Chatbots

AI/BOTS: Cognitive Chatbots, New Retail Frontier

MyKai Launches Banking Chatbot

More human and less robotic is the sound of the beating retail drum this year. As cognitive-enabled chatbots have worked their way into everyday shopping purchases, the days where consumers interacted with automated and robotic-sounding customer service systems may soon become a thing of the past.

This year, we’ve seen the chatbot arena continue to expand apps, like Facebook Messenger, which sees over 100,000 from a variety of businesses. As such, the continual evolution of chatbots is something that was likely to happen sooner or later, with consumers’ ever-increasing demand for not only quick service, but also a high quality level of customer service. Through the advancements chatbots have undergone over the past few years, including artificial intelligence (AI) and natural language processing, the presence of more human-like responses are slowly becoming the expected norm among consumers.

To provide more human-like responses, cognitive computing is key, and the retail industry is taking note. TechTarget defines cognitive computing as “the simulation of human thought processes in a computerized model,” which does its best to “mimic the way the human brain works” with the goal of “solving problems without requiring human assistance.” With Gartner’s prediction of 85 percent of enterprise interactions occurring without human assistance by the year 2020, it looks like cognitive chatbots will be one of the major proponents moving the retail industry forward.

As it stands now, chatbots have worked their way into consumers’ everyday lives in some fashion or another — be it through Facebook Messenger or simply shopping online. Over a quarter of U.S. consumers use chatbots on a daily basis, according to 3Cinteractive Corp.’s research. The comfort level of interacting with chatbots may be small, but significant.

Retail executives are increasingly more confident in the use of artificial intelligence and natural language processing. As such, it should come as no surprise that recent IBM research indicated that 91 percent of retail executives believe cognitive computing will be a major disruptor to the industry, while 83 percent think it will have a big impact on their businesses’ future and 94 percent of merchants are planning to invest in the technology.

What’s helping to change the retail landscape, according to IBM, are five specific pieces of activity, which includes: expanding customer expectations, self-serve retail, technological progress, eroding margins and security breaches. Within its research, IBM shared the core way cognitive systems like chatbots can provide a level of benefit that cannot be done in silos:

“Cognitive systems can fundamentally change the way humans and systems interact and significantly extend the capabilities of humans by leveraging their ability to provide expert assistance. They provide advice by developing deep domain insight and bringing this information to people in a timely, natural and usable way. Cognitive systems can play the role of an assistant — albeit one that does not require sleep — and can consume vast amounts of structured and unstructured information, can reconcile ambiguous and even self-contradictory data and can learn.”

By advancing cognitive chatbots in the retail industry, retailers would be helping to fill in the gap between technology and humans. As more people look to technology for a large portion of their everyday needs, including shopping, the use of such chatbots is going to continue its upward trajectory.

The issue that arises from this is how it will not only impact the bottom line but also how it will change the retail-to-consumer relationship. With additional ways to discern what consumers want via intuitive interactions through technology like robots, odds are we’ll see smoother purchase transactions and perhaps an increase in loyalty to those merchants using cognitive chatbots at a high level.

The idea of cognitive chatbots is being pushed forward as the go-to avenue for retail interactions by many throughout the wide-ranging industry. In a sense, cognitive chatbots will be the next frontier for the retail industry to develop and conquer.

This week in the AI/BOT news cycle, MarketsAndMarkets’ latest research is predicting that the retail analytics market is set to reach $8.64 billion by 2022. This news, in combination with Facebook’s expansion of its Marketplace into Europe, reveals how the retail industry is set to see some major changes in the next few years.

In Juniper Research’s “Top 10 Disruptive Technologies in FinTech 2017,” the research and market intelligence company shared the technologies that will see the greatest impact on FinTech within the next year. Coming in at the number three spot: chatbots.

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