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Will Macy’s AI-Powered Mobile App Be Friendly Tech — Or The Terminator?

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There’s no question IBM’s Watson is smart. After all, it beat the pants off the best-of-the-best Jeopardy contestants. But is it smart enough — and flexible enough — to help a Macy’s customer find the perfect dress for her daughter’s wedding?

That’s one of the things the retailer is trying to discover with its 10-store test of a mobile web tool that connects shoppers with an artificial intelligence (AI)-powered platform. “Macy’s On Call” taps IBM Watson, via the Satisfi intelligent engagement platform, allowing customers to input natural language questions about each participating store’s assortment, services and facilities.

According to Macy’s, each store’s system will be keyed to the particulars of that location, and the system will evolve as it learns more about the store’s customers. Macy’s also is incorporating a Spanish language feature to serve a broader subset of its customers in select stores.

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Five of the 10 pilot stores are base learning locations, with the Watson implementation deployed solely as a customer-led self-service initiative. In the other five locations, there will be an enhanced layer of associate support available, and users will have the option to request a one-on-one consultation with a Macy’s specialist associate. The program is expected to run through late fall 2016.

A Boon For Department Stores, Or A Bane?

Macy’s has its questions about the effectiveness of AI that it hopes the pilot program will answer, but the topic itself raised numerous questions from the RetailWire Brain Trust. Retail TouchPoints also received input from Evan Neufeld, Director of Intelligence at consulting firm L2. Some of the most pressing issues include:

Is it in a department store’s best interest to give shoppers another reason to stare down at their phones rather than experience the brick-and-mortar store’s offerings?

Will the technology provide customers the help they need, not just in finding products but in making buying decisions?

Is this the first step toward reducing (or eliminating) the role of store associates, or will it help them do their jobs more effectively?

Would a mobile solution that provided this information to associates actually enhance customer service?

If the pilot is successful, will Macy’s (and other retailers) have the back-end system support required to scale up these services beyond pilots and relatively limited use cases?

L2’s Neufeld believes that Macy’s is smart to experiment with new and varied ways to provide customers with the information they’re typically seeking in the store. “All the research out there shows that it’s clear what customers want: to find stuff and pay for it,” he said. “There’s a saying with mobile that ‘One size fits none.’ Macy’s realizes they won’t reach everyone with just one app or mobile site, so they need to see how different solutions compare to each other, and how they resonate with different audiences. For example, Millennials are much more adept at texting than other groups.”

While members of the RetailWire Brain Trust agree that Macy’s needs to keep itself at the cutting edge when it comes to customer service technology, some industry experts are uncertain about the ultimate utility of applications like this. Following are excerpts from their comments (read the full article and discussion here):

Frank Riso, Principal, Frank Riso Associates: “This is a very positive step for Macy’s. When all sales staff are busy or not available, the shopper can now get the information they need about items in a different color or size so that when they do contact a sales person, they know exactly what to ask for. It also keeps the staff honest about what is in inventory.”

Bob Phibbs, President/CEO, The Retail Doctor: “The more you get consumers to look down, the more irrelevant you’ll make your brick-and-mortar experience. The idea that employees can be replaced by an app makes your store nothing more than a warehouse with very expensive stuff. It is hardly a growth strategy.”

Michael Day, CMO, Retail, Teradata: “Especially in the department store space: The day the human customer service element totally goes away is the day the format goes away. That said, Macy’s can deploy AI (leverage the data and manage the technology) to augment and make better their in-store customer service and customer experience.”

Mark Price, Managing Partner, LiftPoint Consulting: “There is a significant consumer segment that prefers to deal with technology on their own time and at their own pace, rather than have to wait for customer service or support. The ability to access real-time inventory at a location level, as well as rapid answers to standardized questions, will improve perceptions of customer service as well as free up time for store associates to reduce out-of-stocks and improve the check-out experience as well.”

Charles Whiteman, SVP, Client Services, MotionPoint: “If these applications can connect customers with the products they’re looking for by overcoming staffing, stocking and store signage problems, they certainly should justify themselves by avoiding lost sales. On the staffing front, I think the technology can be especially valuable in markets with a diverse customer base by overcoming language challenges. A multi-lingual app will be far more cost-effective than staffing stores with bilingual associates.”

Camille P. Schuster, PhD, President, Global Collaborations: “Experimenting with AI is great. With fewer associates available now, replacing many more with AI is premature. Replacement of personnel depends upon two things: whether AI can have responses to all consumer questions programmed and whether consumers want to either type in their complete questions or will be understood if using voice recognition.”

Cristina Holm, Director and Co-founder, HOLM: “If this is designed to replace shop floor staff, it will fail. The tests will highlight that app adoption will be low and behavior to ask an employee (if one is visible) will be a shopper’s first reaction. Why do I say this? It’s easier and faster to talk than reach for phone, open an app, type, read the response etc. It’s the staff members that need a handheld oracle so that they can accurately and promptly answer these questions.”

Christopher P. Ramey, President, Affluent Insights & The Home Trust International: “Any use of technology to enable clients is a positive move for consumers. In this case, it’s AI rather than a salesperson with LI (limited intelligence). Invariably, customers will prefer the former. The more fascinating point is the long game. Hitting a button to buy online is easier than standing in line to make the purchase. This will greatly expand showrooming. The path to purchase will come down to ‘Do you want it shipped to you or do you prefer picking it up now?’ Looking further, Macy’s will have more stores that are substantially smaller. Retailing will turn into ‘facilitailing’. You read it here first.”

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