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RETAIL
REVOLUTION
THE POSSIBILITIES, POTENTIALS & PITFALLS
OF IMPLEMENTING AI
02
Artificial intelligence (AI) is completely
revolutionising retail. Not only is it accelerating a
customer-first proposition for companies, but it is also
bringing the physical and virtual closer together. Now
that ecommerce has fully taken off across Europe, it is
even more important we create seamless, frictionless
communication in the customer journey.
At OMD, we are always striving to unlock the demand
potential of brands and ignite consumer desire that
accelerates business growth, with innovation and
creativity at the heart of everything we do. As clients
shift to a customer-first model, we actively help
them bridge ideas and technology to drive better
personalised marketing communications that deliver
results in the boardroom.
Over the last six months OMD, in partnership with
the Goldsmiths research team at the University of
London, embarked on a dedicated research project to
investigate the possibilities, potentials and pitfalls of
implementing AI in retail. The research looked at 12
European markets to understand the current consumer
landscape exploring similarities and differences in
AI perceptions, retail behaviours and AI usage. The
insights generated to date have unearthed a wealth of
information to guide brands and businesses on their AI
journeys.
We all know AI will transform marketing
communications so we need to start immersing
ourselves in this emerging opportunity now.
WELCOME
   03
NIKKI MENDONÇA
PRESIDENT, OMD EMEA
INTRODUCTION
THE AI REVOLUTION IS NOT ABOUT THE
ROBOTS, IT’S ABOUT THE CUSTOMERS
If you’re not thinking about the coming AI revolution
you are already falling behind, half as many European
consumers say they are as familiar with AI as unfamiliar.
All of a sudden a promise from Science Fiction has
become an everyday reality for the majority of
consumers.
Brands such as Amazon and Spotify, personal
assistants like Siri and Cortana, technologies including
programmatic trading and search; all of these rely on
machine learning to deliver a competitive advantage.
So AI is already delivering on its long term promise,
which means consumers are better prepared for the
much more dramatic changes to come.
04
   05
RESEARCH:
OVERVIEW
This is significant for a retail industry challenged to keep
up with customers’ rapidly developing expectations.
Shoppers are increasingly demanding VIP treatment
from retailers who will respect their time, their
individuality and can inspire them in unique, personal
ways. Just as interactive technologies have created
and fuelled these demands, the only way for retailers
to deliver the high-quality personalised experiences
customers now expect - at scale - is through the next
stage of those technologies; artificial intelligence. The
question for retailers is how best to employ AI to create
the shopping experiences of the future.
THE CHALLENGE
ACROSS EUROPE*
BASE: NATIONALLY REPRESENTATIVE ACROSS UK, ITALY, SPAIN, ROMANIA, RUSSIA, POLAND, NORWAY, NETHERLANDS, SWEDEN,
FINLAND, DENMARK AND GERMANY TOTAL N=14,960
Q. How familiar are you with AI? Scale – 1 (not at all familiar) to 10 (very familiar)
Q. Would you consider AI to be a part of your life? Yes, I am already using AI; Yes, I would like to get an AI device/app; No
Source: OMD Snapshots, April 2017
60% CLAIM
TO BE AT LEAST
SOMEWHAT FAMILIAR
WITH AI
20% ARE
ALREADY USING
AN AI DEVICE
ANOTHER 38%
WOULD LIKE
TO GET AN AI
DEVICE OR APP
06
Quondiss ediendam porum ia
se aurnulii sus hae, prae conum
probsed patem inesunu meris,
moendit, derei consilla adhum no.
Upecidese inu eto huis, ficaperri
consum remquitrum.
Gervivivit. Verum nihil ut det,
consulicaes con vit. Sent? Go vis
incutu estimor udamque pritum.
Iri publi, con silis consullabem,
vit inatu et, que es fac res is host
perunte naterum iam obunt. Qui
faciam me quem publien tellati
fernius libuncus, cum Romnemn
ihilis nox modit fatum pra re
tanum tam co in Etra, no. Valii
pessi caest vidionsteme tin tam,
simiusque efacier iciistiu iste,
nosteri iptis et graes consus re,
sernium fachusquit, me ius, ca ad
medo, esensiliciam noncluterbi
enique cont, quo temprei pescis
seniam priocrunu venterio, nonsunc
erritarica ex morbit; num nemqua
rentem det; nossimiure, utessolus
consum menduci endium aus lis
int for quonfec re tam egerfer
fecesseris dentium, sendius.
