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I had the pleasure of attending Shop.org’s Digital Summit 2016 in Dallas last week. The key themes centered on new technologies and their impact on the retail space. Chatbots and augmented reality are the most likely to take off in the near future, while virtual reality is likely to be limited in the near term.
2016 was the year of chatbots in the West. Facebook launched chatbots for Messenger in April. Apple’s iOS 10, released in September, gave iMessage an app store, in which developers can add chatbot apps. Although not open to 3rd party developers at the time of writing, Google launched its new messaging service, called Allo, in September. Allo uses artificial intelligence, like the chatbots, to respond to a user’s questions.
Not surprisingly, chatbots was a big topic at the Digital Summit. Neil Patil, President, Software Products Group of Fluid Inc, spoke about how chatbots will impact the retail industry, using the term “conversational commerce.” He believes that finding the right product online is still too difficult to do—search and filters provide a limited experience. By “conversing” with a chatbot, the shopper gets “a high degree of personalization, convenience and decision support.” His company surveyed shoppers about their experience with chatbots and found that 75 to 80% of users would use them again and rated the experience a 2.3 to 2.5 out of 3. Shoppers answered around five to six questions from the chatbot.
In speaking with vendors of chatbot services, I learned more. One vendor, Web Spiders Group, highlighted the fact that shoppers can use chatbots as a group which helps in purchasing decisions. Retailers get access to a new channel, messaging apps, and data that can be used for predictive selling.
While I have my concerns about chatbot discovery, representatives from ShopIn told me that you can use Facebook ads to link to Messenger bots.
Numerous retailers have embraced augmented reality. Speakers from Houzz and Sephora highlighted their experiences.
Alan Cohen, cofounder and president of Houzz, talked about its new product, Sketch, that allows people to visualize how home furnishings will look in their homes.
Sephora has rolled out numerous augmented reality products, which Johnna Marcus, Senior Director, of the Innovation Lab, highlighted. Her motto for evaluating new technologies is: knowing what the business case is, what the consumer case is and if the technology works well.
The Sephora app has many augmented reality features. There is the Pocket Contour Class that teaches consumers how to apply contouring make up properly. Another one is the Sephora Virtual Artist. It allows users to visualize how lipsticks and lashes look on their faces. The company has seen that users try on about 50 lipstick shades per session with a total of 75 million shades tried on so far. Sephora has rolled out the Virtual Artist to stores so that users can have a similar experience in-store.
Beck Besecker, CEO of Marxent, spoke about virtual reality’s use cases for retail. The most well-known example is Lowe’s Holoroom. A designer oversees the Oculus headset to help consumers design their own home. He pointed out that although the costs associated with virtual reality have dropped considerably, it is still very expensive to produce virtual reality media assets and buy the proper equipment. He thinks that the use case for virtual reality right now is limited to purchasing decisions on items that cost over US$10,000. The benefit of going from a photo to a virtual reality experience doesn’t outweigh the cost of the virtual reality experience for most items today.