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����԰AV Scholarly Impact of the Week profiled April 13, 2021

“Hey Alexa, add milk to my shopping list.”

As home voice bots like Google Assistant, Amazon’s Alexa, and Apple’s Siri have become more affordable, online voice command shopping has reached new levels of popularity. Consumers can easily outsource their purchase decisions to artificial intelligence (AI) and algorithms. At the same time, online retailers like Amazon have capitalized on this desire for convenience by automating online ordering and payment, and offering next day delivery. These changes, welcomed by consumers, are disrupting the retail landscape - and not just by channeling purchases to preferred suppliers and distributors. Retailers and manufacturers are no longer marketing their wares to human customers but to the trusted bots influencing their decisions.

Beedie School of Business Professor Judy Zaichkowsky became interested in the appeal and potential impact of AI decision making after attending a talk on digital disruption by ����԰AV alumnus Frode Strand-Nielsen. That Christmas (2017), she noticed how everyone wanted a voice bot digital assistant. As a thought leader on consumer behaviour and advertising, Zaichkowsky wanted to explore the popularity of these digital technologies and discover what effects AI-influenced shopping was having on the marketplace. She was sure retail managers would want to know too. 

Zaichkowsky assembled a research team that included Professor Philipp Klaus from the University of Monaco, and together they have published several scholarly articles. Their most recent work, was published in the Journal of Retailing and Consumer Services.

According to the research, people have positive experiences when talking to a voice bot and enjoy the feeling of being in control. Most bots speak in a friendly, female voice that feels conversational. The voice is charming, exudes trust, and mimics an interaction with a real person. If the first suggestion of a shampoo is not acceptable, the AI technology will offer another. The human-like experience of interacting with technology is key to continued trust in the device.

The voice bot experience far exceeds our interaction with screens. When asked if she thought the global pandemic had contributed to an increase in voice bot shopping, Zaichkowsky was quick to agree. “Voice assistants have exploded during the pandemic, and many people are relying on this type of shopping. After working all day, people are tired of looking at screens.”

When it comes to routine purchases such as ordering shampoo or other household staples, people also love the convenience and ease of using voice technology. Not only can they ask Alexa for help with routine purchases, Amazon’s shipping technology has refined the logistics of goods delivery. Alexa can gather a customer’s shopping history, and have it packed, shipped and on their doorstep before they ever knew they needed it.

For more complicated purchases such as homeowners or car insurance, AI also has an edge. Rather than read and evaluate every policy option, AI can help a customer narrow down their needs to what’s most important. In fact, consumers are moving towards trusting AI to make better decisions than they can. And they may trust AI to make better recommendations than their human counterparts, since over time the AI voice bot gathers data about the users’ preferences.

Professor Zaichkowsky calls this voice bot assisted shopping “AI-influenced decision-making” or AIDM for short, and she wants brand managers to know how it works. For the last several decades, brand names have represented quality, reliability and status – attributes that helped consumers make their own purchase decisions. In the new AIDM model, the supplier is making the decision, based on what is readily available in the warehouse, regardless of brand. It is interesting to look at Amazon as a first mover in online retail – a bookseller that quickly became the “best” brand because of its dependable delivery and order management.

Given that AI voice bots are now offering the “best brand choice” to customers, it’s conceivable that the new generation of online shoppers may not experience a fondness for Coca-Cola or Kellogg’s. Bot shopping is also leading to a monopoly on distribution as AI sources the suppliers. Ultimately, the producer of an item is becoming so distanced from their customer, that they do not have basic information about who is buying their brand.

However, there are options for brand managers, says Zaichkowsky. Brands can differentiate themselves and then trademark and promote that difference to gain an edge. Even in the age of AI, consumers still align with brands that represent quality, reliability, status and other values. Furthermore, any company, be it established or a start-up, can place their high-quality and competitively priced product in the bot mix, where it can become a best seller, no advertising required. For example, Amazon has helped private label clothing companies become popular on their platform.

Another option for brands is to develop their own voice bot assistants, following the lead of companies like Spotify, Comcast, the BBC, and social media giants TikTok and Snapchat. Brands Coca-Cola and KFC have partnered with Amazon to have Alexa recommend their products. Nike has partnered with Google Assistant to promote its running shoes and running app. There are opportunities to embed voice bots into customer service roles across the online marketplace. Zaichkowsky’s study encourages brand managers to rethink their marketing strategies to include voice commerce, and to develop the technology as a further touchpoint with customers.

Meanwhile, Zaichkowsky cautions that voice assistants are merging economic and political power into fewer and fewer hands. Digital assistants threaten consumer privacy and choice. Bots that seem impartial could be used in deceitful ways to dominate markets, stifle competition and undermine democracy. She urges regulators and legislators to safeguard consumers’ interests and privacy, and guard against monopolies. It’s not a crusade against innovation, says Zaichkowsky, it’s a call to encourage competition and maintain healthy local and global economies that protect the well-being of citizens. And it’s a call to consumers and brand managers to understand the ways AI is influencing purchase decisions to capitalize in the era of convenience.

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