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September 30, 2016updated 13 Jan 2017 12:02pm

Brand loyalty in an AI world

Will consumers still be loyal in an AI world? Does AI spell the death of the human salesman?

By Ellie Burns

Every company aspires to achieve a certain loyalty amongst their customers, tailoring brand, image and corporate message to grab a certain demographic in order to maximise revenues.

However, the world is evolving into a landscape ruled my an anytime, anywhere mobile world – with artificial intelligence emerging as the prominent way in which consumers can engage with the brand of their choice.

Accenture's Teo Correia on brand loyalty in an AI world

Teo Correia, senior managing director at Accenture’s Consumer Goods Global Practice.

Discussing how the emerging AI world will impact brand loyalty, CBR spoke with Accenture’s Teo Correia about customer loyalty in an increasingly smart world.

EB: In an age when customers value, speed, ease of use and cost, is brand love dead?

TC: Brand love is not dead but it has become more nuanced. Today, consumers interact with brands in two distinct ways. A high percentage of the consumer goods we purchase are “utility” buys which we replenish on regular basis. We don’t want to think too much about these, so we are loyal to some utility brands out of habit – for example, if a consumer is buying groceries online they are more likely to order goods from their saved list of brands which they bought before rather than browsing.

Then there are consumer goods that consumers purchase from brands that they want to experience or spend time with – it’s the difference between Nescafe which the consumer buys because they need to quickly and easily restock, and Nespresso which is rooted in the aesthetic experience of visiting the store. Both are examples of brand loyalty, but in different forms.

 

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EB: How will AI impact our purchasing decisions and brand loyalty?

TC: AI will probably have more of an impact on ‘utility brands shopping basket” purchases rather than ‘experience’ brands. AI will help consumers to make those purchasing decisions they don’t want to have to think too much about by predicting our patterns of consumption.

Amazon Dash is a prime example – where you press a button to automatically order a favourite item; the next step will be where the fridge or washing machine predicts the consumer needs and preferences and presses the button to order. In a way this enforces loyalty, because it makes predictions based on past purchases, but the reduced consumer interaction also means brands will need to make themselves more visible to the consumer.

 

EB: Are there any notable companies who are using AI effectively?

TC: At the moment, few companies are using AI beyond the experimental stages. In consumer goods, for example, most don’t have enough customer data to use AI to effectively deliver personalised solutions to customers. Facebook or Uber for example have a huge amount of data; whereas a consumer goods company will have global sales figures but may not track who is consuming their product.

This is a huge opportunity for consumer goods companies who are now focusing on their e-commerce function to gather the data they need to really make the most of new technologies.

 

EB: Will the future will be dominated by machine-to-human interactions – is the human salesman a thing of the past? Do consumers actually care if they are talking to man or machine?

TC: AI will play a growing role, but it doesn’t spell the end of the human salesman. Ultimately, people trust people. Whilst chatbots and other forms of technology can help to solve many issues quickly and efficiently, people can get frustrated talking to machines. The winners will be the brands that use algorithms to track and solve pre-defined problems but keep human interaction at the heart of their business to solve complex problems, differentiate themselves and build personality.

 

EB: How important will personalisation be in the AI future?

TC: Over the last ten years, we’ve seen an explosion of brands born in the digital age. They identified a need in the market and built a cult following from a low base and with no customers. AI will no doubt help these businesses to continue to challenge the market and compete with established players. Personalisation will be absolutely key to success.

 

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