Holiday Prep: Hammacher Schlemmer toys with speech recognition

This is the first in a series of stories about retailers bolstering their Web sites in time for the 2005 holiday shopping season. Stay tuned for more.

It’s the high season for catalog retailer Hammacher Schlemmer, and that means its call centers are inundated with phone orders and questions about the company’s lineup of unusual apparel, electronics and home items.

“Even with the call center fully staffed, we can’t take all the calls we get,” says Don Rogers, vice president of operations at the Fairfield, Ohio-based retailer.

To meet peak call volumes, Hammacher Schlemmer augments its staff with third-party call center services. Beginning this holiday season, it’s also using speech-recognition technology to automatically handle some of the more straightforward calls, such as those related to order status and catalog requests.

The technology that automates these calls is from Voxify. The vendor’s speech applications don’t employ the familiar “Press or say 1” methods that some interactive voice response (IVR) systems do. Rather, Voxify’s speech-enabled applications are programmed to navigate natural conversational exchanges.

Built-in features include the ability for automated agents to adjust and respond to a caller, as opposed to simply following predefined call paths. The agents can pause when a caller needs more time, repeat and clarify what a caller is asking for, and offer options.

This conversational approach is one of the primary reasons Hammacher Schlemmer chose Voxify’s software, Rogers says. The retailer had considered using speech-enabled technology in the past to handle customer calls, but wasn’t satisfied with sterile, inflexible IVR products that might have turned away customers.

“We’ve looked at doing this a number of different times over the years. We never would have done it with [traditional IVR], and we never would have done it with the traditional business model — which is you make this huge investment in hardware and software development, and then you hope you get a payback,” Rogers says. “We’re not big enough. We can’t make those kind of investments.”

Voxify’s technology is user-friendly and clean enough that customers will accept it, he says. In addition, the software is hosted, so the retailer didn’t have to invest in any on-premises hardware or software. Voxify only charges Hammacher Schlemmer for calls that get handled by the automated agents.

“Our business is extremely centered in November and December. It’s really hard to justify big investments in technology because you need them for such a short period of time, and then they virtually sit idle,” Rogers says.

Checking up

Hammacher Schlemmer uses three of Voxify’s automated agents. The first is a welcome agent that acts as a filter to determine if each call can be handled automatically or needs to be routed to a live agent in the call center.

The second is an order status agent, which Hammacher Schlemmer deployed in June. This agent lets customers retrieve their the status of their orders. It can tell a caller whether or not an order has shipped, and if it’s en route, it can provide details such as the shipment’s status in the UPS supply chain.

The order status agent also handles calls related to returned merchandise. If an item has been shipped back to Hammacher Schlemmer, the agent can tell callers if a replacement product has been reshipped, or if an account credit has been processed.

In August, Hammacher Schlemmer deployed a third agent, designed to handle catalog requests and address changes. Callers can make or alter a catalog request, which gets recorded. The software then translates the callers’ speech into text, then exports the text file to Hammacher Schlemmer.

It makes sense to handle functions such as these with automated agents, since the transactions are simple, Rogers says. “To take a customer service representative’s time on the phone with a customer to do this… it’s just a waste,” he says. “More and more, people are beginning to feel that way themselves. They just want the information, they don’t need to talk to someone.”

The automated agents are particularly helpful around the holidays, when calls related to order status spike. “Last year in November, about 9% of calls were about order status. In December it was 13%,” Rogers says. “It’s just human nature: The deeper we get into December, the more people get nervous about whether their gifts are going to get there.”

So far this season, the Voxify agents are handling about 6% of calls to Hammacher Schlemmer. “That’s a pretty sizable number of calls that they’re taking, at about half of the cost [of a live agent]. That’s pretty much a winner for us.”

Compared to the cost of outsourced call center agents, the savings is even greater, Rogers adds. “Every call I don’t give them I’m saving even more than 50%.”