AI AND THE CONSUMER EXPERIENCE JOURNEY NIRANJAN GIDWANI

 

CONSULTANT DIRECTOR | BOARD MEMBER SSGMUAE | MEMBER UAE SUPERBRANDS COUNCIL | HBR ADVISORY COUNCIL | CHARTER MEMBER TIE DUBAI

For many of us, over the past few years, geographical location has become less relevant — so long as there is internet connectivity.

We have seen that e-commerce strategies have shifted from a perpetual top priority on every retailer’s plan, to a desperately needed lifeline that could enable them to survive. Investments have been made in logistics capabilities to enable last-mile, new business models like ghost kitchens (restaurants with a space for kitchen equipment and facilities, but without any dining area for walk-in customers), cloud kitchens, dark stores (retail distribution centers that cater exclusively to online shopping), and investments geared toward digital capabilities in AI and blockchain.

However, to have good medium to long term success, organizations would need to address the issue of what consumer experience they need to offer. The consumer experience is no longer just a transactional process of in-store shopping. It now has to be rooted in deep, ongoing and enriching relationships. 

With initial indicators of what is happening globally, retailers must understand the future of experience-led capabilities. E-commerce is an integral piece of that future. But it’s not just about being online — it’s about doing it right and continuing to consider how in-person shopping fits into the customer’s overall journey. Are e-tailers driving consumers away by doing exactly that which attracted them in the first place? Now consumers are being drowned in a flood of choices – a multitude of brands, prices, and designs. 

Internet giants like Google, Amazon, Netflix have built up years of data on what we like and what we don’t, and yet, with all the AI in use, what they recommend on many occasions could still be a whole lot of rubbish.

With start-ups rapidly gaining ground and growing, they too need to understand the same concept of consumer experience through the apps created for various services. As more and more start-ups succeed, they would need to be prepared for similar competition to arrive faster than normal.

Organizations will need to keep reviewing how they can be price-competitive and still maintain margins. And how they can orchestrate the consumer journey seamlessly from digital to physical and back again.

The new buzzword is that stores should be used as experience zones and fulfillment centers. While this can be a truly effective strategy, it requires systems and business units that communicate with each other to deliver on the promise. As scale up happens, retailers’ ability to deliver a consistent experience must also match up.

Over the years, rapid changes in business have already been disrupting all sectors. Whether it be distribution, supply chain, healthcare, energy, real estate, telecom or transportation, a lot more has changed in the last seven years than in the three decades that came prior. The way forward call to action would require to be on two fronts –

-While strategy is the key, a fair amount of focus would need to shift away from strategy. The world is beginning to realize more and more that strategy relies on a model where various key parameters and assumptions are predicted and simulated. And yet, some unknowns could be completely missed out. 

A better approach would be to, along with strategy, put more emphasis on identifying and building financial, structural and people capabilities as well as competencies suitable to any industry segment. 

-The employees who are closest to the market, or understanding the pulse of the customer, should be empowered to make better decisions.  Which in turn makes for a faster response time. However, for this approach to work successfully, higher calibre and better trained people would need to be positioned from bottom to top. 

The mistake many organizations end up making is – they stay competitor-focused while doing incrementally better for the end consumer.

The emergence of peer-to-peer (P2P) platforms, collectively known as the “sharing economy", has enabled people to collaboratively make use of under-utilized inventory through fee-based sharing. 

The rapid growth of P2P platforms has arguably been enabled by two key factors: Technology innovations and supply-side flexibility. Technology innovations have streamlined the process of market entry for newer & wider range of suppliers, kept transaction costs low and created better convenience for consumers.

The winners in a global economy will be those players whose collaborative relationships effectively augment their own operational excellence, consequently enabling them to deliver value farther, faster, deeper, and cheaper to customers wherever they may be. 

Technology is closing the gap between decisions made by consumers and the satisfaction of those choices. As on-demand mobile services become the dominant business model, a number of innovations will emerge. This is where AI can and will play a crucial role.

Not every start-up will be able to beat a current player. Not every big company is going to be disrupted. If businesses wish to disrupt instead of being disrupted, they should have their pulse on their consumers first and then their entire competition set. It is in these areas that the power of AI could be harnessed.

In one of my future articles, I would like to touch upon how an average affording consumer is now getting drowned in a flood of choices online.