3 Executive Insights for Application of Artificial Intelligence in eCommerce

At the recent VentureBeat MobileBeat conference on July 13, a panel of executives assembled to discuss the impact of emerging technologies on the future of commerce. Three executives from high-profile companies - Holger Luedorf, senior vice president of Business Development at Postmates; Nichele Lindstrom, director of Digital Marketing at Whole Foods Market; and Eric Moujaes, senior director of Global Digital Product at McDonald's - chimed in and gave their insights on what they believe to be the most overhyped and promising technologies that will impact commerce in the near term.

Their perspectives fell on the spectrum of the slightly surprising (drones will not be the future delivery vehicle of choice) as well as in alignment with current 'hot' trends (chat bots look to be in like flynn). All three executives' opinions shed light on the potential future of our role as consumers and on businesses as providers in a 'brave new world'. I delve into a few of their key insights to provide additional context and use cases:

Drone May Not Fill the Skies After All

With companies like Amazon and Google forecasting the use of drones for delivery (any day now), people may be expecting these unmanned aerial vehicles to be a serious part of the future of commerce, but McDonald's Eric Moujaes believes differently. Moujaes thinks drones have had their heyday as an up-and-coming trend in the media - at least for the foreseeable future - and that they'll be much less in the public eye than originally thought.

Drones seem particularly cumbersome in urban environments, with tall buildings, a lot of people, and the general hustle bustle making it foreseeably difficult to pull off drone delivery effectively. That isn't to say that drones won't have any place in the future delivery of our online purchases, but Moujaes believes they're more likely to be used in suburban or rural areas, where fast delivery by automobile is limited; however, this won't equate to a ubiquitous overhaul of the delivery industry.

New drone laws released by the Federal Aviation Administration in June include limitations (for example, vision of the drone must be maintained by a human pilot at all times and no person may act as a remote pilot for more than one drone at a time), but there's hope for those who want to use them for delivering goods (up to 55 pounds of airload allowed). One of the most interesting inclusions is the terminology that most restrictions are 'waivable' if an applicant can demonstrate that their operations can be conducted under terms of a 'certificate of waiver'.

You don't have to look too far to find views similar to Moujaes'. An article in Bloomberg News argues that droids may be more useful than drones for near-term delivery, with British startup 'Starship' being the first to manufacture its delivery robot in the UK and already testing bots in the U.S. In addition, the legal ramifications associated with drones, such as those related to privacy and civil rights (as echoed by Barack Obama in a 2015 Presidential Memorandum) remain an issue that could prevent extensive use of drones in the near future. Government, private parties, and the American public will have to hash out the ethical ramifications involved with this emerging technology before it becomes mainstream.

Conversation is on Horizon as Next Big Commerce Platform

Conversational commerce - chatbots and voice-activated apps - are certainly a hot topic amongst AI startups and executives, and they may be poised to disrupt industry in a big way. Both Whole Foods' Nichele Lindstrom and Postmates' Holger Luedorf seem to be in agreement on this point.

Chatbots Will Have a Lot More to Say (and It's All About You)

Lindstrom stated that she might have considered bots to be overhyped even 18 months ago, but now believes they can drive real value in the market, and she thinks they'll be especially valuable when able to autonomously operate in various contexts. When a bot can be tied to a customer relationship manager (CRM) software, for example, and a Whole Foods customer gets online with a chatbot to check on the status of a delivery, that chatbot should (and presumably will) be able to pull up a personalized profile that allows it to respond accordingly.

A future Whole Foods chatbot may be able to simultaneously take into account the fact that 'Jane Brown', whose order is late, has ordered (specific) veggies every week for the last year, has called multiple times in the past for a variety of reasons (and it should know the result of those calls), and pull on a whole array of other data sources that make the resulting chat a 'rich experience', instead of an aggrandized version of a question-and-answer machine.

The above example illustrates similar points summarized in a Forbes article by Daniel Newman on the beneficial trends of introducing chatbots into commerce:

  • Scalable customer service - human interaction only when necessary
  • Improved customer intelligence and increased competition amongst businesses
  • Different navigational experience - conversation-based interface to find information, less text-based searching
  • Personalization - more like interacting with a good friend than a business

A recent VentureBeat article contributes overlapping ideas, including the notion that messaging with a smart bot online has the potential to help maintain the feeling of connection and be less stressful than a phone call, which often includes wait times, dropped calls, and lost tempers. This streamlined experience of interacting with customer service personnel seems especially important to and more often leveraged today by young adults (i.e. those aged 18 to 34), the same population that will be using this technology over the next 20 years.

Slack and Kik bot are examples of automated bots on the rise. Slack recently launched an external API for developers, which Taco Bell has already publicized with its in-the-works 'Tacobot', apparently capable of taking your order and doing so with 'personality'; whether consumers relate to the same 'brand' of personality will be one of many areas for exploration by businesses.

It's true that chatbots have a ways to go before they can be let out on a long leash, and for the moment human intelligence still reigns supreme; in fact, many 'virtual assistants', for all their rising success, still remain entirely human on the other end, including Magic (released in early 2015 and available for a cool $100/hour) and the Operator app, developed by Uber cofounder Garrett Camp, which connects users with a network of efficient human helpers.

But there's been plenty of progress (thanks to big data and machine learning) in getting chatbots up to speed in processing and responding to contextual awareness, with companies like x.ai (featuring twin bots Amy and Andrew) training their bots to handle 'every' scheduling context, and Google (with its bot Allo) already taking a lead position in natural language capabilities. The ultimate aim with chatbot assistants, as elaborated by x.ai's Chief Data Scientist Marcos Jimenez Belenguer, is to make the experience of a chatbot or virtual assistant 'better' than working with a human, almost 'magical' in its ability to meet your every 'unique' need. How long it takes data science teams to unleash a truly intelligent bot will likely be a gradual rather than an instant phenomenon.

Voice May Make Text Look Antiquated, Sooner than Later

On a similar plane, voice-activated assistants (which seem likely to intersect and become one with chatbots/virtual assistants at some point in the future) are picking up speed. PostMates' Luedorf believes voice is a potentially powerful gamechanger. Amazon is already showing us the use of this technology with Echo's Alexa, which represents the beacon of today's smart home, able to order the 'usual' pizza or purchase more Tide dish detergent from a local delivery company. This IoT-connected, voice-activated device is (to date) an archetypal image of the everyday convenient and efficient household assistant, capable of 'doing' commerce with a simple vocal command and turning off lights to save energy at the same time.

Voice-powered mobile apps are also in our midst, and China's "mobile first" society is already using WeChat to the tune of 700 million active users every month. WeChat embodies an important difference from many U.S. apps, which have trended towards a plethora of separate, narrower applications. In contrast, WeChat is a jack-of-all-trades, able to hail a taxi, order takeout, buy movie tickets, even customize a retail purchase according to your needs. Already, over 10 million businesses in China have WeChat accounts, and this multitasking app may be reflective of the more inclusive and all-knowing voice apps that will enter the U.S. market in the near future.

Predictions are only worth their resulting outcomes, but listening to those businesses already in the trenches with these and other emerging technologies is undoubtedly a smart move when it comes to positioning a business that stays with or ahead of the curve over the next five to 10 years.