A Breath of Fresh Air (AI Retail): The CX Perspective

From 1996 to now

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January 18, 2024

In 1996, as a young post-graduate student, I remember once trying this new thing called ‘a Yahoo search engine’ to try and find information related to an essay I was to write (using technology to try and get out of doing any actual work is not a new student behaviour).

It was a clunky, slow, and ultimately fruitless experience. The internet was going to be the next big thing apparently. I wasn’t so sure. Back then, the ‘worldwide web’ (web 1.0) was really just a collection of networked corporate brochure sites, but it represented the first seeds sown regarding how branding and retail consumer connections would evolve. It had huge potential but initially was a clunky user experience.

The Rapid Advancements in Technology and Consumer Connectivity

The subsequent technology advances accelerated quickly. Desktops became laptops, dial-up became broadband, internet connectivity reached critical household mass, and consumer: brand connectivity became 24/7 with the advance of mobile, WiFi and 4G.

Looking back, again I remember reading expert commentary, sometime around 2001 after the dot.com crash, that having the internet on our mobile devices would be the next significant consumer:  retail catalyst.  It was hard to understand, holding my then Nokia 3310 in my hand, that the screen on which the most exciting thing was a snake, would be the window to anything of significance. Again, the future potential was a very clunky user experience for now. Then the iPhone came along and that particular genie was out of the bottle.

The Emergence of Social Media and Its Impact on Retail

When we first used Facebook (launched in 2004) or Google Maps (launched 2005), few consumers realised their future power relating to retail and consumer behaviour. It just looked like new software to help you stalk your ex and plot a route to drive to see them.

Throw in 5G, voice-activation, big-data and social media with their advanced algorithms and the heightened customer experience around search, consideration, and buying all became more convenient. ‘Faster, better, and frictionless’ became a war-cry for most brand and retail professionals, as well as for the consumers they sought to serve.

AI: The Biggest Step-Change in CX

To put it simply, we have heard ‘this is going to be the next big thing’ many times over the last three decades. Sometimes the proposed advances actually have little effect (in-home 3D printing at scale is yet to happen) but sometimes, we need to listen. Artificial Intelligence is set to be the biggest step-change of all when it comes to consumer connections. It is that like that piece of the jigsaw you place that unlocks everything.

Today, at every event I perform, there is a question or complete agenda relating to AI. It’s the hot topic, affecting every industry. We all know it is here to stay, will change everything but most are still unsure as to exactly how it may affect their own brand or business, and more importantly, where to get started.

It’s like the internet in 1997 and mobile in 2001. We know it will change everything but most are unsure exactly how for them. From the debates and discussions I experience at events, there is clearly a fear from the average corporate executive around not knowing enough about AI and how it works. People are panicking. They feel they should know more, be doing more. They fear being left behind. They still don’t understand block-chain (does anyone?), and now its AI.

The power of AI to your brand and business CX

The first thing to say is that you don’t need a deep understanding of AI at a technical level. For example, most don’t know the inner workings of the petrol combustion engine that gets them to work in the morning, and nor do you have to. Most don’t know how the hardware and software actually works on the device on which you are reading this article right now. Again, you don’t need to. If it works and gives you what you need, that is enough. And so, while AI is exciting and yes, somewhat magical and mysterious, the first thing to say is not to tie-yourself up in knots trying to understand the technology. If you seek to develop a deep knowledge of natural language progression, generative tech, algorithms, and quantum computing, you may very well forget what actually is important – the application of the power of AI to your brand and business CX.

At its heart, Customer Experience (CX) is about just that – an experience the customer has when consuming or buying your product. To make an impact, to cut-through today, it must go beyond simply a positive experience, satisfaction, meeting consumer expectations. It must deliver delight, sparkle, magic, and that is where AI helps.

Personalisation: The Heart of Future CX

I was going to write an article about the ’10 ways AI would change CX’ but decided I would simply focus on one, the one that really matters, personalisation.

This has long been a developing value for the modern consumer, but one that has largely been delivered devoid of intimacy and experience by most brands. Personalisation, despite the promises of big data, seems trapped in the 1990s. Beyond using my name and relatively blunt ‘because you previously bought this…’ tactics, it has failed to become an everyday reality in retail.

Physical store experiences are largely a commodity experience, devoid of any personalisation. Online experiences are only marginally better, simply storing previous items bought or buyer details. Preferences are stored on occasion but rarely creatively actioned.

AI will change everything

Imagine a world where you didn’t have to do any of the hard work when it came to searching and buying the things you need. A world of predictive demand, products and services tailored to your every whim.

