Chatbots and virtual assistants: Retail challenges e-commerce
Algorithm-based software assists customers during pre-purchase interactions. Big retailers like Walmart are experimenting with artificial intelligence technologies. The new trend.
When they visit a car dealership, 80% of customers who have chatted with “Holly” via Facebook ask to speak with her. But none of them will ever be able to meet the “Holly” who carefully proposed a vehicle based on their tastes, preferences and budget. The manager is ready with the response: “Unfortunately Holly is out at the moment, but you can always talk to me. I can guarantee you the same conditions as those proposed by Holly.”
Designed to communicate with customers. Marie, Bennie and Ashley are also very popular. And none of them are every available to personally meet customers. That’s because they are chatbots, algorithm-based software that are designed to assistance customers in specific interactions. Therefore, we can’t expect “Holly” or “Marie” to be able to communicate outside the domain for which they were designed.
Different from Apple’s Siri. A chatbot is different from Apple’s Siri, Google Now or Microsoft Cortana. Thanks to these virtual assistants installed in our mobile phones, we can communicate with them in natural language to make an appointment in our agenda, to ask them for the weather forecast or to read an email, etc.
Although limited in their conversational capacity, next-generation chatbots are equipped with artificial intelligence so refined that they can guarantee excellent results in certain contexts. Holly is just one example of how the retail world is changing. Competition in e-commerce is both rapid and deep, and merciless.
Two numbers are enough to capture the type of threat this poses:
Amazon is estimated to grow 15% a year for the next 10 years. This is an impressive trend, especially if you consider the company’s current business volume.
In the United States, the number of stores that closed in the first half of 2017 (around 5,500) has tripled compared to 2016.
It is telling that even giants like Walmart, the world’s largest retailer, are revolutionising their strategies. Walmart launched “Store No. 8,” a start-up incubator for developing artificial intelligence technologies to help make its retail offer even more competitive.
Millions of data stored. Technologies that Walmart will soon be be experimenting with includes installing cameras and microphones in some stores. Video footage and conversations will be given to artificial intelligence algorithms to analyse visitors’ movements and their reactions and judgments will be captured by microphones. Millions of pieces of data will be used to optimize their marketing strategy and how products are displayed, in effect, redesigning the in-store shopping experience.
In addition, to stimulate internet sales, Walmart has recently signed an important alliance with Google (which could be read as an anti-Amazon strategy). You will be able to order products through a voice assistant installed in all Android smartphones and tablets (Google Assist), and above all, Walmart users will be able to connect their Google Account, which, by tracking our internet searches, will be able to collect information about our buying habits, which is very useful for Walmart.
Competition is good for consumers. While many retailers are showing losses and shutting down stores, big retailers like Walmart or even smaller players such as the car dealership where “Holly” works are investing heavily in new technologies to ensure the survival and relevance of their businesses. We should wish them the best: as we know, competition is good for the market and for us as consumers.
English translation by Lettera43