time ensuring consistency and accuracy of information.
An omnichannel communications platform such as Infobip makes it convenient for brands to streamline their communications and customer data into one platform, for effective targeting and sales generating opportunities.
How does conversational commerce as a fundamental for businesses in e-commerce and social media work towards achieving growth in a digital-first space?
As consumers become more digital savvy or digital natives, the way for brands to engage them will be on channels preferred by their target customers.
Tapping into this, conversational commerce becomes the foundation for which businesses can establish a relationship with their customers through text or voice in real time.
Brands can consider messaging apps, personalized texts, push notifications, and chatbots, or AI assistants to interface with customers and deliver a helpful, convenient customer experience.
Not only is conversational commerce a mobile-friendly way to move customers through the sales funnel (or resolve their issues) in this smartphone usage dominant era, but it can also provide uniquely customised service to each individual shopper.
Businesses through chatbots can leverage on customer data, product data, and interaction data to shape their communications with customers, leading to improved service and reduced wait times for customers (due to chatbots’ always-on accessibility).
Beyond that, conversational commerce also enables brands to deliver the following:
- Improve customer experience through user-friendly, personalised assistance.
- Driving automation for certain customer service tasks and be “available” to customers at all times.
- Increase customer engagement and loyalty through personalized recommendations, cross-selling, and reaching out to customers at the right time.
- Grow revenue by reducing customer churn by moving customers seamlessly through the purchasing journey.
- Attract new customers by leveraging technology, Square Future of Commerce report found that 25% of Gen Z consumers are interested in shopping through chat or text messages.
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