Episode #105: The Ultimate Guide to Conversational Commerce (Reprise)

A special treat today as we revisit one of our most popular episodes. And it’s popular for good reason. Conversational Commerce is set to become the “next big thing” — enabling shoppers and sellers to transact directly through chat or social media. It’s a way to meet your customers where they are. And it’s truly revolutionary.

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PODCAST TRANSCRIPT

All right. Welcome to the CXM Experience. And as always, I’m Grad Conn, CXO at Sprinklr, chief experience officer. I’m here today to talk to you about conversational commerce.

Yeah, you probably don’t know what conversational commerce is. But as I describe it and take you through it, it’ll become pretty obvious. I think it’s incredibly exciting. I actually think conversational commerce may be one of the biggest things to happen in the last decade, in terms of the way we shop online. And if you think about our online shopping habits, most of what we’re doing online, in the shopping universe, was defined a while ago. We were busy buying things in the late 90s. And so here we are in 2021, we’re still having very similar experiences. There’s been a refinement, but very similar experiences.

Conversational commerce, has the potential to up end that and really change the way that we buy. And I’ll talk about that more in terms of where it sits and how to think about it. And we’ll go into detail. So by the end of this, you should be an expert on conversational commerce.

I will say this is new. This is very early. People who are jumping on this are digital leaders. Many, many Sprinklr customers are jumping into this. We have some of the world’s most innovative companies as our customers. So that’s not surprising. But it is definitely a new field. I’d encourage people to get into it, because it’s a really great way to cut the Gordian knot.

We talked a little about the Gordian knot in a previous podcast, which is how do you take an intractable problem and get around it. And the way Alexander the Great untied an untieable knot was by taking out his sword and chopping it in half. Boom, you’re untied. Same thing here. We’ve got these very complex commerce stacks, very complex martech stacks. Customer engagement’s really tricky. It’s hard to get an integrated 360-degree view of a customer. It’s a bit of a problem. The tech debt that we all have as companies — well, I don’t have it because I use Sprinklr. But for everyone else, the tech debt that you have as companies, it’s real, it’s like a big deal. Conversational commerce offers you an opportunity to bypass all that and go straight to customers. And just start with a whole new fresh, clean stack. So, if that’s interesting to you, let’s keep going. And let’s keep talking.

If you haven’t been noticing, there have been a lot of commerce additions to Instagram, and to Messenger and everything they’re doing on Facebook. Shopping ads, stories, Instagram shop, editors picks, brand shop, product, cart and checkout, timeline posts, the grid, creators picks, collections, product launches, chat. And most importantly, shipping updates have all been launched on Instagram over the most recent history. And if you listen to what Mark Zuckerberg is saying about Facebook and his platforms, WhatsApp, Instagram, Facebook, Messenger, their future is going to be a future of commerce. So they’re beginning to think of themselves as a commerce channel. And less so as a social channel. Still, obviously connecting people the way they connect people, but that the business will become a commerce business. Pretty exciting. And it’s an amazing new direction for where they’re going.

You can actually do this today. There’s an interesting example, that we have in one of our decks where we see a shopping ad for a little toy car. You can read the product detail right there, right in Messenger. You can put it in a cart in Messenger. You can see your shipping and tax, you can place the order, see the order has been placed, get confirmation, and get an order summary all without leaving the platform.

And this idea of being able to stay in a single platform and a single experience is quite different. We’ve gotten maybe a bit too used to the fact that we click on a link and we end up somewhere else. And there’s spinning circles. And there’s all sorts of different, data points, and things flying at us. And sometimes it works. And sometimes it doesn’t. And to a certain extent, I always hate doing that. I always hate clicking on a link because it takes me out of the platform. And sometimes it works. And sometimes it doesn’t. Sometimes I get lost and sometimes I don’t. And it’s just frustrating. And so, what the platforms are doing is putting enough functionality into the platform itself that you don’t need to leave.

It’s going to have far reaching implications for companies like Shopify, for a lot of the companies that rely on the Shopify universe, for all the external cart companies. I think it’s gonna be quite challenging as this stuff moves into the dominant platforms. But that’s what’s happening. So that’s the trend. And for anyone who sells online, this is going to be great because it reduces a lot of friction.

So, what is conversational commerce? Let me define it formally for you. And then we’ll get into a couple of examples. So conversational commerce, sometimes called c-commerce, and sometimes called c-comm. And I’m sure soon called cc or something like that, allows people and businesses to connect through chat with the intent to drive the purchase of a good or service. So, with our Sprinklr c-commerce solution for Facebook and Instagram, brands can engage and transact with customers via Messenger. And through Messenger, customer care agents can send messages directly from their product catalog. And the products can be selected manually by the agents or suggested via an AI recommendation engine. Basically, what we’re saying is that it’s time to meet people where they are, shopping in their favorite messaging apps. And conversational commerce is uniquely positioned to meet the needs of today’s consumer.

So, it’s kind of a formal definition, what does it really mean? It means that I see something I want on Facebook, I click on it, I’m in Messenger, I transact the whole thing, and I’m out. But I’m not transacting with a robot. I’m not transacting in a generic way. What’s really cool about conversational commerce is I’m transacting with an agent. So conversational commerce sits in between the personal (theoretically) personal environment of a retail store, and the impersonal and very generic environment of online shopping.

