AI Puts Power in the Hands of the Consumer

November 28, 20189min

Can we foresee a world where Artificial Intelligence (AI) recommends who people should have children with, where they should live, and what their next job should be?

This is not the fantasy of an over-stimulated script-writer. AI, fuelled by ever more powerful algorithms, is capable of constantly updating its knowledge of individual consumers’ patterns of behaviour, private lives, hobbies, likes, and dislikes.

Using such information and cross-referencing it with masses of other demographic data it has the predictive capacity to make recommendations with high degrees of confidence. After all, dating apps and websites use algorithms to match their customers as effectively as possible or to give them advice on how they can improve their chances of finding the perfect partner.

In reality, few citizens want their private lives governed by algorithms, however sensitive. But in the decisions they make as consumers about what to buy or where to go on holiday, AI (an umbrella term that includes natural language processing and machine learning) is already a force to be reckoned with and is set to become far more influential.

Analysts at Gartner predict that 20 percent of citizens in developed nations will use artificial intelligence assistants to help them with an array of everyday, operational tasks by the year 2020. Millions of consumers are already enjoying the benefits of using voice-activated devices. In the UK, Ofcom reports that 13 percent of households use an AI-driven smart speaker such as Amazon Alexa.

The growth of consumer-facing AI solutions is putting greater power in the hands of the customer contemplating the purchase of goods and services. He or she can interrogate the solution and rapidly get a comprehensive picture of what is available, and where and what other consumers think.

Consumer-facing businesses will have to respond. They will have to optimise their entire operations by integrating data such as internal sales and customer records, competitive intelligence, trend analysis and social media preferences. Instead of keeping all the data in separate departmental pools, they will need to bring it all together in a data lake where it can be analysed. Then they can create customer profiles or personas that bring them closer to customers before providing hyper-personalised services, recommendations and updates that are intensely relevant to what individual consumers want.

Is word of mouth changing?

One important source of insight is often overlooked, which is customer sentiment. Every day millions of customers leave opinions about services and products that offer a wealth of insights to fellow consumers. That covers almost every aspect of buying, receiving and using electrical goods, clothing or car parts, or the quality of service provided by legal firms or estate agents. Smart, AI-powered, highly agile customer insight platforms are giving consumers rapid access to the accumulated wisdom of thousands of real fellow-customers.

AI is able to filter out the particular aspect of the product or service that most interests them or to provide an accurate insight into sentiment about a product or service. This is a very potent consumer tool. Research among 2,000 UK consumers by Feefo conducted this year found that 94 percent of respondents now turn to online reviews before buying products or services.

Consumers can get the information they want more quickly than ever

AI will rapidly analyse the information to keep consumers informed in real time. Take a national double-glazing company, as one example. Customers in Bristol may suddenly have started experiencing difficulty obtaining quotes or find installation is shoddy, whereas customers of the business elsewhere in the country are happy.  If you live in Bristol that information is likely to be critical to your choice of supplier.

Equally, two retailers selling the same model of washing machine may generate very different levels of satisfaction in their respective sets of customers. Consumers can quickly drill down and find if these problems are serious enough to affect whether they go ahead and buy a new appliance with a specific retailer. Gone are the days of relying simply on word-of-mouth.

In the travel industry, AI is giving consumers greater levels of insight that they use before deciding on a significant purchase. Smart insight platforms give the millions of consumers contemplating a weekend away or a month in the Maldives, the ability to extract key information from thousands of reviews about any aspect of a holiday, from whether a particular hotel is suitable for their age group or a villa genuinely has disabled access. The power is at the fingertips of the consumer.

Transforming the service sector

The same forces are at work in the service sector. Smart insight platforms provide job-seekers with accurate and up-to-the-minute feedback on how agencies and individual recruitment consultants perform. Candidates can see for themselves whether an agency is suited to their needs, relying on information that comes from real clients and is on a reputable platform operating nationally across multiple industries. They are more likely to put their faith in such information than in the opinions of a limited number of relatives and friends.

In myriad ways, AI will hand power back to the consumer, enabling them to make smarter decisions more quickly than ever. To respond, any customer-facing business will need the ability to detect trends in sentiment and how they relate to specific aspects of their products or services. Research has found that while 78 percent of businesses monitor the “voice of the consumer”, less than a quarter feel they have access to the insights they need to transform their organisation.

That must change. All businesses and professional services organisations need to take customer insight more seriously and use AI-powered platforms to obtain intelligence about their customers that will give them a major competitive advantage. From supply chain managers to online helpdesks and store assistants, access to this information in real time allows everyone to meet the requirements of a much more demanding market of consumers using AI to shape their decisions.

Neil McIlroy

Neil McIlroy

Neil McIlroy is Head of Product Innovations at Feefo.

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