Rob LoCascio is the founder and CEO of LivePerson.
You may not know me or even my company, LivePerson, but you’ve certainly used my invention. In 1995, I came up with the technology for those chat windows that pop up on websites. Today, more than 18,000 companies around the world, including big-name brands like T-Mobile, American Express, Citibank and Nike, use our software to communicate with their millions of customers. Unlike most startup founders who saw the birth of the internet in the mid-1990s, I am still CEO of my company.
My longevity in this position gives me a unique perspective on the changes that have happened over the past two decades, and I see one happening right now that will radically transform the internet as we know it.
When we started building websites in the mid-’90s, we had great dreams for e-commerce. We fundamentally thought all brick-and-mortar stores would disappear and everything dot-com would dominate. But e-commerce has failed us miserably. Today, less than 15 percent of commerce occurs through a website or app, and only a handful of brands (think: Amazon, eBay and Netflix) have found success with e-commerce at any real scale. There are two giant structural issues that make websites not work: HTML and Google.
The web was intended to bring humanity’s vast trove of content, previously cataloged in our libraries, to mass audiences through a digital user experience — i.e. the website. In the early years, we were speaking in library terms about “browsing” and “indexing,” and in many ways the core technology of a website, called HTML (Hypertext Markup Language), was designed to display static content — much like library books.
But retail stores aren’t libraries, and the library format can’t be applied to online stores either. Consumers need a way to dynamically answer the questions that enable them to make purchases. In the current model, we’re forced to find and read a series of static pages to get answers — when we tend to buy more if we can build trust over a series of questions and answers instead.
The second problem with the web is Google. When we started to build websites in the ’90s, everyone was trying to design their virtual stores differently. On one hand, this made them interesting and unique; on the other, the lack of industry standards made them hard to navigate — and really hard to “index” into a universal card catalog.
Then Google stepped in around 1998. As Google made it easier to find the world’s information, it also started to dictate the rules through the PageRank algorithm, which forced companies to design their websites in a certain way to be indexed at the top of Google’s search results. But its one-size-fits-all structure ultimately makes it flawed for e-commerce.
Now, almost every website looks the same — and performs poorly. Offline, brands try to make their store experiences unique to differentiate themselves. Online, every website — from Gucci to the Gap — offers the same experience: a top nav, descriptive text, some pictures and a handful of other elements arranged similarly. Google’s rules have sucked the life out of unique online experiences. Of course, as e-commerce has suffered, Google has become more powerful, and it continues to disintermediate the consumer from the brand by imposing a terrible e-commerce experience.
I am going to make a bold prediction: In 2018, we will see the first major brand shut down its website.
There also is a hidden knock-on effect of bad website design. As much as 90 percent of calls placed to a company’s contact center originate from its website. The journey looks like this: Consumers visit a website to get answers, become confused and have to call. This has become an epidemic, as contact centers field 268 billion calls per year at a cost of $1.6 trillion.
To put that in perspective, global advertising spend is $500 billion, meaning the cost of customer care — these billions of phone calls — is three times more than a company’s marketing expenses. More importantly, they create another bad consumer experience. How many times have we been put on hold by a company when it can’t handle the volume of incoming queries? Websites and apps have, in fact, created more phone calls — at increased cost — and upended digital’s promise to make our lives easier.
There is something innate to our psychology in getting our questions answered through a conversation that instills the confidence in us to spend money. This is why there is so much chatter about bots and AI right now. They tap into an inner understanding about the way things get done in the real world: through conversations. The media are putting too much focus on bots and AI destroying jobs. Instead, we should explore how they will make our lives easier in the wake of the web’s massive shortfalls.
As I have discovered the truth about e-commerce, in some ways it made me feel a sense of failure from what my hopes and dreams were when I started in the industry. I have a lot of hope now that what I call “conversational commerce” — interactions via messaging, voice (Alexa and so on) and bots — will finally deliver on the promise of powering digital commerce at the scale we all dreamt about.
I am going to make a bold prediction based on my work with 18,000 companies and bringing conversational commerce to life: In 2018, we will see the first major brand shut down its website. The brand will shift how it connects with consumers — to conversations, with a combination of bots and humans, through a messaging front end like SMS or Facebook. We are already working with several large brands to make this a reality.
When the first website ends, the dominoes will fall fast. This will have a positive impact on most companies in transforming how they conduct e-commerce and provide customer care. For Google, however, this will be devastating.