Concept of machine learning and artifical intelligence. 3D rendering
Photo: iStock | HT Ganzo

Do Retailers Need to Have the AI Talk With Consumers?

Recent surveys show consumers are interested in but also increasingly concerned about potential threats from artificial intelligence (AI) with the arrival of ChatGPT and other generative AI.

A recent survey conducted by Forbes Advisor found 76 percent of U.S consumers were concerned with misinformation from AI tools such as Google Bard, ChatGPT and Bing Chat. Most were concerned about AI’s use for product descriptions, product reviews, chatbots answering questions and personalized advertising.

The findings suggest “a consumer demand for transparency and ethical AI practices to foster trust between businesses and their customers,” according to Forbes.

A survey from CX platform DISQO taken in early March found 34 percent of U.S. adults don’t think generative AI tools should be used for most consumer-facing content (43 percent among Boomers versus 21 percent for Gen Z).

The top-five concerns around AI were poorer accuracy, cited by 45 percent; lack of human touch, 38 percent; negative impact on jobs, 36 percent; low emotional depth, 35 percent; and more bias, 29 percent. Sixty-eight percent had a low overall knowledge level of AI-generated content tools.

“Consumers are wary and need to be informed and educated about what’s in it for them,” Patrick Egan, director of research and insights, DISQO, said in a statement.

A Morning Consult survey taken in mid-February found that while more than half of the U.S. public believes AI integrations into products and services are the future of technology, just one-third think AI technologies will be developed responsibly. One-third trust AI to provide factual results.

“We don’t need to be afraid of it, but we do need to be in control of it,” Massachusetts Congressman Jake Auchincloss told Morning Consult. “It can’t be like social media where it was allowed to scale and to influence much of our private and public lives before we really got a handle on it — and frankly, still haven’t gotten a handle on it.”

BrainTrust

"From a consumer perspective, I have two concerns about AI and generative AI -- accuracy and trust."

David Naumann

Marketing Strategy Lead - Retail, Travel & Distribution, Verizon


"I’ll predict that consumers are going to want to know when the content they’re fed comes from generative AI. We’ll need transparency."

Cathy Hotka

Principal, Cathy Hotka & Associates


"The retail community needs to explain the benefits of AI to consumers. By using AI retailers are showing customers how much they value their time."

David Biernbaum

Founder & President, David Biernbaum & Associates LLC


Discussion Questions

DISCUSSION QUESTIONS: Will consumer apprehension around artificial intelligence likely impact retail’s ability to capitalize on the technology? What role should retailers play in building trust in AI tools?

Poll

12 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
John Lietsch
Active Member
11 months ago

AI is so powerful it has erased the past. We already have issues of trust as evidenced by the numerous domestic and international attempts to protect personal identifiable information (PII). This is not new. The concern around generative AI is that it’s not very accurate but generative AI isn’t the only game in town. For example, if we couple generative AI with predictive AI and train the system on data specific to that retailer, we can dramatically improve the customer experience. And let’s not forget that we created this monster with all the unnecessary hype, positive and negative. Maybe we will eventually stop saying that everything is powered by AI and actually start leveraging AI to deliver meaningful and profitable business improvements.

Bob Phibbs
Trusted Member
11 months ago

How many people even understand what ChatGPT is? ChatGPT has the potential to revolutionize customer service by providing instant responses to customer queries. But I do think it is one step closer to Skynet — even though I’m comfortable using it.

Melissa Minkow
Active Member
11 months ago

AI isn’t new, but consumers’ awareness of its use is new. Now that consumers are aware of AI integration, it would be beneficial for retailers to acknowledge it and be transparent about use cases. The more consumers hear from retailers, the more comfortable they’ll feel with it.

Cathy Hotka
Trusted Member
11 months ago

I’ll predict that consumers are going to want to know when the content they’re fed comes from generative AI. We’ll need transparency.

Richard Hernandez
Active Member
Reply to  Cathy Hotka
11 months ago

This, 100%.

Dr. Stephen Needel
Active Member
11 months ago

One-third show some apprehension — I’m not seeing a problem from the consumer side. What consumers will probably be angrier about is bad AI – when you’re sucked into a customer service chat with a program that can’t actually help you (hello Humana, hello Xfinity, to name two of my least favorite offenders).

Richard Hernandez
Active Member
Reply to  Dr. Stephen Needel
11 months ago

Yes, chatbots are not on my favorites list either. I spend more time tailoring how I state my problem for them than I spend explaining my issue to a live attendant.

David Naumann
Active Member
11 months ago

From a consumer perspective, I have two concerns about AI and generative AI — accuracy and trust. The use of AI for chatbots, in my opinion, has been marginally successful. I have never had a positive experience with a chatbot that has successfully answered my question or made me say “wow, that was a great experience.” While much of the information from chatbots may be accurate, it is rarely different from what I can find on the website before I tried the chatbot. For more complex information or important decisions, I think it will be hard for most consumers to trust generative AI. That is if they actually know the response or content was created by generative AI.

Gene Detroyer
Noble Member
11 months ago

If ChatGPT and other generative AI develop into what the hype says, the consumer will have no idea if they are dealing with a human or a bot. Isn’t that the objective?

Ryan Mathews
Trusted Member
11 months ago

First of all, I think we need to separate the part of AI that is really machine learning (ML) from what we are now — slightly erroneously — calling generative AI. This is important because ML is essentially a really smart calculator that can identify patterns while generative AI is perfectly capable of “creating” misinformation and disinformation as anyone who has any significant experience with ChatGPT et alia will quickly learn. When ML makes mistakes it’s because of bad coding or a bad algorithm. AI can be “bent” by users — including often generative AI agents. So, yes, consumer concerns around AI — fueled by recent media reports — will continue until retailers employing AI systems do some consumer education, i.e., not just when and how AI is being used, but why and how potentially misleading it can be. This educational effort — serious education — is critical to building consumer trust. My concern is that retailers, like many, many AI commentators don’t really understand the technology well enough themselves, let alone understand it well enough to explain it to their customers.

Trusted Member
11 months ago

The retail community needs to explain the benefits of AI to consumers. For example, chatbots can help customers navigate the store quickly and receive personalized product recommendations.

By providing personalized recommendations, AI makes checkout faster and more efficient. By using AI retailers are showing customers how much they value their time and improving their shopping experience.

I doubt very much that the retail industry as a whole will educate consumers so it will be up to individual retailers to have that talk with their own customers.

Roland Gossage
Member
10 months ago

Even though there is a lot of discussion about AI, many consumers still have misconceptions about how the technology is used in business, particularly in retail. To effectively integrate AI solutions, brands need to be transparent with their customers. They must explain how the technology and the data it’s collecting are used and what it means for delivering personalized experiences. Studies show that consumers don’t object when retailers capture their data. The issues arise more frequently when they fail to capitalize on the data collection to provide a customized shopping experience.