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AI and broadband are eating retail for breakfast. In the first half of 2019, we’ve seen 19 retailer bankruptcies. And the retail apocalypse is only accelerating.
What’s coming next is astounding. Why drive when you can speak? Revenue from products purchased via voice commands is expected to quadruple from today’s US$2 billion to US$8 billion by 2023.
Virtual reality, augmented reality, and 3D printing are converging with artificial intelligence, drones, and 5G to transform shopping on every dimension. And as a result, shopping is becoming dematerialized, demonetized, democratized, and delocalized… a top-to-bottom transformation of the retail world.
Welcome to Part 1 of our series on the future of retail, a deep-dive into AI and its far-reaching implications.
Let’s dive in.
A Day in the Life of 2029
Welcome to April 21, 2029, a sunny day in Dallas. You’ve got a fundraising luncheon tomorrow, but nothing to wear. The last thing you want to do is spend the day at the mall.
No sweat. Your body image data is still current, as you were scanned only a week ago. Put on your VR headset and have a conversation with your AI. “It’s time to buy a dress for tomorrow’s event” is all you have to say. In a moment, you’re teleported to a virtual clothing store. Zero travel time. No freeway traffic, parking hassles, or angry hordes wielding baby strollers.
Instead, you’ve entered your own personal clothing store. Everything is in your exact size…. And I mean everything. The store has access to nearly every designer and style on the planet. Ask your AI to show you what’s hot in Shanghai, and presto—instant fashion show. Every model strutting down the runway looks exactly like you, only dressed in Shanghai’s latest.
When you’re done selecting an outfit, your AI pays the bill. And as your new clothes are being 3D printed at a warehouse—before speeding your way via drone delivery—a digital version has been added to your personal inventory for use at future virtual events.
The cost? Thanks to an era of no middlemen, less than half of what you pay in stores today. Yet this future is not all that far off…
Let’s begin with the basics: the act of turning desire into purchase.
Most of us navigate shopping malls or online marketplaces alone, hoping to stumble across the right item and fit. But if you’re lucky enough to employ a personal assistant, you have the luxury of describing what you want to someone who knows you well enough to buy that exact right thing most of the time.
For most of us who don’t, enter the digital assistant.
Right now, the four horsemen of the retail apocalypse are waging war for our wallets. Amazon’s Alexa, Google’s Now, Apple’s Siri, and Alibaba’s Tmall Genie are going head-to-head in a battle to become the platform du jour for voice-activated, AI-assisted commerce.
For baby boomers who grew up watching Captain Kirk talk to the Enterprise’s computer on Star Trek, digital assistants seem a little like science fiction. But for millennials, it’s just the next logical step in a world that is auto-magical.
And as those millennials enter their consumer prime, revenue from products purchased via voice-driven commands is projected to leap from today’s US$2 billion to US$8 billion by 2023.
We are already seeing a major change in purchasing habits. On average, consumers using Amazon Echo spent more than standard Amazon Prime customers: US$1,700 versus US$1,300.
And as far as an AI fashion advisor goes, those too are here, courtesy of both Alibaba and Amazon. During its annual Singles’ Day (November 11) shopping festival, Alibaba’s FashionAI concept store uses deep learning to make suggestions based on advice from human fashion experts and store inventory, driving a significant portion of the day’s US$25 billion in sales.
Similarly, Amazon’s shopping algorithm makes personalized clothing recommendations based on user preferences and social media behavior.
But AI is disrupting more than just personalized fashion and e-commerce. Its next big break will take place in the customer service arena.
According to a recent Zendesk study, good customer service increases the possibility of a purchase by 42 percent, while bad customer service translates into a 52 percent chance of losing that sale forever. This means more than half of us will stop shopping at a store due to a single disappointing customer service interaction. These are significant financial stakes. They’re also problems perfectly suited for an AI solution.
During the 2018 Google I/O conference, CEO Sundar Pichai demoed the Google Duplex, their next generation digital assistant. Pichai played the audience a series of pre-recorded phone calls made by Google Duplex. The first call made a reservation at a restaurant, the second one booked a haircut appointment, amusing the audience with a long “hmmm” mid-call.
In neither case did the person on the other end of the phone have any idea they were talking to an AI. The system’s success speaks to how seamlessly AI can blend into our retail lives and how convenient it will continue to make them. The same technology Pichai demonstrated that can make phone calls for consumers can also answer phones for retailers—a development that’s unfolding in two different ways:
(1) Customer service coaches: First, for organizations interested in keeping humans involved, there’s Beyond Verbal, a Tel Aviv-based startup that has built an AI customer service coach. Simply by analyzing customer voice intonation, the system can tell whether the person on the phone is about to blow a gasket, is genuinely excited, or anything in between.
