MGI Research

Monday, Oct 26th

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Taking Commerce to Conversation - a Definition of Conversational Commerce

Conversational Commerce FlowIn this research note, we aim to formally define the principles and attributes of conversational commerce as well as its benefits and factors that differentiate it from traditional web chat support channels.

Even prior to the Covid-19 pandemic, organizations were seeking new opportunities to monetize their dialog with customers. The pandemic has accelerated the push to open new self-service and assisted commerce channels. After all, every customer interaction is an op-opportunity to engage in a conversation, to enhance one’s brand value and potentially convert this dialogue into revenue - hence the concept of conversational commerce.

SUMMARY

Key Issues:

  • How does Conversational Commerce fit into Agile Monetization?
  • When will Conversational Commerce adoption move into the mainstream? 
  • What is the business case for adopting Conversational Commerce?
  • Who are the winners and losers in conversational commerce?

In today’s world, dominated by the Covid-19 pandemic we see a renewed push to automate and enable self-service including commerce and Monetization. This is what sets Conversational Commerce apart from chat and chatbots. We expect that by 2025 more than 30% of e-commerce transaction value will involve some form of conversation-al commerce.

Conversational Commerce offers organizations of all sizes four distinct opportunities to incrementally drive e-commerce conversion and grow topline revenue:

  • Monetize customer support and product inquiry chat
  • Increase level of engagement with consumers and reach new prospects
  • Transform a low-tech unstructured text-only chat channel into a highly capable and structured customer engagement and commerce mechanism
  • Increase cross sell opportunity across all channels

Conversational Commerce should be a key consideration for any commerce strategy. It touches on all aspects of digital interactions and consumer journeys. It drives efficiency thru scale and automation, increases customer satisfaction thru engagement, context and relevance. The most measurable ROI comes from the different Monetization opportunities it de-livers and through growth in conversion and through collection of rich metadata. We expect a meaningful growth in adoption of Conversational Commerce over the next 23-48 months and pandemic-coping strategies driving interest in this area.  

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