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What Is Conversational Commerce and How Does It Work?

Jamie Landry
February 28, 2023
Last Updated On
conversational commerce blog header

Conversational commerce describes the online integrations and tools e-commerce brands use to communicate with consumers online — think AI chatbots, FAQs, and more. 

In 2022, brands spent $67 million on conversational commerce software, projected to grow to $290 million by 2025. It’s important to support customers through all stages of their purchase journey, and this doesn’t necessarily require a human agent for each problem — enter customer experience (CX) integrations in the form of conversational commerce. 

Conversational commerce helps brands streamline customer support processes and the online experience for visitors — so what exactly are these integrations, and how should brands incorporate conversational commerce into their marketing strategies?

What Are the Different Types of Conversational Commerce? 

Conversational commerce isn’t a one-size-fits-all solution. The right API and conversation flow will depend on your product, service, online funnel, and, most importantly, your audience. 

It’s also worth noting that conversational commerce is a natural part of any social commerce strategy, too — if users don’t convert on the platform, hopefully, they’ll go to your site, which should be equipped to answer any questions users have. 

Here are some examples of conversational commerce:

Chatbots

Chatbots use AI technology, machine learning, and natural language processing to respond to customer queries and offer support. Sometimes, they pop up without prompting to provide guidance or recommendations to users, or a user navigates to the chatbot option (often found on the website’s lower right-hand corner) for help. You might want to prompt your chatbot to automatically offer guidance based on a specific path you’d like users to take or use your chatbot as part of your remarketing efforts (more on that below). 

Messaging Apps

While messaging apps might seem similar to chatbots, but should be even more familiar — this is when brands use a pre-existing messaging app (or maybe you make your own) like Facebook Messenger, WhatsApp, or Viber. These can often be integrated into your site with an API, plugin, or widget.

Voice Assistance

Voice assistance is software that can carry out commands via voice — for e-commerce, this means people making purchases with voice using tools like Alexa or Google Home. How else does voice assistance come into play? Accessibility. This is a large aspect of online user experience; voice search allows anyone to search for and find your brand online. 

Live Chat Software

Live chat software might appear similar to chatbots, but Live chat involves communicating with a human for customer support rather than machine learning to guide users and answer their questions. It is better suited for complex issues that benefit from an empathetic human, while chatbots are a great solution for simple, standard, and common queries that don’t necessarily require a unique perspective.  

Conversational Commerce Brand Examples

So, how do some of the best brands use conversational commerce? 

Rare Beauty Promotional Pop-Up 

Rare Beauty is an excellent example of using a promotional pop-up that adds value and doesn’t distract from the user experience. 

rare beauty 10% promotional pop up

When a user initially visits the website, they receive a pop-up notification with a 10% off offer. If this offer isn’t used before their second session, it’s still available and shown to users, minimized in the corner of their screen (on the right or left side, depending on the specific page layout). This example shows the value of using non-disruptive chatbot software that adds value and is responsive to how they navigate the site.

rare beauty customer support chatbot

Mejuri Chatbot

Mejuri is another great example of a well-built passive chatbot that reaches various users’ needs. The chatbot is ‘open’ when you land on their homepage with two tabs visible, Answers and Chat. In ‘Answers,’ there are answers for various categories, including FAQs, Order and Shipping, Return and Exchanges, Product Care, Product Information, Sustainability, Gifting, and Payment.

mejuri promotional contest pop up

The chatbot also has a search bar so users can conduct their own searches. It is a great way of mitigating any potential problems or questions users might have before diving into their product offering. 

mejuri customer support chatbot

Nespresso Customer Support 

Nespresso’s chatbot doesn’t use an auto pop-up but prompts users with a ‘Need Help?’ message — interestingly enough, this message reads ‘How Can We Help You?’ in Canada. This is a great demonstration of localizing your chat for different demographics (even if they speak the same language!) and encouraging user action before escalating to a human agent. 

When users click ‘Need Help?’, the chatbot offers ‘Self-Serve Solutions’ with FAQ, Machine Assistance, and Claim Your Machine Promotion sections, and two sections for extended support — both online and phone assistance.

Conversational Commerce in Your Marketing Strategy

The type of conversational commerce you use on your site will depend on which metrics you measure and monitor and what makes sense for users. How does conversational commerce impact your social media e-commerce efforts? Do you want to offer support only when users seek it out, or do you want to employ it as a campaign tactic? The most effective solution for brands will consider both when creating their conversational commerce strategy. 

If users drop off at a certain page, consider employing a chatbot that asks users for feedback, so your team can better understand how to improve user experience. Or, you might want to share a promotional message on your homepage or product page related to a specific campaign — this might be as simple as highlighting an offer (like Rare Beauty does with their initial 10% promotion) or sharing a particular product in your visuals. 

