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Upgrading how we buy
How artificial intelligence could bring more joy, more confidence, and less regret to consumer decision-making
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The labyrinth of choice
Making a purchase decision online can be complicated.
Thanks to globalization and digitalization, the range of available brands, products, and services is now extraordinarily vast. What’s more, channels, devices and information formats have proliferated, creating a diverse array of touchpoints for evaluating a purchase. These span search results, news media, retailers’ websites, blogs, aggregators, marketplaces, comparison sites and more.
67
%
of consumers believe that making the right decision requires more effort than it used to.
Whether people are looking for clothing, holidays, or insurance, it’s not surprising that many suffer from indecisiveness and choice-overload as they move from purchase trigger to final decision—a portion of the consumer journey that behavioral scientists have dubbed “the messy middle” owing to this complexity.
Recent research conducted by Google showed that 67 percent of consumers believe that making the right decision requires more effort than it used to. And it’s not just the process of navigating the messy middle and reaching a decision that’s complicated. Sometimes, consumers don’t even know where to start—they’re not necessarily shopping for a product, but for a solution. They want to get to a specific outcome, but they don’t know what question to ask, or to whom. It can be overwhelming.
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The businesses that are going to succeed best over the next ten years are the ones that are making best use of AI”
Mike Mason, Chief AI Officer, Thoughtworks
Advances in AI could give consumers and brands new tools to cut through this complexity. As the technology improves, AI has the potential to better understand users’ intent, make sense of what matters to them as individuals, and provide information that’s relevant. And there is an appetite for this. 79 percent of consumers surveyed by Google said they would find it helpful for AI to understand their specific needs and recommend products. A larger amount—82 percent—would find it helpful for AI to reduce their shopping research time.
The potential shifts that AI could bring to consumer journeys are relevant to almost all industries, and throw up a broad array of prospects and considerations. “It will take us each stepping up to navigate and lead the industry through yet another pivotal moment,” says Marie Gulin-Merle, Google’s Global VP of Ads Marketing. Tools that are operated by consumers independently of brands could create challenges for marketers who would, for example, need to adapt to an environment where people have new ways to explore and evaluate products. On the flip side, AI could also give brands tools to proactively help consumers make their purchasing decisions—and this creates an opportunity.
“The businesses that are going to succeed best over the next ten years are the ones that are making best use of AI,” says Mike Mason, Chief AI Officer at technology consultancy Thoughtworks. “It's not like AI is going to come along and replace those businesses outright—it’s another organization that is leaner, faster, and smarter because they've embraced AI better. That's the competitive threat.”
And for consumers, these tools aren’t just about convenience. They could also level up the shopping experience altogether, unlocking new avenues of enjoyment.
But first, what exactly are these tools?
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The technology: Moving up the fidelity curve
Chatbots used to underwhelm. Many were entirely deterministic, algorithmically identifying keywords or phrases in a user’s prompt and then taking that user along a decision tree to the best scripted response. Questions were misunderstood, answers often irrelevant and, as a result, chatbots on retailer websites often added friction into consumer journeys—the opposite of what was intended. The introduction of machine learning made some chatbots better able to handle conversations, and to improve the quality of their responses over time, but the user still frequently found themselves yearning to speak to a human.
The latest generation of chatbots have advanced a long way up the “fidelity curve”: a term that describes the correlation between technological progress and more persuasive user experiences. The current wave is able to use language fluently and produce compelling responses.
So what has changed? Generative AI—and it’s transforming more than chatbots.
Generative AI is a type of artificial intelligence that has recently upended the world’s understanding of what AI can do. Unlike conventional machine learning, it is not task-specific, and it’s not about classifying data. Instead it has a broad range of abilities, and is notably good at creative tasks: making imagery, prose, or videos. It also has the ability to reason across vast, unstructured data sets and multiple data formats. Generative AI has a particular aptitude for natural language processing—the ability of a machine to interpret and comprehend human language. Indeed, the typical user interface for most of the tools it underpins is a chatbot.
Traditional machine learning—sometimes called “predictive” or “analytical” AI—has already had an enormous impact on consumers. Over the past decade it has furnished them with everything from product recommendations to visual search. While these things will remain important, the dawn of generative AI opens up new possibilities.
