Consumer-facing industries are well along the path of radical change. Changes in consumer behavior and expections—driven by artificial intelligence (AI), advanced data analytics, and other disruptive technologies—are empowering and connecting consumers in new ways. Research backs this up, too. For example, by 2020 the market size of AI-driven personal assistants and bots is expected to be $12 billion and 50% of essential household items will be auto-replenished using the Internet of things.
Many of the central assumptions that business leaders have trusted for decades—about what consumers want and how to serve them best—are suddenly becoming irrelevant. Corporate leaders need to change the way they think about tomorrow. If they don’t, or don’t act quickly enough, they will fail to realize the right results.
Through our FutureConsumerNow initiative, Ernst & Young has been exploring how consumers across the globe may change in the future and how companies can start preparing today for that new reality. Through this initiative, we’ve identified 150 drivers of change that will profoundly affect consumer-facing industries. A deep look into these forces gave rise to eight hypotheses that provide a 360-degree view of a consumer’s life. We’ve then modeled the worlds they could live in and identified where to capture value.
At the heart of these eight hypotheses is the elevation of the “Smart Consumer.” Consumers already gather and analyze their own data to improve to become better versions of themselves through wearable devices or other technology that tracks their fitness and sleep patterns. Eventually, AI will help the Smart Consumer fine-tune every aspect of their lives—how they will shop, work, live, play, eat, use technology, move, and stay healthy.
What has become crystal-clear is this: Companies that want to build trusted, profitable relationships with these consumers will have to reinvent themselves.
Our eight hypotheses detail the key factors that will fundamentally reshape the lives of future consumers. If we look at only one of these hypotheses—shopping—here’s what we see: In the not-too-distant future, shopping and buying will become two very distinct activities. AI will curate and buy for consumers. Consumers, in turn, will only shop for the products and services that help them express who they are and match their values.
In the future, consumers also will be less concerned about the seller or the brand for the bulk of their task-oriented purchases. We predict that competitively priced and relevant products will simply arrive via AI and machine learning-based platforms that curate massive amounts of consumer data. Consumers will have access to their own personal AI companion or concierge who they trust.
Three Ways To Create Value
So what should CMOs of consumer-facing companies do? How can they create value for consumers in shopping? Here are three ideas.
1. Think Platform
Invest in AI-driven platforms. We believe that in the near future, we may see large global consumer brands owning or participating in AI-driven platforms that don’t skew toward one marketplace or product portfolio. Instead, the platforms may lean toward elements of their firm’s purpose and values. On a purpose AI platform, consumers will be offered products that may contain only recycled packaging and sustainable ingredients made by livable wage producers or local farmers. It’s easy to see why the love of a platform may surpass the love of brands—the platform will be a company’s alter ego.
2. Dig Deep Into The Data
Consumer-facing companies have been discussing mass personalization at scale for decades. The power of AI platforms, combined with the granularity of data and depth of consumer insight that will soon be available, will turn delivering curated messages from leading practice into table stakes.
For CMOs, being able to put these massive amounts of data to work will be key. The Fourth Industrial Revolution will reward companies that can manage resources of abundance: consumer data.
3. Master The Ecosystem
Consumers’ expectations will continue to outpace a company’s ability to capture and shape them. When companies are clear about their core competencies and the gaps they need to fill, they often realize the importance of leveraging an ecosystem of partners. CMOs are perhaps the most versed in ecosystems—having multiple agency, data, analytics, and innovation partners.
In the future, these partners will offer more holistic capabilities focused on customer acquisition or managing membership or loyalty. Cultivating an ecosystem of partners will be critical. A company’s value and competitive advantage may come from the ability to use consumer insights gathered from its treasure trove of data to shape messages, product innovation, and AI platform superiority.
As consumers disengage from their relationships with brands, it is more important than ever for marketers to find new ways to make them “feel the love.” By making the most of AI platforms, digging deep into the data, and mastering the ecosystem, companies can win the future consumer by delivering personalized products and services that speak to who they are and what they stand for.