Nibble’s AI Hagglebot Makes Deal-Making Digital

Haggling, clipping coupons , web browsers automatically scouring the internet for discount codes . It’s human nature to get the best possible deal. It’s also human nature to outsource that effort to someone (or something) else.

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Meet Nibble: an artificial intelligence (AI) negotiation platform empowering businesses and brands to negotiate one-on-one with their customers on demand. Through a combination of academically backed negotiation science and industry-recognized conversation design, according to co-founder and CEO Rosie Bailey, it delivers win-win outcomes at scale.

“Nibble allows a consumer to negotiate their own personalized deal in e-commerce by chatting to our chatbot for about 60 seconds,” Bailey told Sourcing Journal. “The technology uses our own natural language models and algorithms , trained on over one million negotiations with Nibble.”

The UK-based startup developing an AI negotiation chatbot for e-commerce customer engagement was founded in 2020 and raised $3.3 million in a seed funding round led by London-based venture capital firm Venrex in 2022. The firm allegedly boasts 200 clients, including makeup brand Iconic London and mattress company Eve Sleep. These clients have, per Bailey, seen 20-plus percent improvements in sales, AB tests and better profit margins. According to a LinkedIn post, Nibble agreed deals for over $1 million worth of purchases in July. The personalized pricing platform takes a 2 percent cut of sales.

“A real-life negotiation in person, where the price agreed worked for buyer, worked for seller, and the process was friendly and fun,” Bailey said of the inspiration behind the bot. “We think negotiations can be win-win and help build relationships.”

Nibble’s nucleus is Atomic Copy, the name given to the company’s technical approach to conversation design. Generative AI (from OpenAI ) is also employed for a few specific uses within the technology.

“We break down Nibble’s responses into small phrases which can be used like Lego bricks to construct a conversation,” Bailey said. “It allows us to tightly control the use of language because how you say things is just as important as what you say in a negotiation.”

While the concept of a hagglebot isn’t novel— Walmart enlisted AI-based platform Pactum to barter with its suppliers in 2021 and negotiating support systems in general date back to the 1980s, according to BBC—and personalized pricing is a long-utilized business strategy, Nibble is gaining traction as gamifying shopping experiences mount in popularity.

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But not everyone is a fan of Nibble, concerned that encouraging the retail market to behave like the stock market is risky, as negotiation opens the floodgates for a race to the bottom . To that end, Bailey doesn’t recommend using the chatbot for everything, and certainly not in situations where brands are “happily making full price sales.”

“Most of our clients use Nibble as an alternative to other promotions and it is more targeted and more subtle than blanket discounts ; used this way, it’s the opposite of the race to the bottom and delivers margin improvements,” Bailey continued. “I think if the retail market could respond dynamically to supply and demand, we might be in a good position to tackle over-production and waste, so I don’t think ‘operating like a stock market’ is always going to be a bad thing.”

Bailey boasted about Nibble going live on fast fashion retailer Asos ’ website earlier this month on LinkedIn , noting that shoppers took to social media to voice their excitement. But commenters on the post were quick to note the concerns of overconsumption.

“Fast fashion is already cheap with a huge environmental and social impact. Overconsumption is one of the biggest problems,” marketing strategist Nat Libby wrote. “How does misleading shoppers into thinking they negotiated a discount on items that will now be priced to include this discount actually help the world?”

Bailey clapped back, commenting that while she, too, is worried about overconsumption , she “can’t pretend to have the solution to this huge issue.” However, she alleged that research revealed that “people value items they have negotiated for more highly” and perhaps this “plays a small part in helping people buy more thoughtfully.”

Neither Libby nor Sourcing Journal could find this alleged research backing Bailey’s claims.

A spokesperson for Asos told Sourcing Journal that Nibble was never accessible on asos.com, and the brand has no plans to introduce it on asos.com. Nibble is, however, a feature the company is testing on a trial basis on asossamplesale.com, a separate, off-site clearance channel for old stock.

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