Siri, What Do I Need to Know about Conversational Commerce?

2/13/17

By Joe Skorupa

I recently asked Siri if she was human and she answered, “That’s a rather personal question.” Then I asked if she was a chatbot. “No comment.” Good answer. It really doesn’t matter. Siri has been a great assistant (virtual or otherwise) for seven years. Now, however, there is a new kid on the block, the Amazon Echo and Alexa and many other chatbots. Welcome to the new age of conversational commerce.

Many of us have been talking to Siri on iPhones since 2010, but chatbots did not really explode in the marketplace and into public consciousness until the last couple of years. The reason is the booming success of the Amazon Echo and Alexa platform. They launched in late 2014 for Amazon Prime members and then released to everyone else in 2015. Amazon cemented the success of Echo and Alexa by placing them in its first-ever Super Bowl ad in 2016. Sales now total about 5.5 million units.

Clearly, consumers are excited about the prospect of talking to the internet through a virtual assistant and retailers are suddenly seeing commercial possibilities in the new era of conversational commerce.
 
Facebook, Google and Microsoft launched major solutions last year that demonstrated how machine learning and Natural Language Processing (NLP) have made huge leaps forward.
 
Artificial intelligence (AI) has simultaneously become cool and chatbots, the next-generation of the more familiar interactive voice response (IVR) systems used in many call centers, are a perfect way to tap into AI’s enormous potential.
 
In addition, open source communities and vendors have matured to the point where third-party API’s for creating and managing chatbots have become readily available. In an incredibly short period, a chatbot ecosystem has emerged that is putting conversational commerce technology within easy reach of developers.
 
What all this means is that startups are rapidly emerging that can integrate NLP and AI logic into chatbots and produce solutions that rival those developed by the mega-tech companies.
 
There is an explosion of vendor activity around chatbots, but what most retailers want to know is which competitors are using them for conversational commerce and how are they using them.

Who Is Doing What?

The big four voice-command platforms are Apple Siri, Amazon Alexa, Google Home and Microsoft Cortana. Each has functions that operate like a personal assistant, one who is always ready to help consumers via voice commands and operate at scale – no matter how many people talk to Siri or Alexa at any given moment they are always ready to respond.
 
The messaging platform Kik, aimed at teenagers, and Facebook Messenger actively encourage and support creation of chatbots. As a result, thousands of chatbots have sprung up on these platforms in less than a year.
 
Retailers that have made the leap into chatbots, using either voice command or text messaging, include:

•  Whole Foods allows users to search for recipes and find store locations. More than 50% of its recipe searches happen in grocery store aisles.
• 1-800-Flowers rolled out one of the first bots on Facebook Messenger, which allows users to send flowers and gifts, make gift suggestions, process orders, and send shipping updates.
• eBay has the ShopBot smart personal shopping assistant that helps visitors find the best deals.
• Macy’s On Call answers common customer questions, such as where to find specific products and is available in both English and Spanish.
• Victoria Secret Pink has a Kik chatbot that enables teenage girls to find the perfect bra. Teens answer a few questions about their current bra fit in order to receive customized size and Pink product recommendations.
• Tommy Hilfiger’s TMY.GRL on Facebook Messenger promotes Tommy’s fashion line for supermodel Gigi Hadid. Fashionistas can learn about Gigi, access behind-the-scenes content, and shop.
• H&M’s Kik bot offers teens outfit inspiration and on-demand personal styling. The bot pulls from H&M’s product lines to build a whole outfit.
• Burberry’s Facebook Messenger bot shares new collections and doubles as a live customer service portal. It also invites users to explore clothing and view sketches of its clothing lines

 
Sephora is in a chatbot class all by itself. It started with a Kik bot that shares makeup recommendations, videos, tutorials and tips for eyes, lips, face, hair and nails. It then launched a Facebook Messenger chatbot called Sephora Virtual Artist that allows users to upload a selfie and try on different lip colors, which has received more than four million visits. Recently it launched the Sephora Reservation Assistant on Facebook that uses natural language processing to book makeover appointments. Each of these bots can process orders.
 
The use cases extend far beyond retail into banking, travel, hospitality, entertainment, healthcare, and consumer goods. Specific scenarios where chatbots can shine include:

• Customer service: Be the first point of contact in a helpdesk chat session. If the bot cannot provide the needed service, it can intelligently route the call to an agent
• Search and answer questions: Be an intelligent personal assistant and knowledge navigator
• Shopping: Bots can be the gateway to product discovery, product details, and guided recommendations
• Service provider: If you order food or schedule a meeting or provide information about a store, there can be a bot for that.

A chatbot, like any new technology, has limitations. To work effectively in conversational commerce scenarios three things are required:

1. Shoppers must get useful information
2. The experience must be convenient
3. The interaction must not be annoying in some way (ask too many questions, for example)

If these three requirements are met, studies dating back to the 1960s show humans will not care if they are engaging with a computer or not.

I told Siri she provided me with great service three separate times and she came back with three different answers. The funniest was this: “’I am putting myself to the fullest possible use, which is all I think any conscious entity can ever hope to do.’ Sorry, I stole that line from HAL.”

Who doesn’t love Siri!