Conversational Commerce – The Next Chapter Of Ecommerce

Conversational Commerce Blog Post Image

The multiple paths a potential shopper can take during an online shopping experience can be dizzying.

There are many routes to making an online purchase — website, apps, email, social media, just to name a few.  

All of these options can be disorienting to customers if there isn’t one clear route for reaching businesses.

Enter “conversational commerce,” where stores and buyers connect through messaging apps.

Companies today can use chatbots to instantly communicate with customers and resolve their issues on multiple platforms, such as Facebook or their online store.

Some of these 24/7 tireless bots even use Artificial Intelligence (AI) to infer customers’ preferences and create a valuable, individualized shopping experience.

This guides the shopper to find the right product and complete their purchase, hence the term ‘conversational commerce’.

Learning how to set up your business for conversational commerce isn’t always clear since bot technology is still developing.

To help sellers out, we’ve created this conversational commerce guide to cover everything from defining exactly what a chatbot does to measuring your bot’s ROI.  

We also recently enhanced Gobot’s integration with Shopify so as allow Shopify stores to automatically pull all of your store products right into their chatbots (check this out here here).

If you apply this knowledge to your online business, you’ll be set to launch your first bot.

With this new chatbot technology, your business can immediately meet customers’ wants to create a personalized, helpful shopping experience.

Let’s start with the basics. What is a Chatbot?

A chatbot is a computer program designed to simulate conversation with human users.

Chatbots for e-commerce companies are typically designed to engage customers, provide customer support, make product recommendations and help complete buyers’ purchases.  

Here are two examples of how conversational commerce chatbots can help businesses connect with their customers:

Levis

Levi's Website Chatbot

[Click here for source]

We all know that shopping for jeans can be a pain.  

There are so many styles, and most don’t fit your body type just right.  

Enter Levis’ Indigo bot.

Indigo asks you about your style preferences and gradually narrows down your jean selection options in a very efficient way.  

H&M

European clothing brand, H&M, created a chatbot that asks users questions about their style and offers photo options for users to select.

The chatbot creates a fashion profile of each user to make outfit suggestions ultimately, and inexorably, leading the visitor to purchase the suggested clothing.

Users can also create their own outfits and vote for other users’ outfits, creating a truly interactive conversational commerce shopping experience.

H&M Chatbot
[Source]

Levis and H&M show that conversational commerce chatbots are more than just computer programs in e-commerce.  

Good, well-thought out chatbots make for a much more enjoyable shopping experience.

Customers are increasingly recognizing the utility of this technology and are ready and willing to integrate bots into their online shopping.

Chatbot usage on the rise?

Conversational commerce isn’t just a cool-sounding concept — user research shows that buyers are more ready and willing than ever to shop online with chatbots.

Here are a few reasons why your online business should be using a conversational commerce bot to boost sales.

People Are Increasingly Using Messenger Apps

According to a Business Insider report, consumers have been using the main four messaging apps — Facebook Messenger, WhatsApp, WeChat, Viber — more frequently than the main four social networks — Facebook, Twitter, Instagram, and LinkedIn — since 2015.

How messaging apps have growth in user base over time


[Click here for source]


People Want to Shop with Messenger Apps

People aren’t just using messenger apps to chat with friends — they’re also excited about shopping with brands’ bots.

Here are a few stats that highlight buyers’ willingness to shop via a messaging interface:

  • 47% of users are open to purchasing items through a chatbot.
  • 71% of users are willing to receive customer service through a messaging app.
  • On average, users are willing to spend more than $55 on chatbot purchases.

These high figures show that a large percentage of buyers trust chatbots as a way to interact with businesses. Conversational commerce for the win! 

Plus, buyers are used to and totally comfortable with the chat messaging interface. They also love instantaneous responses!

More Businesses Are Using Chatbot

E-commerce is a competitive space — with so many other merchants, you have to stay ahead by tracking other sellers’ activity to see how they’re reaching their customers.

Right now, the data shows that merchants are embracing chatbots.

  • 80% of businesses said that they already use chatbots or plan to use them by 2020, in a recent Oracle survey.
  • 48% of businesses are already using automation technology, according to the same Oracle survey.

What’s clear is that businesses are increasingly implementing chatbots to serve their customers in the long-term.

Without a chatbot you risk falling behind your competitors who are already utilizing conversational commerce to interface with their customers via messaging.

How Do Chatbots Work?

Before you add a chatbot to your business and dive into conversational commerce, it’s important to understand how this technology works.

Understanding the different types of bots out there will allow you to generate one that serves your online business’ needs.

There are essentially three types of chatbot systems out there.

The first type functions based on a set of rules, the second type functions using machine learning and the third type is hybrid combination of the first and second types.

Rule-Based Chatbots

Chatbots that function based on a set of rules are restrictive, but typically more reliable than AI chatbots.

They can only respond to specific commands rather than interpreting a user’s language.  

However, they will never respond in an unpredictable way or sound dumb.

Rule-based chatbots are great if users are only expected to have simple queries that refer to a limited set of information.

The personal finance app Digit, in the example below, uses rule-based chat because the user is only expected to ask a narrow set of questions about their account.  

For example, if the user clicks the Checking button towards the bottom, the bot responds with checking account related information.

Diggit chatbot

Click here for source.

AI Chatbots

Chatbots that function through machine learning use AI to handle a wide range of conversations and requests from users.

Instead of only responding to specific commands, AI chatbots can interpret a user’s language to understand and meet their needs.

AI chatbots make sense if you want to handle complex queries and comments from users, such as attempting to understand a users help related request.  

However, we note that AI is not to the point where you can completely rely on an AI chatbot to replace your live chat agent.

It’s best when humans and bots work together in harmony.

