Consumer experience in the AI age

In the experience economy, breakthrough brands are taking a human-first view. Somewhat paradoxically, they use artificial intelligence (AI) to interact with consumers in ways that create greater empathy and relevance across all contexts. Another paradox is that AI won’t do the work for us. Although it seems counter-intuitive, the deeper customer engagement enabled by AI also requires brands to first take time to better understand customers and anticipate their needs. AI can then do what it’s good at: personalize the consumer experience, with a speed and scale of content and service that’s otherwise unachievable.

Beauty retailer Sephora is one of the best examples of the new generation of “experience makers.” While the distressed retail sector saw 9,300 stores close in 2019, Sephora opened 35. It plans to double that number in 2020 – a level of success that’s mainly due to the company’s obsessive focus on delivering customer value.

Having begun experimenting with AI back in 2013, Sephora is way ahead of the game. The retailer understands that what matters is what AI is applied to. The company has long focused on – and cared about – the needs and behaviors of its customers. It believes in giving customers tools to manage their relationship with Sephora and, in turn, using the same tools to learn customer preferences. 

The key is that Sephora offers customers products and services they care about, such as exclusive invitations or personalized product recommendations, rather than telegraphed promotions for products it’s trying to sell. The retailer creates preference upstream through carefully cultivated, curated relationships based on contextually relevant services that anticipate and address the customer’s needs. By creating value for customers, it also creates affinity with them. When Sephora customers use a voice assistant to book a skincare appointment, you can bet they’ll say, “Book me a makeover at Sephora.”

Of machines & people

There’s a fundamental misconception that AI is a solution in and of itself. While AI does analyze customer data at speeds and magnitude unthinkable in the past, the most enlightened brands use it to better predict customer needs so they can enable staff to do what humans do best.

In the age of the machine, leading with empathy is a brand differentiator. USAA is a great example of a brand that positions empathy as a core capability and uses AI to strengthen it. The financial services provider to military members and their families empowers its call center staff to serve as brand ambassadors and uses AI to bring customer context to agents’ screens. This way, they can focus on listening and solving individual challenges rather than searching for customer details and history.

The voice-driven consumer experience

AI, in the form of machine learning and natural language processing, is also driving the conversational interface revolution, in which brands will have to quickly learn to design for and differentiate in a world without visual interfaces. When brand visuals fade away, sound takes center stage. Audio opens opportunities to create emotions that aren’t available through images.

Think about that: Through AI, sound enables brands to express themselves and engage with consumers differently, and voice conveys emotions far more effectively than visuals. “The voice of the brand” has evolved from metaphor to reality.

When a leading financial services provider sought to create a memorable consumer experience, it partnered with our team to create voice-enabled access to on-demand news and market quotes. In addition, the chatbot we built has had 45 million unique interactions with customers since the 2018 rollout.

The winners here are the brands that understand the economics of consumer experience, those that focus on using AI to be more meaningful and more relevant to their customers. In short, those that deliver more value, more rapidly.

Algorithms can go a long way toward helping brand marketers uncover insights and find new paths to interact with customers. It’s up to us find the human touch.

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