Cognitive computing is quickly gaining ground in the marketplace and already influencing our lives. Brands like Staples and 1-800-Flowers.com have implemented cognitive systems for a variety of use cases.
For Staples, it’s their “Easy Button” that allows customers to use voice commands to place orders via a smartphone app. Or consider 1-800-Flowers.com, which has grown by acquisition over the years; their team implemented cognitive systems to streamline its order management and provide a common customer experience across all of its channels.
In a recent interview with Steve Gatto of our Perficient Digital practice, I learned about why enterprises should consider cognitive systems for eCommerce. And as our conversation continued, we uncovered the benefits of implementing these systems.
“Cognitive computing will allow commerce enterprises to gain a competitive edge because it allows them to enhance the customer experience, increase efficiencies in a cost-effective way, and optimize business processes,” said Gatto.
Enhancing the Experience
Ultimately, brands want to help customers find the right product at the right price at the right time. “One way consumers are benefitting from cognitive systems is through the presentation of content within digital customer experiences. Some commerce sites use cognitive technologies to support virtual shopping assistants,” Gatto stated.
“A great example of this is North Face, which built its commerce site on a cognitive platform, and has used the tool for guided selling. The brand has such a wide variety of jackets from which to choose that the system helps customers identify the best one for their specific needs and style,” he continued.
In this case, the platform asks the customer questions, analyzes the responses and then recommends jackets based on those responses. It uses natural language processing and machine learning to analyze information such as geographic location, time of year, and average climate conditions to narrow product recommendations to just a few choices.
“With cognitive solutions, businesses can better understand their customers’ specific needs, habits, and preferences so they can present the right content and deliver a more valuable, efficient experience,” said Gatto.
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While cognitive has some obvious benefits for improving the front-end customer experience, so much of what makes up a “frictionless” commerce experience is supported by behind-the-scenes operations and back-end systems.
“There are some great use cases for customer service and distribution teams implementing cognitive systems, which allow them to cost-effectively increase operational efficiencies,” said Gatto.
“Attack of the bots” is a trending topic among distributors and retailers. This widely-used technology frequently found on commerce sites appear as pop-up chat window that prompts customers to engage with what appears to be a customer service rep. These bots drive the initial conversation with the consumer, but the experience can often trickle down to a live person that tackles specific questions or feedback.
“These bots are evolving to include machine learning so ultimately, there’s only cognitive technology working behind the scenes to solve problems or answer questions without having to transition to a customer service rep,” said Gatto.
“On the distribution side, cognitive technologies help marketing or merchandising teams make decisions around optimal promotion or product mix. Instead of creating rules in the system based on the merchandisers’ ‘gut-instinct’ or basic web analytics, cognitive systems can now analyze massive amounts of unstructured and structured data. Then, it will present recommendations of the right merchandising mix that optimizes sales revenue,” he continued.
As eCommerce has matured, traditional and pure-play commerce businesses have established processes for conducting “business as usual.” Cognitive computing has the potential to shake things up when it comes to distribution and fulfillment.
“The beauty of cognitive systems is that they can analyze where the order originated, and depending on the location of the inventory, it can present the closest location or ideal shipping method that saves on costs – and at the same time, satisfy customer expectations to receive the order in a timely fashion,” said Gatto.
“There’s a use case of a major department store retailer that implemented cognitive computing to optimize fulfillment of online orders during the holiday season. The retailer analyzed several factors, such as where inventory exists, how orders were normally fulfilled, and carriers typically used (UPS, FedEx, or USPS), to create rules around these factors.
“The retailer tested a subset of orders during this period using recommendations from the cognitive system, and in the end, saved $8 million in operational expenses. Imagine the cost savings for when the retailer applies it to their entire organization,” he concluded.
There’s no doubt that cognitive computing will greatly contribute to eCommerce businesses as they digitally transformation.
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