AI will change everything because it will fundamentally change consumer expectations. Once that happens, your brand or business will be in catch-up mode unless you have already embedded AI as part of your consumer connection. As generative AI and virtual assistant/agents become every day, the nature of the consumer decision making process is set for significant change.

The AI driven virtual assistants alter our expectations as consumers. There will be some free-to-market players (with the usual sponsored ads), but eventually most of us will happily pay our monthly subscription to our preferred provider. Your AI assistant will know everything about you, from your business life, personal life, preferences, and purchase history. It will have access to every aspect of your digital life, your schedule, your payment methods, your location. But most importantly, it will take all the hard work out of making buyer decisions. It will be your slave.

A story about CX with AI

Let me give you an example. I am currently looking to book a skiing holiday with my teenagers in February. We have used the same resort for the last 3 trips, and so it is time to try somewhere new. To research resort options from two arrival airport choices, the transfer times to the resort, the flight date/times to suit my location and schedule, find accommodation to match said flights, read the hotel/AirBnB reviews for the accommodation, find private ski lessons and a resort that has other things to do – I’ll be honest I’m even tired writing all of that.

Previously, as a consumer, I would have used online search, had several browser windows open, hotels, flights, location searches, trust pilot, and spent hours going between them all trying to make it all tie together. I’d be using direct websites, third party agency sites, tourist sites, review sites. There would be thousands of permutations and likely combinations. It is exhausting and often circular in nature.  It is why actual travel agents are sometimes still worth their weight in gold.

With the current AI chat-bot type products, I can enter my requirements and get some hotel suggestions to match dates or run basic filters (hotel/chalet). But each bot is independent of the other. The bot running on booking.com has no link with the bot answering my query over on the resort app or the airline app. Again, as a consumer I am doing a lot of the work.

Imagine a world where AI and the bots are not app, website or brand specific. A world where they sit above everything, an AI virtual agent running queries across everything, at quantum speeds. And the best part, they work just for you, their master.

If I gave my future AI assistant the same problem, it will come back with one or two well researched options. It knows my travel preferences, the airports near me that I use regularly, the kind of accommodation I like, number of rooms, even bed size preference. As I form the query, it might generate a few questions of its own to further refine its work, and finally output the perfect resort to match my schedule. It will put together the flight itinerary, airport transfers, propose an ideal accommodation option, and create an itinerary of things to see and do off the slopes.

And the best part? If it sounds right (which it usually will be, as the system is always learning and will continue to generate better and better personalised product around its master) it will just ask if I want to book it. With one ‘yes’ answer, it will immediately buy/book my airport transfer cars for the 3 of us, flights including 20Kg bags and preferred seat allocations, book the self-catering apartment accommodation and order online groceries to be delivered to that location on the day after arrival, book the ski lessons, buy the ski passes, hire the skis required (based on the heights and weights of those travelling), and reserve the husky sledding and snow mobile trips for us all. Imagine how long it would take you to do all that as a customer. But with one ‘yes’ command it will all just happen.

There are consequences to all of this. In the past, if you worked for the tourist board of Val d’Isère, you might buy your way to the top of the Google search for ‘ski resorts near Lyon’ to maximise visibility for your product. In the new AI assistant/agent model, brands will still want to cut-through, but we may not be able to buy our way as easily.

Transforming Consumer Expectations

Now take that ski holiday example and multiply it across ever aspect of your life. Your 10-year-old is struggling with his school math, particularly around area, volume, and perimeter. His AI powered math tutor, a visual deep-fake style video-based product, puts together a series of Minecraft problems and games helping him understand the theory. Problems deeply personal to what he knows and already understands, making learning fun and unique. Meanwhile the same AI math tutor was helping your 14-year-old daughter understand the laws of demand and supply for her upcoming economics test using Taylor Swift ticketing problems. Your daughter is a huge Swiftie and now learning that economic theory makes sense and is personal and memorable.

You want to buy a new jacket and have an idea of the ‘kind of one you’d like’ in your head. In the past you’d have had to search the internet for hours to try and find the item as you imagine it to be. Now with Google’s SGE (Search Generative Experiment) you can simply generate an image using text prompts (ultimately from your mind), let the AI render it into reality as a 3D image on screen, and then ask to be shown items ‘like this’ that already exist for sale. Basically, you can bring any product from your imagination on to the screen, and find something like it for sale.

