The BOT revolution for retail
No way I will talk to a machine, or is there?
At least that is what I told Siri.
And she just laughed.
Because she knows stuff.
THE BOT REVOLUTION IS COMING
Reason 1: Look at the numbers.
Reason No 2: The Big 3 are playing in this space and that should tell you something.
● Facebook: Messenger & WhatsApp
● Amazon: Alexa
● Google: Allo
That is not to mention applications like Slack and dozens of others who have their own bot-solution. I was personally confused with Facebook’s strategy to buy WhatsApp for such an exorbitant price, particularly when they already own Messenger. As bots have gained in popularity, it is beginning to make more sense.
Reason No 3: The learning curve with Chatbots is flat (few barriers).
You don’t even need an App for that, because there are services like Magic that does not even require an App Platform, and whilstOperator is an App, it is completely agnostic about what you want and simply gets onwith the job of getting it. Like a global concierge that you just ask and it happens. (US and China only, more countries to follow.)
The buzz words are chatbots and conversational commerce, and it is worth thinking about the trends to understand if and why they are important.
BASICS & DECISIONS
Chatbots are applications that respond intelligently to user input. It is a simple process to install the application on your own website, your own app or run within an existing messaging platform.
The chatbot maker can choose to build conversations that are programmatic and structured. That is, you build a conversation tree that reflects conversational options. As you can imagine it is difficult to anticipate every possible variation, it is important to build a sensible fall back option.
Or you can choose to use Natural Language Programming (NLP). It is vastly more complicated and you will need a developer for this. This can also evolve into the real AI (Artificial Intelligence) or ML (Machine Learning). These bots get smarter over time. Think how SIRI gets to recognise different accents of the same words.
Chatbots have many uses - from dating to gambling to news, but in the retail environment two broad types of activities; SALES and SERVICE. We are looking at Chatbots as a means of delivering Micro Learning. Imagine the CEO could ‘talk’ to all staff across a country-wide network of stores, get feedback and pass on tips and focus for the day – all with no ongoing cost after setup?
From a retail perspective, it is called ‘conversational commerce’ because a series of SMS-like conversations easily (and very securely) can terminate in a ONE-CLICK purchase. (No doubt Facebook will want to clip this particular ticket in some way in the future, so bear that in mind.)
The other application is to create stock response for your FAQs on your FB page or on your website. (The ChatBot can be installed in your website with an easy copy & paste). Customers can ask questions, the bot reads and responds accordingly. No human intervention - and that is the big cost saving.
One of the more sophisticated examples of such a BOT is one called KIT. It is now owned by Shopify, and it is deployed to ‘take instructions’ from Shopify store owners and then ‘creates’ social media campaigns (like Facebook Ads) - all automated. It costs the store owner $10 per month, and you don’t have to think too hard about creating and scheduling Facebook Ads.
THE UPSIDE OF CHATBOTS
Everybody has Facebook/Messenger etc - it’s ubiquitous, so you as the retailer/business entity don’t have to persuade the user/consumer to download yet another app.
You get more data from the user (via the associated platform like Facebook) than you would have ordinarily from a one-way medium like email. This enables better targeting and more relevance of your communications.
High open rates and engagements.
Inexpensive to run (no data charges or costs like SMS etc), although right now most of the early Gold Rush providers will persuade businesses to fork out hundreds of thousands when it should be thousands or maybe tens of thousands to set up bots.
Most importantly, Chatbots enable two-way conversation and are immediate and therefore more relevant (than an email newsletter peddling week-old news.)
THE DOWNSIDE OF CHATBOTS:
They are really easy to build. You can YouTube it, pay $20 on Udemy or simply DIY because the technology enables you to get basic BOT simply by dragging and dropping elements on a screen.
I can’t do any coding, not even HTML, and I built a bot in a weekend. (Try it out at our Facebook page.) In my explanation that follows I will refer Facebook and Messenger as an example because they are commonly used, but most applies to all messaging apps.
Because it is so easy, expect bot-pollution to occur rapidly. Because of the pollution, consumers will be swamped and it will lose its efficacy very quickly; particularly for the inefficient or irrelevant bots.
Just like email marketing is crumbling under the onslaught of spam and waste, so too will chatbots. Email click-through rates are now commonly around 2%. Messages can be over 80%. (When was the last time you ignored a message on Messenger or WhatsApp or even SMS?)
But it is even easier to block a bot than it is to unsubscribe.
With email marketing, at least you owned an asset - an email address with permission to use it. That meant you could go to any email platform, depending on your needs. I am sure everybody has now left Aweber, and are exploring MailChimp and Active Campaign and the like.
With message bots, you have access to a much richer data sets since you receive profile-related info from Facebook. But you can’t leave the platform (Facebook/Messenger), so you never own that data.
You are also dependent on the platform to make the rules, and what is free today will not be free tomorrow if it has any value.
SOME PRACTICAL SUGGESTIONS
Planning the actual Bot. Having now built a few myself, I cannot stress the importance of planning enough. It is tempting and easy to just start building with a vague idea.
Adopting a Chatbot strategy. It is very important that you take an eco-system approach. You should think about ALL the bots that you might want to run, and then decide which platforms you will be using, and how you will be using them.
CRITICALLY - you must create a digital asset library and keep a record of the bots and the assets (images, links etc.) that they use. You will have to make changes in the future, and if that means you have to practically re-write the bot, you will spend all the money you thought you were going to save. And part of the eco-system will be a digital product roadmap that will (a) keep you on course and (b) help to manage system when people churn and when the technology changes.
As with any new technology, there will be different types of people to be on the lookout for:
● The Zealots who believe this is the latest must-have.
● The Cowboys who will be rushing in with a bravado that is not backed by knowledge and experience.
● The Hustlers who will be out to make a buck as quickly as possible while there is a premium to be paid for people (who claim to have) the right experience.
● The Gurus who will be proclaiming words of wisdom from the highest blog mountain.
Right now, there are very few people who know everything. You will find UX experience in marketing agencies, you will find the technical nous typically amongst the technical development community. And you will find the sales-and service experience in the retail community.
Few have all of these requirements in sufficient quantities to be able to guarantee that all efforts will be succeed.
At the bottom of this page there are two videos that explains the notion of ‘fractured value’. That provides the background to why it is so critical for survival and growth to be able pivot, adapt and innovate.
● Some of the brands doing interesting stuff with bots.
● A directory of bots that will prompt you to think widely about the applications
● A slightly different, non-commercial use of Bots we developed
Drag-and Drop Design Platforms
● API.ai (A bit more complex for NLP)
Storyboarding and Planning Tools
● LucidChart or Draw.io (Apps that integrate with Google Drive, and is connected directly)
● List of 17 Free Drawing Software applications
Long-timers who may recall some previous writing here on Inside Retailing, may remember that it has been a bit of a Mantra that the required response to the Next Big Thing is NOT to merely jump on the bandwagon.
We suggest you jump on the bandwagon(s) because that is how you build and retain the capability to adapt and change.
In fact, the key to success is not whether you are backing the right technology horse, it is your whether you have the capacity and ability to turn on a dime - to mix some metaphors for you.
You become agile by being agile.
I asked SIRI, and she agrees with me.
Dennis Price: Founder at Ganador: Retail Advisory with a focus on the customer.