What are the opportunities and threats?

Conversational commerce offers retailers and product brands opportunities, but can also result in threats. These are present depending your type of company and assortment. The overview below identifies the most important ones.


 

1. Opportunities

The main opportunity offered by conversational commerce is to enable direct and low-threshold contact with consumers. This has the following advantages:

 

  • More and more specific information about customer needs and context can be obtained during a conversation; consumers also share information more easily, mutual 'engagement' can be increased ("I am looking for a stain remover for certain type of stain", "I am looking for a gift for a 6-year-old ");
  • A more personal and more appropriate offer can then be made ("Should I send it to our Schiphol store, ready to be picked up by you?") And the right choice can be confirmed ("With this dress you’re undoubtedly the best-dressed woman of the party" );
  • It offers companies the opportunity to be present when need arises (because consumers grab their phone for almost everything) and then offer instant satisfaction;
  • It combines the possibility of holding a conversation while using visual material;
  • It can facilitate and accelerate repeat purchases;
  • Consumers ignore legitimate chat messages (for the time being) less quickly than, for example, e-mails;
  • With a smart use of resources, it can also result in cost reductions through efficiency, and it is scalable;
  • The conversation can easily be logged and later searched or analyzed.

 

Organizations can learn a lot. A chat bot better understands the exact questions of the customer than when customers are referred to the FAQ. The chat bot's answers can still be 'fixed' and can be improved manually or continuously optimized via a learning application.

 

Connecting the conversational commerce solution to an existing platform naturally also offers the advantages associated with participating in a platform. It can generate extra traffic while consumers do not have to install an extra app. At the moment, it can still bring certain first mover advantages by being the first provider to use these types of chat bots in a product segment.

 

2. Threats

 

Starting with conversational commerce can also bring a number of threats. An important aspect in this is the quality of the conversation. A number of factors play a role in the quality of conversations in chat bots:

 

  • The quality of the Dutch language in the used voice / chat technology is not at par; this should, however, be a matter of time before sufficient improvements have been reached in the Dutch language;
  • Replacing 'Human-to-human' with 'Human-to-chat bot' gives the risk of miscommunication, which can quickly lead to disappointed consumers;
  • Switching channels while maintaining content, context, conversation and authentication is quite complicated, both in terms of technology / information provision as well as organizational.

 

Setting up a professional solution requires a considerable investment, especially in time to make the system smarter and better. However, the above points emphasize the importance of this. If this investment is insufficiently done, the danger of insufficient quality or uniformity soon arises. This will detract from the brand and can be perceived as 'cheap' by the consumer: I am being discarded via a cost-effective but inadequate solution.

In addition to this, stricter privacy rules do not simplify the use of chat bots. With algorithm-based conversations and with the use of speech technology, unique identification deserves special attention, especially for recording a formal transaction.

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