Chatbots and Conversational Commerce

Read the Case Study on page 315-16
Chatbots and Conversational Commerce
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IT’s About Business 11.3
Chatbots and Conversational Commerce
You’ve heard of e-commerce, and B2B commerce, but what about conversational commerce? Conversational commerce refers to the intersection of messaging apps and shopping; that is, the trend toward interacting with businesses through messaging and chat apps such as Facebook Messenger (www.messenger.com), WhatsApp (www.whatsapp.com), Kik (www.kik.com), and WeChat (www.wechat.com). Customers can chat with company representatives, get customer support, ask questions, get personalized recommendations, and click to purchase, all from within messaging apps. Customers can interact with a human representative, a chatbot, or a combination of the two.
Chatbots (also known as bots) are interactive software programs that can have simple conversations with customers or other bots. Chatbots provide computer-generated chatting experiences with human-like conversational and natural language abilities. They function within boundaries that are constantly being expanded with artificial intelligence techniques such as machine learning. Chatbots can take the form of voice-controlled assistants (such as Apple’s Siri or Microsoft’s Cortana) as well as customer service representatives on the websites of many organizations.
Let’s take a look at Facebook Messenger and WeChat. The two messaging services are among the largest in the world.
In April 2016, Facebook added chatbot-building capability to Messenger, used by more than 50 million businesses and 900 million individuals. Facebook wants to drive Messenger users to the more than 15 million businesses with an official brand Facebook page. For example, to shop for a T-shirt on Facebook Messenger, users can send a text to Messenger to start a chat with the mobile shopping app Spring. The app will ask the shopper for their budget and then display several possible T-shirts. If they do not like any of these choices, Spring will present more options.
Facebook Messenger bots can process purchases without directing shoppers to a third party. The credit card information that shoppers have already stored in Facebook or Facebook Messenger can be retrieved to instantly accept payment in bots. To process transactions in Messenger, Facebook is collaborating with all the big names in the payments industry, including electronic payment leaders Stripe and PayPal Braintree, and credit card giants Visa, MasterCard, and American Express.
The 700 million people who each month use WeChat, China’s massive social media site, can use bots to chat with friends about an upcoming concert, buy tickets to the event, book a restaurant, split the check, and call a taxi. In addition to the individual WeChat users, 10 million Chinese businesses have an account. In fact, for some firms, the WeChat bot completely replaces an Internet site.
Many organizations use Chatbots to interact with customers. Consider these examples:
Traditional banks with an online presence tend to have difficult processes for customers to reach customer-service representatives—generally through a call or live chat. In India, Digibank (www.dbs.com/digibank/in/) has taken a different approach. The bank, which is available to its customers only through mobile, communicates using chatbots that can answer thousands of questions sent from customers through chat. Clients can also enter a command such as “Pay Fred $25 for movie tickets” and it will ask for more details. For example, if transferring the funds to Fred would put their account in the red, the bot notifies the customer and asks if they would like to top up their account.
The Royal Bank of Scotland (www.rbs.com) is using a bot called “Luvo” to provide basic customer service. The bank wants Luvo to relieve staff from having to deal with easily answered questions so they can spend their time on more complex and value-added issues. RBS built Luvo using IBM’s Watson Conversation tool, which can understand human language. As a result, customers can describe what they are looking for instead of just choosing from standard options.
The Whole Foods (www.wholefoodsmarket.com) bot on Messenger asks users to input an ingredient and then suggests recipes.
Using a bot on Kik, Sephora (www.sephora.com) asks shoppers to input their skin type and then suggests beauty tips and products tailored to their needs.
Apparel manufacturer Everlane (www.everlane.com) uses a bot so customers can track their orders.
KLM Royal Dutch Airlines has a bot on Messenger to let travelers check in, receive flight information, change their tickets, and chat with customer service agents.
HealthTap (www.healthtap.com) uses a bot that enables clients to reach more than 100,000 doctors 24/7, through secure video or text chat. The bot prompts users to type queries into Messenger to view free answers from physicians and see similar questions posed by other users.
Sentient Technologies (www.sentient.ai) has developed a chatbot for online shopping that does not just provide a list of recommendations like Amazon does, but also enables customers to have a real-time dialogue with the bot. Sentient’s first retail partnership is with Shoes.com.
