The Rise of the Chatbots

With MarketsandMarkets recently predicting that chatbots are due to be worth more than $300 million by 2021, it’s clear they are the latest innovation to make a big impact on the world of marketing and retail.

The same technology and principles underlies a raft of diverse applications: chatbot technology lets you order a pizza from within Facebook Messenger by chatting to a Dominos bot. The same tech is behind the increasingly sophisticated automated assistants from Google, Amazon and Apple.

Siri is just one of the Virtual Personal Assistants trialled by the tech giants of Amazon, Google and Apple

The key to making chatbots that are helpful for businesses is the contextual understanding of language. Rather than a standard computer or mobile device search, which returns results related to the keywords you enter, chatbots can only succeed if they’re able to maintain their half of an actual conversation, bearing in my mind your previous preferences and the specifics of what you’ve told it.

Chat bots created by businesses for a specific purpose have the easiest job here: understanding the context of a situation is much easier when the full context is ‘ordering a pizza’. This level of chatbot technology is increasingly cheap and available to businesses, and is a way of circumventing so-called ‘app fatigue’. Consumers are increasingly overwhelmed by the range of apps demanding to be installed to manage different areas of their life. The ability to build some of your own app’s functions into a widely installed programme is a way to re-engage burned out customers.

The more sophisticated chat bot technology that powers things like Alexa, Amazon’s voice activated personal assistant, and low level automated customer service bots are more expensive, as they can perform in a wider range of situations, but also more fragile. Alexa’s problems have been widely shared, with products accidentally ordered by toddlers and parrots, but giants like Amazon and Apple have thrown their weight behind perfecting the technology and the benefits will filter down until they are available to smaller businesses.