Conversational Commerce: What Does It Mean and How Should Consumer Goods Brands Respond?

First, it is important to emphasise that conversational commerce is very much in its embryonic stages. We are currently at the “robotic dialogue” stage, where the voice assistants are relying on a limited number of information sources, and are programmed to respond to a variety of questions. As AI advances, these virtual assistants are going to become better at understanding people; how they engage with others, why they search for particular issues over others and, ultimately, what makes them purchase certain items. These gadgets are set to become the perfect personal assistants, responding to and even anticipating every consumer need.

These changes are going to be profound, requiring a revolution in thinking from both consumer goods marketers and advertisers. When developing brand identities, they will need to consider the power of the spoken word and its impact on the consumer, as well as how they can build the capacity to “talk back” and actually engage in conversation with a person. The extension to the development of brand personalities will need to encompass voices and human communication. For some brands, the opportunity to develop a resonant spoken identity could drive healthier relationships with consumers, but for others, particularly those that are not very well known, or do not boast a strong media presence, there are unfortunately serious risks.

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For brands with powerful identities resonant with consumers, there will be exciting opportunities. According to Kees Jacobs of Capgemini, a set of demands could be developed that allow a consumer to contact a brand directly by stating, say, “hello Pepsi”. Such an innovation could allow brands to keep consumers constantly engaged, perhaps even proactively seeking out a conversation with them and drawing them into purchasing a particular product. In addition, Google announced that it is working with Lenovo on developing a voice assistant with a screen, which would open up the possibility of developing “a talking advert”. However, for brands without a strong media presence (for instance, manufacturers of everyday items), conversational commerce could pose severe difficulties. Are consumers really going to be interested in speaking with a brand about a household cleaning spray, for instance? In a world where consumers are no longer watching adverts on television and instead are talking to their digital assistants, how are the manufacturers and retailers of basic goods going to deliver their messages to their audiences, many of whom are looking at price over brand? Clearly, conversational commerce brings both opportunities and challenges for the consumer goods sector. What’s certain is that FMCG leaders need to ensure that they are staying in touch with the latest technological developments and learning from other businesses on best practices.

At the End-to-End Value Chain Pillar, our objective is to help consumer goods companies navigate the digital transformation and ensure they are able to take advantage of new trends such as conversational commerce. We have developed a learning series targeted at FMCG leaders, providing them with easily digestible and accessible advice on how they can implement and respond to new technological trends. Make sure you check it out by visiting our dedicated webpage.

This post was written and contributed by:

Ruediger Hagedorn
Director, End-to-End Value Chain
The Consumer Goods Forum