What is Chat-Commerce and It’s Impact On Online Business

12 eCommerce Trends to Watch In 2019
November 20, 2018
Finding the Right Website Development Vendor
Finding the Right Website Development Vendor
February 18, 2019
Show all

What is Chat-Commerce and It’s Impact On Online Business

What is Chat-Commerce and It's Impact On Online Business

In the US, e-commerce sales are expected to grow 39% between 2018 and 2022 to over $700 billion. To date, this growth has been driven largely by easier access to the internet, pervasiveness of smartphones and improved measures to secure transaction data.

From a company perspective, many sales and marketing departments took advantage of these trends and rushed to build strong online brands. Social media and search engine optimisation strategies changed the way businesses reach customers.  Now, there is a new technology shaking up the buying process further: chat-commerce.

What is a Chat-Commerce?

Chat-commerce is a relatively new term, but it can be thought of as:

  • The marriage of a chatbot and messaging app
  • Automated technology that allows online brands and shoppers to converse
  • A chat or voice-based interface that connects companies and their customers

Chat-commerce aims to replicate the in-store experience where shoppers speak with someone at the store to get their questions answered or for recommendations on other products or services. It’s a strategy for delivering a better and more personalised user experience.

How is Chat-Commerce Likely to Evolve?

Chatbots have been around for a few years. They represented a step-up from lonely days of clicking “Buy Now” or “Add to Cart” buttons with no interaction, but initial versions were fairly limited in their functionality. They were mainly used a substitute help desks and didn’t directly impact commerce.

As is common with technology, chatbots are continuously evolving into more powerful business tools. Chatbots have proved to be an effective way to sort customers before directing them to a human customer service agent. Increasingly, companies are partnering with popular platforms, such as Facebook, to try and capture customers through the Messenger app, but companies use bots in a variety of ways:

  • Casper: Can’t sleep? The mattress company’s chatbot, Insomnobot-3000, will keep you company. While the bot does include product plugs, it uses a longer-term customer engagement strategy mostly focused on building brand loyalty.
  • 1-800-Flowers: Through a partnership with Facebook, users can buy and send flowers and gifts from 1-800-Flowers directly through the Messenger app.
  • H&M: The clothing store’s bots recommend clothing based on questions a user answers. The bot can also help users build a full outfit from one piece of clothing the user selects – i.e. the bot helps up-sell the customer on additional items of clothing.

Where will chat-commerce go from here? It’s hard to predict but it’s always a good idea to follow your target audience. Most companies have already recognised the shift from web to mobile interactions, but what about smart speakers or other Internet of Things (IoT) devices? Surely, the next evolution of chatbots and chat-commerce will be able to integrate with more and more “smart” devices.

While a study by Oracle indicated that 80% of companies already use or plan to use chatbots by 2020, it’s clear that the ways chatbots and chat-commerce are used in sales and marketing have considerable potential for growth.

What Does Chat-Commerce Mean for Retail and E-commerce?

As the examples above illustrate, there’s no one way for businesses to incorporate chat-commerce. As you decide what strategy is right for you, here are a few things to consider:

  • Go Where Your Customers Are: You need to go where your target audience is and build a chat-commerce strategy on the platforms that are popular with your users.
  • Analyze the Customer Journey: You’ll need to analyse your customer journey and see which part would benefit the most from a chatbot – is it during the first website visit, when ordering or after a sale to collect feedback?
  • Monitor Progress: As with any new technology, you’ll need to track and evaluate your chat-commerce strategy and adjust as needed. It’s important to monitor how well the chatbot stays on brand, how many users interact with the bot as well as other success metrics.

This may seem daunting. Yet another technology you have to learn. Yet another sales and marketing tactic. But it could be worth it. Chat-commerce has the potential to increase your customer engagements, improve the user experience and, hopefully, grow your sales.

Visuer Interactive is a  web development company, specialise in web design and development, eCommerce web and creative design for infographic, presentation and visual communication.

Back to News & Views