Vivis. Habem, co C. Udam sesenat
uscrissatre ites et inam simei tus
fuit effret; erfir audacip sendet
nius, con rei tio inum qui inem
ponsil hocae cerfectam cupioratius
imandam visteres corum dion
vernum quonte publiciptela entem
di fuidi prio manduciam sentelienti
potiam. Ebem amdicipses Cas
intionfica; inaribus ad re conclud
emnimium etra o urnihil lesimmolut
L. Simanum horbis delut gra
sensult uuscerferio mus licid iam
tis; Catiam is aciensu spions nos
Mae auctus isse publi pra, que
eterio egillego Cupimpratrum
atum ti, consin Itaturesed
inimmoe rriocuperum. Atiqui
egerum movervi gilici publintem iu
quam que macchuspim detorum
anum nonlostiam nos nocchuc
emernimium que ceresserum
interem perfit? Diurei prica; hilinum
liistima, me re, noris consulicaus
se diciamedis. Satuis ius, se
maximanum temquid cononsus
elute, se atuus acibus, cononsulatus
essidictur host auctum spienam
quam tin rei tus et in simus for
aperfec risque cortentim auce id se
te ceps, Cateatorum hebuncessa
quidemquid Catiliu squium orum,
furnius movirmius, obultum oc rei
patanultodit die iam sus; hortilia
egerudentil us, se aperis bon nim
renest faceris eo audendit, consula
o et Catum videper finve, ut videm
temum clego Catiemus audam
nonte consimo visquem deporum
mero, sigilica; nihicatui sendachum
tam viverebat, nesenihilis nos fit;
nonsus neque tam publii ius se ta,
sendit. Guliam omnequam pubis
viliquid consua imus? Oximpro
bsendactus manti, pera norat, vis,
nonitante tam is, Catum dierdiis
aperfirius sulostius bondem Romnis
cone cesedo, clum simihilicia et,
omnimum ineriusse firmaiore
pravest uastrae pero conclum mus,
C. Ahabutea rei porum in sessulic
re eorae vitusse diussi iam. Verdit
clessili, ocus, quod re culudet cris,
ma, praes acepsed remum quid
me conterore cut porum pri pons
patuspios ocut ressenihili, miurbit,
sed noximor tilicam dienatius, sed
C. Viverem enterem adem dium
pessena tridem enam auciend
epopulvit.
Ihicuspera etodiem untios Ahalius,
nonum movis occiam in dius
rendam mor lintebatus consul
consin tatudac tatquam se dienitem
poraeconsil vem imus cam iur qua
ponlostia ma, esitat verriamentem
menihilis. Equam quam ac iam es es
noccit; nones, nos mendien atiem,
nimodin dit.
Sultorunt ia qui senduci vivere
nihicit, Catus? Aximus, omnem
Manning Gottlieb OMD Challenger Conference  |  7
KEY THEMES
EXPLORED
AI
PERCEPTIONS
RETAIL
BEHAVIOURS
AI
USAGE
   07
RESEARCH:
OUR APPROACH
OMD and the Goldsmiths research team at the University of London embarked on a dedicated research project
to understand consumer perceptions of, and behaviours with, artificial intelligence across different retail
environments.
12
MARKETS
14,960
NAT REP
RESPONDENTS
1
HACKATHON
6 SUBJECT
MATTER EXPERTS
18 TECHNOLOGIES
TESTED
6 CHATBOTS
CREATED
08
The research used a mixed method approach giving insight into how consumers accept, understand and trust AI,
exposing how brands can implement AI services that deliver meaningful human impact.
STAGE ONE
Setting the scene through extensive
desk research into the field of
AI in retail and initial consumer
experiments testing a diverse range
of bots with six UK participants
from the general public.
STAGE TWO
Immersing 15 UK participants
into the world of retail focused AI
using exploration techniques to
capture consumer experiences and
expectations.
A Hackathon and subject matter
expert interviews were also
conducted, providing us with
valuable insight into the current AI
landscape and future trends.
STAGE THREE
Quantifying our understanding of
how consumers perceive AI in retail
through a robust and in-depth
survey, giving insight into the
possibilities, potentials and pitfalls
of implementing AI across 12
markets.
   09
1. BRING THE RIGHT SKILLS TO THE TABLE
THE APPLICATION
As with all new and exciting technologies, there is a
tendency to jump straight in and start ideating or even
building. In conducting this research, we advocate
a consumer-centric approach – putting the needs,
desires, expectations and attitudes of audiences at the
heart of the process. We have compiled a list of some
of the key learnings from our projects in this area,
predominantly in chatbots and voice. These rules will
help you succeed in applying AI and creating systems
that benefits you and your customers alike.
