What can retailers do about consumer’s AI concerns?

Discussion
Jul 31, 2018

While consumers are more aware of artificial intelligence (AI) through chatbots, voice assistants and intelligent homes, they’re also confused and wary about the technology.

An online survey of 2,000 consumers in the U.S. and U.K from FleishmanHillard found 45 percent either agree or strongly agree that the positive aspects of AI outweigh the negatives. Forty-nine percent agreed that AI is an “exciting and exhilarating topic” and automation will change lives and jobs for the better.

Only 31 percent of those surveyed, however, feel that they had already seen the benefits, and 40 percent had not seen a difference. Fifty-six percent further agreed that AI needs more regulation and restrictions. FleishmanHillard said that proper education may temper those concerns. Indeed, 53 percent of those surveyed agreed that education from businesses, government and academia about the role of AI in society needs to improve.

“We need to reassure both businesses and consumers that AI is not about remote science-fiction style gadgets in 2050. It’s about tools — now and today — that can drive productivity, boost profitability and, done correctly, help everyone live better lives,” said Sophie Scott, global managing director of FleishmanHillard’s technology sector group, in a statement.

A recent survey of 10,000 consumers from Capgemini’s Digital Transformation Institute likewise found both positive and negative consumer opinions about AI.

On the positive side, 73 percent had interacted via AI, and 69 percent of those who have used AI indicated they were satisfied with those interactions. Sixty-three percent of AI-aware consumers like it because of its 24/7 availability and how it provides greater control over their interactions. Forty-eight percent of overall survey respondents saw the possibility of delegating tasks to a virtual assistant as exciting.

However, while Capgemini’s survey respondents are keen for AI to have a human-like voice (62 percent) and the ability to understand human emotions (57 percent), 52 percent are not comfortable when AI is set up to look like a person. The report also finds that two-thirds of consumers (66 percent) would like to be made aware when companies are enabling interactions via AI.

DISCUSSION QUESTIONS: Do you see fears over artificial intelligence holding back the technology’s potential for retailers? What concerns need to be addressed? What extra steps could retailers take to educate consumers about the technology behind AI?

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Braintrust
"This is about trust, not AI. That said, we shouldn’t discount benefits AI will bring in behind-the-scenes retail operations consumers will never see."
"AI is a huge, broad sweeping discipline rapidly integrating itself into every aspect of human life, technology touches. AI is also the buzzword..."
"Another thing is the issue around how much AI will be used without the customer knowing it in the future. "

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20 Comments on "What can retailers do about consumer’s AI concerns?"


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Dr. Stephen Needel
BrainTrust

Actually, I’d go in the other direction and tell retailers to shut up about AI. In general, AI is not there to help the shopper, it’s there to help the retailer. Stop talking about it and use it if you think it will do good for your business. Then think twice about whether the investment is worthwhile. Unless you are Amazon or Google or Walmart.com, there’s not a lot of positive evidence yet.

Lyle Bunn (Ph.D. Hon)
Guest

This comment is spot-on. Consumer research into the subject by those seeking to advance their AI service revenues should not be taken as guidance to end users. It is a back office, economy of operation function that does not require flag waving.

Nikki Baird
BrainTrust
One, I think retailers need to be open and up front that consumers are interacting with an AI, rather than trying to fool them by presenting a “person.” What consumers don’t like is feeling like they’ve been punked. If retailers tell consumers up front what’s driving the interaction, and give them an escape button for if the interaction goes off the rails, I think most consumers are willing to give it a go — as the study found. Two, I don’t see consumer fears holding it back. While most of the activity and investment by retailers seems to be in customer-facing channels today, the real value and power of AI will be behind the scenes, where consumers feel the benefit but aren’t directly interacting with it. The only way a consumer backlash might come is if retailers disrespect consumers, like in point one where they try to pretend they’re not actually using AI when they are. Three, the biggest challenge for retailers is making sure they have good data and that their AI is making… Read more »
Charles Dimov
Guest

Remember that AI isn’t just used on front-end applications. These are the most visible to consumers. Voice commerce (Google Home), email optimizers, chatbots and such are the AI examples people see. But there is much of the technology that can be useful that is back-end focused. For example supply chain optimizers, demand planning systems and such. On these applications, most people would agree, this is a great idea if it actually helps a company improve their bottom line through efficiencies and reducing waste, overstocking and so on.

Retailers may want to put a positive brand to it. For example “Retailers+ (a fictitious firm) uses AI to help reduce inventory and packaging waste. It means we can deliver goods to you without wasteful overstocking, excess shipping and packaging.”

In that light most consumers would probably appreciate Retailers+’s efforts with AI. It is all about the angle, and not just buying into a superficial view of new technology. Find the balance.

