A couple of years ago at the Techonomy conference, Ray Kurzweil—inventor, futurist, and director of engineering for Google—said that by 2029 computers will consistently understand human language. In fact, this day might arrive even sooner. The recent announcement of Google Duplex points to the rapidly growing ability of machines to understand language. Duplex is easily the most natural-sounding, computer-generated, and fully autonomous conversational bot yet developed. It heralds the day when conversational commerce is an everyday reality. It was a big enough deal that it both elicited privacy fears and charges that it had been faked. (A new conversational capability for Google’s devices was just announced in late June.)
The term “conversational commerce” was coined only a few years ago and means using voice to deliver convenience, personalization and decision support for complex information tasks like online shopping or search. Since then, the concept has grown in popularity but more importantly in functionality, as virtual assistants like Siri, Cortana, Google Voice, and of course, Alexa have proliferated. There’s even an inaugural technical conference for conversational commerce this year. Predictions are that by 2020, 50 percent of all searches will be by voice. It provides consumers a more natural and intuitive way of engaging with digital technology. With the growing proliferation of connected devices, conversational commerce will have a profound impact on how we search, shop, and engage with companies and their customer service. (Techonomy’s Josh Kampel wrote about the voice juggernaut in the fall 2017 Techonomy Magazine.)
Conversational commerce is conducted through AI-powered chatbots. The goal for a merchandizer is to provide both personalized service and the right content. Many companies are already using algorithms that continuously learn and adapt to customers’ preferences to present personalized content. That’s part of the back end of conversational commerce. Another is the integration with legacy systems that control functions ranging from accounts receivable to supply chain management. On the front end, natural language processing such as displayed by Google Duplex is fundamental, interacting with the customer to ensure engagement and satisfaction.
Conversational commerce delivery channels are increasingly through messaging applications and virtual personal assistants, but also include human agents as needed. In the former category are Facebook Messenger, WeChat, and WhatsApp, while in the latter fall both of the growing services of Amazon Alexa and Google Assistant. With conversational commerce, customers can interact with humans, chatbots, or both. Within a single channel, customers can converse with a chatbot, receive personalized recommendations, and make purchases.
At my company, 7.ai, we offer conversational and transactional capabilities to support Amazon Alexa and Google Assistant. This is a growing trend. A study by Ovum found that there will be more than 7.5 billion of these virtual personal assistants in use by 2021. With the twin advances of chatbots and virtual assistants, machine-assisted conversational and transactional interactions will exponentially increase. Common interaction models and enterprise integration will allow companies to extend an ongoing conversation through a single thread that crosses all voice and digital channels. These channels would include a web browser, smartphone as well as a virtual personal assistant.
The next wave–Apple Aims to Beat Facebook
While Facebook Messenger and Facebook’s WhatsApp service have been early adopters of chat and conversational commerce, Apple is now making a strong play to supplant them, recognizing that chat is a vital way to improve customer experience. Using Apple’s Business Chat, users will initiate a conversation using natural language to communicate with businesses, to ask questions, resolve issues, schedule appointments and make purchases. All of this can be done on existing iPhone, iPad, and Apple Watch devices.
Business Chat offers real advantages compared with Facebook. The latter has famously had privacy issues, whereas Business Chat connects with businesses without passing on the user’s personal data and keeps the person anonymous. Unlike Facebook Messenger, Apple’s platform won’t require businesses to have a social media presence, meaning businesses won’t need to set up and manage an additional channel. Consumers can search for products and services using a variety of means, including maps, Siri etc. Its linked payment solution is tied to Apple Pay, which improves convenience. Most importantly, Apple has a history of security and protecting consumer privacy. If Apple won’t collect consumer data, that’s really likely to drive adoption.
Today, we and others are working hard to integrate the various front-end channels with enterprise back-end systems, to offer consumers robust and seamless conversational commerce. We do this with APIs, microservices, and feedback loops that tie everything together, enabling each component to learn from the others and improve over time.
Smart chatbot technology that delivers instant information and knows when to transfer a consumer to a live agent will make it even easier for businesses to provide efficient service within a channel poised to become far more than just messaging. As with Google Duplex, we are seeing AI technologies get closer to human responses every day, and very soon it’s going to be hard to distinguish these responses from those of a company’s best human agent. Ultimately, natural-language interactions will become the norm in how people expect to interact with technology, and the driver behind much of commerce.