Based on research of over 70,000 subjects in more than 30 languages, Beyond Verbal’s app can detect 400 different markers of human moods, attitudes, and personality traits. Already it’s been integrated in call centers to help human sales agents understand and react to customer emotions, making those calls more pleasant, and also more profitable.
For example, by analyzing word choice and vocal style, Beyond Verbal’s system can tell what kind of shopper the person on the line actually is. If they’re an early adopter, the AI alerts the sales agent to offer them the latest and greatest. If they’re more conservative, it suggests items more tried-and-true.
(2) Replacing customer service agents: Second, companies like New Zealand’s Soul Machines are working to replace human customer service agents altogether. Powered by IBM’s Watson, Soul Machines builds lifelike customer service avatars designed for empathy, making them one of many helping to pioneer the field of emotionally intelligent computing.
With their technology, 40 percent of all customer service interactions are now resolved with a high degree of satisfaction, no human intervention needed. And because the system is built using neural nets, it’s continuously learning from every interaction—meaning that percentage will continue to improve.
The number of these interactions continues to grow as well. Software manufacturer Autodesk now includes a Soul Machine avatar named AVA (Autodesk Virtual Assistant) in all of its new offerings. She lives in a small window on the screen, ready to soothe tempers, troubleshoot problems, and forever banish those long tech support hold times.
For Daimler Financial Services, Soul Machines built an avatar named Sarah, who helps customers with arguably three of modernity’s most annoying tasks: financing, leasing, and insuring a car.
This isn’t just about AI—it’s about AI converging with additional exponentials. Add networks and sensors to the story and it raises the scale of disruption, upping the FQ—the frictionless quotient—in our frictionless shopping adventure.
AI makes retail cheaper, faster, and more efficient, touching everything from customer service to product delivery. It also redefines the shopping experience, making it frictionless and—once we allow AI to make purchases for us—ultimately invisible.
Prepare for a future in which shopping is dematerialized, demonetized, democratized, and delocalized—otherwise known as “the end of malls.”
Of course, if you wait a few more years, you’ll be able to take an autonomous flying taxi to Westfield’s Destination 2028—so perhaps today’s converging exponentials are not so much spelling the end of malls but rather the beginning of an experience economy far smarter, more immersive, and whimsically imaginative than today’s shopping centers.
Either way, it’s a top-to-bottom transformation of the retail world.
Over the coming blog series, we will continue our discussion of the future of retail. Stay tuned to learn new implications for your business and how to future-proof your company in an age of smart, ultra-efficient, experiential retail.
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This article originally appeared on diamandis.com. Read the original article here.
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The recent high profile failures of some home social robots (and the companies behind them) have made it even more challenging than it was before to develop robots in that space. And it was challenging enough to begin with—making a robot that can autonomous interact with random humans in their homes over a long period of time for a price that people can afford is extraordinarily difficult. However, the massive amount of initial interest in robots like Jibo, Kuri, Vector, and Buddy prove that people do want these things, or at least think they do, and while that’s the case, there’s incentive for other companies to give social home robots a try.
One of those companies is Zoetic, founded in 2107 by Mita Yun and Jitu Das, both ex-Googlers. Their robot, Kiki, is more or less exactly what you’d expect from a social home robot: It’s cute, white, roundish, has big eyes, promises that it will be your “robot sidekick,” and is not cheap: It’s on Kicksterter for $800. Kiki is among what appears to be a sort of tentative second wave of social home robots, where designers have (presumably) had a chance to take everything that they learned from the social home robot pioneers and use it to make things better this time around.
Kiki’s Kickstarter video is, again, more or less exactly what you’d expect from a social home robot crowdfunding campaign:
We won’t get into all of the details on Kiki in this article (the Kickstarter page has tons of information), but a few distinguishing features:
Each Kiki will develop its own personality over time through its daily interactions with its owner, other people, and other Kikis.
Interacting with Kiki is more abstract than with most robots—it can understand some specific words and phrases, and will occasionally use a few specific words or two, but otherwise it’s mostly listening to your tone of voice and responding with sounds rather than speech.
Kiki doesn’t move on its own, but it can operate for up to two hours away from its charging dock.
Depending on how your treat Kiki, it can get depressed or neurotic. It also needs to be fed, which you can do by drawing different kinds of food in the app.
Everything Kiki does runs on-board the robot. It has Wi-Fi connectivity for updates, but doesn’t rely on the cloud for anything in real-time, meaning that your data stays on the robot and that the robot will continue to function even if its remote service shuts down.
