We are no longer passive consumers. Long gone is the one-way, single message broadcast from brand to customer. Today, the relationship between consumers and brands is much more complex. Brand propositions are dynamic, multi-directional, and a multi-channel value exchange where consumers are increasingly able to define the brand proposition based on personalization.
Nothing illustrates this better for me than the fact that me and my family have started instructing a talking cylinder in our living room, telling it to turn lights on, play music, and search for things like holiday deals. Like ours, an estimated 2.7 million homes in the UK are already actively using an Amazon Echo or a Google Home device. This is all before Apple has even actively entered the UK market with its HomePod, and we all know its potential to drive adoption of this technology even further.
Beyond the novelty factor, the appetite for interacting with artificial intelligence-powered voice-activated technology is clearly there. However, asking Alexa to play a favorite song on Spotify is one thing – are consumers actually proactively interacting with the technology to browse or purchase items?
The simple answer is yes.
Today’s consumers are wholly and undeniably in charge of their shopping experience. People expect to be able to control the information they receive, the choice of products they browse, which channels they shop on, and when. By leveraging data-driven insight, AI is at the forefront of facilitating this as a neat value exchange between brands and consumers.
In research commissioned by SAP Customer Experience at the end of 2017, of the 1000 UK consumers surveyed, 31% trusted their AI-enabled digital home devices to help make important decisions like gift research and purchasing during the recent Christmas shopping season. This is more than double the number in previous years- with those who used the device for more than a year, considerably more likely to use it to actually research gifts and purchase items.
With familiarity, users are clearly getting more comfortable with the idea of interacting with machine learning technology to make important shopping decisions. Significantly, this is also an indication of the level of trust required for people to make the leap of faith to make AI-led technology an integral part of the buyer journey.
Voice-activated: The path to trust
Trust has been a well-known friend and adversary for brands, since that first ever brand-to-buyer transaction. It’s no different today. People need to feel like they can trust the person or entity they buy from or interact with. In-store is an obvious human to human interaction and a tangible evidence of the product, online is visually representative of human interaction and a product.
But what if the first interaction with a brand or product for a customer is an all-talking, singing, listening (but not yet dancing) device?
It’s easy to assume that the quality and “coolness” of the technology alone will influence people to actually use it. Also factor in the relatively low price points of these devices and the potential omnipresence of the AI – making itself accessible everywhere and anywhere in the home, office, and now even in cars. However, though accessible emerging technology has the potential to make consumer engagement even richer, consumer adoption of technology is not enough and there are still barriers to overcome to turn intent into purchase.
For trust in AI to be cemented, it needs to firstly perform as expected. It’s true that only a modest 55% of those who owned a ‘smart’ in-house device and had shopped with it for a year or more felt that their device knew them well enough to be trusted to recommend gifts to buy. This clearly being a missed opportunity for brands to engage with established users to influence purchase behavior and to recommend new products or services based on preference.
This isn’t necessarily a reflection of a lack of faith in the actual technology. It’s worth also noting that that only 26% of those who had only just started using the device to shop, trusted the AI to make gift recommendations. What this means is that familiarity and usage ultimately drives better trust. From a data and technology perspective this can also be attributed to the AI making better recommendations after a longer period of time, with a deeper understanding of the user’s regular behavior and preferences.
We also mustn’t forget that when brands first moved to desktop and then to mobile, it took time for people to trust these platforms to shop. Brands need to think about how they best seize the full potential of the technology and data available to harness AI and voice-activated devices in a way that works for today’s shoppers.
The age anomaly & voice-activated devices
The impetus is now on brands that create strategies for voice-activated devices to deliver an enhanced version of the responsive, personalized and frictionless experience shoppers expect from the now “traditional” digital channels.
The SAP Hybris survey illustrates this in a powerful way. As was not the case for desktop or mobile fifteen years ago, the 40 – 71+ age group surveyed over Christmas were actually highly engaged with their in-home devices; 44.6% and 54% researched and purchased gifts in the age groups 53-71 and 71+ respectively. Which interestingly, makes the most active shoppers on these digital devices those over the age of fifty.
Since the younger generation of the Millennium were naturally early adopters of desktop and mobile shopping, it’s easy to assume the “Grey Shopper” to be less likely to adopt AI-powered technology, but the research proves my assumption wrong.
However, going back to the connection between trust, performance and frictionless experience – the more natural voice-activated prompt of the likes of Echo, and the convenience of home shopping seems to be overwhelmingly appealing to the older age group. Brands would be wise to quickly tap into this, particularly since Baby Boomers have disposable incomes in the way today’s millennials don’t.
Engaging in the moment
Regardless of age, brands need to work on encouraging and reassuring the hesitant, inactive home shopper. Modern technology is poised to do this, but businesses must think beyond the technology, and focus first on building consumer trust and an experience that is both relevant and personal.
Whatever form in-home devices evolve into in the future, with AI at its core, they have the unique ability to leverage both implicit and explicit customer behavior in an unprecedented way. If brands use this insight to develop a single view of customers across a number of channels they will learn to understand their real-time needs, and build this trust. Only then will the curious talking device on our living room table create true value for both brands and shoppers alike.
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This post was originally published on Engage Customer, and has been republished here with permission.
