Using Artificial Empathy to Increase Revenue
Artificial intelligence (AI) is high on the list of priorities for retailers. One of the challenges of AI, however, is the inherent human need for, and capacity to demonstrate, empathy. While AI is evolving to become more human-like, left to its own devices, siloed intelligence can feel robotic. That’s why retail leaders are actively working to create empathetic experiences throughout the buying journey.
The usage of artificial empathy (AE) is growing among retailers that want to stay ahead of the pack. It’s an open door to opportunity, and one that has the market racing towards testing and perfecting. However, you may be asking, "What exactly is artificial empathy?" Well, according to Wikipedia, it's "the AI that can detect and respond to human emotions." That’s right, it’s effectively knowing what the customer is thinking and predicting what they will want next.
All of this begs the question: How does AE improve the customer experience and create revenue opportunities?
It’s already known that generating revenue should be synonymous with creating and delivering value to customers. But if you want to do that well, you have to dissect the customer journey and capture the data around that experience. And that isn’t just about giving them what they want. After all, at a macro level the market aggregates individual’s decisions on any given day. The potential in marrying AI with AE is predicting the volatile nature of human decisions, considering the interests of the different players in the system, and coupling this with the nuances that influence how we receive and deliver information. As businesses harness these insights, their ability to create products, services and experiences that match market expectations will grow.
On a high level, here are three ways AE can deliver more value to customers and increase your bottom line.
Engineering Human Experiences
Consumers expect a highly personalized journey when making a purchase. In industries where value-added services like professional installation are picking up steam, engineering human experiences demonstrates significant revenue potential for companies that are able to jump into the game.
With consumers now spending more money on experiences, it brings opportunities for added sales or partnerships. For example, a mountain bike sale may give rise to the purchase of a biking adventure package. Statistics show 73 percent of millennials are more likely to shop at a mall if it has a leisure or entertainment experience. Even better, customers spend a fifth MORE on retail goods if the shopping center has a health or wellness center such as a gym.
Retailers like Walmart, Target and Aldi have recently announced billions of dollars of investments in renovating stores to provide a better customer experience. Even banks are jumping on the bandwagon with coffee shops on premise. In fact, the projected spending on the “experience” economy is set to hit $8 trillion by 2030.
Friction is a death knell to the customer journey. As consumer demands become more specific and are attached to a higher level of urgency, reducing friction gets trickier. AE can mitigate this risk through automated technology that anticipates problems and resolves them before they happen. Effectively using technology to generate revenue always goes back to the customer experience and figuring out how to bridge the gap between reality and expectation. AE is that bridge.
Think about the Amazon.com shopping experience. People love the online retailer's customer experience because it's quick and easy — a click of a button and your goods can be with you the next day or within hours. Free shipping and returns, easy payment options, and customer loyalty programs like Prime are also plusses. In fact, 71 percent of consumers join loyalty programs because of the promise to save money. Member programs can eliminate friction and make the buying process seamless.
Limiting Wasted Resources
Stewarding resources is vital for any company's long-term success. It’s a perpetual challenge, especially when so many are intangible. Because consumers increasingly value brands based on how they position themselves, AE has the potential to unlock a curated customer experience by predicting and delivering the desired outcome along each step of the buying journey.
You could focus resources on innovation, improving your product or packaging, changing your business model, but the most important emphasis must always be customer focus. This, says, Jeff Bezos, is the reason for Amazon’s rise. The company uses data analytics so that decisions are based on customer needs and behavior, not what you think is needed.
AE must be part of that customer-focused solution, enabling retailers to further optimize automated interaction, improve customer support and the entire customer experience at a lower cost. Resources can then be reallocated towards areas that drive further innovation.
So are you building out a strategy that harnesses the power of artificial empathy and sustains a highly relational customer experience? If not, you should be.
Hassan Archer is chief operating officer of Buy It Installed, an e-commerce company that gives consumers the option to add professional installation at the time of purchase on a whole range of products (e.g., consumer electronics, smart home devices, computer hardware, lighting, etc.) by simply pressing the Buy It Installed button on the retailer's website.
Hassan Archer is COO of Buy It Installed, an e-commerce company gives consumers the option to add professional installation at the time of purchase of a whole range of products (such as consumer electronics, smart home devices, computer hardware, lighting, etc.) by simply pressing the Buy It Installed button on the retailers website.