Can IBM's Watson Change How People Shop?

By Daniel B.

IBM's Watson supercomputer has done everything from appearing on the game showJeopardy! (beating multi-time winners Ken Jennings and Brad Rutter) to aiding doctors in making decisions in how to treat cancer patients.

Now the supercomputer's processing power has been turned to another task: helping people shop during the holiday season. IBM has launched a new free app for iPad and iPhone that helps people understand why some holiday trends are occurring. Called Watson Trend, the app also predicts what the hot products are so people can buy them before they sell out.

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Watson Trend.

It's an intriguing idea that can help consumers in the short run (you might want to go buyStar WarsLegos as soon as you finish reading this), which could provide helpful information for retailers in the future.

How does it work?The Watson Trend app "distills the sentiment of tens of millions of online conversations by scouring 10,000 sources across social media sites, blogs, forums, comments, ratings and reviews," IBM explained in a press release. The information produced goes beyond just determining which products are hot. Target,Wal-Mart, or any other major retailer have deep inventory tracking that shows them that.

Instead, Watson Trend gives a reading on how people feel about the products they have already bought or are thinking about buying. The company explained how it works, at least partially, in the press release:

So, while the app is only offering this data to help consumers, in the long run, it could tell chains like Target and Wal-Mart that people are experiencing great satisfaction with theirStar WarsLegos and plan to buy more, but have been frustrated by minor injuries from using their two-wheel "hoverboard" self-balanced scooter.

One piece of data could tell the chain it needs to stock more Legos, while the other could let it know to stock up on helmets, bandages, and knee pads. Those are both theoretical examples, but that's the type of data Watson Trend could deliver if it moves from being a free consumer app to becoming a service for retailers.

It's not a business yetWhile IBM monetizes Watson's abilities and data in a variety of ways,and a retailer could engage its help,the company does not view the Trend app as a business, at least not right now.

"We see the launch of this IBM Watson Trends as an opportunity to connect with clients, friends and family in a way that makes our technology and industry expertise understandable to the average person," IBM Commerce'sDoug Fraim told The Motley Foolin an email, "Our hope is that this free app inspires people to imagine how cognitive commerce can improve their lives at both home and at work."

That sounds nice, and it may well do that. Trend has real potential as a business tool, and the free app seems like a great way for IBM to publicize the kind of data it can deliver. It's not a publicity stunt akin to appearing onJeopardy!,but it's clearly an attempt to keep Watson in the public eye.

Useful, but a little hard to followReading what IBM gleaned from the data in its press release offers a number of useful takeaways, including the aforementioned Lego data and the fact thatMattel's new Hello Barbie is in demand not because of the doll's style, but because parents like its ability to interact with kids. In a broad sense, Watson Trend has shown that "edutainment" toys will be popular gifts, as will wearables.

It's harder to actually use the app and find information like that on your own. Watson Trend offers a list of top products by category and shows "the story behind the trend" and "the numbers behind the trend" as well as a selection of what people are saying. It's interesting data, but it's difficult to make any conclusions from it as a consumer.

This Watson kid has potentialClearly the business play for IBM is selling Watson's retail prediction skills to chains like Wal-Mart and Target. The app, or at least the company's interpretation of its data, shows that the supercomputer can identify trends and provide useful, actionable information.

Watson Trend won't change how consumers shop this year, but it has potential as a consumer and a retail tool in coming years. Currently, it's more of a novelty, where people can read about items they might buy and learn how others feel (at least a little bit). Going forward ,it's clear the potential exists to do much more, and IBM could push Watson as a smart way for consumers and retailers to know what's going to be hot while there's still time to act on that information.

The article Can IBM's Watson Change How People Shop? originally appeared on

Daniel Kline has no position in any stocks mentioned. He prefers the "Happy birthday Paulie" robot from Rocky IV. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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