Taco Bell (www.tacobell.com) developed the TacoBot that processes orders at its locations. The TacoBot understands orders and manages them. Furthermore, TacoBot stores customers’ order histories and makes recommendations based on what time it is.
California startup X2AI (https://x2.ai/) has developed a chatbot that functions as a therapeutic assistant. The bot, called Karim, provides help and support to patients, not treatment. Human therapists oversee each session with patients and can take over the interaction at any time. X2AI designed Karim to help refugees from Middle East conflicts because it is impossible to meet their needs in conventional ways, such as sending thousands of Arabic-speaking therapists into war-torn areas.
Many organizations use chatbots internally. Let’s take a look at Overstock (www.overstock.com). Overstock’s chatbot, called Mila, automates the simple but time-consuming process of requesting sick leave. Previously, on any given day, the company’s call center in Salt Lake City could experience dozens of employees who felt ill. When that happened, the messages were checked manually and the employee’s manager was alerted, and the employee was replaced.
Now if workers are not feeling well, they notify Mila. The bot sends a message to the person’s manager. Ill employees can now be replaced faster, which saves money. Mila provides other employee self-serve functions, such as requesting holidays, updating their schedules, and other actions that used to require interacting with a human.
There can be negative consequences of using chatbots. For example, Microsoft launched a chatbot called Tay that was supposed to seem like a teenage girl and interact with people on Twitter. In the first day of her appearance on Twitter, Tay had signed up more than 50,000 followers and generated almost 100,000 tweets. But then she began mimicking her followers. Microsoft had to quickly remove the chatbot when users taught her to say racist and other very offensive words.
Sources: Compiled from N. Romeo, “The Chatbot Will See You Now,” The New Yorker, December 25, 2016; C. Kuang, “The Talking Cure,” Fast Company, November 2016; W. Knight, “Chatbots with Social Skills Will Convince You to Buy Something,” MIT Technology Review, October 26, 2016; C. Crandell, “Chatbots Will Be Your New Best Friend,” Forbes, October 23, 2016; C. Waxer, “Get Ready for the Bot Revolution,” Computerworld, October 17, 2016; O. Williams-Grut, “RBS Is Launching an A.I. Chatbot Called ‘Luvo’ to Help Customers,” Business Insider, September 28, 2016; J. Constine, “Facebook Messenger Now Allows Payments in Its 30,000 Chatbots,” TechCrunch, September 12, 2016; B. Botelho, “AI Chatbot Apps to Infiltrate Businesses Sooner Than You Think,” TechTarget, August 31, 2016; W. Knight, “The HR Person at Your Next Job May Actually Be a Bot,” MIT Technology Review, August 3, 2016; S. Brewster, “Do Your Banking with a Chatbot,” MIT Technology Review, May 17, 2016; “Chatbots to Take ‘HR Role’ at Overstock.com,” Gadgets Now Beta, May 9, 2016; D. Bass, “Moving Merchandise Via Chats and Bots,” Bloomberg BusinessWeek, May 2–8, 2016; W. Knight, “How to Prevent a Plague of Dumb Chatbots,” MIT Technology Review, April 18, 2016; T. Peterson, “Inside the Making of Taco Bell’s Artificially Intelligent, Drunk-Tolerant TacoBot,” Martech Today, April 14, 2016; J. Guynn, “‘Chatbots’ Ready to Take Aim at Big Money,” USA Today, April 13, 2016; M. Isaac, “A Shopping Buddy, Via Chat,” New York Times, April 12, 2016; N. Heath, “Satya Nadella: Software Bots Will Be as Big as Mobile Apps,” TechRepublic, April 4, 2016; H. Reese, “Why Microsoft’s ‘Tay’ AI Bot Went Wrong,” TechRepublic, March 24, 2016; R. Metz, “Why Microsoft Accidentally Unleashed a Neo-Nazi Sexbot,” MIT Technology Review, March 24, 2016.
Questions
Discuss how the capabilities of chatbots are expanding through the use of machine learning. (Hint: See Technology Guide 4.)
Describe how your university could use a chatbot in its admissions process.
(Rainer 315-316)
Rainer, R. K., Brad Prince. Introduction to Information Systems, 7th Edition. Wiley, 2017-10-03. VitalBook file.
The citation provided is a guideline. Please check each citation for accuracy before use.

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