Time to Talk: The Future is Conversational

Time to talk
The future for brands is conversational
Breakfast Briefing on Conversational Commerce
Capgemini, Intel and MIT
New York | Tuesday | January 16, 2018

2The information contained in this document is proprietary © 2018 Capgemini. All rights reserved.
Agenda
Introduction: It’s Time to Talk
Kees Jacobs, Capgemini
A Growing Tempest in a Larger Storm
Jon Stine, Intel
A New World of Customer Experience
Mark Taylor, Capgemini
The Technology and Intelligence Behind the Talk
Chris Hunt, Intel
The Business Operations Behind the Scenes
Shannon Warner, Capgemini
The Case for Standards: Open Conversational Commerce
Prof. Brian Subirana, MIT
Opportunities Abound: What to Do Next?
Dick Cantwell, Jon Stine & Kees Jacobs

It’s time to talk
Kees Jacobs
Capgemini

Personalized
Service
Social
Observation
Trust &
Empathy
Voice
Dialogue

Conversational
Commerce
Is The Next
Wave Of
Disruption

Remember the
Roman
Empire?

A growing tempest in a
larger storm
Jon Stine
Intel

A Growing Tempest in a Larger Storm
≈95%
Voice Word Accuracy
Rates for Microsoft,
Google, IBM
As of 2017.
English Language, Laboratory tests
20%Searches on
Android app through speech
as of
May 2016.
Source: KPCB.
Image sources: cnet.com, The Verge, The Economist, Wall Street Journal,

Conversational Commerce = Platforms x Mass Shopper Adoption
Here it Comes
Source: Location World.com
325%
increase
in use of Amazon’s Alexa
2016-2017
40% adults
use voice search once a
day, USA 20171
$13 Billion
smart speaker industry
by 2024
94.2 Million
homes with smart
speakers by 2020
The five-year growth rate forecast, smart speakers: 653%.
Comparative mobile phone adoption: 286%.
1 This figure is expected to reach 50% by 2020 Source: MIT Auto id Lab Predictions
$20-35 Billion
Addressable retail revenue
via CC,
forecast 2020

Conversational Commerce at First Glance:
Accelerants to Retail’s Darwinian Evolution?
Acceleration Of
Digital Commerce
Decline In
Profit Margin
Disintermediation
From customer
Strengthening
Of Amazon

A new world of
Customer Experience
Mark Taylor
Capgemini

“Death, for
brands, has
a name…
Alexa”
Scott Galloway. Clinical Professor of Marketing. New
York University Stern School of Business
Which means either:
The end of the brand as we
know it
The best opportunity for
brand differentiation since TV

Our Core Beliefs
1. CONVERSATIONAL
INTERFACES WILL
RESHAPE DIGITAL
EXPERIENCES WHILE
ALLOWING US TO SCALE
HUMAN CONNECTIONS
AND ENGAGEMENT
2. CONVERSATIONAL
COMMERCE IS THE SINGLE
BIGGEST OPPORTUNITY FOR
BRANDS TO ACT LIKE
PEOPLE IN THE DIGITAL
CHANNELS.
3. BRANDS ACTING LIKE
PEOPLE IS THE SINGLE
BEST WAY TO BUILD
CUSTOMER
ENGAGEMENT AND
LOYALTY.

The Technology Is The Enabler Not The Benefit
1. CONVERSATIONAL INTERFACES WILL
RESHAPE DIGITAL EXPERIENCES WHILE
ALLOWING US TO SCALE HUMAN
CONNECTIONS AND ENGAGEMENT
By easily connecting the
real and digital world
around us, the QR code
was expected to be a major
success. Less than 2% of
consumers regularly use
them…
13 million Beacons are
deployed in retail
environments globally.
67% of consumers are
ready to accept in-store
promotions, and yet,
customer value has still to
be delivered
▪ While the growth and adoption of voice assistants is impressive, other technologies have also
held much promise for the improvement of the customer experience
▪ What will matter is not the capabilities but how the capabilities drive value for
customers and therefore for brands

