Tag Archives: artificial intelligence

Voice-Activated Shopping an Effortless Customer Experience

Is voice-activated shopping the digital outcome that retailers need to offer their customers an effortless shopping experience? Or is it taking AI and machine learning a step too far?

Humans are what we are because of our ability to speak with one another, to listen what’s said, to comprehend the info and to react on what we perceive. We also like to be part of a group, to socialize. Said MacFarlane 2, (2014): “Because our evolutionary heritage provides us with genetic material open to forces and influences from the physical environment, we also require a social environment for brain development and for the acquisition of skills such as speech and written communication.”

So we learn from others and learn others by using our voices. But that is now changing. Now, after millions of years of being humans, we’re learning machines how to listen to voices, to recognize and analyze the message and then to respond in a ‘sensible’ way.

So, if you’re still able to speak, say Hallo! to voice-activated shopping. Because, according to Hailee Sosnowski’s post in DigitalCommerce, voice search is projected to account for half of online searches by 2020.

What is Voice-Activated Shopping?

Voice-activated shopping (VAS) means that a customer can use his or her natural voice to control technology whilst shopping. There is no need to touch anything and the customers can do voice-activated shopping by using their smartphones. VAS is already adopted by some retailers.

Laura Agadoni (JLL) remarked the following about voice-activated shopping: “Right now it’s being used for ordering groceries, pizza or coffee. For consumers there’s no driving to stores, logging onto a computer, or pulling out smartphones to open an app. They simply say what they want to one of the new voice activated devices coming onto the market from the likes of Google and Amazon.”

Take the example of Alexa, the AI-based personal assistant from Amazon. With Alexa in your kitchen, adding an item to your Ocado order is a breeze, says Holly Godwin (OcadoTechnology). Run out of biscuits and have a friend coming for tea? – Just tell Alexa “Alexa, ask Ocado to add biscuits”.

Alexa converts the audio stream into a command (for example, “add to trolley”) and a search term (such as “biscuits”). Alexa most probably will find exactly what you want, because Ocado has ‘trained’ Alexa to recognize the top 15,000 commonly search terms from Ocado.com.

How will Voice-Activated Shopping affect the retail market?

In today’s age of digital driven technology, it’s no shame to ask how voice-activated shopping may further disrupt the retail market. However, there is no consensus about what the opportunities or challenges of VAS are for retailers.

Opportunities using VAS (OnlyRetail.com)

  • More sales. Amazon found that sales of its Echo devices increased nine fold compared to 2015. Also, they also spend 10% more and their buying frequency went up by 6%.
  • Shopping for customers is now effortless. VAS allows householders to buy groceries just by talking to the fridge.
  • Gathering data for an omnichannel approach. Voice-enablement could be the unifying force omnichannel has been missing.
  • Investing for the future. It’s been reported that 55% of 13- to 18-year-olds use voice search every day, so clearly there is an appetite (Emma Lyons, Campaign US).
  • Speed of ordering. The ability to immediately order household essentials is the most obvious use for voice-enabled retail.

Challenges using VAS

  • “It’s still quite a new market and quite complex, so it requires advice and people will want to come talk to someone who can explain how it works, so we see it as an opportunity in that respect,” according to Grace Bowen, RetailWeek.com.
  • Tailoring search algorithms for Voice-enablement. “We know that shoppers will not go past the second or third page of a Google search result – voice will be like that on steroids” (Luke Tugby Retail Week).
  • Acceptance of VAS. Older generations may take a bit more convincing to adopt voice-activated technology.
  • Universal use of VAS in retail. A big question is whether voice recognition technology can work for all retail. What about fashion? Consumers can’t very well order a “black dress,” for example, and get exactly what they want, wonders Laura Agadoni (JJL).

Concluding

Speech has been argued to be the most natural and comfortable way to communicate 1. So it came as no surprise that it is now integrated in AI technology. So, what do commentators say about voice-activated shopping technology?

“Voice recognition technology is the next iteration of online shopping as consumers increasingly prize ways to complete chores or get the information they need easily and quickly,” Laura Agadoni (JJL).

“The convenience of voice search makes it instantly attractive to consumers, but it also introduces new complexities that retailers who want to survive the age of voice must fully understand,” Hailee Sosnowski, paid search planner, BKV (DigitalCommerce360.com).

My advice? Are your business performing as planned? If not, revisit your business’s digital marketing plan and identify the problem areas. If the most important reason why your business is losing sales is that your customers seeks VAS, then do VAS!

