Conversational commerce is the use of voice technology, such as smart speakers, to interact with a specific brand or authorize the purchase of a product or service . For example, Amazon's Echo speaker with Alexa voice assistant allow users to verbally authorize purchases from Amazon's website. The Google Home speaker provides similar capabilities for Google channel partners, as does Apple's Siri-based Homepod speaker.
Companies started using conversational commerce in the mid-2010s to encourage social media interactions between customers and brands. Early strategies evolved as new communication channels emerged, some examples of which include smartphone text apps and messaging apps such as Facebook Messenger and WhatsApp. Conversational commerce can be used by customer service representatives to answer customer questions and cross-sell or upsell products.
How conversational commerce works
Conversational commerce relies on artificial intelligence (AI), natural language processing and historical data patterns to facilitate interactions with consumers in a personalized, direct way. Conversations typically begin with a customer reaching out through their preferred channel or device. As of this writing, chatbots and chat messaging platforms tend to be used more than smart speakers to make simple purchases, such as renewing a subscription.
There are some concerns with conversational commerce through its various channels. At this point, most chat systems and voice-assistant speakers can't conduct complicated purchases. Furthermore, consumers may be uncomfortable completing a purchase through one of these channels or are so comfortable with the current way of purchasing products and services that they need to deal directly with humans to complete the sale.
Conversational commerce risks
Data security is a concern within the conversational commerce market space. Most chat and voice channels require credit card information, and the risk of accidental purchases or data theft has been a roadblock for conversational commerce adoption. Once a smart speaker is set up with a credit card, for example, there is always the risk that someone other than the card holder would approve a transaction -- perhaps without the cardholder's consent. Until there are standards for identity verification and better integration of payment technology within devices, it's expected that consumers will refrain from using conversational commerce to make new purchases.