Chatbots Drive Shopify's Kit CRM Deal

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Shopify on Wednesday announced that it has agreed to purchase Kit CRM, whose Kit chatbot automatically sends out marketing text messages for online stores.

It also lets businesses run targeted ads on Facebook and Instagram, make recommendations based on store activities, post on social media and use functionality provided by other social media apps, Shopify CMO Craig Miller said.

Kit last month released an API that lets it interact with other apps in the Shopify App Store.

Kit "will continue to work on their product offerings under the Shopify umbrella from San Francisco," Miller told CRM Buyer. The integration of Kit into Shopify's platform "is happening gradually and is in progress right now."

Shopify doesn't plan to remove Kit, which "is very well loved," from its App Store, he added.

More and more companies are introducing chatbots.

Facebook on Wednesday released into beta its Messenger Platform with chatbots. Shopify has integrated with the platform.

Microsoft introduced the Murphy chatbot for Skype on iOS, Android and Windows in late March.

"Chatbots look like the new spaghetti being thrown at a wall to see if it sticks," observed Denis Pombriant, principal at Beagle Research.

Their sweet spot "will be in providing the ability to proactively personalize brand encounters by providing contextual innovation," he told CRM Buyer.

Two levels of bots are emerging, according to Holger Mueller, a principal analyst at Constellation Research.

One is the assistant on a website, which "has been proven and has been working for a while," he told CRM Buyer.

A newer type is the bot built into a chat platform, Mueller said. That's the kind Microsoft and Facebook announced.

Chatbots need a development framework, speech recognition, big data support and machine learning, all on a cloud or shared infrastructure, he added.

"Conversation or chat is a more natural way for humans to communicate," Mueller asserted. "Going through websites and Web forms is a result of technology not being able to support this in the past."

Chatbots "makes websites and apps obsolete," Mueller said. "Commerce happens from the chat or a conversation -- see what Amazon's doing with Alexa."

Chatbots can take the place of human customer service agents who would otherwise have to keep answering repetitive questions, Anne Moxie, a senior researcher at Nucleus Research, told CRM Buyer.

"Adding a chatbot to the e-commerce experience, when done well, can drive greater customer engagement and [ideally] let companies gather richer data about their customers," said Rebecca Wettemann, a research VP at Nucleus Research.

"But there's still a lot of work to be done to refine and ensure the quality of interaction," she told CRM Buyer.

"Connecting commerce and customer service is where the ROI is," said Natalie Petouhoff, a principal analyst at Constellation Research.

Customer service or conversational social are not only about serving customers but also "largely about lead conversion," she told CRM Buyer, although bots "must be really intelligent to be able to respond in the right channel with customer background and context."

Consumers "expect to have a multitude of touchpoints with their brands," said Guy Courtin, a principal analyst at Constellation Research.

Therefore, businesses "must explore and look at a multitude of technologies," he told CRM Buyer. Whether adding chatbots translates into sales has yet to be determined.

"When it works -- and the demos are encouraging -- it's easier to write and support chatbots than writing websites and apps for different platforms," Constellation's Mueller noted.

Facebook Messenger's chatbots reportedly have spammed users, and unsubscribing didn't help.

"You can alienate your customers fast if this isn't done well," Beagle Research's Pombriant said. "I see many irate people complaining that a bot just doesn't get it."

Further, "what happens when the customer really needs to talk with a human?" he asked. "The statement 'Take me to your leader' takes on a new significance."

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

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