Read also: Artificial Intelligence – Digital Outcomes or Digital Disruptions for Retailers?

Notes:

1 Kääriä, A.  2017. Technology acceptance of voice assistants: anthropomorphism as factor, Master’s Thesis, University of Jyväskylä.

2 MacFarlane, A.E. 2014. Voice activated: exploring the effects of voices on behaviours., PhD Thesis, University of Canterbury.

Image:

Flickr.com

Marketing Automation is enabled by Artificial Intelligence, Big Data and Chatbots

“Marketing automation is growing – sizzling fast, announced Michael Jans recently in his blog AgencyRevolution.com. In fact, there are eleven times more B-B companies using marketing automation than were in 2011 (VBInsight). Most visible marketing automation for retail customers are chatbots.

Advancements in artificial intelligence (AI), coupled with the proliferation of messaging apps, are fuelling the development of chatbots.  Artificially intelligent chatbots or conversational agents can be used to automate the interaction between a company and customer.

What is Marketing Automation?

Marketing automation, in general, complements interactive and direct marketing with the help of automation and further on in CRM and email marketing 4. The goal of marketing automation is to target the right customer with the right content 1. To achieve this goal, the optimization of customer data – e.g. name, contact information, transactional data is critical. Consequently customers can be targeted with the right message. Therefore marketing automation allows marketers to respond instantly to identified opportunities in real-time even outside the marketing plan.

This use of marketing intelligence provides valuable management insights to markets, customers and campaigns and leads to enhanced efficiency. Also, this same use of data enables customers to receive personalized, relevant messages and offers at appropriate times. As result of this, customer experience is improved significantly. Indeed, Sarah Burke of Spokal concurs: “Marketing automation is a super effective tool when it’s used to supplement our marketing efforts in an attempt to make the lives of our customers even better”.

However, marketing automation is facilitated by Artificial Intelligence.

Artificial Intelligence

Techopedia defines Artificial intelligence (AI) as an area of computer science that emphasizes the creation of intelligent machines that work and reacts like humans. AI is becoming part of our lives ever more. Today we can ask a computer questions, sit back while semi-autonomous cars negotiate traffic, and use smartphones to translate speech or printed text across most languages. For AI to work properly, the machines or robots needed to be ‘learned’.

Machine learning is the process that offers the data necessary for a machine to learn and adapt when exposed to new data. Nello Cristianini suggests we should think of it as training a machine: “It depends on the other two methods by reading mined data, creating a new algorithm through AI, and then updating current algorithms accordingly to “learn” a new task.”

For most retailers and marketers in the digital economy, the intelligent ‘machines’ of choice are chatbots. However, chatbots are dependent on a host of interconnected and emerging technologies, many of which rely on machine learning and require massive amounts of data 3.

The use of data to enable Marketing Automation

Douw G Steyn, owner of the Bricks2Clicks (this blog) had this to say about Big Data: “One of the fall outs of the digitization of business is the massive amount of data that are everywhere. Every time a customer makes a purchase online or registers online, data is generated. The data can potentially tell you almost everything about consumers.”

Randy Bean in MITSloan commented on the use of Big Data with AI: “The impact of Big Data goes well beyond simple data and analytics. Big Data and AI in combination are providing a powerful foundation for a rapidly descending wave of heightened innovation and business disruption. While the first wave of Big Data was about speed and flexibility, it appears that the next wave of big data will be all about leveraging the power of AI and machine learning to deliver business value at scale.“

Data mining can find the answers to questions that you hadn’t thought to ask yet. What are the patterns? Which statistics are the most surprising? What is the correlation between A and B? (upfrontanalytics.com).

“Intelligent machines need to collect data – often personal data – in order to work. This simple fact potentially turns them into surveillance devices: they know our location, our browsing history and our social networks. Can we decide who has access, what use can be made of the data, or whether the data gets deleted for ever? If the answer is no, then we don’t have control” says Nello Cristianini in the New Scientist.

Chatbots as interactive conversational platforms

By definition, a chatbot is a computer program that responds to natural language text and/or to voice inputs in a human like manner 2. Chatbots can run on local computers and phones, though most of the time they are accessed through the internet (Chatbots.org). Moreover, the effectiveness of Chatbots is depended on the quality of the source data and how well they are programmed. They are after all robots! And robots need to be learned…

Once a customer starts to interact with a chatbot, the chatbot’s software identifies the customer. The chatbot will then have the demographic information of the customer, her purchasing history – such as what products she’d purchased most frequently, what time of the year she does most of her shopping, and when last did she purchased? The scope and depth of information can be never-ending.

