Shep’s blog: Is cognitive analytics a game changer for retailers?

9th Feb 2016

Customer service and marketing are always moving forward and advancing. There is always a hot new phrase or exciting new trend or technology. Sometimes I am reminded of the scene in The Graduate when a man pulls Dustin Hoffman’s character aside to give him a hot tip about plastics, an up-and-coming industry at the time. Today’s hot topic is this: cognitive analytics. It involves computers that almost seem to think – and they do it by assimilating, analysing and interpreting data faster and more accurately than the human mind. IBM’s Watson is the leader in this amazing new field.

Watson is IBM’s Artificial Intelligence supercomputer. It has been used in the past to accumulate and interpret data to help businesses understand trends and patterns in consumer behavior and more. And now, Watson is available for consumer use through IBM’s new app, Watson Trends.

Need to buy a gift and not sure where to begin? Just ask Watson Trends. The app covers three areas – Tech, Toys and Health – and reports on the top 100 items in each category. It doesn’t just produce a list of top-selling items, but predicts what items will become popular.

How does it work? IBM, arguably the most powerful analytics company in the world, tracks 10,000 sources including blogs, social channels, forums and more for this consumer-focused app. It not only looks at what is selling, but also takes into consideration the reviews and ratings. In other words, Watson not only gives you the “what,” but also the “why.”

Watson is smart. Uber smart! According to information on the app, “Watson understands that context and tone have an effect on the meaning of language. It can interpret that understanding into recommendations. And it continually learns by absorbing new knowledge at a rate that humans cannot, helping its users become smarter faster.”

And did I mention that it is free? Consumers, retailers and manufacturers can use Watson’s data for smarter decision making in everything from manufacturing to ordering products for a store to the final purchase.

I checked the predictions on Watson Trends just prior to the start of the holiday shopping season. The hottest item in the “Tech” gift category was not a surprise – it was the Apple Watch, a watch that can email, message, count steps and more. And the hot item in the toy category was the Star Wars Lego set, extremely popular with all the buzz around the latest film in the franchise, Star Wars: The Force Awakens.

A true game changer?

The Star Wars connection got me thinking about technology, too. The movies take place over a span of 30-plus years, but the technology looks pretty much the same throughout. The Storm Troopers wear their cool white protective uniforms, the Jedi TIE fighter spacecraft maintain their unique design, and the lightsaber is an enduring element.

What about our world? I remember a contest held around 1980 in which contestants drew pictures of what they thought aviation would look like 20 years later, in the year 2000. People submitted drawings of some very futuristic-looking aircraft. But even now, in 2016, planes look pretty much the same as they did in 1980, cars too. The difference is inside.

Technology has made planes and cars faster and more efficient. And the same can be said for business. The concept of business hasn’t changed, but technology – like Watson Trends – has made businesses faster and more efficient.

Here are some other technological advances in the business world:

  • Delivery and logistics: Computerized systems continue to make delivery more efficient and streamlined. FedEx is still the overnight standard for delivery, but watch Amazon. Its distribution system and drone delivery could change the game.
  • Transportation: As I mentioned, vehicles still look pretty much the same on the outside, but the systems underneath are more efficient. Planes and trains are faster, and there’s something new on the horizon – driverless vehicles. Whether you’re moving people or cargo, imagine the possibilities.
  • Robotics: You may not yet have a robot doing your housecleaning, but maybe there’s one moving around on your floor – that little robotic vacuum cleaner is pretty neat. Even more, however, robots are performing more tasks for businesses, such as putting together automobiles and packing warehouse orders.
  • Communication: This has changed dramatically in the past 30 years. Then, there were two choices: face-to-face or over the phone. And that was a phone that was attached to the wall. Now, mobile phones are everywhere. People are in constant communication by phone, email, text, video and more. And, might I add, it is inexpensive.

Technology is taking over. And with the easy access to analytics, the shopping experience is changing drastically. Consumers know what to buy. Retailers know what to stock. This could be a true game changer in the retail industry.

Shep Hyken is a customer experience expert and the Chief Amazement Officer of Shepard Presentations. He is a New York Times and Wall Street Journal bestselling author and has been inducted into the National Speakers Association Hall of Fame for lifetime achievement in the speaking profession. Shep works with companies and organizations who want to build loyal relationships with their customers and employees. For more articles on customer service and business go to

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By LinkedIn Group Member
10th Feb 2016 16:46

This comment was posted by Jack Springman in the MyCustomer LinkedIn group.

To be a game changer it will need to spot the unexpected alongside the obvious. Predicting Star Wars toys will be big when there is going to be a Star Wars film coming out won't impress any retail buying teams - who would appear to be the natural target for this. What I would like to see is a Surprise category - higher risk predictions - items, apps, etc. that have an outside chance of becoming hot, not because their is a massive corporate marketing budget behind them but because they mirror in some way previous unexpected successes. With any recommender system it is easy to highlight things that people are likely to buy anyway, successfully recommending things that people wouldn't know about or normally consider - that is where the challenge is, and that is what the benchmark for success with Watson Trends will be.

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By David Sealey
02nd Mar 2016 18:53

A thought provoking post. This is important when we consider that the World Economic Forum is predicting that by 2020, the jobs market will have been greatly disrupted by AI based tech.

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