Conversational commerce is exploding, and smart merchants are cashing in on the opportunity to engage with consumers in meaningful ways across every available channel. Learn the impact of conversational commerce on customer loyalty.
The first quarter of U.S. E-commerce sales in 2022 has reached $250 billion. E-commerce is a broad umbrella under which mobile commerce (M-commerce) falls. However, the customer journey has become increasingly sophisticated as more and more people use multiple screens, devices, and things to make purchases.
- In 2021, brands were estimated to generate almost $3.56 billion via mobile devices
- Companies retain 89% of their customers using omnichannel devices
The bottom line is that consumers are interested in the easiest way to pay. As omnichannel purchasing options become more prevalent, consumers are taking advantage of new commerce channels. This extends to more nascent commerce trends, like conversational commerce, where people interact with AI-powered chat or voice bots to complete purchases.
Convenience is the Name of the (Commerce) Game
Customers value convenience more than ever and want to pay whenever and wherever they want. Conversational commerce has become a popular method for shopping because it enables this type of convenience.
AI technology enables voice assistants to “learn” information about their owners (shopping habits and preferences, favorite brands, etc.) and make shopping suggestions based on prior shopping history. What’s more, the entire payment experience is embedded, meaning consumers bypass it altogether. Rather than rifling through a physical wallet or touching a smartphone to access a digital one, a user’s payment information is stored in their online account (think: Amazon), where the entire transaction happens behind the scenes.
Most people are familiar with this technology via interfaces like Siri. These chatbots can mimic human-like conversational experiences by analyzing huge volumes of data and using algorithms to personalize experiences for end-users. This sort of personalized experience allows the consumer to get what she needs without having to interact with a human.
AI Technology Provides a Strategic Game Plan
In theory, this all makes sense…
However, the technology needed behind the scenes to make chat- and voice-bot experiences meaningful and realistic enough to drive revenue, is complex. Conversational commerce requires trust with consumers, the ability to enable frictionless payments, and top-notch transaction security.
To implement conversational commerce, merchants often work with technology partners that can build custom solutions tailored to their unique needs. With chat- and voice bots, there are many layers to consider for proper functionality:
- Sensory Layer: The ability to integrate with popular messenger and voice frameworks such as Facebook, Google Assistant, Slack, and Alexa. This also includes some server-side programming for building Sensory Layer specific Response.
- NLP Layer: The NLP layer may be powered by Amazon Alexa for Voicebot or Google’s Dialogflow for chatbot, for example. This layer is where intents and utterances are built.
- Controller Layer: This layer controls all other layers and performs independent validation on inputs, security, and responses, including any exception handling, etc.
- Business Layer: This layer implements any BOT-specific business logic, including the integration with the Fulfillment Layer. This layer may have different business logic for different banking channels and may include compliance-related logic.
- Fulfillment Layer: This is the back-end integration layer that handles the fulfillment of any user-requested functions. It includes connector logic specific to backends, including databases, web services, or a legacy framework layer.
Each of these layers is necessary and works together to provide the most realistic, accurate, and streamlined experience to end customers.
Understanding the Loyalty Playing Field
The loyalty space has grown crowded and is hard to differentiate. Many merchants offer loyalty programs through a variety of mechanisms, owing to which incentives and rewards have now grown commonplace. Unfortunately, this runs counter to the original intent of loyalty programs, which was to entice consumers to choose—and remain with—one brand over the others. Today, a more human, unique, and empathetic approach is required to see success in loyalty programs. This highlights the need for accurate and highly targeted personalization within loyalty programs.
Interest in premium loyalty programs is also on the rise. People are more willing than ever to pay for premium services (like Amazon Prime) that offer special benefits. The key is ensuring the personalization piece is in place. Merchants must embrace this reality over the outdated notion that people are unwilling to “pay to play”.
Evolving Loyalty Programs for the Game-Winning Touchdown
The happy intersection of consumer preferences and AI technology is increased customer loyalty. As the number of connected devices grows and as merchants become more capable of interacting and engaging with consumers anywhere and anytime—they will be able to have a better understanding of these complex consumer preferences. The amount of data that is available for collection will increase exponentially. Brands and merchants that harness AI technology to analyze and apply that data in a meaningful way will come out as the winners.
The better merchants understand consumers, the more they will be able to cater to their increasingly sophisticated preferences. The end result is the ability to drive brand preference and affinity in the form of loyalty. Customers have increasingly become acclimated to interacting with their desktop, laptop, or smartphone screen to complete a purchase. As more and more people begin interacting with—and conducting commerce through—chat/voice-bot technology, they will grow accustomed to more human-like interactions, akin to the beginnings of commerce in brick-and-mortar shops. Conversational commerce presents a unique opportunity for brands to engage with customers on this level, forming emotional bonds with them and meeting their expectations on a deeper level.
Getting the Brand Experience Right
The key is to work with a technology partner that can help you create the most meaningful experiences for your customers. This means building a tailored solution that properly represents your brand tone and voice from the bottom up. By building a custom solution that is also connected to other backend systems—merchants can facilitate a streamlined, frictionless experience from start to finish, increasing customer loyalty, driving revenue, and boosting lifetime customer value.
Get in touch with our payment experts to know how you can put this into action, the right way.