Generative AI is not perfect. It may hallucinate—make things up—and the extent of its impact will in part depend on the degree to which the error rate can be reduced. But even with that caveat, it could allow a number of technologies to develop in powerful new directions. This includes chatbots, but also voice assistants, virtual previews, automated purchasing and more.
“This may be the moment that tools such as these move high enough on the fidelity curve to play a meaningful role in purchasing journeys,” says Carrie Tharp, Vice President, Global Solutions & Industries at Google Cloud. And it’s not only about upgrading the here and now. “Generative AI may also provide consumers with new kinds of decision-making strategies entirely.”
The AI opportunity: How AI could benefit consumers
AI is driving a shift in the way that humans and machines interact. This has the potential to help consumers at every stage of their shopping journeys, changing how they discover products, how they interact with brands, and how they make decisions—all the while reducing their cognitive strain and helping them make fewer poor choices.
“It could cut out quite a lot of the mess in the ‘messy middle’,” says Sian Davies, Founder of The Behavioural Architects, a consultancy that studies consumer decision-making. “Driving to extremes, it could cut out the arduous tasks that you don't want to waste your time doing, streamlining those decisions. Yet it could also allow people to deepen engagement with the things that they really enjoy shopping for.”
So what might this look like in practice as the technology develops? We’ve considered four use cases where it stands to tackle pain points and enhance consumer experiences, and spoken to experts from around the globe for some informed speculation on where current developments could take us…
Click to explore
Help me take the pain out of the shopping I least enjoy
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The next normal: Engaging with algorithms
In a world where AI plays an ever-increasing role in supporting consumer decision making, organizations will need to consider how their brands, products or services have the best chance of being the ones that consumers ultimately choose.
It may soon be commonplace for consumers to use a conversational interface to explore and analyze huge amounts of information. On the one hand, this is a challenge for organizations. If your product doesn’t show up among a bot’s recommendations, then it renders brand power irrelevant for the purposes of that interaction. And if yours does show up, for certain products, consumers may be led more by a bot’s dispassionate assessment of which option is best—and that may trump brand perceptions. But traditional marketing and branding won’t be irrelevant. For categories such as apparel, for example, if a consumer is looking at six white T-shirts, the brand alone may be the deciding factor.
“Brands will continue to play a huge role, but the extent may vary by category—in high-engagement and emotive categories that are of personal significance to me, it will matter more,” says Google’s Marie Gulin-Merle. “In so much research we’ve done, brand is the most important mental shortcut, so I don’t think that is going away.”
Nevertheless, in a world where AI mediates more of our online interactions, what would brands need to do to retain, or improve, their position?
Follow the consumer
Brands will need to respond to the changing ways that consumers shop, and success may not necessarily rest on who has the biggest budget. Indeed, as McKinsey’s Harreis observes, rather than AI making it harder for smaller brands to cut through, “AI can help consumers identify local or smaller brands that have a very clear value proposition and brand image.”
Success will instead be driven by marketers understanding how AI-supported consumer journeys work. If agent-mediated journeys become commonplace, for instance, clearly it will be important to ensure agents can effectively navigate and interact with your website.
Walk the walk
With values-led consumerism on the rise, the growing sophistication of AI may not only give consumers more power to identify brands that match their core values, but also allow them to test brands’ claims about their practices. Conversational interfaces may allow consumers to ask probing questions about companies, and receive advice based on large volumes of publicly available data and information taken from company reports, news stories and other third-party sources.
If brands want to show up for conscious consumers they would need to be more transparent about their policies, and need to share more data to prove their credentials in those areas. “The assumption would be the more data you share, the more accurate the AI answers will be,” Harreis says. “And hopefully the more congruent it will be with what as a brand you’re trying to achieve with brand values and the customers you’re trying to attract.”
Conversely, brands should remember that bad practice would be harder to hide—this is a paradigm where actions would speak louder than words.
Remember: Product is king
In an AI-supported customer journey, the reviews and other third-party content associated with a product or service would be paramount—a key part of how the AI will judge their suitability for a consumer. Much of that will be outside of a brand’s control, so having a good product, service or customer experience that meets consumer needs and delivers on promises will be vital.
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It doesn’t matter how much money you invest in the latest AI, if what you offer isn’t relevant to your target audience”
Bianca Kronemann, Lecturer in Digital Marketing and Consumer Behavior, University of Hull
“It's not only about ‘how good is your technology, how much did you invest in fancy AI tools?” says the University of Hull’s Kronemann. “It’s still about how good is what you're offering to consumers. It's about relevance. The consumer is at the heart of marketing, not technology. It doesn’t matter how much money you invest in the latest AI, if what you offer isn’t relevant to your target audience.”
