Based on some estimates, conversational commerce through mobile phones could become an estimated trillion-dollar company in 2030.
Marc Lore, a former CEO of Walmart WMT +1.2 percent WMT +1.2 percent U.S. E-commerce and serial entrepreneur, is on the job again, finding tech startups that resemble the future of retail; however, they are here now. For instance, the concept of conversational commerce. The latest discovery is Wizard, which is developing one of the most effective AI-driven platforms for conversational commerce. Lore, along with other investors, thinks it will transform mobile shopping.
The NEA’s Tony Florence recently led a Series A financing round in the amount of $50 million. It’s not bad for a venture that isn’t yet launched. Wizard’s CEO and founder Melissa Bridgeford wisely is focusing on a B2B model which can enable consumers and businesses to shop and transact through text messages, allowing consumers to skip the web entirely and carry out the entire purchase experience through text, which will result in more excellent conversion rates and more sales.
The money of the Series A funding will be utilized to invest in technology and people. “We’re determined to hire top-quality engineers with expertise in AI machines, machine learning, and NLP (a field of machine learning] and growing our team across all functional areas including operations and sales,” Bridgeford said. “We’re located in New York, and we’re hiring engineers from across the nation to assist a remote team of tech experts.”
“Web-based e-commerce was created for desktops,” Bridgeford said. “Web-based eCommerce is being forced onto mobile devices with no success. It’s slow, takes many steps and time, and is hampered by the checkout procedure, which means increasing the number of screens and clicks. As a result, the conversion rate is reduced to half. The conversion rate is 4 percent for mobile devices and just 2 percent for desktops.
Bridgeford noticed the shift towards mobile solutions across all areas of her life, including ride-sharing apps and payment services. “I realized the issue and was determined to address it,” she said. “We’re nearing the point of becoming able to offer an extremely user-friendly format as well as an efficient and flexible format for the backend. We’re white labeling our technology and giving retailers and brands the ability to communicate with customers via text.”
The market for chatty commerce is on its way to growing into a trillion-dollar market in 2030. Bridgeford said that that’s an optimistic estimate, adding that a significant segment of the population is “craving this type of technology.”
“Having been a major part of my professional life in e-commerce, I’ve been evident that conversations are what’s coming to retail shortly,” stated Marc Lore, the serial entrepreneur, and shareholder in Wizard. “With advanced learning being more widespread, it is possible to create a highly personalized and interactive shopping experience that will revolutionize the way customers shop. I’m convinced that what Melissa and the Wizard team Wizard are creating will be the catalyst for a change.”
“Mobile initial solutions are revolutionizing the way that services and products across every industry from ride-sharing to payment to food and more, and there’s a huge potential to boost innovation using AI machines, machine learning, and other new technological advancements,” said Tony Florence who is the managing general partner of technological at NEA. “Conversational commerce could revolutionize the way we shop online, and we’re excited to work with Wizard in their quest to transform mobile shopping.”
Accel was also a participant in the round. Lore, Florence, and Sameer Gandhi, a partner of the venture capital firm Accel, sit on the Wizard’s board.
Wizard will be focusing on consumables and replenishable due to the large repeat orders and the low discovery rate. Customers don’t need to conduct the same amount of research about laundry detergent as they would when buying the Apple Macbook.
Bridgeford said that a percentage of buyers have already decided what they’re going to buy across all categories. “Even for more discovery categories, text can be a good way to identify those who are aware of what they want to buy,” she explained.
High-frequency purchase rates for consumer packaged goods are particularly appealing for Wizard from the beginning. “That covers the health and beauty industry and other industries we’re looking at,” Bridgeford said. “Text isn’t designed to capture all sales. Instead, It’s a good strategy to get 20-30 percent of sales. It’s a great way to expand the number of sales you can make.”
Text is now capturing a more significant segment of consumers, who use Uber UBER +1.9 percent and Venmo all day. “Those people aren’t stepping into shops or sitting in front of computers,” Bridgeford said. “Text is simply a quicker method of purchasing extremely quickly.”
Bridgeford has been intrigued by conversational commerce for a while. Before joining Wizard, she co-founded Stylust, a text-based B2C shopping platform known as Stylust that was later transferred to Wizard “to allow us to use the technology’s learnings from the last several years to increase the growth and success of Wizard.”
Before that, she was employed as a finance manager at Guggenheim Partners and Cain Hoy Enterprises.
Wizard is not a lot like Jet Black, a conversational messaging concierge type of shopping platform that Lore established during his Walmart time in the office. The retailer shut down the service just 18 months after it was launched and deposited the lessons learned for a future date.
Bridgeford has also used Jet Black and her former company Stylust to help inform Wizard. “Jet Black was a B2C strategy. We’re currently launching in the B2B market as we work with brands and retailers to allow them to interact directly with their customers. Our backend is automated with AI-driven conversational commerce. There are many ways to break down conversational commerce. We’re thrilled to draw on Jet Black’s knowledge and my previous company’s knowledge to develop Wizard into a stronger product. Wizard.”