Speaking Conversation Commerce’s Language

That the era of conversational commerce is officially upon us can be seen in any number of anecdotal metrics – from the glut of voice-centric AI products and innovations on the floor of CES, to the explosion of Echo device sales over the holiday season, to the flurry of excitement over Apple’s long-anticipated HomePod release, to the legions of chatbots wondering how they can “help you today” across scores of retail and banking sites.

And while the explosion of conversational interactions is somewhat new, Mastercard’s SVP of the Commerce for Every Device program, Kiki Del Valle, told PYMNTS that it’s a trend that has been brewing for a while. And what seems clear at this point, Del Valle noted, is that the conversation commerce as of 2018 has reached a critical inflection point.

“The future is here when it comes to natural language processing – or NLP – via voice or using chatbots,” she noted. “This is becoming a main mode for how commerce is happening, and will be happening going forward.”

And it’s a trend, she noted, that Mastercard wanted to further dig into to get a better understanding of how the emerging conversation technologies are affecting consumers’ everyday lives. A study conducted last fall looked at commerce broken down into two categories: interactions with voice assistants and interactions with messenger/text-based chatbots.

The Conversational Customer

According to Del Valle, the study did in fact find that voice-activated NLP experiences drew a slightly different crowd, with slightly different preferences, than chat-based interfaces. Consumers who prefer voice, she noted, tend to give it high marks for convenience and naturalness of interaction. Those who prefer text, on the other hand, tend to favor it for privacy and perceived level of security.

Consumers are also somewhat more aware of voice interactions than they are of text-based interactions, according to the survey data. Around 87 percent of consumers were aware of voice-activated AI technology in some form or other, only 43 percent for chat-based AI interactions. For those voice customers, around two-third reported using the technology at least once a week, and about a third reported using it daily.

Those interactions, Del Valle noted, are still mostly taking place on smartphones, though smart speakers are making up an increasingly large portion. And, she pointed out, the interactions themselves are changing.

Though the “classic” use cases for AI devices remain popular – search, questions about the weather, directions – people are increasingly focusing those interactions on commerce. But a growing number of people are using this interface for more complex tasks, with 21 percent of respondents using this technology to shop, pay bills, bank online or send money. Moreover, Del Valle noted, among smart AI users on smart speakers, six in 10 reported making some sort of commerce or bill pay transaction via voice technology at least once a week.

Ordering food remained the most popular use.

What Needs to Evolve More

Security, Del Valle noted, remains a leading concern, particularly around voice NLP, with seven in 10 consumers in the survey reporting concerns about their cards being compromised, their information ending up in the wrong hands or their contact information being too publicly available.

“There is not a great understanding about what is happening behind the curtain,” Del Valle said, pointing out that customers want a frictionless experience when they are conducting commerce with a voice assistant, but that they also want to feel like they are in full control of that process.

That means, for example, customers don’t want to have to enter and re-enter their payment information and credentials every time they enter the site — that is an annoying friction point on a mobile phone, and nearly a deal-breaker on a voice-activated device. But they do want to be able to approve and secure their payments with a password or voice-based biometric. According to the survey, customers also strongly prefer to have control over which payment method they use, and they want to know the payment has actually gone through.

“We see that nine out of 10 consumers are looking for a validation of their payment at the time of purchase, and a confirmation about what payment method was used. The question that people need to be asking is what is the ‘one-click’ checkout experience equivalent in a voice-enabled transaction.”

Because, she noted, there is still a gap to bridge when it comes to using voice tech. During the payment process, for example, consumers are increasingly comfortable using voice tech and chatbots – but for other services connected to financial services, customers are more reticent.

And that, Del Valle notes, will broadly be the future of moving conversational commerce and financial services forward: Finding ways to build out the innovations that live up to consumer expectations.

Because the race for awareness is over – and has been won. Consumers know the products are out there, and have expressed quantifiable interest in evolving their shopping and financial habits around them.

The trick, the data shows, is living up to what consumers expect that evolution to look like.

“Consumers need to feel like the driver in this process,” Del Valle noted, “and the entire ecosystem needs to find ways to innovate to that very high bar.”