Conversational Commerce is the process of buying goods and services over messaging channels like SMS, Messenger, Instagram Messaging, and WhatsApp.

Chris Messina coined the phrase “conversational commerce” back in 2015. Over the years, the term has been broadly applied to any conversations, automated or agent driven, between the user and an ecommerce brand. It has included both marketing related and customer service related conversations.

Conversational commerce has been steadily gaining ground, but has now reached an inflection point. It is now poised for rapid adoption by brands. There are several reasons for this:

1. Mobile adoption: a smartphone is the primary device for a majority of the users in the US now. Brands are reporting that more than 70% of their users are interacting with them exclusively using smartphones. And mobile users prefer to use messaging platforms as opposed to email. 
2. Popularity of messaging platforms: messaging platforms like SMS, Messenger, Instagram, and WhatsApp have seen an unprecedented growth in popularity. While they initially gained popularity primarily as user-to-user communication platforms, they are fast becoming the primary channel for business to user communication as well, especially for the mobile consumer. Users are far more engaged and active on these channels than they are on email. This is reflected in high message open rates (95%), reply rates (30%), and conversion rates (2X compared to mobile browsers).
   
   Growing popularity of messaging for business to user communication hasn’t gone unnoticed by the major messaging platform providers. Meta is investing heavily in API and ad support for Messenger, Instagram, and WhatsApp. Google recently launched Google Business Messaging. Apple Business Chat started by initially focusing on Customer Service use-cases, but is now promoting commerce related use cases. 
   
   
3. SMS marketing: 2021 was unquestionably a breakout year for SMS Marketing. It is now a mainstream marketing channel for ecommerce brands. While the specific marketing strategies brands are using on SMS are still heavily borrowed from the one-way email marketing playbook, nevertheless, it has helped with the widespread adoption of text messaging as an important channel of communication between e-commerce brands and their customers. This sets the stage for using SMS and other messaging channels to be used as commerce destinations.
4. Headless Checkout & Payment Vaults: One of the key factors that has limited widespread adoption of Conversational Commerce by ecommerce brands has been the inability to complete a checkout inside SMS or other messaging channels. This has been due to (a) a lack of payment methods integrated into messaging channels, and (b) a lack of headless checkout APIs in ecommerce platforms. Absence of easy checkout through messaging means that the user has to go to the website to complete their order, where they encounter the usual friction of logging into their account or creating a new account and entering all of their information.
   
   2021 saw a rapid acceleration in the emergence of headless commerce platforms - both new platforms as well as existing commerce platforms adding headless capabilities. Headless checkout, in particular, has gained a lot of ground, making it possible for merchants to sell their products on channels beyond their website. This combined with growing adoption of cross-merchant payment vaults like Shop Pay, Bolt, and Fast has paved the way for frictionless checkout initiated through messaging.
   
   Since checkout is the most strategic and valuable part of the e-commerce journey for a brand, availability of conversational checkout, which increases the conversion rates by 2X, will dramatically increase the adoption of Conversational Commerce by brands.