From Game Show Hero to Retail Innovator
One of the more interesting developments to come out of the IBM Smarter Commerce Global Summit in Nashville this week, from which I've just returned, is the launch of IBM Watson Engagement Advisor. The "super computer," named after IBM founder Thomas J. Watson, was designed as a computing system that could rival the human brain's ability to respond to questions posed in natural language with speed, accuracy and confidence.
Watson rose to fame following a 2011 appearance on "Jeopardy!," in which it defeated two of the more celebrated players to ever appear on the long-running quiz show. Now Watson is trying to make headlines in the retail industry. The cognitive computing system — IBM made it clear that Watson isn't a search engine or a personal assistant like Siri — is being sold on its ability to enable brands to crunch big data in record time to better engage customers and prospects in key functions such as customer service, marketing and sales.
The future of Watson in retail appears to be in customer service. The idea is to have Watson serve a role similar to customer service reps (CSRs). The service will empower a brand's CSRs to provide fast, data-driven answers, as well as interface directly with customers. Potential benefits to retailers include cost savings from labor reductions in the call center, improved customer satisfaction scores, increased average order values and higher lifetime customer value — the theory being the superior customer experience offered by Watson will result in more customers being satisfied with their experience and thus more likely to return to purchase again.
The IBM Watson Engagement Advisor "Ask Watson" feature will help to service customers in multiple channels, including website chat windows, mobile push alerts and over the phone. The cognitive computing system continuously learns from interactions with customers, providing fast and more accurate personalized interactions.
Improved interactions between customers and brands are necessary, according to recent reports. Forrester Research's 2012 Customer Experience Index revealed only 37 percent of brands received "good" or "excellent" customer experience index scores from their customers, while 64 percent received a rating of "OK," "poor" or "very poor." As for what's in it for retailers, the American Consumer Satisfaction Index showed that a 1 percent increase in customer satisfaction translates into a 4.6 percent increase in market value.
"Consumers have said that they're willing to share more information for a better experience," said Stephen Gold, vice president of marketing and sales operations for IBM Watson Solutions, in an interview at the Smarter Commerce Global Summit. "Watson can pore through vast amounts of information, structured and unstructured, and then it can weight based on algorithms its confidence in particular responses. Watson is able to put a question into context and navigate the complexities of a situation with an individual to get them the right information."
While certainly an impressive system, I have my doubts about Watson being the answer to retailers' customer service issues. Here's why: I believe the computing system is more of a cost-saving tool for retailers than it is a customer engagement solution. Saving money is critical, especially in today's challenging economy, but the entire theme of IBM's Global Summit revolved around ways for brands to foster better, more personalized and relevant experiences with customers and prospects across every touchpoint they interact with them in.
To me, more automation — albeit with a system that can understand natural language — isn't a more personalized customer service experience. If I'm picking up the phone to call a retailer, it means I've already researched my question online and haven't been able to find the answer. I'm calling as a last resort. I'm banking that the live CSR on the other end of the phone will relate to my situation and be able to offer a resolution.
I acknowledge this is a decidedly old-school point of view, but I don't think I'm alone in holding it. In fact, I'm willing to bet my point of view would be the majority if older consumers were polled on this topic. That said, I could be completely wrong (it won't be the first or last time). Maybe consumers do think an automated service like Watson is the answer to their customer service frustrations. IBM certainly believes it is. Time will tell, but in the meantime I'd love to get your feedback on this topic. Do so by posting a comment below.