In April 2016, Facebook announced the launch of its 'Chat Bot Platform' – a technology that enables developers to create Artificial Intelligence 'chatbots' to simulate human conversation with users. But the Mark Zuckerberg-fronted social media site is not the only company putting chatbots to work; the fashion industry is taking notice, as well.
One such chatbot has been created by Spring, a New York-based e-commerce site that boasts a roster of over 900 brands – including establish brands like Givenchy and Loewe, as well as emerging brands, Cushnie et Ochs and Jennifer Fisher jewelry. The Spring chatbot – which takes the form of a robotic personal shopper – is accessible through Facebook's messaging app.
Upon initiating a conversation with Spring’s bot, the customer is asked five multiple choice questions about the type of garment they are looking for, including their gender and budget. The bot then follows up, almost instantaneously, with five suggested items which can be purchased immediately by simply clicking to redirect to Spring's online store. Over time, and with increased use, the bot will study the shopper's purchase history and learn their preferences in order to tailor its offerings to personal wants and needs.
The bot system is intended to facilitate the online shopping experience by minimizing the time customers spend trawling through multiple online stores, websites and apps, and by assisting the product comparison process (thereby also increasing competition amongst retailers). The option for immediate interaction with these virtual consultant bots is also expected to minimize retail costs spent on manned telephone and email helplines.
With the introduction of these personalized e-concierge bots into the Facebook Messenger app – which has a reported 700 million monthly active users – the exposure that the software may bring to brands, and the impact it may have on e-commerce generally, promises to be quite significant!
Amongst other legal regulation, online retailers operating websites in the EU need to comply with a whole host of rules contained in (i) the Consumer Contracts Regulations 2013; (ii) the Consumer Protection (Amendment) Regulations 2014; (iii) the Consumer Rights Act 2015; (iv) the Electronic Commerce (EC Directive) Regulations 2002; and, (v) the Data Protection Act 1998. Our Retail team would be delighted to help you make sense of all this, should you have a website in the EU and have any questions about compliance.
In the U.S., no shortage of legal regulations must be considered in connection with the use of chatbots. As Emily Dorotheou, a Media Communications and Technology Associate at Olswang, says: “The introduction of chatbots in highly regulated industries such as financial services, medical, legal and pensions highlights an array of potential issues relating to liability and the extent of advice provided. Any company giving a chatbot authority to advise users will need to ensure that the chatbot has access to a large volume of up to date information in order to understand instructions and questions, and provide helpful and relevant responses. If chatbots are advising on user health issues, financial decisions or legal issues, it will be very important that the advice is informed, correct and highlights all associated risks. In the event that they are unable to answer, a clear disclaimer and potential human intervention trigger will need to be considered.”
Moreover, chatbots “need to be able to recognize if and when a user may be required to accept terms and conditions. This is especially important if chatbots are being used to facilitate online transactions or provide any type of advice. The chatbots will need to present the terms and conditions in an appropriate format and then keep a record of the terms accepted by the user. Owners of chatbots will also need to bear in mind that any terms and conditions provided by the chatbot will need to contain all necessary information to ensure compliance with UK and EU regulations and company policy.”
In short: tread carefully when using chatbots, friends. They are slated to provide huge advantages for companies of all types but need to be used in accordance with the huge array of existing and likely soon-to-be-developed laws and regulations.
Nicola Conway is Trainee Solicitor at Bryan Cave in London.