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Social media management business Hootsuite has acquired artificial intelligence chatbot company Heyday for $60 million.
Vancouver-based Hootsuite announced the deal Tuesday, saying it wanted to buy Montreal-based Heyday because the e-commerce sector is rapidly moving onto social and messaging platforms and the purchase will give it more opportunities to help brands elevate their customer experiences.
“Social is the new interface of commerce and customer care. Modern day brands have to manage a multitude of daily interactions and conversations at scale - which is impossible to do without AI automation,” said Hootsuite chief executive Tom Keiser, in a release.
“With the acquisition of Heyday, Hootsuite will now give AI capabilities to marketing, sales and support teams globally so they can deliver exceptional experiences at scale.”
Expanding its services is key for Hootsuite because the social media management space has become increasingly crowded in recent years as platforms have realized the value in social media management and began offering their own scheduling and analytics tools.
Hootsuite rivals like Buffer, Sprout Social and Later have also sprung up and tried to corner the same market.
Hootsuite's acquisition could help it stave off some of the competition and draw in clients attracted to Heyday's software.
The company said Heyday and Hootsuite will operate as separate entities, but Hootsuite plans to use Heyday's AI for its own products.
Hootsuite, which was founded in 2008, said the deal closed last week and will help it build relationships with a slew of Heyday customers, including Lacoste, Decathlon, Cirque du Soleil and Danone.
Bruce Winder believes the deal could be lucrative for Hootsuite because AI chatbots are increasing in popularity.
“It is a growing area and I do think it's going to continue to grow,” said Winder, an independent retail analyst and the author of “Retail Before, After and During COVID-19.”
He's seen chatbot technology cropping up more and more in messaging services operated by social media platforms and on e-commerce websites.
While AI chatbots used to be quite rudimentary, he said they're now growing in sophistication and people are becoming more used to interacting with them for simple queries instead of heading to a store of picking up the phone.
“It's not going to replace staff in stores, but it can help augment and complement staff in stores,” Winder said.
“I would rather chat with a bot than phone a 1-800 number, that's for sure.”
Winder believes the pandemic has already accelerated that habit for many people and helped those who were hesitant or new to certain technology get more comfortable with services like chatbots.
“Everyone went online, people are shopping more online, used to getting help online and communicating online,” he said.
“All the arrows point toward this technology becoming more important in e-commerce and this appears to give Hootsuite another option on their menu that they can offer as it becomes more topical.”