Brands Have Got Their Voices Back
2. CONVERSATIONAL COMMERCE IS THE SINGLE
BIGGEST OPPORTUNITY FOR BRANDS TO ACT
LIKE PEOPLE IN THE DIGITAL CHANNELS.
"VOICE, AS A THING RATHER THAN AN ABSTRACT
CONCEPT, OPENS UP A WHOLE NEW PALETTE FOR
BRANDING, WHICH TRADITIONALLY HAS BEEN
VERY VISUAL,“
Mindshare 2017
▪ Voice assistants will soon sound significantly
more like human beings
▪ Voice assistants are also learning to better
use pitch, volume, rate and tone - all
elements of speech used to effectively
convey emotion and emotion favors
connection
▪ In the past, 'brand voice' has been
metaphorical, now what the brand sounds
like will be a key attribute
▪ What should your brand sound like?

Accelerating The Path To Affiliation
3. BRANDS ACTING LIKE PEOPLE IS THE SINGLE
BEST WAY TO BUILD CUSTOMER ENGAGEMENT
AND LOYALTY.
An emotional connection matters more than
customer satisfaction
HBR August 2016
Conversational commerce will drive deeper,
more human connections at scale and will
drive a different level of relationship, of
engagement and of brand affiliation.
CX
ACTUALI ZATION
IDENTI TY
ASPIRATIONAL
BELONGING
REWARDS ME
STRESS RELIEF
COMFORTING
ANTICI PATES
KNOWS ME
ENG AGING
TIME S AVER
AVAILABILI TY
SIMPLIFIER
NO BARRIERS
CONVENIENCE
INFORMATIVE
QUALI TY
LOW EF FORT
AFFILIATION
ANTICIPATES MY NEEDS
MEETS MY NEEDS
CX HIERARCHY OF NEEDS

Final Thoughts & Observations
Success in this space will require
alignment in three areas across
brands. The enabling technologies,
the organization and the customer
experience strategy itself. It is
critical to remember that the
question is bigger than the
technology.
When digital interactions that
consumers have with brands look
more like how people interact with
associates in stores, more
conversational, more participative,
brands will request more
information from their
customers and customers will
expect and require more value
in return.
Consumers, given the right degree
of contextual relevance, will
respond better to
conversational interfaces than
other digital interfaces like
websites and apps. A more
human, natural interface will
engender/permit ever-growing
levels of relationship, deepening
toward affiliation.

What are the technology
implications of
Conversational Commerce?
Chris Hunt
Intel
$
@

The Fastest Rate & Lowest Cost Of Innovation
Business Components / Services
Business Applications / Systems
Data Infrastructure
End to End Experience Management
Intelligent Interfaces
Conver-
sational
AR/VR
e-
commerce
Robotics …
Store Home Auto Mobile Web Service Support Social
Guest Experience
Every conversation is
unique
Every conversation is
“visible”
Every conversation is a
lesson
Every lesson can be
embedded and reapplied
- consistently
Every interface can
embed conversation
Learning

But Conversational Commerce Exposes The Wizard
Shopper Intelligence
Commerce Intelligence
Supply Chain Intelligence
Experience Intelligence
Bricks and
Mortar
Conversationalists Digital
Guest Experience
Operational Intelligence
Conversational
Commerce
INVITES a personal
relationship with brand
It’s a race – where
everyone must leverage
their strengths
It demands modernized
IT architecture
Winning depends on our
ability to respond
intelligently from deep
within the business
Unified Multi Interface
Management
Context Aware Experience
Management
Deep Understanding of the
Shopper
From Demand Planning to
Digital Marketing
Lowering Costs at Optimal
Performance
Optimizing Supply Chain
and Logistics
Responsive Customer
Engagement

Truly Responsive Customer Engagement
Modernized IT
Infrastructure
Accelerated innovation through
architecture designed for agility
New Conversational
Interfaces
Refactor all channels
for Conversational Commerce
Responsive Systems
of Engagement
Learning Intelligence Infused
Throughout
+
+

Shannon Warner
Capgemini
The Business Operations
behind the scenes

Conversational Commerce
should NOT be just an IT test.
As a game changer for
Customer Engagement, its
impact spans your entire
organization.

