AI: Your New Personal Shopper

Marc Teerlink

With artificial intelligence (AI) recommendations driving 75% of Netflix selections and 35% of Amazon purchases, businesses must start looking to market to their newest customer – AI. As the technology continues to mature, it will be able to augment mundane and/or routine purchasing decisions that are still important to the customer but are not necessarily the most experiential or engaging.

When AI offers the ability to offload routine actions and support and extend ongoing communication between brands and customers, the businesses that are investing heavily in AI will be the ones that can sell through, and to, to AI assistants. It’s critical for businesses to stay ahead of this, as AI assistants are bound to have significant purchasing power in the near future.

A virtual assistant, also called an AI assistant or digital assistant, is an application program that understands natural language voice commands and completes tasks for the user.

Handing over purchasing decisions

Think about today’s modern consumer. Our brains have gone into cognitive overload from the complexities in our everyday lives – career workload, social media, digital and physical advertisements, personal life – the list goes on.

To cope, consumers will rely on AI to push repetitive, mundane brand interactions into the background and free up precious mindshare. Consumers will welcome the opportunity to leverage AI to interact with brands to purchase, for example, “one pack of plain white paper towels from the vendor offering the best deal.”  My favorite example is “get me some new blue pens,” where the AI uses my personal order history and reviews to order my pens instead of picking the first set of blue pens from a list. Just think for a second about the amount of click-through time needed to make that order manually from your phone, versus the speed of the simple voice command, “get me some new blue pens,” where the AI does the heavy lifting.

AI takes on background shopping

There will always be certain types of shopping, let’s call it meaningful shopping, that will require customers to truly interact with brands. For example, people will likely never instruct AI to “purchase my wedding dress” (or in my case, my tie). That said, there is a type of shopping we’ll classify as “background shopping,” where customers consider the items routine purchases or even subscription-worthy and can be done on a repeatable basis – think toilet paper, domestic shopping, house cleaning items, etc. Items that must be re-ordered based on need rather than a fixed schedule.

While AI might not always get the decision right the first time, it will begin to sort through available options based on your set parameters and, over time and supported by your input, it will learn and adjust its algorithms to mirror your preferences. Because of the convenience and sophistication that AI will offer for background shopping, it will become a no-brainer for consumers to utilize AI assistants.

The challenge now falls on creating the relationship between AI and brands – how do you make your brand stand out to an AI assistant? And how does the brand retrain human employees towards “human + machine scenarios”  where employees will be able to seamlessly extend the brand experience for those situations beyond the AI assistant?

Persuading AI to buy

Companies have a delicate balance and choice going forward.  Companies that want to avoid falling into the background shopping category will have to make an even greater effort to determine what makes certain consumers think about shopping for a product as a meaningful experience rather than just a chore or menial task.

Still, there are some products and services that will undoubtedly fall into “background shopping.” Rather than trying to make them stick out as meaningful experiences and ultimately failing, organizations can take a different approach: catching the attention of AI assistants.

Organizations must take a strong look at what can set them apart from competitors, whether it’s eco-friendly processes to resonate with green shoppers, unscented formulas for sensitive skins, or industrial-sized packs of goods for a big family. This is the next generation of brick-and-mortar trade promotion management: while manufacturers used to pay retailers for the best spots on the shelves, we’re now looking at a digital version to drive product placement within the AI platform.

Though there is still much uncertainty on how brands will reach the equivalent of premium shelf placement for AI, it’s clear that online advertisements and paid social programs aren’t going to cut it when it comes to AI making the purchasing decision.

In short and thinking forward, there is a new type of choice as we try to bridge the gap between brands and consumers. Organizations must choose when and how to include AI assistants in their strategy discussions for getting products and services into the right hands – their end customers.

SAP worked with more than a dozen industry experts to uncover five trends that will determine the customer experience over the next decade. “The Future Customer Experience: 5 Essential Trends” report examines each of these trends and offers recommendations for how brands should respond now to prepare.

This blog originally appeared in CustomerThink.

Marc Teerlink

About Marc Teerlink

Marc Teerlink is Global Vice President of Intelligent Enterprise Solutions at SAP. He drives the strategy, vision, and production of intelligent technologies delivered through the SAP Leonardo Portfolio. Prior to his current role, Marc was IBM Watson’s Chief Business Strategist, where he oversaw the new offerings portfolio for the Watson platform during IBM's formative years of artificial intelligence. During his time at IBM, Marc executed a number of successful transformational projects and created and delivered cognitive computing solutions and services offerings. Before IBM, he built expertise as a banker, consumer products business manager, consultant, and change leader within nine countries across three continents