Conversational Commerce: Understanding How it is Shaping the Retail Landscape

A potential customer talking to a Walmart associate pointing at a laptop
"What new technology does is create new opportunities to do a job that customers want done." – Tim O'Reilly
  • The global smart speaker market revenue is expected to grow from USD 11.9 billion in 2019 to over USD 35.5 billion by 2025

These statistics indicate how voice technology is massively impacting online retail. 

What is Conversational Commerce?

Coined by Chris Messina in 2016, ‘Conversational Commerce’ refers to eCommerce done by various means of conversation amongst people, brands, services, and bots. The communication may take place via channels such as live chat support on websites, chatbots on messaging apps, voice assistants, etc., and is supported using technology such as speech recognition, speaker recognition (voice biometrics), natural language processing, and artificial intelligence (conversational commerce).

Let’s look at some interesting examples of conversational commerce in action. 

Nike – Remarkable voice shopping experience

Nike partnered with Google in 2019, to offer a remarkable voice shopping experience for its customers. They came up with the never-before-seen voice-activated shoe drop to promote Nike's Adapt BB.

These shoes made their debut during an NBA game. During halftime, the commentator announced that the fans could purchase a part of Adapt BBs via their Google Assistant (asking how to buy shoes).

Within 6 minutes, the shoe went out of stock! That is the power of voice. – Taking personalization up a notch

Known for its stellar customer service and technology, the flower company lets customers place orders using Samsung Bixby and Google Assistant, among others. To take the convenience further, it allows customers to process the voice-orders through several payment options, including Google Pay, Apple Pay, and Samsung Pay. 

The company also has an intelligent virtual assistant to solve customer queries round the clock and offer personalized services to returning customers using AI.

Voice commerce during the pandemic

The recent COVID-19 pandemic taught us numerous lessons, including how companies can substantially leverage voice technology for contactless shopping. 

A significant voice commerce trend was to provide customers the option to create shopping lists, recommend the best brands or products, virtual store navigation, and seamless checkouts. 

Human interaction – 0. Safety – 1. 

Note: Fifty-nine percent of customers care more about customer experience post-Covid than they did before (38%) when deciding where to buy goods and services.

AI and hyper-personalization

Hyper-personalization combines AI and real-time data across platforms to deliver detail-oriented omnichannel experiences to customers, reducing their pain points during the buying journey. 

Not all customers are privy to sharing or repeating the same information on a platform, such as their phone numbers or date of birth. Voice commerce tools with conversational AI help keep track of the chat or call histories and other data to offer information at a granular level. 

Instead of asking them what shirt brand they are looking for, offering them the latest options in their favorite brand drives value.

Walmart uses Proactive models to personalize user experience across customer care experiences on chat and IVR, greeting users with the most relevant options that they may need help with. Even within a conversation, the proactive models understand what the user means currently (NLP) and what the user may need next. 

We’ll cover this later in the post. For now, let’s take a dive into:

How is Walmart amplifying Conversational Commerce?

With the aim to improve and simplify the shopping experience for customers, Walmart has introduced several voice or conversational commerce initiatives over the years. In no particular order, these are:

Walmart Voice Order – Adding favorites to the carts is one line of command

In 2019, in partnership with Google, Walmart announced the Walmart Voice Order, which simplified grocery orders using voice commands. 

To activate the feature, users only had to pick up their device and say, "Hey Google, talk to Walmart."

For customers, ordering became as simple as, “Hey Google, add shampoo to my shopping cart, please." The Google Assistant started adding items directly to the customers' virtual Walmart Grocery cart quickly and accurately based on their prior purchase information, such as their favorite brand of shampoo.

(Note: Walmart also partnered with Apple and made the Voice Order available on Siri.)

In the absence of past order data, the technology suggests items with the best local price and availability and allows customers to modify their carts.

Walmart’s recently built and deployed deep learning AI led to an increase in accepted substitutions by over 95%. In case a desired item is unavailable, the solution helps identify the next best available item for customers based on variables including – brand, price, individual customer preference, and aggregate shopper data in real-time. 

Customers are asked to approve the substituted item or tell whether they don’t want it. These signals are used to identify the next best item for customers if their selected item is out of stock. If the customers give feedback that they don’t want any item, the signal is fed into the learning algorithms. This, in turn, enhances the accuracy levels of future recommendations by removing guesswork. 

Walmart’s AI for customer care

Walmart has been leveraging AI and taking leaps on the customer care front as well. AI is at the core of conversational agents - from using Natural Language Processing (NLP) models, which enable seamless conversations with customers, to using ‘Proactive’ models for personalized experiences across domains.

The goal for these conversational agents is to anticipate customer needs and understand any feedback to provide intuitive and personalized experiences across all of our platforms, such as chats, IVR, help center, and more.

Furthermore, understanding user intent enables us to route users into appropriate self-service flows, e.g., enabling faster returns, checking order status, etc. This results in experiences that help our customers save time and money while allowing our associates and partners to quickly serve and delight our customers anytime, anywhere.

Walmart’s Ask Sams – Inventory management done right

Rolled out in the US in 2019, Ask Sam is a voice tech from Walmart made available to its associates at more than 5000 stores. The tool assists the associates in finding products, viewing sales information, accessing store maps, looking up prices, and so on. The same tech proved critical for accessing COVID-19 information, including the latest guidelines and safety videos. Also, come to think of it, in the pandemic era, it was easier to use the app to navigate information while wearing gloves.

From a member care point of view, one of the significant benefits offered by the tech was speeding up the time to access information instead of writing a query on a small screen, giving associates more time to engage with members. 

The takeaway

Conversational commerce in retail is not just restricted to the big names in the industry. Today, most retailers implement (or have implemented) the technology to automate their services and delight their customers, and offer them alternatives or answers they are already looking for. This drastically closes more leads and reduces shopping cart abandonment rates. Also, customers can quickly get their desired products and product recommendations in no time and have their queries resolved - owing to enhanced customer care. Make no mistake, it is here to stay and grow - not just for online shopping and care experiences, but in-store experiences as well.

The cue for eCommerce or retail companies is to continuously improve their Natural Language Processing (NLP) tech and personalization tech and get the customers acquainted with the same for more intuitive experiences. The approach has to be customer-centric, adapting quickly to customers’ rapidly evolving conversational and eCommerce needs. And that’s something Walmart constantly strives for.