Data and
Insights
Unified
Commerce
Streaming
Supply Chain
Marketing
Leaders will bring together cross-functional teams who will innovate to
create customers’ future expectations

Conversational Commerce has a two-fold impact on Data
Data as a Voice
Experience Enabler
Voice data as a
Driver of Insights
Governance
Search
Voice-Based Taxonomy
Semantic Tags
Product & Non-Product Content
…
Single View of Shopper
Customer Behaviors in Home/Car/etc.
Predictive Recommendations
Narrow Search
…

Conversational Commerce is an enabler of and catalyst
for Unified Commerce
Dedicated Smart Speakers
Mobile Apps
Shopping Cart Innovation
Enable…
Wayfinding
Service on Demand
Shopping List Access
Ads
Product Content…
Voice
Inside the Store
Voice as an
Omnichannel
Demand Driver
Subscription Services
Batched Orders
Shoppers expect shorter lead times
New Service Channel
…

Shopping will begin to mirror the customers’ stream of
consciousness…creating demand for a streaming
supply chain
Number
of Orders
Average
Order Value
Cost to
Serve
Contribution
Margin
Although, conversational commerce should result in an overall increase in total
spend / engaged customer. It’s essential that retailers proactively solve for the
potential negative impacts of conversational commerce on its supply chain.

Conversational Commerce demands a whole new
discipline in Marketing…and, creates another dimension
in omnichannel customer engagement
How to be discovered via Voice
channels?
What’s the future of voice-based
search marketing?
Harnessing the literal voice(s) of your
brand
Differentiating the Retail vs. CPG
Brand
Content Marketing (Recipes, Dietary
Advice, etc.)
Loyalty Initiatives
Events
Shopping Lists
Voice
of your Brand
Driving Conversational
Traffic

The case for standards in
Open Conversational
Commerce
Prof. Brian Subirana
MIT

Tomorrow,
will it be
channel agnostic,
device agnostic, and / or
brand neutral ?

Who Owns Your Brand / Name?

State-of-the-art Attacks on your Brand

Parsing
Wake Activate Intent and Slot
Ignore Term Shop List Slot
June 2017
July 2017Wake
”Alexa, Smart Shelf add Pizza”

“BIG BROTHER IS
WATCHING YOU.”
Nineteen Eighty-Four
George Orwell. 1949

“I only want to understand
why so many people, so
many villages, so many
towns and so many
nations support a tyrant
which has only the power
they themselves give to
him.”
Discourse on Voluntary Servitude
Étienne de la Boétie, 1548

The “Canon” for Conversational Commerce…
A Universe of Choices
Neutral Navigation
PII Removed
Physical Characteristics of the Voice
Privacy
“Incognito” Mode for Voice
How to Delete “Browsing” Histories
Data Transferability
Transparency
Voice Synthetization with Permission
Command Standardization
Psychiatric Diagnosis
Learned Models
Awareness
Bi-Directional Neutrality
Cookie and Session Transfer Neutrality
Consumer Protection

Suggested Next Steps to Pave the Way
1. Initial Standard (two papers 1Q18)
2. Reference Architecture (one paper 2Q18)
3. Vision for Retail 2020 and initial field research
4. Set-up a Standards Organization

Dick Cantwell, MIT
Jon Stine, Intel
Kees Jacobs, Capgemini
Opportunities abound –
what to do next ?

