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  • Chetan Shetty, Chief Operating Officer

The Extentia Blog – The Implications of Conversational Commerce in 2016

The Implications of Conversational Commerce in 2016

The hashtag is dead. Or at least that’s what trends, statistics and industry experts the world over are saying. Social media has scaled its peak and is already on a downward trajectory. Business Insider published numbers that indicate this: “The combined user base of the top four chat apps is larger than the combined user base of the top four social networks. Chat apps also have higher retention and usage rates than most mobile apps. Finally, the majority of their users are young, an extremely important demographic for brands, advertisers and publishers.”

So move over Facebook, Twitter, Instagram, Snapchat and all the other social media apps. WhatsApp, Line, Hike and its ilk are the new kings of online communication and that has given rise to a new trend, one called Conversational Commerce. Don’t understand what it means? Don’t worry! Chris Messina, also known as the godfather of the hashtag, and its official creator as per the New York Times has explained this new trend in a fairly straightforward fashion (as published on the Medium). He says, “utilization of messaging/chat platform, including other natural languages interface to interact with people, brands, services and bots that previously have no place in bidirectional, asynchronous messaging context.”

To explain it further, in even more straightforward terms, it is all about convergence to facilitate convenience. It means making your messaging apps like WhatsApp, or IoT devices like smartwatches, or even Intelligent Personal Assistants such as Google Now, Cortana and Siri more diverse, and allowing direct communication with brands through these mediums. A living example of this is Facebook Messenger’s tie-up with Uber. How does this work? Here is an example – say you and your friends, while chatting on Messenger decide to meet up for lunch. You can call for an Uber without leaving Messenger and opening the Uber app. Here is a more detailed explanation from the Facebook newsroom link – “To get started, download the latest version of Messenger. Then, from within a conversation, tap the “More” menu and choose “Transportation”. You can also search directly for Uber – our first partner – and tap the car icon to request a ride. From there, you’ll receive updates on your driver’s status and notify your friends that you’ve called a ride. With the ability to request, track and pay for a ride in Messenger, we’re making transportation as simple as sending a message.”

This is only the beginning, because according to USA Today, Conversational Commerce is already a thing in China, and will blow up in the United States soon. The article quotes Julie Ask, principal analyst at Forrester, and here’s an excerpt of the relevant parts:

Julie Ask, principal analyst at Forrester, says the U.S. is already behind China, where users of the messaging app WeChat can order food, call a taxi, check their bank balance and even shop flash sales of limited-edition goods. And for the user, the experience is just like texting a friend.

“An average phone user spends 84% of his or her time in just five apps,” Ask says, noting that a large chunk of that time is spent texting or instant messaging on apps. “Brands are realizing that people just aren’t spending time in their apps so the companies are trying to engage you in places like Facebook because they know you spend a lot of time there.” Right now, Ask says, there are only two companies pulling ahead in the space. “In the U.S., Facebook and Google are going head-to-head … They are aggressively chasing this,” she says.

The rapid growth of messenger apps also seems to favour the future success of Conversational Commerce. For example, WhatsApp is close to recording 1 billion active users as per this piece on Forbes. In fact, since this piece was published in January of 2016, and WhatsApp also claims a growth of 1 million users per day in that very same article, chances are they will have already crossed the one billion threshold by now. And as TechCrunch reports, Facebook Messenger is hot on its heels with an 800 million user-figure. Again that number was collected at the end of 2015, so expect FB Messenger to also be creeping up on the Billion mark soon.

So what does all this mean for business and app development? Well, apps are constantly evolving, and Conversational Commerce us just another guise for apps to take if you think about it. As for businesses, preparation for the future is vital for any corporate entity who wishes to stay relevant, ahead of the competition, and ultimately – successful. So if you want to get in on the action and see how you can leverage Conversational Commerce, come to Extentia because when it comes to apps, we’ve got it covered.

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