For much of last year, AI seemed immune to the normal laws that govern the marketing hype cycle: expectations just kept on inflating. Of course, to any ecommerce veteran the inevitable deflation was visible from a mile away. But the form that deflation has taken is still fairly surprising. The technology, it turns out, largely functions as promised: AI is in fact quite good at making personalized recommendations. The problem is, consumers don’t seem to want them.
A survey we recently conducted of 2,000 consumers found that the vast majority of shoppers (85%) were uninterested in using AI to help make purchasing decisions. Meanwhile, 60% said they would be unaffected by AI recommendations. Which is to say that while the AI boosters have done excellent work persuading the marketers, they have their work cut out for them with the people who actually matter, i.e. customers.
What’s behind this skepticism? Why is it that AI seems to generate such reflexive distaste? If brands are going to make the most of this powerful technology, they are going to need to answer these questions first.
AI has a Branding Problem
The survey’s findings represent a paradox, because while consumers may dislike AI-driven recommendations, poll after poll also has demonstrated that they like personalization, and are more likely to frequent brands that offer it.
Undoubtedly, one part of the puzzle here has to do with data security: the cascade of high-profile breaches we’ve witnessed over the last few years have made consumers more wary than ever of how brands might use their personal information.
But branding may also play a significant role here. AI-driven recommendations rarely announce themselves as AI-driven recommendations: to the uninformed consumer, the average ecommerce recommendation looks more or less like it did before AI took over the industry. As one recent UK poll demonstrated, consumers are “blind to AI’s benefits,” with the majority unconvinced that it’s improving their retail experiences. They think of AI as somehow nefarious, even as it actively guides their purchasing decisions.
What Brands Can Do
With Google’s phase-out of third-party cookies set to begin in Q1 2024, acquiring customer information is about to become much more difficult. And this problem will only become more intractable if consumers can’t shake their skepticism about AI.
What is needed, then, is transparency. The data backs this up: according to one SpiceWorks survey, 78% of consumers believe brands should disclose when a given interaction is powered by AI. While this might not be tenable (or desirable) in every case, it suggests that if brands can speak honestly with customers about some of the ways they intend to use their personal information, they can go a long way toward ameliorating some of the current consumer concerns around AI.
At the same time, marketers shouldn’t let the promises of AI blind them to the importance of the human touch: as a recent study from researchers at Temple and University of Science and Technology China, human-curated recommendations can be just as effective as AI recommendations. It would seem that AI currently has little value in helping a brand land new customers or upsell existing customers higher-value items.
Looking Ahead: What Brands Should do in the Here and Now
All of the above makes sense: Consumers don’t want to feel like brands have ceded their marketing efforts to the machines. As others have pointed out, consumers want to be heard, not algorithmically studied. Paradoxically, AI, with its massive datasets, can feel even more impersonal than older methods of personalization. Instead of throwing their lot in with largely untested AI solutions, brands need to take the time to actually listen to their customer’s needs, and understand what messaging resonates best with them.
For instance, one thing we know matters substantially more to consumers than shiny AI tools are well-designed, smoothly functioning websites. For instance, according to our survey, the majority of consumers view a brand’s website as their most important marketing channel. Additionally, 60% will abandon purchases if a website is poorly designed or otherwise malfunctioning. And yet countless businesses in dire need of a CMS overhaul have neglected this foundational need, lavishing all their energies on AI instead.
There is no question that AI will eventually win the day. The technology is too powerful not to. But it will only help those brands that are thinking about marketing holistically, and not just lunging at the shiny new thing.
Truly personalized ecommerce means keeping the full range of the consumer’s needs in mind — a list that encompasses things like privacy and quality CMS in addition to tailored recommendations. It also means properly messaging this technology, explaining to users how their data will be used and providing them the opportunity to opt out. This is hard work, and bears very little resemblance to the plug-and-play ease promised by the AI boosters. But your customers will reward you for it.
As VP of Marketing at Storyblok, Thomas Peham leads a growing team and influences business growth through positioning Storyblok as the primary CMS for the 21st century. Storyblok to date empowers marketers and developers in 130+ countries. Leading brands such as Adidas, Oatly, Pizza Hut and T-Mobile trust us as their CMS. Peham is a SaaS marketer, tech enthusiast, hobby runner, semi-pro photographer and coffee lover. Follow him on Twitter (X) https://twitter.com/tompeham.