The  of a typical conversation between a chatbot and a retail client (image: Chatbotsnewsdaily)

Eric Samson writing in Entrepreneur.com mentioned 7 benefits using chatbots as marketing tools

  1. Customer service – by providing the chatbot option for customers, you will lower the stress of dealing with customer service and increase customer satisfaction with your brand.
  2. Consumer analysis – chatbots can play a large role analysing customer data, and optimizing sales and marketing strategies in light of this analysis.
  3. Personalized ads – another chatbot strategy that’s proven to be successful is the creation of personalized ads.
  4. Proactive customer interaction – chatbots are ideal for “reach out” initiatives. To do this, the accompanying action should be something small, like inquiring whether or not the customer needs assistance.
  5. Site feedback – chatbots are great for reaching out to customers via simple questions and the gathering of feedback. This strategy is useful, especially for website optimization.
  6. Lead-nurturing – using the information that chatbots collect about a customer, you can create customized messaging that guides the consumer along his or her “buyer’s journey,” ensuring movement in the right direction that achieves higher conversion rates.
  7. Maintain a presence on a messenger act via a chatbot – by maintaining a presence on a messenger app via a chatbot, you can save money while simultaneously remaining available for your customers 24 hours a day.

According to Chatbot Conference, the 3 main disadvantages of chatbots are:

  1. Too many functions – most of developers strive to create a universal chatbot that will become a fully-fledged assistant to user. But in practice functional bots turn out not to cope with the majority of queries.
  2. Primitive algorithms – AI chatbots are now considered the best as they can respond depending on the situation and context. However, complex algorithms is required for this purpose. Meanwhile, only IT giants and few developers possess such powerful technological base.
  3. Complex interface – talking to a bot implies talking in a chat, meaning that a user will have to write a lot. And in case a bot cannot understand the user’s request, he will have to write even more. It takes time to find out which commands a bot can respond to correctly, and which questions are better to avoid. Thus, talking to a chatbot does not save time in the majority of cases.

Concluding

With Big Data, Artificial Intelligence and Chatbots there aren’t a clear ‘pecking order’. The Upfront Analytics Team explain it as such: “Data mining, artificial intelligence, and machine learning are so intertwined that it’s difficult to establish a ranking or hierarchy between the three. Instead, they’re involved in symbiotic relationships by which a combination of methods can be used to produce more accurate results.”

The speed at which technology is moving forward – “software is developing software” and “machines are building machines” an affordable, practical usable chatbot for customer care and marketing is not far away…

Read also:

  1. Predictive Analytics helps Retailers to make sense of Big Data
  2. Chatbots in Retailing – a Fact or a Fad?

Notes

1 Mattila, J. 2016. Customer experience management in digital channels with marketing automation, Master Thesis, University of Oulu, Department of Information Processing Science.

2 D’Haro, L.F. and Lue, L. 2016. An Online Platform for Crowd-sourcing Data from Interactions with Chatbots. Proceedings of WOCHAT, IVA.

3 Etlinger, S. 2017. The conversational business: How chatbots will reshape digital experiences, Altimeter.

4 Sandell, N. 2016. Marketing automation supporting sales, Master’s Thesis, University of Jyväskylä.

Image

Pixabay

 

Chatbots in Retailing – a Fact or a Fad?

Retailers are frequently yelled at by frustrated customers, or, if things go well, they are commended. That’s part of the emotional exchange that comes with a retailer’s job description. However, chatbots may change all of that.

A chatbot is a computer program which conducts a conversation via auditory or textual methods. In other words, sales assistants in a number of retail businesses are now robots. To this end, bots can help retailers in many other ways.

“Chabots are seen as easy and fun ways to help customers achieve an outcome. You’ll encounter them on web sites, social media and even on your smartphone. Say hello to Siri, Allo and Alexa, to name a few”, writes Christine Crandell recently in Forbes.

Siri, Allo and Alexa are computer characters which, through natural language-style dialogs with humans, perform various tasks, such as answering questions, helping them to navigate websites. “They can either look like a human being, or a digital avatar, an animal, alien or may have an image that does not look like a living creature at all” according to ChatBots.org

Apart from retailers not having to face angry customers anymore, the bots allow Bricks and Clicks retailers to catch up on lost sleep. A chatbot is a handy aid for retailers with online customers when their bed time arrives.  “We’d all like to be all things to all customers, but even the most dogged marketer has to sleep sometime”, according to TargetMarketing magazine. The fiction of chatbots has now became a reality as many retailers has bought into the technology.