Bob Amster
BrainTrust

Some of what can be accomplished with AI will appear as spooky and/or intrusive to those who are not used to the technology or value their independence to make their own decisions. Retailers ought to monitor consumer reactions to AI-based campaigns and other offerings lest there be a backlash reaction to AI if perceived as over-the-top.

Brandon Rael
BrainTrust

AI as a concept has too many irrational fears associated with it, especially for those who grew up during the heyday of the Terminator movies. There really is no need to publicly state that a particular retailer is leveraging AI or other predictive insights. Rather, these are tools and solutions at the retailer’s disposal, as they work to provide a seamless, personalized and localized shopping customer experience.

Retailers know that the Holy Grail of shopping remains — having the right product, in the right place and at the right time. That fundamentally will not change until the end of time. Simply put, commerce will remain commerce regardless of the physical or digital channels.

The challenge for retailers will be to take a crawl/walk/run approach when it comes to the power of AI. As the technology evolves and matures, we should expect these insights to be at the retailer’s disposal, and it will empower the merchandising teams to operationalize on these valuable consumer data points.

Ralph Jacobson
Guest

As consumers learn more real facts about a trend, they become more willing to adopt the trends themselves. I remember when privacy concerns first emerged and fears of the unknown drove panic in the streets. Yet, today although privacy concerns are still very much top of mind, shoppers are very willing to share their personal information with brands they trust.

The same will be true for AI. Today, it is largely a fear of the unknown and/or that machines will take over the world — and our jobs. The truth is that man and machine are better than man OR machine. This is more about augmented [human] intelligence. As AI evolves, chatbots and other consumer-facing technologies will become more accepted and in-demand.

Art Suriano
Guest
I think the overall issue is how businesses are attempting to use AI and how that impacts the customer. Frankly, I challenge much of the data we are reading today because too much of it comes from the very companies that are producing the technology. I see retailers spending enormous amounts of money on undeveloped technology without knowing that when completed it will be what customers want. I strongly recommend that ALL retailers listen to their customers and not the tech companies. That said, there is tremendous room for technology to provide services and conveniences that should make life more enjoyable for all. However, when looking specifically at retail, remember the best advantage of the shopping experience is the human interaction that takes place between a store level associate and the customer. It is excellent and smart to include wanted technology in the overall shopping experience. However, if a retailer attempts to replace the human interaction opportunities with AI or some other form of technology, I guarantee that retailer will lose. Then that retailer will… Read more »
Ricardo Belmar
BrainTrust
Ricardo Belmar
Retail Transformation Thought Leader, Advisor, & Strategist
4 years 6 months ago

Retailers should not treat AI any differently than any other technology, tool, or process they use in consumer-facing interactions. They need to be upfront and transparent about what they are doing so consumers don’t feel they are being duped. This is about trust, not AI. That said, we shouldn’t discount the benefits AI will bring in behind-the-scenes retail operations consumers will never see. This is the short-term benefit I see for retailers with AI.

Shawn Harris
BrainTrust
Shawn Harris
Board Advisor, Light Line Delivery
4 years 6 months ago

Retailers need to be mindful that the view of the world their AI-based tools have is the data used to train the system, not the world itself. Retailers need to be mindful of biased data. Bias could potentially come in the form of diverging customer interactions/treatment based on say fit size, or customer ZIP code. The thing about current machine learning is that many algorithms provide predictions that often times we as humans could never cognitively conceive. This could leave retailers open to unintended outcomes, from judgements made on misunderstood predictions.

For retailers, on one end the feature engineering of data will be critical, while on the other the importance of judgement will increase. In customer-facing interactions, it would be wise to tell consumers when they are dealing with a human-like AI. It’s OK to anthropomorphize chat bots, text and voice-based, just communicate to the consumer that they are dealing with a “smart” bot.

Evan Snively
BrainTrust
Evan Snively
Director of Planning & Loyalty, Moosylvania
4 years 6 months ago

Some companies may have fears that prevent fully leveraging AI, but I would venture to say that in many cases this is because they don’t fully understand how to best implement an AI strategy across the business. Simply having a designated team of smart guys/gals in a room working on algorithms and machine learning for PR purposes won’t move a company forward. There needs to be a vision on how to utilize this technology as a core component of business operations that is led from the C-level down.

Worry more about the best utilization of the technology, and less about explaining what goes into the secret sauce. Customers don’t really care how its made, as long as food tastes good.

Rich Kizer
BrainTrust

I agree with Ralph Jacobson’s comment, “Today, it is largely a fear of the unknown …” We had a focus group participant say it best: “I want to date technology, not marry it.” In time, elements of technology that scared us eventually become great services and tools we all use daily.

