‘Amazon Charts’ Re-Define ‘Best Seller’

The New York Times: Amazon now tracks “not only the top-selling digital and print books on Amazon, but the ones that customers spend the most time reading … With its lists, Amazon aims to redefine the notion of a best seller, expanding it to include books that are ‘borrowed’ from its e-book subscription service, and ones that are streamed on Audible. As a result, the lists give increased visibility to books that might not typically appear on other best-seller lists.”

“All of Amazon’s acquisitions and new features are having a cumulative effect, allowing the company to draw on its vast customer base and troves of data to discover what is popular, and return that information to customers, creating a lucrative feedback loop … Crowdsourcing and data mining are also driving the company’s approach to its bookstores, which act as showcases for books popular with customers on the site. While the stores have traditional categories, like fiction, nonfiction and travel, the most eye-catching shelves feature categories culled from Amazon’s customer data.”

“The first thing customers see when they walk into the store is a large display table, labeled Highly Rated, which includes books with an average rating of 4.8 stars or higher on a scale of 5 … Another display case, labeled Page-Turners, features books that people finish reading on their Kindle in fewer than three days … Another section features the most ‘wished for’ books from Amazon’s website … The books are all displayed face out. Under each book is a card with the average customer rating, the number of reviews and a featured review from an Amazon reader. Displaying the full cover of each book mimics the visual look of Amazon’s website, and might lure customers to unfamiliar titles.”

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Not SeeFood: App Apes ‘Shazam for Food’

The Verge: “In a peculiar case of life imitating art imitating life, Pinterest has announced a new recipe-finding feature that makes use of computer vision to tell you about a dish when you point your smartphone camera at it … It sounds an awful lot like SeeFood, the fake ‘Shazam for food’ app from the HBO comedy Silicon Valley. Pinterest, of course, doesn’t use that terminology anywhere, nor does its marketing material even reference the sitcom or its ludicrous parody, which manifested itself as an app that could only tell you whether an object was or was not a hotdog.”

“When reached for comment regarding SeeFood, a Pinterest representative confirmed to The Verge that the Silicon Valley episode was ‘separate and completely coincidental’.”

“This is all part of a broader artificial intelligence push in the tech industry to apply machine learning techniques to everyday life. By training neural networks on huge mounds of data and translating that into a real-time algorithm, tech giants like Google, Facebook, and Microsoft are now developing software products that can digest and understand the world, from text to photos to even videos.”

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The Stitch Fix Secret: Make Shopping Easy

The New York Times: Stitch Fix is a mail-order clothing service that offers customers little choice in what garments they receive, and shies away from discounts for brand name dresses, pants and accessories. Despite a business model that seems to defy conventional wisdom, Stitch Fix continues to grow … To the company’s founder, Katrina Lake, success comes down to delivering what consumers want: making it easier to shop … In her view, what was important was helping customers find clothing they liked without taking lengthy shopping trips and returning dozens of items.”

“At the company’s warehouse, Eric Colson, formerly a top data scientist at Netflix, spoke to the role that data science — once the province of high-tech giants — plays in nearly every aspect of the Stitch Fix business. Mr. Colson excitedly illustrated on whiteboards how the company’s systems can narrow down a broad range of women’s pants to a relative few that each individual customer is statistically likely to keep … Algorithms have even cut the number of steps needed for workers to pick out clothes for individual clients.”

“Yet the question remains whether customers who are initially thrilled by receiving a customized box of clothing will remain customers for months or even years … Stitch Fix executives declined to share their retention statistics, but claim that they are above industry averages.”

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Algorithmic Retail: Beyond Dynamic Pricing

The Wall Street Journal: “Advances in A.I. are allowing retail and wholesale firms to move beyond ‘dynamic pricing’ software, which has for years helped set prices for fast-moving goods, like airline tickets or flat-screen televisions. Older pricing software often used simple rules, such as always keeping prices lower than a competitor.”

“These new systems crunch mountains of historical and real-time data to predict how customers and competitors will react to any price change under different scenarios, giving them an almost superhuman insight into market dynamics. Programmed to meet a certain goal—such as boosting sales—the algorithms constantly update tactics after learning from experience … The software learns when raising prices drives away customers and when it doesn’t, leading to lower prices at times when price-sensitive customers are likely.”

“Algorithms can also figure out what products are usually purchased together, allowing them to optimize the price of a whole shopping cart. If customers tend to be sensitive to milk prices, but less so to cereal prices, the software might beat a competitor’s price on milk, and make up margin on cereal.”

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IKEA Asks: Do You Speak Human?

The Verge: ‘If you put an AI in charge of your house — letting it control the lights, the alarms, the temperature, and so on — how would you want it to act? Should it be ‘autonomous and challenging’ or ‘obedient and assisting’? Would you prefer if it sounded male, female, or if it was gender neutral? Should it be religious? These are just some of the questions Ikea is asking its customers in a new survey titled: Do you speak human?”

“With this new survey, Ikea is focused on computer personality, looking to find out what sort of AI people would be happiest to interact with. This is a question that preoccupies the big tech companies, too — that’s why they’re hiring novelists and comedians to finesse the personality of their digital assistants.”

“Ikea is updating the results of the survey as it goes; so far it’s saying that 41 percent of people want their AI to be ‘obedient and assisting,’ 42 percent want it to be ‘gender neutral’ (as opposed to 35 percent for male, 24 percent for female), and 87 percent say they want their AI to ‘detect and react to emotions.’ There’s bound to be some self-selecting bias at work here, as the people who answer this survey are more likely to be interested in technology in general, but it’s still a very intriguing project.”