How chatbots can be used by retailers

Chatbots can be used in many ways by retailers. Nicki Baird (Forbes) suggests that chatbots can do everything – from interacting with customers about new products, to helping them to figure out the trading hours of your shop. Furthermore, leverage chatbots the ubiquity of messaging apps and allows retailers to conduct one-to-one conversations with customers in real-time. Besides, retailers have the opportunity to make money with chatbots.

Ross Simmonds (Crate, Hustle and Grind), identified seven ways retailers can make money with bots:

  1. Bots as a Services (BaaS) – help people and teams to be more productive. They can manage tasks or tackle communications challenges – by replicating business models already in use;
  2. Bots plus sponsored and native content – native or sponsored content is a model in which brands pay to have their content distributed by media companies directly into their channels;
  3. Bot leveraged affiliate marketing – for example: retailers can develop a bot that offers tips and tricks on how to stay healthy and use affiliate links to send people to fitness products that have affiliate links associated with them;
  4. Bots for research – there are bots that you can pay to do the research for you.
  5. Bots for lead generation – may act as a lead generator with an initial focus on content. Chatbots designed to deliver insights and information to users who are looking for advice or information can be lined up with products that the retailer offers;
  6. Pure retail sales bots – the user will make the purchase directly through a chat with the bot and it will act similar to a transaction from a typical website;
  7. Cost per conversation/task – as bots become more sophisticated, people may be willing to pay to have conversations with the bots that can help them with various challenges in life.

“Thanks to big data, artificial intelligence (AI) and predictive analytics, as well as the proliferation of messaging apps, retailers finally have the tools (including chatbots) to get the right messages to their customers”, suggests Craig Alberino in TotalRetail. However, the chatbot hype is not favored by everyone…

Consumers that use  chatbots can complete a purchase in a minute or two. Have a look at the video from Kore:

The future use of chatbots

Although the use of chatbots is getting much attention nowadays, not everyone is excited about it. Jon Evens writing last year in The Walrus reminded us of the “Eliza effect: “Humans unconsciously assume that software which communicates conversationally has much more intelligence and sophistication than is actually present.

Inevitably, the software eventually fails to match that assumption, disappointing and frustrating the user who unconsciously expected more.” Consequently, your frustrated customers may want to communicate (again) in person with you. Because the computer does not understands… Above all, what is good and bad about chatbots? Quora.com responded as follows:

The Good Things about Chatbots The Bad Things about Chatbots
1.       Chatbots are a good alternative for mobile apps 1.       Chatbots have a high error rate
2.       With bots, nothing new needs to be learnt 2.       Chatbots don’t put people first
3.       Bots are capable of providing a great user experience 3.       Bots are limited in their capabilities
4.       Chatbots as the factotum for all business needs 4.       Chatbots aren’t as intelligent as humans

Concluding

In summary, are chatbots the “silver bullets” that retailers can use to compete in a digitized retail environment? Or will it be another fad with demanding customers not getting assisted properly? I suppose we have to wait and see. However, Leo Sun (fool.com) recently asked: “Were the social network’s chatbot ambitions ahead of their time?”

Importantly, this is after Facebook is reportedly scaling back its chatbot efforts on Messenger after the programs failed to fulfill 70% of users’ requests. Consequently those requests couldn’t be handled without human agents, and bots built by outside developers “had issues” because the “technology to understand human requests wasn’t developed enough.”

Finally, perhaps Dale 1, (2016) sobering comment can be noted by all: “If we want to have better conversations with machines, we stand to benefit from having better conversations among ourselves.”

Additional reading:

  1. Artificial Intelligence – Digital Outcomes or Digital Disruptions for Retailers?

Note:

1 Dale, R. 2016. The return of the chatbots. Natural Language Engineering, 22(5):811-817.

Image and video:

  1. Pixabay
  2. Kore

Artificial Intelligence – Digital Outcomes or Digital Disruptions for Retailers?

Artificial intelligence (AI) is intelligence exhibited by machines. AI, still science fiction for most of us, is now becoming a daunting reality in the retail sector. Although we have learned machines (e.g. robots) for some time now, connecting them with the internet may accelerate digital disruption. Digital disruption occurs because unmet needs in the market and in our societies can be addressed through digital means1.

What does Artificial Intelligence means for retailers?

“Artificial intelligence is the key to the future of online retail, providing a crucial way to help shoppers find what they want” suggests Isabell Fraser business and property reporter at The Telegraph.  It is about consumers using voice commands using their smartphones to order products from retailers.

