IBM’s Watson Invests in Fluid for E-Commerce Play

IBM’s Watson Group is investing in Fluid to help it build what it claims will be the first-ever cognitive assistant for outdoor-gear retailer North Face. With a target launch date of Q4 2014, Fluid XPS would let shoppers find the right gear by asking the application specific questions and receiving personalized advice and product recommendations.

“The vision is that it will work on every digital touch point,” says Kent Deverell, chief executive (CEO) of Fluid. “Longer-term, we view it as opportunity to enhance the in-store experience.”

Fluid is a long-time partner of IBM’s ecosystem of start-ups and businesses that build cognitive apps made with Watson. It has provided digital services to North Face for 10 years, including strategic planning for e-commerce, content development, core user experience design, and technology development. While North Face is not paying for the project, it’s acting as a guinea pig for the tech.

“They have product at fairly high price point, and a lot of consideration goes into finding the right piece of gear for your needs,” Deverell says. “They are helping us shape the product as an early beta customer.”

At this point, Fluid has created technical and creative prototypes and proofs of concept, along with the basic interaction paradigm. Alongside Fluid’s significant investment, Deverell says, the IBM cash infusion will help get it to market.

IBM earmarked $100 million for direct investments into companies that are part of its Watson ecosystem, along with an investment of $1 billion into its Watson Group, a new business unit created in January to develop and commercialize what it calls “cloud-delivered cognitive advisors.”

On the back end of Fluid XPS is a database that combines a retailer’s proprietary information, including catalogs, ratings, review, and call center logs, with generally available content, including Wikipedia entries, consumer reports articles, and blog posts. “Watson will take all that content and the questions that consumers are asking, and then leverage multiple content sources to give the good answer back. The more questions you ask it, the smarter it gets,” Deverell says.

While live chat services already do this, Deverell says they aren’t scalable – and besides, consumers don’t like them. Instead of putting the onus on consumers to search, evaluate search results, and identify the right questions to ask, the application will ask consumers questions in order to hone in on their requirements, just like a good sales clerk would do, but it will also learn from their responses and engage in real-time conversations. Fluid says Watson will continuously learn about a consumer’s needs based on the information he or she shares.

The tool could be used by consumers across devices, as well as, eventually, by live sales clerks to better inform their services.

The goal is to make Fluid XPS available to more retailers, and Deverell says that it’s already working with several other major retailers that can’t be named.

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