It’s hard to say whether features like these are unique enough to help Kiki be successful where other social home robots haven’t been, so we spoke with Zoetic co-founder Mita Yun and asked her why she believes that Kiki is going to be the social home robot that makes it.
IEEE Spectrum: What’s your background?
Mita Yun: I was an only child growing up, and so I always wanted something like Doraemon or Totoro. Something that when you come home it’s there to greet you, not just because it’s programmed to do that but because it’s actually actively happy to see you, and only you. I was so interested in this that I went to study robotics at CMU and then after I graduated I joined Google and worked there for five years. I tended to go for the more risky and more fun projects, but they always got cancelled—the first project I joined was called Android at Home, and then I joined Google Glass, and then I joined a team called Robots for Kids. That project was building educational robots, and then I just realized that when we’re adding technology to something, to a product, we’re actually taking the life away somehow, and the kids were more connected with stuffed animals compared to the educational robots we were building. That project was also cancelled, and in 2017, I left with a coworker of mine (Jitu Das) to bring this dream into reality. And now we’re building Kiki.
“Jibo was Alexa plus cuteness equals $800, and I feel like that equation doesn’t work for most people, and that eventually killed the company. So, for Kiki, we are actually building something very different. We’re building something that’s completely useless”
—Mita Yun, Zoetic
You started working on Kiki in 2017, when things were already getting challenging for Jibo—why did you decide to start developing a social home robot at that point?
I thought Jibo was great. It had a special magical way of moving, and it was such a new idea that you could have this robot with embodiment and it can actually be your assistant. The problem with Jibo, in my opinion, was that it took too long to fulfill the orders. It took them three to four years to actually manufacture, because it was a very complex piece of hardware, and then during that period of time Alexa and Google Home came out, and they started selling these voice systems for $30 and then you have Jibo for $800. Jibo was Alexa plus cuteness equals $800, and I feel like that equation doesn’t work for most people, and that eventually killed the company. So, for Kiki, we are actually building something very different. We’re building something that’s completely useless.
Can you elaborate on “completely useless?”
I feel like people are initially connected with robots because they remind them of a character. And it’s the closest we can get to a character other than an organic character like an animal. So we’re connected to a character like when we have a robot in a mall that’s roaming around, even if it looks really ugly, like if it doesn’t have eyes, people still take selfies with it. Why? Because they think it’s a character. And humans are just hardwired to love characters and love stories. With Kiki, we just wanted to build a character that’s alive, we don’t want to have a character do anything super useful.
I understand why other robotics companies are adding Alexa integration to their robots, and I think that’s great. But the dream I had, and the understanding I have about robotics technology, is that for a consumer robot especially, it is very very difficult for the robot to justify its price through usefulness. And then there’s also research showing that the more useless something is, the easier it is to have an emotional connection, so that’s why we want to keep Kiki very useless.
What kind of character are you creating with Kiki?
The whole design principle around Kiki is we want to make it a very vulnerable character. In terms of its status at home, it’s not going to be higher or equal status as the owner, but slightly lower status than the human, and it’s vulnerable and needs you to take care of it in order to grow up into a good personality robot.
We don’t let Kiki speak full English sentences, because whenever it does that, people are going to think it’s at least as intelligent as a baby, which is impossible for robots at this point. And we also don’t let it move around, because when you have it move around, people are going to think “I’m going to call Kiki’s name, and then Kiki is will come to me.” But that is actually very difficult to build. And then also we don’t have any voice integration so it doesn’t tell you about the stock market price and so on.
Kiki is designed to be “vulnerable,” and it needs you to take care of it so it can “grow up into a good personality robot,” according to its creators.
That sounds similar to what Mayfield did with Kuri, emphasizing an emotional connection rather than specific functionality.
It is very similar, but one of the key differences from Kuri, I think, is that Kuri started with a Kobuki base, and then it’s wrapped into a cute shell, and they added sounds. So Kuri started with utility in mind—navigation is an important part of Kuri, so they started with that challenge. For Kiki, we started with the eyes. The entire thing started with the character itself.
How will you be able to convince your customers to spend $800 on a robot that you’ve described as “useless” in some ways?
Because it’s useless, it’s actually easier to convince people, because it provides you with an emotional connection. I think Kiki is not a utility-driven product, so the adoption cycle is different. For a functional product, it’s very easy to pick up, because you can justify it by saying “I’m going to pay this much and then my life can become this much more efficient.” But it’s also very easy to be replaced and forgotten. For an emotional-driven product, it’s slower to pick up, but once people actually pick it up, they’re going to be hooked—they get be connected with it, and they’re willing to invest more into taking care of the robot so it will grow up to be smarter.
