Artificial intelligence (AI) has revolutionized the shopping experience. Consumers are no longer going to retailers and businesses with a product or service in mind. Instead, they're turning to AI agents to tell them what they should buy. As one participant of Newsweek's "How Is AI Reshaping Business Strategy" webinar on Dec. 1 noted, "the buying journey [has shifted] from product choice to solution engineering."
On Monday, Newsweek brought together industry leaders Suraj Srinivasan and Gopi Kallayil to explore where AI delivers the greatest business value, the state of AI adoption today and what remains the most important consideration for consumers today.
Srinivasan is the Philip J. Stomberg professor of Business Administration at Harvard Business School and a member of the Newsweek Advisory Board. Kallayil is a leading AI and digital transformation thought leader who has worked with business leaders across many industries in roles at Google, McKinsey and other technology companies in Silicon Valley and beyond.
Srinivasan and Kallayil agreed during Monday's conversation that the AI shopping experience has not only created real change in consumer behaviors, but that consumer adoption has far outpaced the speed at which businesses are embracing AI. To catch up, Kallayil suggested that businesses not only rethink strategy, but monitor competitors both within and outside their industry. He also urged businesses to be proactive when they can.
..."Sometimes the consumer may not even be able to tell you what exactly they need," Kallayil said. "You have to then anticipate it and even push the boundaries a little boldly."
Using services like Spotify, SiriusXM and Apple Music as an analogy, he said, "Fifteen years ago, most people were content driving around with access to maybe 10, 30, 40 of their favorite songs."
"Now, with all the streaming services, we put 5 million songs in the pockets of people—and even that doesn't seem to be enough," Kallayil said. "The curiosity of the audience has changed."
But even as consumers embrace new methods of consumption, Kallayil argued that they will only become more empowered with AI than compliant on what shopping recommendations are made or restricted by the suggestions that an agent offers.
"As a consumer, I have discernment, I have choice, I have power and I'm going to make sure that is included in this process as opposed to just completely delegating it to an agent to do it," he said.
In today's shopping age, Kallayil and Srinivasan said it was critical for businesses to focus on trust. They said that consumer trust was an effective way for products and brands to stand out in crowded marketplaces. As agents become popular information providers, consumers will need to know that they can trust these AI models. But if they catch the AI making errors, that trust can erode quickly.
"Consumers are very savvy," Kallayil told Srinivasan. "They're not simply going to trust or accept the recommendations or the decision pathways that these AI agents [offer]. In fact, their expectation will be, 'I can go back and queue the agent with additional factors once it presents me with this information.'"
He added that many of the business leaders he's consulted have expressed a hesitation about adoption AI, but that consumers are already "jumping in with both feet."
"If the consumer speed of decision making is changing and becoming faster, the organization's speed of decision making has to change and become faster," Srinivasan said. "If customer decisions are happening in different ways, AI native organizations will have to support learning about the rapid experimentation, performance dashboards... It's trying, testing, experimenting to keep pace."
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