David Naumann
BrainTrust
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
4 years 6 months ago

AI is still very nebulous for the general public. While most people just associate it with chatbots and virtual assistants like Siri or Alexa, it is much more than that and it is much more than we can comprehend. The fear of the unknown and potential privacy issues is certainly a concern for consumers. Education is the best approach to alleviate consumer concerns. By the way, after researching this topic, I came across this webpage that offers great explanations of artificial intelligence.

Ryan Mathews
BrainTrust

All AI isn’t consumer-facing, but that’s not really the issue. Consumers are willing to trade things like privacy for clearer defined — and increasingly, transparent — benefits. If you don’t lead with the benefit, they’ll never accept the technology. It also depends on whether you position AI as hyper-efficient computation or a sentient “agent.” People don’t have problems with sharing with loyalty card or automatic payment systems, but they do worry about what “Alexa” and “Siri” can hear and what “they” will do with it.

Doug Garnett
BrainTrust

What should hold back AI implementation is wisdom about the narrow range of areas where it offers significant advantage. Remember, AI is really “Big Data” repackaged in sexier trappings. But it still has the same limitations that were already becoming well known for Big Data.

As to consumer concerns, education is not going to help. The only education consumers will hear is education that’s true. Revealing what AI does will be like revealing the sausage making behind how laws are passed — it does no one any good.

Cynthia Holcomb
BrainTrust
AI is a huge, broad sweeping discipline rapidly integrating itself into every aspect of human life, technology touches. AI is also the buzzword of the year, a sound bite used as shorthand to describe most new technologies, whether they have an AI component or not. Consumers have had so much of their personal information culled by Facebook, etc. I think the fear actually begins with the retailer. Retailers do not understand how and what AI can do for their businesses, as there are 100s of retail AI application possibilities. The fear factor, the disconnect in knowledge and understanding of AI/tech confuses the issue of AI potential with fear of not knowing what, if anything the retailer can or should do to capitalize on AI. I believe senior level decision makers, to remain competitive must be educated to understand retail technologies and the opportunity of new AI applications. To achieve this goal, bridge the gap between retail and tech by educating an internal team of retailers to the role of Merchant Technologists. MTs to be led… Read more »
Cate Trotter
Guest
It’s not difficult to understand why consumers might be nervous about AI, but this seems to be a fairly essential part of the process with any new technology. Think back to the first mobile phone compared to the smartphone that we have today — our current tech would have seemed pretty creepy to us back then but now we’re used to it as a society and most of us are willing users of it, and all that comes with that. AI is no different. There’s also always that gap between where the tech might end up and where it is now — usually tech doesn’t live up to our expectations early on but when it gets there it’s great. Another thing is the issue around how much AI will be used without the customer knowing it in the future. I’m a huge fan of Sprucebot which uses AI to make the customer experience better by supporting the retailer with info. The customer never sees the tech, they just have a great personal in-store shopping experience.… Read more »
Shep Hyken
BrainTrust

First, AI is here. You can’t fight it. Used correctly, it does all of the good mentioned in the article. Retailers must be transparent. Don’t try and fake out the consumer. And the one stat that wasn’t shared was how many people interact with AI and don’t know it.

Mike Osorio
Guest

It’s all about transparency when warranted. Most are using and/or interacting with AI assisted platforms many times a day if not constantly and don’t necessarily realize it. Usually that is fine and a constant reminder wouldn’t be helpful or desired. I agree with the comments about shutting up about it when communicating neither adds to the experience or dispels fears. For example I use Waze, the driving directions assistant, daily which is AI enabled. I don’t need to be told it is AI. But if in a situation where the consumer thinks they are dealing with a person, they should be informed if they are instead being served by an AI enabled chatbot.

This is likely to remain an issue only for a few more years. As AI assisted technologies become ubiquitous, and the digitally native generations continue to grow as a percentage of consumers, it will become a non-issue, in my opinion.

John McIndoe
Guest

There are two key concepts that should drive this discussion: first, the role of AI and similar solutions is to help retailers create better plans, targeting strategies and shopper activation based on data they have collected. If retailers do this effectively, consumers won’t ask about what is happening behind the scenes to make it happen. They will see offers tailored to them to purchase products that fit their needs. Only when executed poorly will consumers ask, “why am I seeing this promotion for dog food for the 10th time when I don’t own a dog?” The second concept is the need for trust between the retailer and the consumer. If that trust exists, consumers will provide information that allows the retailer to serve them even better.

wpDiscuz
Braintrust
"This is about trust, not AI. That said, we shouldn’t discount benefits AI will bring in behind-the-scenes retail operations consumers will never see."
"AI is a huge, broad sweeping discipline rapidly integrating itself into every aspect of human life, technology touches. AI is also the buzzword..."
"Another thing is the issue around how much AI will be used without the customer knowing it in the future. "

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