AI-led ‘conversational commerce’ to kill brand websites in five years

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The former lead engineer for Amazon’s Alexa voice assistant told a gathering of Australian blue-chip brands including Qantas, Bankwest, AGL and Open Universities, to stop working on their websites and apps as the primary channel for customer contact and commerce.

Alex Spinelli, who led the design of Alexa’s operating system until a year ago, said branded websites and apps were “unnatural human experiences” and had failed to live up to what the early vision of the internet was supposed to be.

But he would say that.

Mr Spinelli is now chief technology officer at LivePerson, considered the global leader in AI-based conversational platforms which allow companies to blend human and bot interactions in customer service, product queries and commerce.

LivePerson’s chief technology officer Alex Spinelli said his company handled 400 million voice and bot conversations last year.  Supplied


More than 100 billion messages are sent each day across Facebook and Instagram and 13 million text messages are sent every minute in the US, Mr Spinelli said. LivePerson managed 400 million conversations last year across its client base with half having AI integration.

The idea of one-to-one personalisation at scale has been talked about since the 1990s but only in the past three years has it become a reality because AI and machine learning can now facilitate a seamless experience between people and machines in a more natural, conversational way than screens, clicks and swipe rights.

Online’s share of retail sales is only 16 per cent in the US. In Australia it’s 6-7 per cent. Websites have failed most businesses.

— Alex Spinelli, LivePerson

But is Mr Spinelli’s bold call to kill brand websites and apps in five years just a snappy soundbite?

“We’re dead serious about it,” he told CMO Brief during a visit to Australia. “Whether it’s going to take two, three or five years remains to be seen. There are some things that still have to happen for a fully-fledged replacement. In messaging apps, we need a few more rich experiences, we need authentication, which is starting to become available. There are certainly some dependencies queuing up but they are going to happen over the next one or two years. It’s pretty realistic if you look at something like Buddybank, which is way out there in its ability to attract customers. Revenue per user is the highest in the UniCredit family.”

UniCredit is an Italian banking group which launched Buddybank in 2017 as a conversational banking app only on iPhones. It runs a 24-hour concierge desk for all its customer tasks and queries via a blend of conversations with people, messaging and AI.

Optus, Qantas, Bankwest, AGL and Open Universities are among the line-up of Australian companies pushing into conversational platforms. Many have had basic web-chat services for years but the deployment of more sophisticated machine-learning tools and the emergence of professions like “conversational designers” are advancing quickly to create mass personalisation.

We do more of that business through our messaging channels than we do through the phone now.

— Andy Sheats, Open Universities Australia

“There is trouble in paradise,” Mr Spinelli said of today’s website and app system. “The web is not working for most businesses. Online’s share of retail sales is only 16 per cent in the US. In Australia it’s 6-7 per cent. Websites have failed most businesses.”

Gartner predicts by 2021 customer care will overtake product and price as the number one way for business to differentiate how someone feels about how they connect and interact with a brand. Gartner says by 2021, 80 per cent of customer interactions will be automated with AI in some form.

“That’s where we believe dialogues and conversations can make a huge difference, not websites and apps,” Mr Spinelli said. “It’s not a pipedream. About 70 per cent of customers will give up within 10 minutes if they can’t connect with you.”

Online environments, or websites, aren’t going anywhere fast.

— Will Lavender, CXLavender

However, the founder of customer experience agency, CXLavender, Will Lavender, whose clients include Westpac, American Express and NBN, said websites and apps were still too useful to kill.

“Online environments, or websites, aren’t going anywhere fast,” he said. “People like and need to be able to browse, get help or information. Websites service these needs well. Voice assistants are really useful too, and there’s no doubt that they have a far greater role to play within the online service experience. Sometimes, though, we humans just want words and images – 72 per cent of us are more visually orientated.”

Mr Lavender said one of his largest clients was integrating voice assistants for customer service but said “assistant” was the key word. “There’s so much opportunity to assist customers online with more intelligent word, image and voice assistance,” he said. “Sometimes voice will be better, other times a video or words will be.”

Open Universities Australia executive general manager Andy Sheats said it managed 450,000 chat and messaging conversations last year with people exploring university courses across 14 institutions including UNSW, Macquarie, RMIT, Flinders, Swinburne and University of New England. That figure was up 42 per cent on the previous 12 months.

“We do more of that business through our messaging channels than we do through the phone now,” he told CMO Brief. “Our students are all using these messaging channels every day and there’s a frustration when we’re not there with them. That’s really what’s driving it. For us, it’s become our highest usage channel. There was a lot of demand that we probably didn’t even see. I would see us very easily tripling the number of conversations we’re having. Some of that is us actually just realising that demand from customers was there and so we’ve needed to change our processes internally, change our licensing model with LivePerson – all those things we have to do to let our usage max to the level that we’re finding in demand. That’s gone really well.”

We’re really serious about this. Companies should stop working on their websites and apps.

— Alex Spinelli, LivePerson

Mr Sheats said Open Universities was progressively rolling out AI functionality but he saw it more as “driver assist, not autonomous driving” in the mix of bots and real people.

Still, there are public perception hurdles to overcome. A study by Survata and LivePerson of 5000 people in six international markets, including Australia, showed more than half of those surveyed would still rather speak with a human than a bot, even if they have to wait for a short period. In Australia, 56 per cent said they would rather wait three minutes for a human than get immediate assistance from a bot.

Mr Spinelli said US telco T-Mobile, airlines like Delta and Virgin Atlantic and banks such as Citi and HSBC were all moving fast into conversational commerce and that consumer receptivity was growing, even among older segments, because they were used to messaging apps with family members.

“We’re really serious about this. Companies should stop working on their websites and apps and go learn AI and machine learning and then really start thinking about how conversations and dialogues are the new web design,” he said.

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