How Artificial Intelligence is influencing the consumer buying behaviour
Our usual go-to stores have increasingly known our shopping list. This is often due to our online check-out baskets and also the loyalty cards we use at the cashier scanner while checking-out. But the retailers now are getting more aware, dominantly so, of our buying trend through the use of Artificial Intelligence (AI).
The software system is now influencing consumer buying behaviour. The self-learning software can learn to automatically predict and thereby influence and encourage our specific buying preferences and actual purchases in a dramatically aggressive winner.
The remarkable AI can effectively build up a consumer profile for anyone and suggest product before they even realize whether they actually need it and end up buying it. The well known “you may also like” or “based on your history” sections we often see on our favorite shopping retailers. And before you know it, you are in the shop buying “your must try” wine on a weekend, just through influence of AI.
Ubamarket is one such UK firm, that has made a shopping app. People can make their shopping list, scan products for ingredients and allergens and also pay using the phones. Founder Will Broome said, “Our AI system tracks people’s behaviour patterns rather than their purchases, and the more you shop the more the AI knows about what kinds of products you like.”
He further explains, “The AI module is designed not only to do the obvious stuff, but it learns as it goes along and becomes anticipatory. It can start to build a picture of how likely you are to try a different brand, or to buy chocolate on a Saturday.” The app is currently in collaboration with small-scale UK retailers like Spar, Budgens and Co-op. The take up of the app is speeding up, partly as the consumers are shopping more online due to coronavirus pandemic.
Similarly, in Germany, a Berlin-based start-up SO1 is using AI for retailers. A research done by SO1 claims that consumers buy a product nine times more through AI suggestion as compared to the traditional means of promotion. This is also consumer-friendly. Instead of buying a product just to use coupon, through AI suggestions consumer can buy a product that they may actually need.
But there is also a flip side to it. The massive amounts of user data that is being tracked and vast amount of information that are being collected by AI is a red flag, with always a probability of data misuse. Jeni Tennison, UK’s Open Data Institute head, that campaigns against misuse of data, says, “People are happy to be recommended products, but start to feel more uncomfortable when they are being nudged, or manipulated, into particular buys based on a caricature of who they are rather than the full complexity of their personality.”
The biggest name to data collection is Amazon, the online retailer that each one uses frequently. The massive user information it has through shopping history, and also Echo speakers, is beyond comprehension. The giant is now heading into physical retailing market, based on AI based computer vision technology. This will enable people to shop physically at its stores without any human interaction. Already 27 US locations of these Amazon stores are up and running. Kroger, another US retailer, is working on smart shelves fitted with LCD displays in its stores. The feature will attract customers through its “beam contextualized content”.
The pandemic has deeply affected the consumer trends across the globe. As people have panic bought things and have focused on essential things more, the supply-demand balance has been highly disturbed. Artificial Intelligence will work in this scenario to bring balance and keep in sync the demand and production, and hence keep the stock levels as required.