Innovative Retail Technologies

SEP-OCT 2016

Innovative Retail Technologies (formerly Integrated Solutions For Retailers) is the premier source for innovative yet pragmatic technology solutions in the retail industry.

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J anie Yu's resume speaks for itself. Her highlights include a master's from Harvard, a journalism stint with the BBC (British Broadcasting Corporation) and PRI (Public Radio International), International Marketing Director at Burt's Bees, and executive leadership at Cone Communications, where she worked on campaigns for such powerhouse brands as Timberland, Mattel, and Nestlé Waters. Today, she's putting all that experience to work as managing partner at Fung Capital. In that position, Yu keeps a close eye on the technologies and trends that will propel the success of consumer-facing brands. At the moment, few of those trends are holding her interest more than conversational commerce. We recently caught up with Yu and asked her a few questions about the trend and how retail brands can leverage it. IRT: Can you define "conversational commerce" for us? YU: We are seeing a paradigm shift in how consumers interact with information as well as companies. Today, there are more users on chat platforms (What's App, Facebook Messenger, WeChat, Snap- Chat, Line, Kik, Telegram, Apple's newly launched iMessage, and Google's soon-to- be-launched Allo, etc.) than social media. What's App has over 1 billion monthly active users, Facebook Messenger now has 900 million users, up from 800 million users announced in January 2016, and WeChat has over 700 million users. This paradigm shift has led to a new way of consumer engagement and shop- ping, happening through messaging and/ or voice-enabled chat interfaces. Silicon Valley has coined the term "Conversa- tional Commerce" to describe this new wave of commerce. There are three forms of conversational commerce – chat on ecommerce sites, chat in mobile apps, and chatbot within a messaging app, such as Facebook Messenger. However, chat on ecommerce sites and mobile apps has not really caught on due to a suboptimal experience. Chatbot is generating a real breakthrough and gaining significant trac- tion. Since Facebook launched the chatbot platform on Messenger in April 2016, there have been over 11,000 chatbots built, across many categories, such as weather, news, commerce, etc. A chatbot sits within a user's messaging app, such as Facebook Messenger. The user has complete control over when to engage with the bot and what content they'd like to see. When the bot is not needed, it sits quietly in the background. This eliminates the need for the user to download indi- vidual apps from the companies they want to engage with or shop from. Today, a chatbot is typically powered by a combination of AI (artificial intelli- gence) and human agents. As the chatbot learns more about its users, the AI gets better, and the need for the human agent diminishes. Conversational commerce is really hap- pening. According to the Mobile Messag- ing 2016 report, 66 percent of consumers have used a chat app to communicate with a business. IRT: Give us some clear examples of conversational commerce in action. YU: Thanks to the easy nature of chat inter- face, the prime use cases for conversational commerce are high consideration pur- chases, product discovery, and customer service. When you are considering purchas- ing a big-ticket item, such as a trip (flight and hotel), a Hipmunk chatbot (which is The New Conversation In Retail Commerce Conversational commerce is coming of age, and it's being powered by a simple, inexpensive chatbot that virtually anyone can use. What's Next Sept-Oct 2016 30 Since Facebook launched the chatbot platform on Messenger in April 2016, there have been over 11,000 chatbots built. Janie Yu managing partner, Fung Capital A Q&A WITH MATT PILLAR & JANIE YU I MANAGING PARTNER, FUNG CAPITAL

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