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CONVERSATIONAL COMMERCE – THE NEW WAY OF COMMUNICATING WITH CUSTOMERS

On the one hand, the fascination with something new and the idea of finally having arrived in the star ship Enterprise reality, on the other hand, the spontaneous disillusionment with the very limited possibilities of communication: Siri, Alexa and OK Google have unfortunately not yet grown beyond their infancy.

Weather, jokes, Wikipedia - that all works flawlessly. Yet the new language assistants fail far too often with more complex questions or even purchase requests. Still. When it comes to artificial intelligence, mobile applications and dialogue in the digital world, innovations overtake each other every day on the right track. Google, Amazon, Microsoft and Apple encourage the development. They all persistently pursue the goal of making artificial dialogue as real as the good-old customer conversation in the corner shop. This means new opportunities for marketing. Conversational commerce is the new big marketing trend in the era of digital transformation.

WHAT IS CONVERSATIONAL COMMERCE?

Conversational commerce means that the user can buy, reserve, order or obtain information about certain things, services or products immediately and without further written confirmation, solely through artificial dialogue (e.g. chats) or voice control of an application. This offers huge sales opportunities for retailers and companies, but also huge transactional savings potential in the area of services and customer dialogue.

APPLICATION AND TECHNOLOGIES

The easiest applications to implement today are so-called bots or chatbots that can be integrated into existing messenger services and social media. In addition, there are the language assistants of the hardware manufacturers.

Here are some examples:

  • Siri from Apple
  • Cortana from Microsoft
  • Alexa from Amazon
  • Google Assistant/ Google Now from Google
  • Bixby from Samsung
  • Facebook Messenger or other messaging services with chatbots
  • WhatsApp chatbots

The target group is ready. According to a recent study by Capgemini, 51 percent of consumers have already used language assistants. And this is just the beginning. More and more people will integrate virtual, digital assistants into their daily lives. Not only younger users (20 to 29 years) are convinced, but also every third person from 50 to 59 years old.

Voice recognition – such as the widespread use of apps or voice controls – has got users used to communicating with machines. The virtual conversation partner informs the user, entertains him with music and helps him write the shopping list. In the USA and Great Britain, Alexa, Google Assistant and co. are already taking users' purchases – a feature that has so far only worked to a limited extent in Germany. However, for the next three years, it's expected that about 7 percent of purchases will be handled by language assistants. The functions of conversational commerce are growing every day and so are the opportunities for companies.

USE FOR ONLINE MARKETING

Conversational commerce offers companies the opportunity to enter a dialogue with customers without the need for additional personnel. Once the user is logged into the device, all important information is automatically stored, including credit card and delivery address. It's questionable whether every company will have to develop its own systems to keep up with conversational commerce or whether it will use applications from large Internet companies such as Google, Facebook or Amazon in a more or less modified form in the future.

The application possibilities are diverse and can in many cases be automated in such a way that the user journey does not suffer any interruption. Examples of areas in which they could be used:

  • Information, searches and services
  • Product information and features
  • CRM dialogue
  • Voice commerce
  • Direct shopping cart / shopping from the shopping list / reserve now > checkout later
  • Direct commerce posters
  • Voice care (medical area, accessibility...)
  • Smart home use

THE DOWN-SIDE

Due to the closed nature of the different language assistance systems of the manufacturers, the applications are only available in limited silos and hardware environments. As with the operating systems of computers and smartphones, different software is used to manage the so-called skills. This currently still means high development costs for companies and advertisers. In the future, SDK and developer platforms will certainly also be provided here, but first, of course, the self-interest of retailers such as Amazon to sell products via its platform and not directly via the manufacturer applies.

Another challenge of digital language assistants is that the user must be logged into the system to perform transactions. No problem with your own mobile phone and on your PC at home, but what's with the PoS or products in the shop window? At present, multi-user applications are not yet fully practicable and require redirection. For example, in such a way that the transaction is not completed immediately, but a product can initially only be "reserved" by photographing a QR code.

Data protection is also problematic and the devices are always on standby and listening. Just recently, Burger King in the US hijacked the local Google Home devices of TV viewers via TV spot and activated certain functions on private devices. For example, users of smart home devices report in social networks that a customer in Holland was able to control the light for a customer in Germany. The background was obviously a returned product that was not completely reset. And unwanted advertising is another danger when devices misuse conversation at home. This means that data protection must be ensured in order to limit abuse as far as possible from the outset.

DON'T STOP DREAMING

Everything we can imagine in terms of artificial communication, chat bots, voice control or messenger apps will come. And online trading will benefit from this. The interface and the dialogue with the consumer develop into a personally impersonal construct. Although the contact becomes more direct and individual, it becomes more impersonal at the same time through interaction with a machine. People themselves are increasingly mutating into digital personalities, digital footprints are becoming digital Bigfoot prints. But if added value, benefit and safety are right for the user, no problem. Therefore, dare to think of concepts and application scenarios for conversational commerce and implement them as prototypes – this will pay off sooner rather than later.

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Lasse Matthiesen Executive Consulting Director

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20459 Hamburg
T: +49 (0)40 202288-8300
Email: l.matthiesen@saint-elmos.com