Do users visit and convert on a particular product page (let’s say it’s eyeshadow) but never even visit a related product’s page, like a brush? This might be a good opportunity to promote the brush on the eyeshadow’s page.

The types of conversations you encourage users to have should align with your business goals (don’t be afraid to use this software as a part of larger campaigns) and what you know about user behavior on your site.

Proactive Live Chat Integration

Proactive live chat integration is a great way to prompt users for feedback and comments or suggest the next step in their journey on your website. Proactive live chat functions like any other chatbot but starts a conversation with the user rather than waiting for them to seek help or start a chat. 

Brands should use proactive live chat if they find their customer support is under-utilized but still see high bounce rates and single-page sessions, so they can determine the right course of action and mitigate any issues site visitors have. 

Chatbot Integration

If you have e-commerce on your site, you’ll likely have some chatbot integration on your site — but what kind? To determine which integration is best for you, consider the following:

  • Website traffic goals - How focused are you on bounce rates, returning users, or new sessions? 
  • Business goals - Do you want to drive sales? Build your audience? 
  • How could a chatbot be used as a tactic within more comprehensive marketing strategies? 

Your answers to these questions will inform the type of bot you use. For example, if your team wants to use the bot solely for customer support, you might choose a passive chat that requires a click from someone seeking an answer. If you want to use this for multiple tactics, you might want a mix — proactive on some pages and passive on others.

You may choose a proactive or passive chatbot service (or A/B test, which works best for your site).

Direct Chat and Messaging Promotions

Who doesn’t love a discount? Take advantage of chat software to offer value to customers in the form of discounts or letting them know when upcoming sales are. While pop-ups can be intrusive, chatbots can take up less space on a landing page while sharing the same information. This is a great opportunity for brands to A/B test whether a promotion shared in a message or pop-up is most effective. 

Benefits of Conversational Commerce for Brands

1. Reduce cart abandonment. 

One of the best ways to encourage users to convert (and be mindful of their purchases) is to use chatbots to remind users of their cart contents. Examples include reminding people they have items in their cart before they leave the site or a message that reads “Did you forget something?” with an image from their cart. You can even have this message appear when a user navigates toward the exit button. 

2. Helps close potential leads. 

Like the previous example, marketers can use conversational commerce to close potential leads. Brands can use a chatbot to offer advice about a particular product a user is looking at and communicate any relevant discounts. Users can even use a chatbot to monitor prices and be notified when the price drops.

3. Gather feedback. 

As discussed above, chatbots are mostly used to offer support, but brands should also use these to gain insight into how users navigate their sites. Something as simple as a ‘Did you find what you were looking for?’ can be helpful for brands to see if they’re meeting user intent on a given page. If you want more detailed feedback, you can prompt users to write their responses or offer multiple options for users to choose from. 

4. Upselling and cross-selling opportunities.

Do users who like one product or service typically use another? Don’t wait for visitors to find this information alone — give it to them. One example of this is a simple ‘Customers who liked this, also like this’ recommendation or an offer for a related product or their next purchase. 

5. Helps build customer loyalty. 

The right chatbot or messaging software will be intrusive and distracting at worst, but at best? The right chatbot will help users, offer value, and encourage them to visit your site again.

How Brands Can Find End-to-End Commerce Solutions With Dash Hudson

If you’re a brand looking to drive e-commerce sales, you should also have a robust social strategy that aims to increase conversions and adds opportunities for your audience to convert — this is why social commerce is essential to your marketing strategy. 

So, what is social commerce? Social commerce uses social platforms to market and sell — think shoppable links in bio solutions like LikeShop for Instagram and TikTok or shoppable tags on Pinterest. Since most brands link to and from their social profiles and website, brands can maximize these conversion opportunities by implementing a user-friendly, convenient, and seamless shopping experience on their social profiles too. 

So, what can Dash Hudson do to facilitate your social commerce strategy?: 

  • Prove campaigns' efficiency by measuring ROI and how your creative visuals impact audience conversion.
  • Predict what content will perform the best on social platforms to help audience engagement.
  • Embeddable media galleries allow you to organize and curate shoppable content on your website, email, and social profiles.

FAQs

When did conversational commerce start?

Conversational commerce was coined by Chris Messina, hashtag creator and former Experience Lead at Uber. What does he think is the foundation of conversational commerce? Consumer familiarity with messaging that creates a new market for services and experiences. 

How do conversational commerce bots work? 

Conversational commerce bots work differently depending on what type they are — here’s how some of the most popular bots work: 

  • Rule-based, Keyword recognition: These bots are programmed to give a specific answer depending on the keywords used in the question, the issue selected, or words used in the answer.  
  • Button-based: These use buttons with pre-determined issues and answers and don’t rely on users to manually input a custom question. 
  • Machine learning: These bots use AI machine learning to understand the product, website, and customer with each use. This allows a bot to grow more ‘intelligent’ with time and give more personalized answers to customers.

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