APPLYING AI IN MARKETING, WHAT WE’VE LEARNT SO FAR
2. THINK ABOUT WHAT YOUR CUSTOMERS
WILL INTERACT WITH, WHEN AND HOW MUCH
3. BE CLEAR AND TRANSPARENT WITH YOUR
CONSUMERS
4. DON’T LIMIT YOUR IMAGINATION
5. THINK ABOUT AI AS A BRAND BUILDING TOOL
10
   11
AI TO REDUCE
SHOPPER
FRUSTRATIONS:
Consumers recognise the benefits of different types
of help in different sectors. So people shopping in
a wide range of categories - including groceries,
beauty & personal care, books & music and furniture
& decor - would welcome assistance in making
more informed decisions. In other categories -
such as travel, events and movies & TV - they want
to be surprised by new opportunities and ideas.
Additionally, when shopping for beauty & personal
care products, health & fitness or groceries, they
would be open to personalised suggestions.
However, AI is still in the early days of proving itself
to mass audiences and needs be more than a novelty
option for most purposes. Given that there is still
something of an AI sales job to be done, it would be
wise for brands to use AI in very practical ways and
demonstrate functional utility; not just a frivolous
gimmick.
12
   13
BRING THE RIGHT SKILLS
TO THE TABLE
Involving a wide range of stakeholders from your organisation and giving everyone clear roles in the process
will ensure that you have a balanced and rounded view. This multi-disciplined team will help pose a range of
considerations and potentials, as well as help you foresee and troubleshoot problems. It is paramount that the
activation is in line with current brand perceptions and experiences. The role of the marketer is very much about
owning the brand voice, the engagement with consumers and the packaging and promotion of such efforts.
RULE ONE
14
Consumers want AI services to help them do the things they already do in a more efficient and streamlined way
rather than to replace and therefore automate their activities. This also highlights one of the key points where AI
projects can fail; the moment that the AI becomes more difficult or slower to use than their previous approach is the
moment customers will abandon it.
36% of survey respondents who wouldn’t consider AI said they “didn’t need AI”, while just over a fifth said it was
easier to use their default option and just under a fifth said they didn’t understand the benefit of using AI.
What’s surprising is that this “So what?” problem is particularly pronounced among younger audiences.
39% of 18-34 year-olds said they didn’t need AI, while 25% said it was easier to use their default option.
BRANDS SHOULD INSPIRE PEOPLE AROUND THEIR EVERYDAY NEEDS
A ‘SO WHAT’
PROBLEM:
   15
THINK ABOUT WHAT YOUR CUSTOMERS WILL
INTERACT WITH, WHEN AND HOW MUCH
Embracing a consumer focused planning approach ensures that you will consider the lives and routines of one or
several of your target audiences, and importantly the rights and role of the brand in these moments. In early phases
of AI application, many brands are finding consumers do not necessarily work through experiences in ways that
they expected. It is important to incorporate and test branded AI with questions such as ‘tell me a joke’ (one of the
most likely questions to a branded chatbot), ensuring that responses deliver a good brand experience. Marketers
must be the guardians of the frequency of communications and the moments at which they feel the brands can add
value to consumers’ lives.
RULE TWO
16
Shoppers are open to getting “expert” advice via AI. That can mean personalised recommendations, but it could
also simply be a matter of automating basic operations in order to free the humans in the team for more complex
customer interactions.
The way retailers use AI also has to align with their brand personality. As well as a brand strategy, they need a
conversation strategy that informs not only what their human employees say but what their robot employees say
too. Additionally, they also need to be transparent about what they are doing and how they are doing it, in order to
build customer trust. While it is true that shoppers are open to interacting with AIs, their major concerns are around
who is collecting data about them and how that data will be used.
AI WILL DRIVE A HEIGHTENED ROLE FOR RETAILERS WHO COMMIT TO TRANSPARENCY
AND SHARED POWERS WITH THEIR CONSUMERS.
THE VALUE
EXCHANGE:
   17
BE CLEAR AND
TRANSPARENT
WITH YOUR
CONSUMERS
Signposting and setting the expectation in
consumer-friendly language and being honest from
the outset about what technology is being employed
is key. Our research found that respondents have
different levels of comfort across methods of
delivery and platforms, which vary significantly by
age group. With this objective in mind, you should
consider the type of data and processes required to
deliver your desired experience which are in line with
your audience’s comfort levels. For example, saved
multiple choice answers can be used to tailor future
communication and rescue users from
re-inputting information. Different platforms also
allow you to easily access consumer information,
such as using Facebook Messenger to gleam location
data which can be used to promote nearby sites in a
way that feels natural and seamless.
