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Chat Commerce Vs Conversational Commerce – The Difference Matters

At Clickatell, we’re often asked about the difference between chat commerce and conversational commerce. This is not surprising because the terms are cut from the same cloth. While there are similarities between the two commerce channels, there are also key differences that warrant a full explanation to allow business leaders and technologists to understand the best way to enable chat capabilities for their business.

There are clear similarities between chat commerce and conversational commerce. They both afford the ability to connect with and have communications with customers, answer questions and have asynchronous dialogues, and offer and process commercial transactions.

The differences, however, are more stark. Conversational commerce is powered purely with conversational AI and can be deployed on various channels. Chat commerce, on the other hand, is based on using chat platforms to conduct commercial transactions and is mobile-only. Chat commerce focuses solely on conducting transactions within the world’s largest messaging and chat apps, which are now used by billions of people around the world and presently account for billions in annual commercial revenue. Conversational commerce is disparate, not widely deployed, and not running on a ubiquitous and proven platform while chat commerce is a mature, international revenue channel.

What is chat commerce?

With chat commerce, you do business with your customers through their favorite chat apps, like WhatsApp. They don’t need to download your app, visit your website, or walk into a physical location. Instead, you engage your customers where they already are—in chat.

Transactions are made directly through the chat app, which have built-in privacy and security features. A customer sends a message requesting to buy a product or service and the transaction is made solely within the chat interaction. Payment is secure and easy, the process is convenient. Interactions and transactions delight customers with their simplicity, a fundamental aspect of chat commerce that lies at the heart of what distinguishes it from conversational commerce. Chat commerce is as frictionless as: Hi. Buy. Bye.

When you chat with friends and family, you share quick, casual info within your favorite messaging apps; bits of personal news, memes, images that make you think of the person you’re sharing with. It can be a quick back and forth—like a brief chat with a neighbor at the mailbox. Or it can be an asynchronous exchange where you swap responses with long breaks between messages – it can be as convenient as a 5-second dialogue or contain messages over weeks of time or longer, whatever is most convenient for the customer. Bring commerce into that style of communication and you enable purchases of things like streaming sports events, airline seat upgrades, flower delivery to mom, the “usual” pizza for delivery or a purchase that requires questions to be asked and answered over time.

Chat commerce:

  • Simplifies purchasing through popular chat apps.
  • Streamlines authentication of the consumer for success.
  • Empowers consumers with fast interactions in preferred apps.
  • Enables a consumer-led, mobile-first commerce path.

People want to use chat to get things done. Chat commerce allows people to get answers and purchase goods and services – to take action in a remarkably fast and convenient way, directly in their favorite chat app.

Competing meanings for conversational commerce

 Conversational commerce has broad usage and even broader meaning. Depending on context, it can mean everything from chatbot-based customer service within a brand-specific app to concierge-type services like Siri or Alexa.

Most definitions revolve around an AI-informed voice or free-form text interaction. In fact, when Chris Messina coined the term (he was Uber’s developer experience lead at the time) he was referring to automated assistants and chatbots that would interact with consumers through a variety of channels. Conversational commerce promises interactions similar to an interaction with a knowledgeable salesperson.

But too often the promise falls short. Why? The platforms that power conversational commerce aren’t ready for true conversation in the way humans speak and typically engage via chat. Think about your interactions with chatbots or Alexa/Siri. They’re likely to be just as frustrating as helpful. AI-informed voice communications are fraught with misunderstandings. Exchanges with chatbots frequently feel like they’re designed to save the provider the expense of an assisted interaction—not enhance the customer’s experience.

Conversational commerce:

  • Engages customers using AI.
  • Encompasses a broad range of channels beyond chat, such as chatbots on websites and voice-based assistants.
  • Requires the understanding of meaning (without frustrating the consumer too much) for success.
  • Prioritizes the reduction of customer service costs and effort for businesses.
  • Puts consumers on a business-led path.

Why shoppers conduct chat commerce with brands

 Chat commerce lets people use chat apps to purchase products and services. It can be as slick as an airline using automated menus in WhatsApp to enable flight check in and in-flight meal purchase. Or it can be as bare bones as a contractor messaging a supplier and asking to add specific materials to a delivery. In those examples, the interaction is complete in less than the time it would take to load a branded app or navigate an IVR (interactive voice response) menu. The consumer can connect directly from their chat app address book for inbound messaging.

Outbound chat is just as frictionless. Take this telecom use case as an example. A service provider sends this message: “Your account shows a balance due of $62.45. Would you like to pay now? Click to pay or chat for more information.” The customer can pay easily (now or when it’s convenient), ask a question about the bill, or ignore responding directly and ask her bank to pay the bill by chatting with her bank.

Chat commerce is rooted in transactions but the applicability is much wider and more universal. With chat banking, consumers can chat with their banks to complete actions like checking their balances, transferring funds, or putting holds on payment cards. Chat self-service lets consumers confirm appointments, make or change appointments, check the status of orders, and more. You create easy-to-follow customer journeys using menus of options.

 

A good experience doesn’t rely on an AI layer interpreting the customer’s meaning accurately – communications can happen directly and intuitively. It is about quickly and easily getting things done, solving problems, and doing business.

Activate chat commerce with Clickatell

 Clickatell delivers what you need to open chat as a sales and service channel. Our solutions let you use popular chat apps to take orders, upsell, and promote products. And for service? We help you create a self-service option that customers will like because it saves them time and is at the apex of convenience.

Contact us to discover how easy it is to use chat to deliver innovation to your customers, build a new revenue channel, and delight customers with the ease and simplicity of chat.

 

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