Square on Tuesday announced its acquisition of Eloquent Labs, an artificial intelligence (AI) tech company which automates responses to customer questions and feedback, according to a Square blog post. Square stated that Eloquent's AI services can "level the playing field for businesses of all sizes by providing sellers efficient ways to interact with their customers," per the post.
The move comes after Eloquent Labs raised $1.5 million in seed funding in 2017, according to PitchBook data. Other startups, including LiveChat, DigitalGenius and Olark have entered this sector and have raised more money, which may have factored into Square's decision to acquire eloquent labs, according to Techcrunch.
Now that it has Eloquent Lab's technology, the company aims to "advance messaging across our entire ecosystem," per Square's post.
While it's unclear just how Square plans to use Eloquent Lab's technology, the acquisition is part of a broader trend of retailers and ancillary companies adopting chat by technology to engage with consumers. And for good reason. A recent study by Juniper Research estimated that retail sales from chatbot-based interactions are forecast to drive $112 billion by 2023.
In some cases, companies have been able to use artificial intelligence and speech recognition to engage with consumers in creative ways. Take, for example, The Miracle Mile Shops at Planet Hollywood Resort & Casino in Las Vegas and its "witty" and "sassy" chatbot, Jules. As more major retailers deploy artificial intelligence and chatbot tools, researchers anticipate that customers will become more comfortable with them, but it will be a long time before they replace the human interaction — if ever. A 2018 Sitel Group report revealed about 70% of consumers said they would rather speak to a human customer service representative than a chatbot or digital customer service rep.
Though the platform has positioned the acquisition as a move for small business owners, it's unclear how many independent merchants currently use its platform. There has been an increase to woo small business owners to utilize technology that was formerly only available to larger corporations. Earlier this week Google unveiled CallJoy, a service that records, transcribes and encrypts conversations and offers text solutions as a means to streamline efforts to aid consumers. And in April Shopify rolled out a new suite of devices that allow for contactless, secure payments, software for cross-channel inventory management and a consolidated backend that connects with online operations. Square also unveiled products including Square Online Store and Square for Retail to allow merchants to add e-commerce to their sales operations, including tools like Instagram selling, shipping and in-store pickup.