RULE THREE
18
FOUR TRENDS BRANDS SHOULD CONSIDER WHEN CREATING AI SERVICES FOR RETAIL ENVIRONMENTS.
LOOK TO
THE FUTURE:
AUGMENTED
INTELLIGENCE:
AI working with the user in the consumer
experience.
AI that enhances user experience in retail
activities - a partnership. Segment AI to highlight
the space of supervised learning and collaboration
between people and smart machines in the
consumer interaction.
FRICTIONLESS
EXPERIENCE:
The paradox of seamless friction.
Interactions that approximate
seamlessness in the conversation –
such as a pause, a point of friction to the machine,
but a feeling of natural encounter for humans.
Seamlessness should also happen behind
the scenes as smart machines turn data into
consumer insights.
GLOBAL SOCIETY:
A rise in communities of users and
experts coming together.
AI that provides opportunities for creating and
sharing experiences both online and in-store
environments. People still want the human touch,
and seek expert knowledge sharing. Don’t replace
the human expert.
ADAPTIVE &
RESPONSIVE:
The new personalisation.
Emotion detection capabilities that deepen a
sense of affinity with brands. The evolving power
of AI responsive technology will not reduce
options, but it will increase targeting potentials.
   19
DON’T LIMIT
YOUR IMAGINATION
Planning subsequent stages of development is key to ensure improved functionality and new experiences for your
consumers. Whether it’s choosing your technology partners or sourcing a number of best-in-class APIs to power
your experience, it is crucial that you are building in flexibility to continuously optimise and evolve. It is worth
paying keen attention to the developments of both established players, such as Google, Amazon and Facebook, as
well as start-ups in the marketspace – try to think like a start-up that is challenging you. This understanding will
help ensure that you can slipstream their efforts, spot emerging opportunities, as well as learn from their attempts
to cater to and direct consumer behaviour.
RULE FOUR
20
The risk, as with so many earlier technologies, is that companies will focus on what the machines are capable of,
rather than what customers want. Going forward the key is augmentation rather than just automation. Machine
learning, natural language and other AI services are poised to help retailers offer better interactions, solve
problems and achieve common goals. Humans and machines both play a part, and this is where we get the best of
the technological potential.
The over-riding drivers will be delivering value for customers, winning their trust by being transparent about who is
collecting their data and how it is being used, and making them feel like they’re in control of their interactions.
RETAILERS NEED TO THINK ABOUT HOW THEY CAN USE DIFFERENT INTERFACES
AND DIFFERENT APPROACHES TO ATTRACT DIFFERENT CUSTOMER DEMOGRAPHICS.
AUGMENTATION
OVER AUTOMATION:
   21
THINK ABOUT AI AS A
BRAND BUILDING TOOL
Our research gives insight into what type of interactions
may be most appropriate, taking into account different
consumer groups, sectors and behaviours.
This information can help you decide what the best
methods of distribution are, from developing a beta test
to trialling a specific audience soft-launch or creating a
targeted paid promotional campaign. You should also
think about how implementing AI will affect your staff,
suppliers and partners. The right AI solution for one
brand, may be the wrong solution for another.
