Writing in the Harvard Business Review, Niraj Dawar and Neil Bendle, respectively professor and assistant professor of marketing at the Ivey Business School, Canada, outline a near-term future, based on their ongoing research into how technology is redefining relationships between customers, brands and firms.
They expect that consumers will end up choosing one of only a handful of general-purpose AI platforms which will wield significant influence over prices, promotions and the consumer relationship.
“Marketers’ current obsession with creating an omnichannel customer experience will fade as AI platforms become a powerful marketing medium, sales and distribution channel, and fulfillment and service center – all rolled into one,” they argue.
And they predict that AI assistants, built to better understand habits and preferences the more consumers use them, “will win consumers’ trust and loyalty better than any previous marketing technology”.
Accordingly, brand marketing will shift from “forgetful, biased consumers” to AI platforms that retain that information and analyse it along with related product data and reviews any previous consumer behavior.
“Customer acquisition will become even more of a science and will focus on a single channel – the platform – rather than on multiple channels,” they say. “In this universe, influencing the platforms’ algorithms will be the key to winning.”
One outcome for brands is that “product placement and recommendations on AI platforms are inevitable”.
Having acquired customers, brands will then need to constantly justify their positions in order to keep them since, unlike lazy consumers who tend to stick with a brand if it serves their purpose, AI assistants can regularly assess all the brands in a category and recommend new ones if they could do a better job.
Ultimately, AI promises to shift the opportunity for consumer goods companies from one based on economies of scale to one based on “economies of scope”, say Dawar and Bendle.
“Investments in building trust with consumers and their AI assistants will be amortized by asking, What else does this buyer need?
“Superior marketing strategy will still matter – firms must acquire, satisfy, and retain consumers in the AI world – but what it involves is likely to change substantially.”
Sourced from Harvard Business Review; additional content by WARC staff