Maintaining value over time has been another challenge for social home robots. How will you make sure that people don’t get bored with Kiki after a few weeks?
Of course Kiki has limits in what it can do. We can combine the eyes, the facial expression, the motors, and lights and sounds, but is it going to be constantly entertaining? So we think of this as, imagine if a human is actually puppeteering Kiki—can Kiki stay interesting if a human is puppeteering it and interacting with the owner? So I think what makes a robot interesting is not just in the physical expressions, but the part in between that and the robot conveying its intentions and emotions.
For example, if you come into the room and then Kiki decides it will turn the other direction, ignore you, and then you feel like, huh, why did the robot do that to me? Did I do something wrong? And then maybe you will come up to it and you will try to figure out why it did that. So, even though Kiki can only express in four different dimensions, it can still make things very interesting, and then when its strategies change, it makes it feel like a new experience.
There’s also an explore and exploit process going on. Kiki wants to make you smile, and it will try different things. It could try to chase its tail, and if you smile, Kiki learns that this works and will exploit it. But maybe after doing it three times, you no longer find it funny, because you’re bored of it, and then Kiki will observe your reactions and be motivated to explore a new strategy.
Kiki’s creators are hoping that, with an emotionally engaging robot, it will be easier for people to get attached to it and willing to spend time taking care of it.
A particular risk with crowdfunding a robot like this is setting expectations unreasonably high. The emphasis on personality and emotional engagement with Kiki seems like it may be very difficult for the robot to live up to in practice.
I think we invested more than most robotics companies into really building out Kiki’s personality, because that is the single most important thing to us. For Jibo a lot of the focus was in the assistant, and for Kuri, it’s more in the movement. For Kiki, it’s very much in the personality.
I feel like when most people talk about personality, they’re mainly talking about expression. With Kiki, it’s not just in the expression itself, not just in the voice or the eyes or the output layer, it’s in the layer in between—when Kiki receives input, how will it make decisions about what to do? We actually don’t think the personality of Kiki is categorizable, which is why I feel like Kiki has a deeper implementation of how personalities should work. And you’re right, Kiki doesn’t really understand why you’re feeling a certain way, it just reads your facial expressions. It’s maybe not your best friend, but maybe closer to your little guinea pig robot.
The team behind Kiki paid particular attention to its eyes, and designed the robot to always face the person that it is interacting with.
Is that where you’d put Kiki on the scale of human to pet?
Kiki is definitely not human, we want to keep it very far away from human. And it’s also not a dog or cat. When we were designing Kiki, we took inspiration from mammals because humans are deeply connected to mammals since we’re mammals ourselves. And specifically we’re connected to predator animals. With prey animals, their eyes are usually on the sides of their heads, because they need to see different angles. A predator animal needs to hunt, they need to focus. Cats and dogs are predator animals. So with Kiki, that’s why we made sure the eyes are on one side of the face and the head can actuate independently from the body and the body can turn so it’s always facing the person that it’s paying attention to.
I feel like Kiki is probably does more than a plant. It does more than a fish, because a fish doesn’t look you in the eyes. It’s not as smart as a cat or a dog, so I would just put it in this guinea pig kind of category.
What have you found so far when running user studies with Kiki?
When we were first designing Kiki we went through a whole series of prototypes. One of the earlier prototypes of Kiki looked like a CRT, like a very old monitor, and when we were testing that with people they didn’t even want to touch it. Kiki’s design inspiration actually came from an airplane, with a very angular, futuristic look, but based on user feedback we made it more round and more friendly to the touch. The lights were another feature request from the users, which adds another layer of expressivity to Kiki, and they wanted to see multiple Kikis working together with different personalities. Users also wanted different looks for Kiki, to make it look like a deer or a unicorn, for example, and we actually did take that into consideration because it doesn’t look like any particular mammal. In the future, you’ll be able to have different ears to make it look like completely different animals.
There has been a lot of user feedback that we didn’t implement—I believe we should observe the users reactions and feedback but not listen to their advice. The users shouldn’t be our product designers, because if you test Kiki with 10 users, eight of them will tell you they want Alexa in it. But we’re never going to add Alexa integration to Kiki because that’s not what it’s meant to do.
While it’s far too early to tell whether Kiki will be a long-term success, the Kickstarter campaign is currently over 95 percent funded with 8 days to go, and 34 robots are still available for a May 2020 delivery.
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Pepper is a chatty 4-foot humanoid robot by SoftBank Robotics that has started to appear in shopping malls. It can talk, gesture and move on wheels. Pepper’s so-called “emotion engine” allows it to engage people in a friendly way. Related … Continue reading →