How New-Age Brands Leverage Conversational Commerce On WhatsApp To Build Loyalty, Drive Growth

In an always-on, digital-first world, more people are shopping online and need to communicate with brands for additional information, better customer care and a personalised shopping experience. Ecommerce 1.0 was undoubtedly convenient. But consumers today are increasingly looking for two-way conversations that make the entire process more enjoyable, efficient and seamless, in tune with evolving markets and individual requirements. 

As many retail experts point out, ecommerce 2.0 is all about two critical factors – commerce optimised for experience and customer relationships personalised for conversion. Conversational commerce, which is the intersection of conversation and conversion, has built and accelerated this trend in the past few years. So much so that adding a tech tool to enable conversation can increase the lead-to-conversion ratio by 2.5 times, according to Haptic. More importantly, 71% of consumers expect personalised interactions from companies, and 76% get frustrated when this does not happen.                   

Understandably, enhanced customer engagements and seamless shopping journeys are best achieved through an AI-based ecosystem where based on customer data analytics, chatbots/virtual assistants can make product discovery faster, recommend suitable items, provide information and help close transactions. This convenient, real-time assistance makes shopping efficient and helps reduce cart abandonment – globally varying between 59.2% and 79.8%. But that is only one part of the narrative. 

Conversational commerce further enhances marketing and promotion, accomplishing more lead generation than traditional tools and eventually ensuring a higher ROI for brands.

How AI-Powered Conversational Commerce Drives ROI Via Marketing Automation

Digital-first brands and ecommerce platforms are increasingly integrating conversational commerce across all communication touchpoints, including social media, messaging apps, SMS and more. But when it comes to brand promotion, the spray-and-pray strategy has been abandoned in favour of targeted, more personalised but automated marketing campaigns, a win-win for both retailers and prospects.

Conversational advertising is based on deep learning algorithms which can analyse customer data, decode their preferences and target the right audience for effective promotional campaigns. This helps generate more and better quality leads, and brands no longer need to initiate random interactions. Moreover, pushing automated messages with a personal touch can sell more products and free up valuable human resources who can deal with more complex transactions/knotted issues. 

Take, for instance, how ecommerce fashion giant Myntra promotes various brands selling on its platform. According to the company’s disclosure, the marketplace pushes certain items as recommendations to people who had earlier shopped for similar products/styles on other platforms. Its AI/ML-powered conversational tools (read chatbots developed for this purpose) not only push these products via messaging apps (WhatsApp, Facebook Messenger, Instagram and more) and other channels but also ensure the entire process remains interactive and personalised. The aim is to help brands gain valuable customer insights and add value to the customer experience by providing quick recommendations and responses. 

In simple terms, brands now use in-app chatbots to help customers with browsing, transactions, post-purchase feedback and more to provide maximum convenience and personalised services. They also update shipping details, order status, return/replacement criteria and deals/discounts for a hassle-free journey.               

Myntra uses the same approach to retarget existing customers. If shoppers do not buy products they browse, the platform sends personalised reminders via messaging apps, email and other channels. 

Marketing automation can also be used for upselling and cross-selling. By analysing past purchases, a complementary product ad can be pushed upfront when the customer is around or during the checkout. If brands suggest products similar to the ones that customers bought earlier but with improved features, they are likely to make additional purchases.

WhatsApp, Other Meta Channels Are Fuelling Brand Growth Via Conversational Commerce

As Facebook Messenger has a user base of 1.3 Bn (also the world’s fourth-busiest platform), it is an obvious choice for new-age brands to reach their prospects and customers via conversational marketing. Meanwhile, Instagram, with  25 Mn business accounts and counting, also offers many opportunities to provide deep brand experiences, further cementing the bond between brands and consumers. Brands can use Instagram to create video instructions for their products, use influencer marketing for product promotion and communicate with their audiences through direct messaging. 

However, the front-runner in the conversational commerce race is none other than Meta-owned WhatsApp. With 2 Bn+ unique active users globally and 487 Mn in India, it has become integral to everyday life, communications and commerce. Given the massive traction, millions of small-to-medium brands are already on WhatsApp Business, building customer engagement via AI chatbots and driving sales.

For large organisations with more extensive requirements, third-party business solution providers (BSP) enable backend API integration. One such BSP is offered by a cloud software company for conversational commerce, CM.com, headquartered in the Netherlands. 

CM.com’s proprietary tech stack offers a mobile marketing cloud (MMC) for businesses to engage with customers on messaging channels (SMS, WhatsApp Business and more) and the mobile service cloud (MSC),  an all-in-one chat tool helping support agents respond to customer queries across mobile channels from a single dashboard.

