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Have you met Watson yet? Watson, IBM’s cognitive king, is a platform for cognitive technology that can be taught to capture unstructured or “dark” data such as newsfeeds, posts, tweets, and articles. Already Watson and cognitive technology have changed medicine, hospitality and won at Jeopardy. Watson even has a campaign website for the 2016 presidential election. Its next target? Retail.
The Great Divide
IBM isn’t out to create a world of science fiction where robots are in charge. It is, however, using cognitive technology to uncover data that is difficult to capture. Retailers, for instance, face a gap between digital and physical data.
Before entering a store, consumers often spend time online researching products they want to buy. This research could be as simple as commenting “what a great purse! Where can I get one?” on a friend’s photo or searching for the best prices. When they walk into a physical store, however, that data is lost.
IBM’s goal is to help retailers recapture unstructured data to personalize shopping for consumers. In the long run, they want to create “the store of the future” with artificial intelligence, cognitive technology, and robotics.
The first step toward the store of the future was developing an in-store app that created an engaging shopping experience. To do this, IBM took over Westfield Mall in San Francisco during the 2015 holiday season. The takeover included a dome show, interactive touch points, and the main attraction–an app that gave the gift of insight to help holiday shoppers choose gifts.
Shoppers entered several data points about the person they were shopping for including gender, age, and a Twitter handle or several personality traits. The cognitive technology behind the app analyzed the data and suggested gifts based on the data.
Shoppers said the app helped them discover gifts they “hadn’t thought of yet.” One consumer even said it was like the app was helping her think.
Consumers weren’t the only ones who benefited from the cognitive shopping experience. Retailers captured data that gave them fresh insight into shoppers’ individualized wants, a feat that has the potential to change the stores connect with their customers.
IBM set ambitious targets for the app with the goal of attracting 3,000 users in the 20 days of their mall takeover. The response they got far exceeded this goal. At the end of 20 days they had engaged nearly 8,000 users who stayed in the app for an average of 2.7 minutes. A good click-to-buy rate is typically 3% to 5%, the cognitive retail app achieved 11%.
The experience Westfield Mall shoppers encountered in 2015 is set to change the landscape of retail. The cognitive retail app has obvious implications for both retailers and consumers. On a larger scale the app is a harbinger for a new era of tech development.
IBM partnered with Gigster to build the app. On the surface it might seem as though two companies couldn’t be more different: IBM, with several thousand employees, has been an internationally recognized brand for decades with its roots dating back to the 1880s. Gigster, founded in 2013, is fresh out of raising its first few rounds of capital and a relative newcomer.
This unlikely pair joined forces to build a truly amazing product. IBM brought all the cognitive capabilities it has developed over the last forty years to the table and Gigster brought developers with the right skills to leverage those capabilities.
For the retailers they benefitted from having both IBM and Gigster creating the project together. IBM’s cognitive technology gave them access to a fresh set of data to increase their sales. Gigsters’ developers introduced design principles from the gaming industry to create an easy yet engaging experience for shoppers.
The two companies worked together with such a degree of ease, says Lisa Hammitt, Vice President of SaaS and Cloud Marketplace at IBM, because Gigster offers an elite developer on demand service. That model fits nicely into the picture for chief marketing officers, who drive much of today’s development.
Working with Gigster reduced expenses and speed up the development process. Ramp up time was incredible, says Helen Dunavetsky, Global Leader of Saas Marketing at IBM. It took fifteen days to build from start to finish, and IBM could design and make changes while Gigster’s developers were building the app. In the enterprise development space speed of execution like this is simply unheard of.
Enterprises and the Gig Economy
IBM is leading the charge of enterprises working with the gig economy. With approximately one-third of American professionals working as freelancers, outsourcing to independent developers is no longer just for startups or small to medium businesses.
Tech developers are difficult to recruit these days with the best developers passing on well-paying enterprise roles to go and work at companies like Google and Facebook instead. In their spare time many of these developers work on platforms like Gigster to get exposure to new technologies and make extra money to cover their Bay Area rents. Through companies like Gigster, enterprises gain access to top talent that they wouldn’t otherwise be able to connect with.
Outsourcing to freelance professionals helps enterprises reduce their capital expenses and create a more sustainable business model. The gig economy also speeds up production time so that companies can get a polished prototype into the hands of users as quickly as possible.
One Small Step For Retail, One Giant Step For All Industries
The cognitive retail app is a small step toward the store of the future, but the IBM-Gigster partnership will reinvent the way enterprises across all industries develop their products. The gig economy means lean development, more user feedback sooner in the process, and an increased emphasis on user experience.
- See the app here.
- No Standing Gig by Lisa Hammitt, Cognitive Computing and Data Science Executive at IBM
- Video of Roger Dickey, CEO of Gigster, discussing the IBM Watson project at Interconnect 2016
- Press release about IBM and Gigster working together.
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