If you think about online shopping, lots of great things about it, we’re all doing tons of it. But there really isn’t a ton of guidance, you have to know what you want, what you’re looking for. There are concerns around product quality, or product fit, or product appropriateness or sizing. Sometimes it’s hard to tell if it’s right. Sometimes the UX can be difficult to navigate. But more importantly, by constantly switching between different shopping environments, your context switching between UIs, and that is actually hard for humans to keep doing. If you could buy multiple products from multiple vendors in a single UI, that’d be vastly superior, and people will migrate to that.

One of the reasons why people have migrated to things like Seamless and Postmates for food delivery, because trying to go to every single restaurant’s website and trying to navigate menus, it’s very, very difficult. People want that common UI. And of course, there’s no human touch point in online shopping. At best, you might be able to submit a query or go to some kind of community, or maybe do an email.

Now the retail store is great. And we love retail stores. But, a few challenges. One is, you know, going into a retail store may kill you. That would be up there. My concern levels. The one-on-one experience isn’t really as strong as it used to be. Because of the challenge in retail these days, they’re de-staffing. So, the stores are there, but the people aren’t. I spent, I can’t even tell you, 15 minutes running around a store in New York last week, literally just looking for a person to help me. I had to peel someone away from restocking to get them to help me. I got the help I needed. But it was a hunting and finding experience. Not very attractive. It’s expensive to run a store obviously, and stock availability is unknown and very dodgy.

So conversational commerce sits between these two. It’s the best of both worlds. It’s the lower cost of online, and the concierge services of high-end retail. You can try and customize the product, you’re interacting with an agent, you can bargain, give discounts, it’s open 24/7, and you have access to the entire product catalog and stock. Access to the entire product catalog and stock. Imagine if you could go into a store that had everything, in every size, at all times. Kind of cool.

And so, what Sprinklr does is it creates an agent dashboard that allows the conversation from the customer to be viewed. And then when you start having that conversation, you get a 360-degree profile of that customer coming out of the CXM database. And then the AI engine in Sprinklr will recommend ways of responding to the customer’s questions and recommend ways of driving upsell and sales motions. It’s a very compelling, very simple, single glass experience that allows the customer to have a good experience by being well informed, getting answers to the questions quickly, but having a real person on the other end. And it creates a great agent experience because the agent can get quick answers to questions that they’re being asked and leverage the work of the very best agents across the network.

This is something that we’ve put in place in a number of customers. Still very early, but we’re seeing amazing outcomes. And what’s really neat about this is it allows you to take any kind of social marketing effort you may have had in the past, or any kind of messaging platform effort you may have had in the past. And instead of justifying it maybe on cost… often people will say that customer care on modern channels is less expensive than voice. Absolutely true. So that’s an easy way to justify it. But now what can happen is you justify it based on revenue. Right? Now I can say, Hey, I’m doing this to generate more revenue.

I heard a story today about a retailer, they had a goal, I’m not gonna say who it is, but just use it as a benchmark. The team had a goal. The online social team had a goal of generating about 10 to 12, to 14 to $15 million in revenue a year. Every year it would go up by a million, and they were doing a good job of hitting those goals. This year, their goal is 50 million. Just overnight, the goal has tripled, or slightly more than tripled because the world has changed. And we need to be driving our primary sales from this channel. So discontinuous innovation has to occur, and massive digital transformation has to occur to make that happen. So conversational commerce is a great way to do that.

Now, you could say why Sprinklr? Why don’t I just do it directly on Messenger, directly through Facebook? Well, there’s a couple of reasons. One is, it’s very hard to manage the product catalog, because it’s not possible on Facebook to connect the product catalog to the shop. So you’re gonna need to do that, because you want to have your whole catalog available. The recommendation engine doesn’t exist. So, you can get recommended products by agent and community manager, and it utilizes AI for intelligent product recommendations. You can also use this as a way of holistically managing the customer experience across all channels. You can see that customer’s profile, they’re in your CXM database, you’re having a conversational commerce interaction with them. But you know what else they’ve done as well. So, a more holistic management of the consumer allows you to have a way better experience for that consumer.

And then you can also now take conversational commerce, if you’re using Sprinklr, and you can place it in the context of all your paid, owned, and earned activities and metrics. And so you can look at it that way. And then you can also tie in any kind of insights you’re getting from other areas of Sprinklr, like listening insights, what are people saying. You’ll know what’s trending, what people want, how people are looking at things. Or product insights, product comments, feedback, things that people want to see in the product. And then you can use those insights to inform other parts of the Sprinklr stack, like advertising, marketing, the content production. All those things can be informed by what’s coming through conversational commerce, the kind of conversations that are happening, that can help the whole system be better and smarter and more effective.

So, it’s pretty exciting. I hope you get this. We obviously have materials on it. If you want to know more, please send me a note. We can connect with you directly and talk about it. But conversational commerce holds the promise of a whole new way of interacting online. And I would say that within five years, it’ll be one of the most important sales channels for retailers. And I’d say within a decade it will be the Walmart of retail. So, we’ll check back in 10 years and see where we are on that. But I think this is going to be the next big thing and very exciting future for Facebook.

So that’s it for today. Got some really cool stuff on CXM we’re gonna be talking about for the rest of the week. But for now, I’m Grad Conn, and I’ll see you next time.