The opportunity that the Internet of Things (IOT) may offer Bricks and Mortar retailers was previously discussed in this blog (Retail and the Internet of Things). The IOT allows any machine with an on/off switch to be connected to the internet. “The IOT is very closely related to Artificial Intelligence (AI). In fact, IOT would not be very powerful without AI” commented Douglas Green in Quora. According to Mark Jaffe, CEO of Prelert, the realization of IOT depends on being able to gain the insights hidden in the vast and growing seas of data available. Since current approaches don’t scale to IOT volumes, the future realization of IOT’s promise is dependent on machine learning to find the patterns, correlations and anomalies that have the potential of enabling improvements in almost every facet of our daily lives.

Customers of retailers may therefore, in the near future, command any household appliance to function at their convenience.

Not long from now…

Imagine this, not long from now – Mary asks her washing machine (she named it Alice) with the following voice command: “Alice, add 2 kilogram washing powder to the shopping list”. Alice, an AI device, is also part of the IOT. Alice has recognized Mary’s voice command and added washing powder to Mary’s online shopping list which is instantly send to her local grocery retailer. Later the same day, a drone delivered the groceries, also the washing powder that was ordered by Alice.

Allright, we’re not there yet. Two of the most common uses of AI in retail are around visual search, offering shoppers items that are similar to a picture they like and have uploaded, and for personalized recommendations report Leslie Hook and Lindsay Whipp in The Financial Times.

AI inside the physical shop

AI also creates opportunities inside a store. Bricks and mortar retailers hope that AI could draw customers back to their physical stores. Leslie Hook and Lindsay Whipp quoted Michael Klein, head of industry strategy for Adobe Marketing Cloud saying that “merchandising needs to become entertainment”, pointing to digitally enabled experiences such as virtual makeovers or home furnishing demos.

Experts writing in The Future Of Shopping report talk about the impact the “fourth industrial revolution” – a merging of physical, digital and biological technologies – on shopping.

The report, co-authored London marketing agency Holition forecasts the following:

  • Virtual reality (VR) headsets that gauge your mood in the lighting and atmosphere of a simulated store.
  • Immersive virtual experiences involving products, such as visiting a cocoa farm to watch beans being picked and processed to make chocolate.
  • AI assistants that know your interests and tastes better than you do and can pre-empt purchases. For instance, shortly before a seaside holiday they might show you a range of swimwear.
  • Holographic fashion shows held in unusual locations.
A customer using a virtual mirror in store

A customer using a virtual mirror in store – image Wikimedia

Wow! There are seemingly unlimited opportunities for retailers, household appliance manufacturers and cloud computing companies applying AI. Or will the digital disruption that AI cause too big to handle?

The other side of Artificial Intelligence

The AI story unfortunately has an eerie side.

Jerry Kaplan2 introduced AI in his book with the following warning: “Recent advances in robotics, perception, and machine learning, propelled by accelerated improvement in computer technology, are enabling a new generation of systems that rivals or exceed human capabilities. These developments are likely to usher in a new age of unprecedented prosperity and leisure, but the transition may be protracted and brutal”. Kaplan foresees that without adjustments to economic systems and regulatory policies, there may be an extended period of social upheaval…

Kaplan’s concerns are shared by Bill Gates reports The Washington Post.   Gates said: “First the machines will do a lot of jobs for us and not be super intelligent. That should be positive if we manage it well. A few decades after that though the intelligence is strong enough to be a concern”. Stephan Hawkin, although totally dependent on AI, bluntly suggests that AI could bring an end to mankind.  Retailers, however, do need mankind to stay in business…

Retailers that choose to ignore AI may not escape from the digital disruptions it causes. Digital disruptors innovate rapidly, and then use their innovations to gain market share and scale. This happens far faster than challengers still clinging to predominantly physical business models can cope with1.

Concluding

Retailers will have to decide where and when Artificial Intelligence has the potential to replace human intelligence. Cost and scale will drive these decisions. Future decisions about AI by retailers will probably be about the ethics of using the technology and the effect it may have on society.

Notes

1Bradley, J., Loucks, J., Macaulay, J., Noronha, A. and Wade, M. 2015. Digital Vortex: How Digital Disruption Is Redefining Industries, ©Global Center for Digital Business Transformation.

2Kaplan, J. 2015. Humans need not apply: A guide to wealth and work in the age of artificial intelligence, Yale University Press.

Images: flickr.com; wikimedia.org