All this points to one thing – a consumer who expects more. Very quickly, we will look back and laugh at the amount of work, time, and effort we put into our previous product searching and buying. Much like the time we spent renting a VHS cassette tape (drive to the town, spend 20-minutes in the store, drive home, rewind the tape, repeat that all over again in bringing it back), it now sounds comical compared to using Netflix or Disney+.

So, what does this mean for you as a business or brand owner? Well think about it. Every consumer is going to get very used to being their own ‘master’. Friction, effort and comparing products will become a thing of the past. We will outsource more and more to our trusted AI assistant. Text will give way to voice, and voice probably to newer immersive technology. Everything will become easier, faster, frictionless.

If your business doesn’t offer the same, in every element of your CX delivery, you are going to look very irrelevant, very fast. This isn’t just about enabling AI systems in your business for customer service, but about running a deeply personalised, intimate, problem-solving business, a business that not only meets the demands of a more expectant consumer but personalises, predicts, and surpasses them.

AI: Enhancing Customer Intimacy and Service

And on that ‘intimate’ point, take AI therapy. The mental health issues facing society are significant, and waiting lists to see a therapist are of major concern in most markets. Before my psychiatrist colleagues attack me, I am not suggesting that AI can always offer a competing service to a qualified psychotherapist, but it can address some issues for some clients.

Many simply need to be listened to, need company, need a therapist to guide them through common issues around stress, anxiety, grief, or recovery. However, while waiting to see a mental health professional, AI Therapy will be quite intimate, using video deep-fake interaction. It will listen, advise, care, pose hard questions, challenge, empathise and guide. The moment we begin to share intimate space with AI interaction is the moment we accept that the technology game has changed.

AI will quickly become a PULL rather than a PUSH. Consumers expectations will change so fast, expecting faster and better, that your business will have no choice. It has already started in 2023, with the average consumer playing with generative AI for content and image creation.

To not have an AI enabled business will soon be like not having a phone number in the 1980s, a website in the 2000s or a social media presence today. AI isn’t something that you should be considering, it is something inherently better for CX delivery.

But the fear is real. The Hollywood writers’ strike showed that.  AI was set to steal the scriptwriters’ jobs, deep fake visuals would replace actors, entire shows would be created without camera operators, or lighting technicians. As a performer myself, I can identify with that fear, but it is hard to stop progress. Similarly, schools and universities have banned generative AI for research and essay writing. Best of luck with that.

My 17-year-old son is upstairs, literally as I write this, writing an essay for his religion class using Chat GPT. Religion is not one of his exam subjects and his teacher insists they do at least one project this semester. He does not have the time, as he has an Economics test on Friday, a Spanish oral exam on Wednesday and a Biology exam next Thursday. He needs to prioritise that study, and with limited time, he has Chat GPT writing his 1,500 essay (on the Camino de Santiago) after which he intends to re-word the output more in his own words (easy to do once you have the foundation).  He says he will also insert some spelling errors and grammatical mistakes for good measure. He’s just like my 1996 self-using Yahoo to try and write his essay. It is difficult to stop things once consumers have experienced the inherent advantage in using them.

Having a hard-rule that you cannot use AI to write an essay would be like, in my line of work on live-stage, banning delegates from being on their phones during a conference performance. You just need to make it so engaging they wouldn’t want to. The rule won’t stop them, the customer experience will. I still use that as my litmus test today. If I see more than one individual on a phone at any given time, I know I need to change something about my delivery/CX at that specific moment in a speech.

AI is not the enemy; it is an amazing CX enabler

The point is, we as brands need to do better if we are losing the consumers attention, we should not blame or ban technology. AI is not the enemy; it is an amazing CX enabler. It pushes us all to step-up and do better, to get more creative.

So, what will good AI retail look like? Deeply personal, intimate, timely, always contextual, always relevant. The technology will continue to evolve at pace. AI and algorithms will take over more of the consumer decision making process but they will also add more to the overall CX for the brands that creatively execute AI implementation.

So, should you be having AI conversations in your business? Absolutely. Are you expected to know all the answers now? No, but that should not stop initial trials, investment and searching for the best moments on a customer journey where AI could unlock the ‘excite and delight’ every customer deserves.

To finish this article, I asked a generative AI tool to ‘write me a joke about AI and retail’

Why did the AI go shopping in the mall?
Because it heard they had great ‘byte’ sized deals

I feel we have a little way to go before we replace the stand-up comedians. For now, they are definitely safe, as it turns out are the scriptwriters.

Find the original article here

Ken Hughes
Ken Hughes
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January 18, 2024