Beyond Automation, Adapting to AI: Changing Dynamics for Customers, Firms, and Society

There is a lot of talk about Artificial Intelligence (AI), yet many fail to grasp its true depth and breadth of usefulness and application. Recently, WhatsApp introduced Meta AI, which allows users to ask questions about anything. Just like we joke about someone being able to comment on everything under the sun, users are poking fun at this AI feature in Meta because it doesn't always provide accurate answers to their few queries. In a progressive society, we need to enhance our understanding, skills, knowledge, and information, as well as our ability to offer constructive criticism. For instance, the idiom "everything under the sun" needs to be updated; scientific advancements have revealed that the sun sits merely eight light minutes away from us in the vast universe, which is home to stars and galaxies millions of light-years distant.

Creating Great Things:

Creating great things requires significant effort. If we were to examine the initial versions of some of the remarkable applications and software in use today, we would be astonished by the extent of their transformation over the years. More recently, on social media, you might have heard numerous entrepreneurs and tech enthusiasts endeavouring to develop future-focused solutions using AI in various sectors. While their current efforts may appear modest, a few of them will ultimately create solutions that will be used by billions daily. AI is reshaping technology and continues to revolutionise multiple facets of society, adding value across all fields

Understanding AI:

You may have encountered hype surrounding AI, but what exactly is it? Simply put, AI is a computer system capable of performing tasks that typically require human intelligence. The greater question is how a machine can complete tasks requiring intelligence. The answer lies in mimicking human cognitive processes. Humans acquire information in a familiar language through direct experience, interpret information with thoughts and perceptions, store it in memory, and then react or respond. Similarly, in an AI system, computers first learn from data, translate language, perform sentiment analysis, and make predictions or inference based on data. Artificial intelligence systems can perform complex tasks and offer numerous benefits, but they also present challenges that require meticulous management.

How is it benefiting customers?

In the past, our purchasing decisions were based on different factors. Many households, particularly in rural areas, were largely self-sufficient. A few decades ago, we tended to have items with multiple uses rather than specific products for individual purposes. Our needs were identified based on immediate family requirements, often influenced by traditional practices. While buying these necessary items, our primary source of information was word of mouth from family, friends, or other community members. This method of purchasing behaviour was time-tested and relied on the solid fundamentals of trust within the close-knit society. The range of products available for purchase was relatively limited compared to today, making alternative evaluations simpler due to the constrained assortment.

In today's world of increased production, higher per capita income, and widespread internet connectivity, customers are bombarded with information from various sources such as social media, advertisements, mobile messages, websites, emails, and news channels. A massive content is created to grab people's attention every hour. Social media platforms alone produce posts in the form of text, images, audio, and videos in millions of quantities. This information overload makes it challenging for customers to sift through and find what's relevant.

Customers save time and effort finding and easily accessing the goods and services they want with the help of AI. AI is transforming the customer buying journey by making it more personalised, and secure, and enhancing the overall shopping experience.

AI is revolutionising the customer shopping experience through enhanced content personalisation and improved customer interactions. By leveraging deep insights, AI algorithms customise content based on individual preferences, demographics, browsing history, interests, and behaviour. This allows customers to discover new ideas and plan their purchases more effectively. For instance, Generative AI (gen AI) solutions provide customers with recipes, meal-planning ideas, and assistance to create shopping lists. AI-powered chatbots and virtual assistants offer real-time customer support and guidance. Voice assistants like Alexa, Siri, and Google Assistant enable customers to search and purchase using voice commands. Additionally, AI solutions provide visual search capabilities, allowing customers to search for products using images instead of text. Furthermore, AI summarises key points from thousands of customer reviews on e-commerce product pages, helping customers evaluate product attributes and make quicker, more informed decisions.

Overall, AI is helping customers by providing personalised experiences, convenience, and informed purchasing decisions. As AI continues to evolve, it is expected further to enrich the customer experience and reshape the buying journey.

How are organisations benefiting from these changes?

Change is on the horizon and companies that remain passive risk being left behind. The global COVID-19 pandemic served as a wake-up call for organisations, compelling many companies to re-evaluate their long-established business practices. The majority inevitably adopted a direct-to-consumer (D2C) or digital-first approach, while those who refused to adapt are at risk of their survival.

Hundreds of companies, with more than 100 crore valued brands, do not have a basic representable website and forget about engaging social media pages for their brand. Thousands of brands are not listed on e-commerce marketplaces because their marketers feel that their unit economics don’t allow them to sell on e-commerce channels. Meanwhile, Tata Salt serves several thousand orders across marketplaces at Rupees 25 per kg. Incumbent brands are losing the battle for share of voice, engagement, and acquiring new to-brand customers.

Today, e-commerce capabilities are no longer confined to traditional websites; providing a seamless online shopping experience is an expectation rather than a competitive advantage. Companies prioritising customer convenience are better positioned to capitalise on the upcoming growth in e-commerce. This trend is very much evident in the success of quick commerce companies. Combined with the power of AI, marketers can now deliver hyper-personalized experiences at scale, enabling them to focus on innovation and creating greater customer value.

Before the advent of AI, marketing campaigns required months of work to gather insights, design content, and target customers. However, with the help of AI, these campaigns can now be rolled out in a few weeks or even days. It can include personalised content and automated testing at scale. Unlike before, when personalisation was limited to broad demographic data, AI now enables marketers to deliver highly personalised content and experiences to individual consumers based on their browsing history, purchase behaviour, social media interactions, and more. This level of personalisation has proven to enhance customer engagement and boost conversion rates.

AI has completely transformed content creation by automating the generation of text, images, videos, and other media. Before AI, content creation was a time-consuming process and demanded significant human effort. However, with AI-powered tools, top-notch, pertinent content can now be swiftly and efficiently produced, enabling marketers to develop more captivating and varied content for their campaigns. AI algorithms can predict future trends and outcomes with far greater accuracy than traditional methods. AI also handles repetitive tasks such as data analysis, campaign optimisation, A/B testing, and customer segmentation. By automating these processes, marketers are empowered to focus on strategy, creativity, and cultivating relationships with customers, ultimately leading to more streamlined campaign execution and superior overall results.

Many companies are leveraging the power of advanced technology to analyse vast amounts of online content such as comments, images, and videos. This enables them to enhance their products and uncover new possibilities for innovation. By customising general AI models to suit their specific needs and integrating them with their data and systems, companies can distinguish themselves and achieve unparalleled customisation and capabilities. Additionally, there are long-term opportunities for companies looking to revolutionise their processes by embracing advanced AI technology.

Challenges:

Ethical considerations arise while implementing AI in marketing campaigns, including data privacy, algorithm bias, and transparency. Most marketers are handling these issues cautiously to establish trust with consumers and guarantee the responsible use of AI technologies. With gen AI, companies are instituting safeguards to prevent the exposure of personally identifiable information, misuse of copyrighted materials, and other potential risks.

Prognosis:

In the future, marketing enabled by advanced AI technology will strive to create unique and standout customer experiences, driving significant growth. Examples of this could include highly personalised marketing campaigns with tens of thousands of tailored customer experiences, a chatbot for a cosmetics company that interacts with customers to understand their objectives and then creates a customised beauty regimen, and custom-generated meal plans designed to fit a family's eating habits and dietary restrictions. This vision of the future involves creating customer-facing applications that require real effort to conceptualise, develop, and design.

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