Mobile Messaging Conjures A Commerce Platform

Editor’s note: Tom Hadfield is the founder and chief executive of the mobile buying application, Fetch.

This week brought two announcements that reflect a seismic shift in the future of mobile messaging: 600 million users of Facebook Messenger will soon be able to order food, buy products and text directly with businesses; and meanwhile, Magic is raising an astonishing $12 million from Sequoia to allow you to order any on-demand service simply by sending a text message.

America is finally discovering what Asia has known for years: mobile messaging is a commerce platform.

These developments herald what Chris Messina recently described as a new trend towards “conversational commerce,” in which users will be able to shed the need for countless apps from different companies in favor a simple mobile messaging interface.

“Conversational Commerce is about delivering convenience, personalization, and decision support while people are on the go, with only partial attention to spare,” Messina says. Put more simply: we all text more than ever, so why not expand texting’s potential to sending payments, buying products, ordering on-demand services, paying bills, and more?

Facebook and Sequoia are not alone in making a big bet that Conversational Commerce marks the next stage of texting’s evolution. We’re in the midst of a veritable messaging gold rush. Earlier this month, Alibaba poured $200 million into SnapChat, which now lets you send money to a friend or buy a product using their newly-launched SnapCash. This follows Alibaba’s $215 million investment in Tango last year. Rakuten recently snapped up Viber for $900 million with an eye towards integrating mobile commerce into the messaging app.

We all text more than ever, so why not expand texting’s potential to sending payments, buying products, ordering on-demand services, paying bills, and more?

Asian investors were the drivers of this trend for the simple reason that Asia is ahead of America in harnessing mobile messaging’s true potential.

China’s WeChat, for example, generates over $1.1 billion in revenue by offering its 440 million users an all-in-one approach, letting them pay their bills, hail taxis, and order products with a text. Line, a Japanese messaging app with 200 million users, has rolled out LinePay, allowing its users to make mobile payments, order groceries, book taxis, and more.

The Conversational Commerce trend is also being boosted by a number of new ‘concierge’ messaging services that employ a combination of human and artificial intelligence. Magic became the talk of the town by enabling users to send a text to order food, send flowers, or get laundry detergent delivered within the hour.

Other start-ups in the “conversational commerce” space include Scratch and BRANDiD, which provide curated shopping recommendations; and Native, whose personal travel assistant service allows you to book flights and hotels by sending a text. Path Talk was the first messaging app to allow users to message directly with businesses, making restaurant reservations as easy as sending an SMS.

Over time, the use of natural language processing will automate these concierge services, while retaining a human-in-the-loop to ensure accuracy and handle the long tail of requests that cannot be automated.

These innovations point us in an exciting direction, liberating us from the traditional limitations of the mobile interface such as small screen sizes and unwieldy ‘shopping cart’ forms. You no longer need to download and launch separate apps for each on-demand service. Over time, the use of natural language processing will automate these concierge services, while retaining a human-in-the-loop to ensure accuracy and handle the long tail of requests that cannot be automated.

The inevitable evolution of messaging apps like Facebook Messenger and SnapChat into commerce platforms will change the way we think about mobile commerce. It won’t be long until you’ll be texting your food order to DoorDash, paying bills by SMS, or firing off a quick Facebook Message to send flowers to your loved one.

Magic may not be able to be deliver on their promise of bringing a tiger to your front door, but it’s clear that mobile messaging is about to get a whole lot more powerful.