IBM acquires Fluid's personal shopper unit to beef up Watson

Dive Brief:

IBM has acquired the Expert Personal Shopper (XPS) division of Fluid, whose bot-based conversational product recommendation platform already leverages IBM's Watson artificial intelligence technology.
Delivered in the form of a software-as-a-service solution over the Internet, XPS uses Watson-enabled natural language interaction to assist shoppers across digital channels, creating a more engaging, personalized and relevant online shopping experience.
IBM and Fluid began working together three years ago, and Fluid's resulting XPS platform has been deployed by retailers such as The North Face and 1-800-Flowers. Financial terms of the acquisition were not disclosed, but the deal includes the XPS solution, and several members of the XPS team will become part of the IBM iX (Interactive Experience) group.

Dive Insight:

The phrase "conversational commerce" is being dropped with rapidly increasing frequency all across the retail sector as we near the end of 2016, though XPS may have been one of the earliest realizations of the concept. 1-800-Flowers rolled out its XPS-powered Gifts When You Need solution in May of this year, though the deployment by The North Face came way back in the primordial soup era of conversational commerce, otherwise known as 2015.

Much of the retail sector activity around AI is still at the testing phase or happening in small samples, but retail's interest appears to be real. Just in the last few months, we have seen Macy's test a personal shopping assistant built around Watson, and retailers such as Etsy, Amazon, eBay and others put various AI technologies to work for them. Just last week, Staples said its newly-enhanced Easy Button would use IBM Watson technology.

In addition, the two big retailers that had engaged with Fluid — The North Face and 1-800-Flowers — now become more direct customers of IBM, a company which has catered to retail in a number of ways over the years, supplying point-of-sale systems and IT outsourcing expertise among them. Now IBM is pushing hard to become the chief enabler of the conversational commerce era for retail and so many other industries.

IBM has made several acquisitions in the last year to beef up Watson and help drive it deeper into retail and other sectors: IBM initially invested in Fluid in 2014, so it is not a surprise to see Big Blue's interest in the smaller firm advance to acquisition. But timing is everything, and IBM has recognized that retail, with a growing desire to create more automated (but highly personalized and customized) shopping experiences, is ready to embrace AI.