Both new-age brands and established players are now opting for WhatsApp commerce for a couple of critical reasons. First, the platform provides businesses with a cost-effective mobile channel for directly reaching customers, deepening relationships and retaining them. For people out there, it is more inclusive than PCs and laptops and easier to browse and ask questions before closing a deal. 

Second, powered by conversational AI, a streamlined WhatsApp interface can help reduce cart abandonment, retarget abandoned carts, bring down CoD and RTO through candid interactions and build more effective loyalty programmes. 

Finally, WhatsApp’s robust security features such as end-to-end data encryption make it a reasonably safe transaction platform in the digital-first era. For context, Singapore-based Group-IB has ranked India third globally and first in the Asia-Pacific region among 111 countries impacted by cybersecurity breaches. Although healthcare is reportedly the most targeted sector (Sun Pharma is a noted case in 2023), digital commerce remains one of the most vulnerable sectors due to weak preventive systems.    

Asked about the significance of WhatsApp Business, Gleb Grozovskii, head of sales (India) at CM.com, said, “In today’s world, WhatsApp is the most important channel for ecommerce brands to engage with their customers. Furthermore, CM.com provides a holistic, all-in-one platform for brands to target & retarget new and existing customers. Brands can manage all their customer communication needs from a single dashboard.”

Automated Campaign On WhatsApp Business: How CM.com Helped BNew Mobiles 

Although largely automated, conversational commerce can drive impact and scale across platforms, and here is a case study to highlight this. 

Brand: Hyderabad-based mobile retail platform BNew Mobiles. Objective: To enhance the customer experience on its website. 

Launched in 2014, BNew Mobiles is a hyperlocal mobile retailer that sells electronic gadgets like mobile phones, mobile phone accessories, TVs and laptops across Andhra Pradesh and Telangana. 

To take its customer service up a notch, in 2022, BNew Mobiles integrated CM.com’s WhatsApp Business API to provide a seamless customer experience (CX) to its existing customers and new buyers. 

For this, it leveraged CM.com’s customer data platform (CDP) to store and segment customer data. Using this data, BNew Mobiles targets users with personalised messages on WhatsApp. 

With CM.com’s mobile service cloud, BNew Mobiles’ customer agents resolve customer queries in real-time via conversations on messaging channels like WhatsApp, hence smoothening customer experience.

Grozovskii said, “BNew Mobiles and CM.com created a step-by-step plan for integrating WhatsApp chatbot to assist buyers to find the right products.” The chatbot, based on that stored data, provides a personalised shopping experience to the customers.

Talking about the partnership, Sai Nikhilesh Yerraguntla, CEO of BNew Mobiles said, “CM.com accelerated our conversational commerce journey and we’re looking forward to continuing our partnership with the goal of delivering a first-class shopping experience to our buyers across all messaging channels.”

To expand its omnichannel presence, BNew Mobiles aims to connect with its user base on Google Business Messages, Messenger and Instagram.

Conversational Commerce Is A $26 Tn Market, But The Challenges Are Many

The global adoption of conversational commerce presents a $26 Tn market opportunity by 2032, at a CAGR of 15.6% between 2022 and 2032. However, India will likely face a couple of challenges in this space. 

According to an IIM-Ahmedabad report, online shoppers from Tier 2 to Tier 4 cities outpaced the metro buyers and spent up to 77% more than those from Tier 1 in their last online transactions. Clearly, the markets beyond the top cities are emerging as the new growth zone for ecommerce 2.0, especially the 50K+ digital-first brands currently operating in India. However, there can be a pronounced language barrier/communication gap when conversational commerce (read AI-based chatbots) starts catering to Bharat, with just around 15% English-speaking populace.      

In other words, nothing less than vernacular commerce at scale can enable ecommerce 2.0 to take a significant leap, as the next wave of online shoppers will come from non-metros. A Unicommerce report said that Tier 3 online shoppers grew from 34.2% in 2021 to 41.5% in 2022 and Tier 2 online shoppers grew from 19.4% in 2021 to 21.4% in 2022. 

This will require increasing usage of vernacular language chatbots, as well as improved natural language understanding and processing (NLU & NLP) to ensure more human-like conversations. As these advanced chatbots can easily ‘deduce’ the actual meaning irrespective of how it has been expressed, this will help reduce response time, human intervention and operational costs, paving the path for meaningful human-AI dialogues and smooth transactions.

More importantly, digital-first brands need to upgrade their backend systems to integrate the ecosystem and further seek assistance from enablers like CM.com to thrive in a data-driven, chatbot-first and near-automated digital commerce environment.

AI-powered C-commerce is the way ahead for optimising customer support and enhancing customer experience. And ecommerce brands that can implement it fast are bound to secure a first-mover advantage in a fiercely competitive retail world.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.