What Is Chat Commerce Anyway?

July 20, 2016     By : Sofia

Facebook’s F8 conference brought chatbots into vogue, but chatbots are not actually new. Chatbots have existed since the first days of interactive computing in the mid-1960s. As the NY Times suggests, Joseph Weizenbaum, an MIT computer scientist, wrote a program called ELIZA that fascinated an earlier generation of college students and since then, chatbots have been used as a measure of computer intelligence.

Decades after ELIZA, technology has evolved, and chatbots now see a ‘revival’ in a commercialized form with the aim to improve customer experiences and make shopping easier and better.

According to Chatbots.org, “a chatbot is an artificial person, animal or other creature which holds conversations with humans. This could be a text based (typed) conversation, a spoken conversation or even a non-verbal conversation. Chatbots can run on local computers and phones, though most of the time it is accessed through the internet”.

Chatbots are building a foundation for a new type of commerce – chat commerce. Chat commerce is developed with the intention of remaining relevant as traditional ways of engagement become obsolete and ineffective. As it became clear that customer expectations require real-time assistant with highly relevant and customized offerings, AI-powered chatbots appeared to be a tool that could deliver the results in a seamless manner.

Chat commerce provides the ability to engage with customers in real-time, highly relevant content that mimics a human assistant and the capability of performing multi-step actions within a single chat.

Why chatbots and chat commerce are here to stay

As Ted Livingston, the Founder and CEO of Kik, said, “Chat apps will come to be thought of as the new browsers; bots will be the new websites. This is the beginning of a new Internet.”

Here are some of the facts that favor chatbots:

Who is using chatbots to engage with customers on a new level?

Although chat commerce is a relatively fresh area of development, there are many live examples from the food industry, tech world, retail, media and others. Let’s look at some of them.

Tech companies & their chatbots

In the tech world, companies including Facebook, Slack, and Microsoft have begun investing heavily in so-called “conversations as a platform,” with the promise of making booking a flight or buying a new shirt as easy as sending a text message.

At the Microsoft Developers Build Conference in San Francisco, CEO Satya Nadella expressed an excitement over the opportunities chatbots will open for businesses and consumers. He also spoke about how chatbots are being added to lots of different messaging apps, beginning with Skype.

“What if bots could hire a cab, book a ticket,” he said. “It’s a simple concept, yet it’s very powerful in its impact. It is about taking the power of human language and applying it more pervasively to our computing. We think this can have as profound an impact as the previous platform shifts have had.”

In fact, Microsoft has been successfully employing the technology in China with its chatbot Xiaoice. The company gave its chatbot a compelling personality and sense of intelligence by systematically mining the Chinese Internet for human conversations.

Messaging app Kik has launched a ‘bot shop’ that will function like App Store for chatbots. As Fortune reports, the Kik bot shop with exist as a special section in Kik’s app. There, users can begin chatting with bot created by 16 partners, including Vine, Sephora, H&M, and The Weather Channel.

Slack has been working on integration with chatbot Kip, AI assistant for team shopping. As the company shared, Kip is a chatbot that helps users to save time by doing all the shopping for the team.

Chatfuel is a bot platform for creating an AI chatbot on Facebook and Telegram. As the company states, >100K robots created on Chatfuel are serving 5M+ users worldwide. Chatfuel leverages AI to detect phrases similar to the ones predefined by the user and then shows relevant menu sections. The solution does not require any coding and allows integration with a variety of services to deliver rich personalized content.

Retail & commerce and other examples

Sephora, the cosmetics retailer, recently launched its chatbot with messaging app Kik, which, as Forbes reports, has 275 million users spending upwards of half an hour per session in the app. Sephora’s chatbot engages with Kik users with a simple greeting and proposal to take a quick quiz. Sephora’s chatbot offers personalized tips on makeup and other relevant content like how-to videos and product reviews.

Back in 2015, Facebook teamed up with online retailers Everlane and Zulily to experiment with using Messenger as a customer service platform. Following an order, Everlane engages with the customer through Facebook Messenger with the details of the order and shipping information. Further, the same chat can be picked up by a representative when a customer comes back with a question or request.

Burberry, Coach and Chanel have been investing efforts in engaging with customers through WeChat in China. As Digiday reports, while Burberry and Chanel use WeChat mainly for content marketing and customer service, Coach makes a big play in product promotions and loyalty programs. Once a user follows Coach’s main WeChat account, the brand pushes the user to become a member by entering their Chinese mobile number with a chance to win a Coach handbag.

JD, one of the largest e-commerce conglomerates in China and the world, also uses WeChat to engage with customers in two ways: 1) The e-commerce directory of the WeChat Wallet, which is a separate portal where users can pay for services (such as buying a movie ticket, ordering a taxi, or making an appointment with a doctor), or 2) JD’s official WeChat account.

KLM Royal Dutch Airlines allows customers to receive flight documentation through Facebook Messenger. After booking, customers can choose to receive booking confirmation, check-in notification, boarding pass and flight status updates via Messenger. Pana is a real-time virtual travel agent and mobile travel assistant, that turns text messages into travel bookings.

Food industry examples

Among some of the most recent cases in the food industry is Pizza Hut, which just a few days ago, announced the launch of its new social ordering platform, or chatbot, to allow for conversational ordering of pizzas and other items on Facebook Messenger and Twitter. The solution will be debuting in August this year and was developed in partnership with chatbot startup Conversable. Customers will be able to connect their Facebook messaging account to their Pizza Hut account to reduce the information required to order.

Conversable has also been involved with Whole Foods for the launch of a chatbot for finding recipes with emojis. This new chatbot lets customers browse through the store, find products, and then, with a few taps in a Facebook Messenger chatbot, find recipes for a meal.

Burger King is also playing in chat commerce and now allows customers to message a Burger King bot through their Facebook Messenger app to order food and see nearby locations where the order can be picked up.

Taco Bell took a different road and made a bet on Slack. In collaboration with the messaging platform, Taco Bell introduced its new ‘TacoBot,’ a service that allows customers to place pickup orders through the messaging app for select menu items, in a private beta with several companies. Powered by AI, TacoBot can recommend menu items, answer questions, organize group orders, and facilitate transactions “fully equipped with the sharp and witty personality you’d expect from Taco Bell.”

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Sofia

Sofia is a contributing writer for LTP based in New York. She is a market research professional skilled in data analysis and visualization. Sofia has an extensive experience in consumer behavior studies and marketing analytics. She is passionate about disruptive startups with innovative business models that are having a powerful impact on the industries.

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