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Conversational Commerce

CPaaS, the driver for Conversational Commerce

Conversational Commerce is the convergence between messaging apps and commerce. Messaging apps such as Facebook Messenger, WhatsApp, WeChat, Viber but also native apps like RCS (Android) and Apple Messages for Business (iOS) will fulfill a significant commercial role in your customer contact.

What about Conversational Commerce?

Conversational Commerce could be just another new buzzword created by US West-coast based startups. A closer look at China’s WeChat provides evidence that it is more than a buzzword. With 800 million WeChat Pay users and 5 Million brands with active WeChat accounts, this chat-app created an active in-app commercial eco-system. WeChat, besides being a P2P messaging app, supports real end-to-end Conversational Commerce through features such as Chat, Payments, Wallets, Audio, Video, QR codes and Store Payments. With Conversational Commerce (or: mobile e-commerce) capturing 54% of the e-commerce pie by 2021, WeChat and other messaging apps are perfectly positioned to capitalize on this growth area.

Closed versus open Eco-systems

How can chat apps benefit from the expected conversational commerce growth? Let’s start by realizing that Europe, the US and the APAC region are far apart from each other in their approach to innovate and develop new products. The open platform strategy offered by Chinese vendors drives innovation. Enterprises get access to a frictionless environment to setup their conversational commerce customer journey. With a rich set of features, as mentioned earlier, enterprises do not need to spend valuable development resources to build features themselves. The whole eco-system accordingly grows with exciting mobile commerce offerings. Chat apps need to enrich their messaging apps with rich features, payment capabilities and 3rd-party provider solutions.  

Conversational Commerce is not Chat

The enterprise world is misled, as Conversational Commerce in the US and Europe is now being claimed by many vendors as an integral offering in their proposition. In reality, it is nothing more than a human- or chat bot capability connected on a messaging channel. Driven by traditional UCaaS vendors and the new Customer Contact platforms, they are the first to offer messaging apps in an enterprise world. However, replacing voice calls or customer care with bot supported chat is not necessarily Conversational Commerce. Sorry guys!

Rich features

Let me elaborate on “Rich features” in chat apps, as this is key to understanding the difference between Chat and Conversational Commerce. RCS (Rich Communication Services) and Apple Messages for Business are native channels providing features such as:

  • Quick Button replies
  • Location sharing
  • Date picker
  • Carrousel
  • Payment button

These features, intelligently combined, will deliver a user experience superior to a mobile website. Conversion rates will improve as the consumer is no longer forced to leave the channel. Not to forget the boost in consumer trust based on the “Verified sender” capabilities these channels provide. Consumers will know incoming messages from these (native) messaging apps are guaranteed to be coming from your actual bank, hotel or airline.

CPaaS provides tools for Conversational Commerce

In reality, sees that most of the full e2e mobile commerce uses-cases build on a CPaaS vendors proposition. Unfortunately, CPaaS vendors do not have skypemarketing power similar to UCaaS, Chat or Marketing platform vendors. Effectively, the market fails to identify partners who can connect messaging apps and implement true Conversational Commerce. CPaaS vendors traditionally do not only offer messaging channels, but also value-added services in the form of Programmable Telecoms. So, all the rich messaging app features such as Buttons, Calendars, Payments, List-Pickers or Maps can be leveraged through a single Business Messaging API. Visual Builders (non-coded) will follow quickly, enabling brands to leverage to full rich suite of the new messaging channels such as RCS and Apple Messages for Business.

Both WhatsApp and Apple Messages for Business were launched in 2018, RCS in 2017 and a handful of enterprise use-cases were successfully put into production. The use-cases all showed very promising initial results with higher conversion rates, turnover and improved customer experience. 2019 will be an exciting year, with high expectations, proven technology and enabled CPaaS vendors many more enterprises will launch conversational commerce use-cases. Brands will start to leverage existing technologies such as AI, Bot combined with messaging apps and new payment methods. Ultimately offering great new mobile customer journeys. 

Richard van Anholt is Director of Global CPaaS, responsible for developing and owning the global CPaaS Go-to-market strategy. He manages global Strategic Alliances and Partnerships and Analyst Relationships.

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