Purposeful AI

Is Your Business Prepared for Conversational Commerce?

September 22, 2016 at 5:16 AM | Approx. reading time 4 mins.

Who hasn't heard of the popular comic strip and television show 'Dennis the Menace,' in which an obnoxious little boy would confound and annoy his neighbor, the unwitting Mr. Wilson? That old show perfectly describes the state of consumer-focused chat bots up until very recently. For example, you might purchase a home security system that hooks up to your smartphone only to have the teenager next door hack into it and set off the alarm in the middle of the night. A funny prank to the teenager - but not funny to you and your family!

And haven't we all had some amount of fun asking Siri or Google Voice questions in such a way that they would elicit funny responses? But this is changing. Have you noticed that bots are now becoming smart enough to know that people are playing around with them? Instead of trying to answer a question, they simply stay silent. The goofiness involved with baiting a chat bot is changing quickly, as human beings begin to respect machines for what they are.

For instance, I have a smart house - I spent $600 to make it smart. I get alerts, I can set an alarm, unlock doors remotely, drive up to my house and turn on the lights from my car and I can use a voice-activated speaker at the front door. I can look into my fridge from the grocery store to see how much milk we have. Why? Because I installed cameras inside my fridge. The ease of operating anything from anywhere is getting seamless. On the road, my Honda has a lane detection warning system - essentially cameras that identify the line on the road. With time the lane detection warning system will mature and I will stop goofing around by swerving the car out of the lane in order to make the alarm go off.

I used to think that A.I. would become ubiquitous when we embraced technology. Instead, what I realize is that A.I. is already embracing us, whether in fridges, TVs or phones. True, these may seem small steps, but this is intelligence that helps us make decisions faster. We're almost to the point at which we won't need to program devices because they will update and teach themselves.

While A.I. powered bots and digital assistants continue making progress, their presence is still a bit knotty in the retail industry. Bots that have mastered 'conversational commerce' are still to work out a few glitches related to language before retailers can use them to improve customer service.

But these new and improved bots will be ready sooner than you think and find their place as an integral part of 'conversational commerce', a term coined by an Uber executive to describe what he saw as the potential for retailers to utilize messaging apps to communicate with customers.

But first, there's the privacy issue: When Facebook, which owns one of the most popular messaging apps, WhatsApp, decided to revise its privacy policy, a number of privacy and communications advocates lodged official complaints with the U.S. Federal Trade Commission. Not surprisingly, regulatory bodies in the European Union are also hearing similar complaints.

What's to complain about? Well, Facebook recently announced that WhatsApp would share data about its users so that Facebook and Instagram could better target its ads. The move could have a direct impact on 'conversational commerce,' where data from a messaging app could provide retailers contact to users through chat bots or other forms of Artificial Intelligence.

But let's be realistic: Messaging apps that change privacy policies to accommodate the wishes of retailers will happen. It's just a matter of how quickly. In her latest "Internet Trends" presentation, Silicon Valley venture capitalist Mary Meeker pointed to the continually surging growth of advertising via the Internet: It is accelerating up 20 percent vs. up 16 percent year-over-year. Such growth, she said, is thanks in large part to mobile devices, up 66 percent, vs. desktops, up 5 percent. She also pointed to what Baidu's chief scientist, Andrew Ng, said in September, 2014: "In five years' time at least 50 percent of all searches are going to be either through images or speech." So chat bots will become an integral part of customer service.

Artificial Intelligence is on the brink of enabling seamless conversation between chat bots and humans. Retailers will soon be creating effective and seamless 'conversational commerce'. They will have come a long way in a very short time. My message to you is that in the very near future, new iterations of conversational commerce will be potent and offer effective ways for retailers to boost their customer service levels and strengthen ties with their consumer bases. However, they need to make sure the technology is at a level that makes 'conversational commerce' seamless and fun to use - not a public relations nightmare.