The difference between bots, chatbots and AI

People often conflate automation and AI, but there’s a simple way to distinguish the two forms of technology. Automated systems will follow rules established by a human operator, while artificial intelligence is designed to learn and adapt on its own.

Bots, chatbots, and AI each have different capabilities and applications. It’s essential to understand the benefits they bring to customer service (and their limitations) if retailers are to apply the technology correctly.

Bots are simple automated tools, used to make tasks easier

Bots without natural language understanding (NLU) can only recognise keywords and execute actions based on them. They present customers with a list of buttons that they can click to move the interaction along to the next stage.

For an example, fashion retailer H&M uses a bot on Kik to help customers find products they may like. But, because some people still refer to this as a chatbot, it can cause confusion. People may wonder why they have to repeat themselves in several different ways before the ‘chatbot’ can understand the request or response – it’s because simple bots don’t actually understand language.

Bots are great at making the customer service process more efficient by dealing with simple queries ( e.g. “when does the Regent Street branch open?”) but retailers must make sure that they’re clear about their capabilities to minimise customer frustration and reduce customer effort.

Chatbots feature interaction, but still rely on human programmers

Chatbots have NLU engines, which help them understand a broader range of language and allows them to interact (to an extent). They can ask questions, interpret responses, and execute actions. It’s also possible for them to have augmented intelligence, but they aren’t AI because they require the input of programmers to function.

San Francisco-based start-up Codify Academy uses a cognitive chatbot called Bobbot (powered by IBM’s Watson) to answer questions posed by prospective students. People can ask more conversational questions, rather than relying on typing in the right keyword, and its implementation has resulted in a 10% increase in enrolment on the Academy’s courses.

Chatbots can bring a more human element to human-machine interactions and be less frustrating than bots that don’t have NLU engines. Retailers should consider using a simple chatbot as an additional customer service option. Chatbots understand customers and can provide quick resolutions to customer queries. There’s no need to implement more a more complicated – and expensive – AI.

Artificial Intelligence can learn from its interactions

An artificial intelligence uses deep learning to receive data and interpret it. Programmers don't determine these interpretations. Gartner defines AI as technology that: “appears to emulate human performance typically by learning, coming to its own conclusions [and by] appearing to understand complex content”. It also engages in natural dialogue with people.

AI has potential applications in many parts of the retail industry. Supply chain management and logistics, for example, is seen as one of the areas that would benefit most from AI. The technology has the potential to collate data from a variety of sources and use analytics to identify trends that could impact the supply chain, allowing retailers to ensure the efficiency of their service.

However, as MIT researcher Luis Perez-Breva argues, for AI applications to be successful, organisations need to ensure that they work with humans and have a kind of symbiotic relationship where both the AI and human learn and develop. AI requires human interaction to improve, and both employees and customers need to feel comfortable interacting with AI.

A true AI solution is beyond the reach of most organisations at the moment as the technology is too expensive to develop and is simply not ready to put to practical use. However, Gartner’s forecast that, by 2020, 20% of companies will have employees dedicated to monitoring and guiding neural networks, indicates that AI will have a massive impact on many sectors, including retail.

It’s easy to get confused about automation and AI. Gartner even found that some businesses were promoting their solutions as AI, but when questioned by potential clients they admitted that their technology relied on set rules and couldn’t learn from any interactions it had with people. For some businesses, AI has become more of a buzzword for automated systems as a whole – this needs to change if we’re to appreciate the real benefits that these technologies can bring to our businesses.  

While retailers can potentially make good use of AI-powered systems to refine their operations, bots and chatbots can do a great job of improving the customer experience, reducing customer effort, and saving the business time and money.