The Rise of Conversational Commerce

April 2021

Fintech & Payments

Sam Barker

VP of Telecoms Market Research

Conversational commerce is the process by which end users of conversational devices are able to leverage them for commerce purposes, including retail and banking. However, the ecosystem for conversational commerce has evolved with many communications providers acting as the primary point of connection between the end users of these devices and the brands, enterprises and financial institutions that use them. Indeed, the media-rich nature of many standards emerging, such as RCS messaging and chatbots, combined with the rising usage of AI for conversational purposes, has led to the creation of this market.

The payment ecosystem, driven by fintech innovations and mobile apps, has become more interwoven with our mobile devices and is moving consumers into the mainstream of online payments. Mobile wallets are likely to see increased use in eCommerce payments as a result of their rising acceptance by consumers and, consequently, their availability as a payment type on retailer sites, as well as the benefits they offer in terms of smoothing the checkout process. The end goal must be enabling conversational commerce over RCS. Indeed, RCS is part of the movement towards omnichannel retail. Omnichannel retail includes retailers adopting multiple channels to communicate with, and offer services to, their end users.
 
Security is an additional concern. In facilitating the customer experience by offering multiple ways to make purchases, the ‘omnichannel experience’ becomes an ‘omnichannel security challenge.’
The omnichannel experience is being extended further through new developments, such as social commerce. eCommerce has the potential to move towards increasing the availability of (physical) products in real time; linking brands to their consumers with less intermediaries, for example, providing a clickable link direct to an outfit or accessory that a celebrity is wearing.
 
Another key conversational commerce service is chatbots. eCommerce chatbots benefit businesses by automating sales and after-sales support. In the role of a customer service agent, chatbots can answer simple questions such as store locations and opening hours. In addition, they can confirm and track customer orders, as well as answering questions about products, warranties, invoices and returns.
Chatbots can also help users searching for products; removing the need for consumers to sift through irrelevant search results. They can also help increase sales by taking payments in the chat interface, therefore streamlining the payment process. The entire sales process, from product discovery to checkout, can be handled by chatbots, via conversational commerce.
 
Finally, there is the voice assistant market, a service which is experiencing a strong growth in adoption and popularity.  Amazon has continued to maintain its number one place in the consumer voice assistant market through wide-reaching distribution, strong partner programmes, and effective marketing. However, Google, Samsung, Houndify, and other platforms are visibly making strategic moves that will ensure strong competition in the market throughout 2021. Other competing platforms, including Samsung’s Bixby, Apple’s Siri and a host of smaller, more task-specific voice assistants are generally restricted to smartphone-only deployment. Assistants trapped in smartphones face a key hurdle: very few users want to talk to their phone in public. Consumer mind share is clearly created from inside the home or, more recently, from inside the car.