The Open Conversational Commerce Initiative
What Where
When Who
The implications for
Consumers
Retailers/Brands
Society at Large
Public Deliverable:
Research Paper and
Presentation:
NRF 2018
How
OCC Commercial Track
From Interaction to
Conversation: Creating and
Delivering Business Value
HOW
OCC Academic Track
▪ Standards
▪ Reference Architecture
▪ Future Retail Vision
TODAY
2 0 1 7 2 0 1 8
Pilot Projects
Workshops
POC’S
Standards &
Government & NGO Advisory

Business Capabilities
Intelligence
Business
Operations
Customer
Experience

Conversational Commerce Growth Journey

Building enhanced Conversational Commerce Capabilities over time
Customer Experience
Delighting consumers via
relevant 2-way conversational
dialogues
Intelligence
Turning data into intelligence to
feed customer experience and
business operations
Business Operations
Organise for the business
capabilities required to deliver
upon the promise
2018 2019 2020 …

Start Small, Demonstrate Success, Scale fast.
3 days
ongoing
3 months
6 weeks
Discover
Devise
Deploy
Sustain
Understand the vision,
set the direction and
agree the list of use
cases, including one for
immediate progression
Develop first prototypes
for selected use-case,
experiment with new
technologies and test
the value for
consumers
Series of iterative design
sprints to validate and
improve the
conversational solution
with actual users,
sharpen the focus, and
de-risk any future
investment by assessing
the commercial case for
at scale deployment
Iteratively maturing the
entrepreneurial
conversational commerce
capability by monitoring
the outcomes of
conversational services
deployed at scale and add,
adapt and adjust to
consumer findings as
needed to achieve the
overall consumer and
commercial value
proposition.
Customer Experience
Delighting consumers via
relevant 2-way conversational
dialogues
Intelligence
Turning data into intelligence to
feed customer experience and
business operations
Business Operations
Organise for the business
capabilities required to deliver
upon the promise
3 streams that grow
consistently accross the whole
conversational commerce journey:
Discover(3days)
3-day exercise to understand
and prioritise
▪ CP/Retail perspectives and
examples
▪ Start-up eco-system
▪ Partner ecosystem
Discover workshops
Devise(6weeks)
6 week POC exercise, e.g. in
Capgemini AIE labs
▪ Experimentation
▪ Proof of value (POV)
▪ Go no-go
▪ Pilot
Devise workshops
Deploy(3months)
12 weeks Production and test
& learn
▪ Platform & devops
▪ Review & monitoring
▪ Governance
Build-deploy project
Scale(Ongoing…)
Building out the
capability
▪ Consumer Experience
▪ Intelligence
▪ Business Operations
Grow and Sustain

At your Service !
Support

A global leader in consulting, technology services and digital transformation,
Capgemini is at the forefront of innovation to address the entire breadth of clients’
opportunities in the evolving world of cloud, digital and platforms. Building on its
strong 50-year heritage and deep industry-specific expertise, Capgemini enables
organizations to realize their business ambitions through an array of services from
strategy to operations. Capgemini is driven by the conviction that the business
value of technology comes from and through people. It is a multicultural company
of 200,000 team members in over 40 countries. The Group reported 2016 global
revenues of EUR 12.5 billion.
About Capgemini
Learn more about us at
www.capgemini.com
Intel makes the most amazing experiences of the future possible. Intel’s innovations
expand the reach and power of computing in personal devices and enterprise
servers, the Cloud, make the Internet of Things smart and connected, and help
ensure the security of our digital lives. The work of the company’s more than
100,000 employees transforms businesses, propels new discoveries, and improves
human experiences.
About Intel
More information about Intel:
www-ssl.intel.com/content/www/us/en/retail/solutions/overview.html
The mission of the Massachusetts Institute of Technology is to advance knowledge
and educate students in science, technology, and other areas of scholarship that will
best serve the world in the 21st century. We are also driven to bring knowledge to
bear on the world’s great challenges.
The Auto-ID Lab at MIT traces its roots back to 1999 and the founding of the Auto-
ID Center, which laid much of the groundwork for the standardization of RFID
technology and the introduction of the EPC. Now a member of the global Auto-ID
Labs network, the Lab continues research on the evolution and application of RFID
systems, as well as other disruptive Internet of Things technologies.
About MIT and the Auto-ID Lab at MIT
More information about Intel:
www.mit.edu
The information contained in this document is proprietary.
©2018 Capgemini, Intel Corporation, Massachusetts Institute of Technology

Time to Talk: The Future is Conversational

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