The path ahead
In a world where consumer decision making has never been more complex, AI stands to offer tools to cut through that complexity. In some instances, brands can seize the initiative and use it to proactively help consumers simplify their journeys. Those that do this well may get ahead and stay ahead. So what should businesses be thinking about as they evaluate and deploy these technologies?
Avoid tech for tech’s sake
Companies are going to have to be intentional about how they build and buy technology. “You need to understand that technology, all of a sudden, is strategy. Strategy doesn't exist anymore without technology,” says McKinsey’s Holger Harreis. Those who see AI “as a tool, not a toy”, he says, are likely to make the best of emerging developments.
It’s also important to make sure that any new technology integrates well with the wider value proposition—it has to flow naturally into the user journey. Crucially, it has to actively improve the user experience. If it just moves a friction point elsewhere, then it’s not going to work out.
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Breaking down silos is now existential—it’s essential to success”
Marie Gulin-Merle, Vice President, Global Ads Marketing, Google
Having the right “AI culture” inside the business can make it more likely that a deployment is effective. Innovative companies have long extolled the virtues of breaking down silos within organizations, but Gulin-Merle says that in the current AI era this needs to become standard practice. “Breaking down silos is now existential—it’s essential to success—businesses need to use data sets and AI tools across teams, changing their workflows and enabling volume, variations and velocity in operations like never before.”
Prepare for the ‘segment of one’
People will increasingly expect their consumer journeys to conclude with the product that is right for them specifically. This will create an environment where they expect brands to speak to them in a more personalized and relevant way at all times. Here too generative AI can help. “Now, with new AI-powered tools, my team can scale creative concepts to more formats with unprecedented precision and unprecedented speed,” says Gulin-Merle. “This leads to infinite permutations of tailored ads for every customer. We’re now getting closer to showing up with the right message, right person, right time and in real time versus months of linear work.”
It means that marketers will need to become technologists”
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Mai Nguyen, Lecturer in Marketing and Co-Director of the Insight Lab, Griffith University
Of course, a major implication for marketers is the need to understand the new categories of tools in play. “It means that marketers will need to become technologists,” says Mai Nguyen, Lecturer in Marketing and Co-Director of the Insight Lab at Griffith University. Marketers won’t be competing with AI, but they will be competing with marketers who leverage AI.
The upshot? As Victoria’s Secret’s Rupp puts it: “I get to be a super-marketer, because I’m going to have much more powerful tools in my hand than I’ve ever had before.”
And finally, stay nimble to meet the moment…
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While there are clear emerging trends in how businesses and analysts expect generative AI to impact productivity and workflows, there’s less consensus around how it will remake consumer journeys and improve the consumer experience. The future is not yet written and is almost certain to surprise us.
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The biggest risk to the wide adoption of AI is losing the human centricity in it”
Bianca Kronemann, Lecturer in Digital Marketing and Consumer Behavior, University of Hull
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The biggest risk to the wide adoption of AI is losing the human centricity in it”
Bianca Kronemann, Lecturer in Digital Marketing and Consumer Behavior, University of Hull
As it unfolds—and however marketing teams decide to engage with new tools and technologies—brands should take a responsible, policy-led approach, putting appropriate guardrails in place to limit potential downsides as they aim to realize the advantages. At the same time, they need to ensure their use of AI is centered on human needs, experiences, and emotions.
“The biggest risk to the wide adoption of AI is losing the human centricity in it—that we forget who is at the heart of the marketing process, which is people,” says Kronemann. “Technology is a tool that we use to reach and engage our audience, and AI is no exception. If we don't use it wisely, we lose the consumer.”
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Google/The Behavioural Architects, Decoding Decisions Making sense of the messy middle, 2020 (read more here)
Google/Ipsos, The Relevance Factor, Mar 2024, US, UK, AU, BR, CA, FR, DE, IN, IT, JP, MX, NL, SG, KR, ES, TW, TH, VN n=18,003, online shoppers 18+ (read more here)
Whistl, “eCommerce Returns UK Consumer Trends and Best Practice”, February 2024 (read more here)
Shopify, "Ecommerce Returns: Expert Guide to Best Practices (2024)", February 2024 (read more here)
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