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Facebook Chatbots Test ‘Conversational Commerce’

The Washington Post: Mastercard “has partnered with Subway and two other major merchants to launch ‘chatbots,’ which are robots that simulate human conversation. The Subway iteration allows you to order a custom sandwich for pickup, something of a digital version of walking down the chain’s sandwich assembly line.” Cheesecake Factory “allows shoppers to purchase and send out gift cards.” FreshDirect lets shoppers “place orders for groceries and meal kits. The bots will be found within Facebook’s popular Messenger app, and will be powered by Masterpass, the credit card giant’s digital wallet.”

“The debut of the bots will provide a fresh test of shoppers’ appetite for what the industry has dubbed ‘conversational commerce,’ the idea of making a purchase or other customer service transaction through A.I.-powered messaging … Consumers are spending more time online, and yet they are concentrating those minutes in a very limited number of apps. Retailers … are realizing that the best way to snare your interest online might not be with a killer app of their own, but by creating bots that live in the apps that you already use.”

“Facebook has said that more than 33,000 bots have been created for its Messenger app so far. This latest batch demonstrates how differently businesses are approaching the technology at this early stage of the game.”

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Cars That Stare Back At You

The New York Times: “Using cameras with facial recognition software and other biometric indicators, automakers are looking to personalize the driving experience with cars that stare back at you, quietly adjusting seats and driving modes. They may even anticipate your wants and desires by playing your favorite music based on your mood. And it’s not only about convenience, but also about the possibility of improving safety and security.”

“Honda’s NeuV concept car, for example, has a large customizable LCD dashboard and a cloud-connected, onboard computer that uses artificial intelligence to interact with drivers. NeuV employs what the company coyly refers to as an ’emotion engine’ to grease the wheels of the conversation, and its automated personal assistant can read ‘facial skin vibrations’ to help it isolate the driver’s voice and better understand spoken commands.”

“Some elements of the personalized driving experience are already coming to cars. By the end of the year, Ford plans to add Amazon’s Alexa personal assistant to some of its cars … It will not only allow personalized music stations to play with a voice command, but also enable drivers to juggle chores like adding items to an existing grocery list with just a few words.”

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Emotion Detection: The New Face of Customer Service

Medium: “Companies like Microsoft, Kairos and Affectiva are staking claims in the world of emotion detection. These technologies read faces to detect emotions … Emotion detection will initially be used to measure ad effectiveness and to optimize ads and content. This same emotion detection technology will be able to help customer service agents better manage the their customers’ expectations. Human agents will be able to monitor emotions and mood and make offers to increase satisfaction or cross sell additional products at opportune times.”

Meanwhile: “Imagine that you had a questions that you wanted to ask your doctor, so you launch the HealthTime app and the image of a human agent pops up on your phone asking, ‘How can I help?’ The service always loads instantly, and … you never have to re-explain your issue or question. The agent is consistent — it’s the same human avatar every time — and he/she is non-threatening and even fun to chat with …The avatar is never rude or condescending because the AI literally knows what that experience looks like and can intervene before such behavior appears.”

“HealthTime may take a minute to research or come back to you with more specific questions, but if the service can’t find the answer shortly, then it calls you back at a convenient time. In fact, the service can tell how you are feeling right now, whether you want to be chatty, cheered up, or you just want to cut to the chase; it senses when you start to get irritated and compensates; and it intentionally ends on a high note delivering a shot of satisfying dopamine right at the end of the call.”

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Infinite Personalization: A Layer Cake of Fake

David Siegel: “Infinite personalization comprises the artificial intelligence-driven, big-data based tools that allow algorithms to build a personalized Internet echo chamber customized just for you, designed to make you feel great. Infinite personalization feeds you the real, the fake, and everything in between, with the simple goal of holding your attention and getting you to come back for more. It is the process by which companies can measure, match, and predict consumers’ individual preferences with amazing accuracy and then tailor offerings to maximize revenue.”

“Particularly when it comes to information, however, infinite personalization has a dark side … Today, each and every one of us has a custom-designed experience based on our past preferences … One result is that Americans seem to be losing a certain commonality of experience—even, in some cases, within the same household … The problem is likely to get worse. The technology of infinite personalization is getting so good that it’s debatable whether we choose our information sources, or the other way around.”

“The scientific method and the advent of artificial intelligence offer us the promise of greater empiricism and a more evidence-based understanding of reality. Perversely, infinite personalization seems to deliver the exact opposite. Worse yet, we are still in the early days of this information revolution. The ability to use such tools to shape our thinking will only grow more powerful in the coming years. As individuals and as a society, we should be very wary about their potential to warp our perspectives.”

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Artificial Storytelling: Not ‘Fake News’ Exactly

Fast Company: “Connecting with an audience has always been something of an art form—it’s part of the magic of a great storyteller. But AI is steadily converting it into a science. The AI-driven marketing platform Influential uses IBM’s Watson to connect brands with audiences. It finds social media influencers who can help spread a brand’s message to target demographics in a way that feels authentic.”

“Ryan Detert, Influential’s CEO and cofounder, says that the tool uses two of Watson’s services, Personality Insights and AlchemyLanguage, to look at the content written by an influencer, analyzing that text, and scoring it across 52 personality traits—like ‘adventurousness,’ ‘achievement striving,’ and ‘openness to change.’ To date, says Detert, Influential has gathered these insights on 10,000 social media influencers with over 4 billion followers altogether.”

“Influential worked with Kia on a 2016 Super Bowl ad featuring Christopher Walken, and Detert notes … ‘The more the brand and influencers’ voices are aligned … the greater the engagement, sentiment, ad recall, virality, and clicks.’ The influencers that the AI technology pinpointed, says Detert, ‘outperformed their regular organic content with these branded posts.’ In other words, the machine learned how to connect with the influencers’ fans even better than the influencers themselves did.” Here’s the spot:

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