Hybrid bots: Scripted with some AI smarts

Whether you opt for the simpler rule-based chatbot or advanced AI chatbot all depends on what you’d like your chatbot to do.

If you only want your bot to handle simple customer service requests, a rule-based chatbot may do the trick.

With that said, most e-commerce merchants would benefit from the more advanced conversational commerce AI bot that can learn about customers’ preferences to encourage more purchases and provide personalized service.

 The problem with AI chatbots is that AI technology has not advanced to the point where you can fully rely on a chatbot in all instances.

Simply put, sometimes AI chatbots are, well, still learning.

It is for this reason that, given where technology is today, the sweet spot for chatbots is to use a rule based platform complimented with some AI.  

This is precisely why we designed Gobot to largely accept rule based scripts but also leveraged machine learning to help address help requests.

Gobot uses AI, for example, to parse help requests and suggest useful knowledge base articles that address questions posed.

Also, as detailed below, for Shopify stores, Gobot automatically familiarizes itself with all of your store products.

How Do I Build a Chatbot?

There are plenty of platforms out there for building chatbots that accommodate all skill levels or at least advertise as such.

The truth is that even though many of these platforms do not require any coding they are not in any way intuitive and take a very long time to learn.

The AI chatbots, in particular, are a pain to get set up.  

You need to come up with an exhaustive list of ways to ask the same thing (called “bot training”) so your bot can recognize questions that are differently worded but have the same basic gist.

In stark contrast, Gobot was built with the goal of being the easiest to use drag n’ drop bot builder platform.  

Based on thousands of positive comments from our customers, we’ve achieved this goal!

How does my bot communicate with my store?

A chatbot is always useful and fun to engage your visitors and answer repetitive questions.  

For store owners, however, the biggest bang for the buck is a conversational commerce chatbot that truly helps you sell.

In order to effectively do this, your bot needs to know what you sell.

This means the chatbot somehow needs to communicate with your store to pull in products, update inventory, etc.

Many bots on the market require custom coding to effectively pull your store products into your chatbot.

In stark contrast, Gobot’s deep integration with Shopify stores allows Shopify store owners who use Gobot to import all of their products directly into their chatbot with the click of a button.

Chatbots built with Gobot also allow store customers  to automatically track order status, learn about shipping zones, find the closest brick and mortar store locations, and much more.

Below is a sample bot on a Shopify store built using Gobot without any custom coding.  

Of note, Gobot remains in sync with your Shopify store so when you change your inventory your bot is automatically updated.

Smart!

Gobot Personal Shopper Bot 1

Gobot Personal Shopper Bot 2

Gobot Personal Shopper Bot 3

Gobot Personal Shopper Bot 4

Bot Analytics

You can also begin collecting analytics on your bot by either using analytics tools offered in some of the bot-building platforms, or you can tie your bot to an outside bot analytics platform.  

Gobot offers an extensive analytics tool, built-in to its platform.

Other bot platforms, well, not so much, but you can rely on separate bot platform analytics, a few of which are discussed below.

Outside Platform Analytics

For advanced metrics, consider using a third-party analytics service to integrate with your bot.

These providers are solely focused on analytics, so they can track a ton of deep insights on your bot.

They’re also useful for analyzing bots across multiple mediums.

Here are a few third-party analytics services to consider:

Chatbase: Google’s chatbot analytics platform Chatbase shows basic metrics, like active users and conversations, as well as advanced metrics, such as a Funnels report to indicate conversions.

If your bot is able to facilitate orders, this Funnels report is especially useful as a way to track bot-driven sales.

Chatbase is free to use, and it can integrate with any chatbot platform, such as Facebook Messenger and Kik, as well as voice assistants, like Amazon Alexa and Google Assistant.

Dashbot: This analytics provider supports chatbots on Facebook Messenger, Kik, Slack, and Twitter, as well as voice assistants Amazon Alexa and Google Assistant.

Dashbot offers a free plan with an analytics report covering engagement, user demographics, retention, and more.

It also offers bot transcripts to analyze individual conversations.

The paid plan offers additional reporting to analyze competitors’ bots, such as comparing user counts and message counts of other bots.

These market metrics are recalculated daily.

Taplytics: Instead of solely focusing on bots, this analytics provider focuses on entire web and mobile user experiences.

Its comprehensive reporting is useful for understanding your bot if you’re planning on embedding it into your online store or app, rather than just launching it on a messaging app.

Taplytics can track the engagement rate of users with your bot in different locations of your site and app.

With these insights, you can determine which placement creates the most personal and useful shopping experience on your app and online store

Botanalytics: This analytics service supports 13 chatbot platforms and assistants, including Facebook Messenger, Kik, and Twitter.

It takes a deep dive on basic metrics by identifying the best re-engagement times for users and the most commonly used conversation phrases.

Botanalytics also allows you to measure the conversion rates of conversation goals you’ve set.

For example, you can measure your bot’s purchasing completion rates.

The service offers a free plan with limited reporting, a paid plan with conversion funnel and conversation segmentation reporting, and a higher paid plan with customized reporting.

Chatbot usage will only grow

Talking to an automat sounds cold and impersonal.

Yet, chatbots have made many brands more human and approachable to buyers.

These chatbots are personal in that they more consistently remember your name and preferences than a live agent, and they are conveniently always on, 24/7.

As long as companies are upfront about chatbots being technology and not actual live reps, chatbot technology is a surprisingly intimate and useful way to communicate with your buyers.

It’s up to you as a merchant to figure out how your company’s chatbot can most effectively reach and serve your customers.  

The more you fine-tune your chatbot to meet the needs of your buyers, the more surprised you’ll be at your chatbot’s ability to increase your sales and conversions.

Happy selling!

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