When Amazon announced Echo last year it was clear we were about to take another quantum leap in retail technology — similar to the social and mobile waves in the last decade. Already the envy of any retailer, Amazon was yet again betting on a transformative technology that could reshape the way we shop.
Echo is part of the new wave of conversational commerce technologies, where the use of messaging, digital assistants, chat apps, or question-and-answer dialogue makes it possible for people to simply ask for what they need.
This type of commerce is a natural evolution of our market as consumers become increasingly used to conversational interactions. Research shows that 33 percent of mobile phone users engaged their mobile digital assistant last month. Add in mobile transactions growing by 210 percent last year and it’s clear that the days of traditional search and navigation are changing. According to research firm Gartner, nearly $2 billion in online sales will be performed exclusively through mobile digital assistants by the end of 2016.
At a time when retailers and brands are still optimizing their mobile experiences for their current websites, they’ll now have to offer an effective conversational experience directly to their consumers across all digital touchpoints.
So how does it work? Conversational commerce typically uses cognitive computing technology such as IBM Watson to have a true dialogue with consumers. These applications can ask shoppers what they want and allow them to express their needs in their own words. Based on those responses, these systems can ask more questions, refining the dialogue until they are able to make the best possible service and product recommendations. In doing so, conversational commerce replaces search and navigation with dialogue, and the reliance on cumbersome decision trees with artificial intelligence.
Judging by the experience of early adopters, the implications of conversational commerce are enormous. The North Face, for example, which first implemented a dialogue-based shopping experience in 2015 using our Fluid Expert Personal Shopper application, finds that consumers using the experience stay at the site longer and take a look at more products — all while getting an experience closer to that within a store.
Other retailers believe the conversational approach to shopping will in time replace conventional websites altogether. For 1-800-Flowers, which introduced A.I.-driven GWYN (Gifts When You Need) in time for Mother’s Day 2016, the dialogue-based commerce application delivers a shopping experience that represents the company’s many brands and sites without requiring shoppers to open new tabs, conduct multiple searches, or otherwise navigate any of them. GWYN, which is also powered by Fluid’s application, asks questions and delivers recommendations to find the perfect gift across all categories, including flowers, fruit, cookies, gift basket assortments, etc.
These early adopters fundamentally saw a need to provide expert advice and recommendations to every shopper through a conversation. The faster, more intuitive conversational approach improves daily with the rapid development of A.I. itself.
Where only a few years ago there was a great deal of public skepticism about artificial intelligence, it is now generally accepted as a critical enabler within today’s game-changing consumer technologies.
Brands that are eager to implement A.I. conversational commerce experiences on their brand site have the benefit of these early adopters. Among the insights are these three guidelines for retailers adopting conversational tools:
- A.I. learning requires teaching, and teaching requires the right teachers. Since these conversational applications will mimic and represent a voice of the brand to many consumers, brands will need to prepare the tools to make recommendations and have a dialogue that is representative of their company.
- Cognitive technology requires transparency to function effectively. Accurate, expert, high-confidence recommendations require brands to reveal how they match and rate products against each consumer’s needs.
- Usage drives improvement. Cognitive systems require significant iterations and get smarter as they go. Checkboxing these new capabilities won’t cut it — brands will need to actively promote usage, understand feedback, and continually iterate the experience to meet consumers’ expectations.
The conversational commerce solutions now transforming the retail marketplace are ideally suited to the mobile medium and fulfill consumer expectations that transactions will happen anywhere, via website, chatbot, or text messaging.
If A.I. can engage in a dialogue with an online shopper and help them find the product they need, we are several steps closer to providing the kind of personalized brand experience that consumers want wherever and whenever they make a purchase — thus further bridging the gap between the best of in-store and online shopping experiences.
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