Are Consumers Shying Away From AI-Driven Purchases?

There's just one problem: consumers might not like artificial intelligence, at least not in an e-commerce context. Recently, we conducted a survey of 2,000 consumers, and its results on this front were unambiguous: 85 percent of shoppers reported that they were not interested in using AI to help make purchasing decisions, and 60 percent said they would be unaffected by AI recommendations. The gap between the AI boosters and actual consumers is hardly a gap at all: it's a chasm.

Obviously, AI — or at least machine learning — is already in wide use by most brands in the form of things like marketing personalization and automation. Yet its more overt manifestations such as AI customer service chatbots appear to alienate consumers. What's responsible for this growing disconnect?

There could be a few reasons:

1. When it Comes to Personal Data, Consumers Have Been Burned Before

Over the last decade, a succession of scandals and high-profile breaches have made consumers warier than ever about how their personal information is being used. Per a recent Pew Research Center survey, 77 percent of Americans have little to no trust in how the big social platforms might use their personal information, and that number is actually higher for AI companies. For some consumers, the trade-off — more personal data for better personalization — simply might not seem worth it. This equation could change if use cases for AI become stronger and consumers can see a much clearer, tangible benefit.

2. Bad Uses of AI Are Crowding Out the Good

Because AI personalization is subtle, many consumers might not even realize that AI targeting has led them to make a purchase. Instead, when they think of AI, they think of the customer service chatbots that have proliferated across e-commerce sites over the last year, many of which are prone to errors. As studies have borne out, most consumers would rather talk to a human, and view these chatbots as another obstacle thrown up between themselves and human support staff. Granted, this technology is improving quickly, but it has already created a negative association with AI in consumers' minds.

3. Personalized AI Shows Customers More of What They Already Like — and This Might Not Be a Good Thing

It's true that AI is very skilled at figuring out precisely what a customer might want based on past purchase history. But consumers are more complex subjects than many marketers often realize. A recent study here is illuminating: researchers at Temple University and the University of Science and Technology China tried to measure the effectiveness of brand-curated and AI recommendations, and discovered that both were effective, in different ways: AI recommendations led to a "depth selling effect," where customers purchased more of what they already like, whereas human curation led to a "breadth selling effect," where consumers made purchases outside of their AI-determined comfort zones. This seems to show that AI currently has little value in helping a brand land new customers or upsell existing customers higher value items.

Looking Ahead: What Brands Should Really Focus On

There's no denying that AI will change how brands market their products but, as it stands, consumers remain skeptical about how much value this technology actually adds. The lure of the shiny new thing is understandable, but there's only so much AI can add to your business if certain fundamentals aren’t firmly in place.

To the extent that AI recommendations have value, it can only be as part of a well-rounded marketing program. Marketers need to take the time to listen to their customers' existing needs before blowing their budgets on third-party AI vendors whose wares remain largely unproven. In the rush to implement these tools, things that are much more foundational to brands’ success are going neglected — their own websites, for instance. . According to our survey,  the majority of consumers view a brand’s website as their most important marketing channel, and that 60 percent will abandon purchases if a website is poorly designed or otherwise malfunctioning.

Put otherwise: you can renovate a house as much as you’d like, but if the foundation isn't strong, you’ll be wasting your money. AI has its place, and the technology will only improve in the coming years, but it can only help a brand so much if that brand is actively ignoring the present-tense needs of its customers. Yes, a plug-and-play sales generator sounds nice in theory, but there is, in sales as in life, no free lunch. If the goal is higher sales, pay attention to the basics first.

Work still needs to be done to ensure that the AI adds real value to the customer experience, and that your audience is comfortable interacting with these tools. This means educating them on how they work, being transparent with how their data is being used, and giving them a clear choice to ‘opt out.’ AI might be a life-changing technology, but it won't help much if you forget best practices.

Thomas Peham is the vice president of marketing at Storyblok, a headless content management system.