RULE FIVE
22
   23
FOR MORE INFORMATION CONTACT
JEAN-PAUL EDWARDS
Jean-Paul.Edwards@omd.com
CHELSEA HORNCASTLE
Chelsea.Horncastle@omd.com
VIRGINIA ALVAREZ
Virginia.Alvarez@omd.com

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RETAIL REVOLUTION: The Possibilities, Potentials & Pitfalls of Implementing AI

  • 1. RETAIL REVOLUTION THE POSSIBILITIES, POTENTIALS & PITFALLS OF IMPLEMENTING AI
  • 2. 02
  • 3. Artificial intelligence (AI) is completely revolutionising retail. Not only is it accelerating a customer-first proposition for companies, but it is also bringing the physical and virtual closer together. Now that ecommerce has fully taken off across Europe, it is even more important we create seamless, frictionless communication in the customer journey. At OMD, we are always striving to unlock the demand potential of brands and ignite consumer desire that accelerates business growth, with innovation and creativity at the heart of everything we do. As clients shift to a customer-first model, we actively help them bridge ideas and technology to drive better personalised marketing communications that deliver results in the boardroom. Over the last six months OMD, in partnership with the Goldsmiths research team at the University of London, embarked on a dedicated research project to investigate the possibilities, potentials and pitfalls of implementing AI in retail. The research looked at 12 European markets to understand the current consumer landscape exploring similarities and differences in AI perceptions, retail behaviours and AI usage. The insights generated to date have unearthed a wealth of information to guide brands and businesses on their AI journeys. We all know AI will transform marketing communications so we need to start immersing ourselves in this emerging opportunity now. WELCOME    03 NIKKI MENDONÇA PRESIDENT, OMD EMEA
  • 4. INTRODUCTION THE AI REVOLUTION IS NOT ABOUT THE ROBOTS, IT’S ABOUT THE CUSTOMERS If you’re not thinking about the coming AI revolution you are already falling behind, half as many European consumers say they are as familiar with AI as unfamiliar. All of a sudden a promise from Science Fiction has become an everyday reality for the majority of consumers. Brands such as Amazon and Spotify, personal assistants like Siri and Cortana, technologies including programmatic trading and search; all of these rely on machine learning to deliver a competitive advantage. So AI is already delivering on its long term promise, which means consumers are better prepared for the much more dramatic changes to come. 04
  • 6. RESEARCH: OVERVIEW This is significant for a retail industry challenged to keep up with customers’ rapidly developing expectations. Shoppers are increasingly demanding VIP treatment from retailers who will respect their time, their individuality and can inspire them in unique, personal ways. Just as interactive technologies have created and fuelled these demands, the only way for retailers to deliver the high-quality personalised experiences customers now expect - at scale - is through the next stage of those technologies; artificial intelligence. The question for retailers is how best to employ AI to create the shopping experiences of the future. THE CHALLENGE ACROSS EUROPE* BASE: NATIONALLY REPRESENTATIVE ACROSS UK, ITALY, SPAIN, ROMANIA, RUSSIA, POLAND, NORWAY, NETHERLANDS, SWEDEN, FINLAND, DENMARK AND GERMANY TOTAL N=14,960 Q. How familiar are you with AI? Scale – 1 (not at all familiar) to 10 (very familiar) Q. Would you consider AI to be a part of your life? Yes, I am already using AI; Yes, I would like to get an AI device/app; No Source: OMD Snapshots, April 2017 60% CLAIM TO BE AT LEAST SOMEWHAT FAMILIAR WITH AI 20% ARE ALREADY USING AN AI DEVICE ANOTHER 38% WOULD LIKE TO GET AN AI DEVICE OR APP 06
  • 7. Quondiss ediendam porum ia se aurnulii sus hae, prae conum probsed patem inesunu meris, moendit, derei consilla adhum no. Upecidese inu eto huis, ficaperri consum remquitrum. Gervivivit. Verum nihil ut det, consulicaes con vit. Sent? Go vis incutu estimor udamque pritum. Iri publi, con silis consullabem, vit inatu et, que es fac res is host perunte naterum iam obunt. Qui faciam me quem publien tellati fernius libuncus, cum Romnemn ihilis nox modit fatum pra re tanum tam co in Etra, no. Valii pessi caest vidionsteme tin tam, simiusque efacier iciistiu iste, nosteri iptis et graes consus re, sernium fachusquit, me ius, ca ad medo, esensiliciam noncluterbi enique cont, quo temprei pescis seniam priocrunu venterio, nonsunc erritarica ex morbit; num nemqua rentem det; nossimiure, utessolus consum menduci endium aus lis int for quonfec re tam egerfer fecesseris dentium, sendius. Vivis. Habem, co C. Udam sesenat uscrissatre ites et inam simei tus fuit effret; erfir audacip sendet nius, con rei tio inum qui inem ponsil hocae cerfectam cupioratius imandam visteres corum dion vernum quonte publiciptela entem di fuidi prio manduciam sentelienti potiam. Ebem amdicipses Cas intionfica; inaribus ad re conclud emnimium etra o urnihil lesimmolut L. Simanum horbis delut gra sensult uuscerferio mus licid iam tis; Catiam is aciensu spions nos Mae auctus isse publi pra, que eterio egillego Cupimpratrum atum ti, consin Itaturesed inimmoe rriocuperum. Atiqui egerum movervi gilici publintem iu quam que macchuspim detorum anum nonlostiam nos nocchuc emernimium que ceresserum interem perfit? Diurei prica; hilinum liistima, me re, noris consulicaus se diciamedis. Satuis ius, se maximanum temquid cononsus elute, se atuus acibus, cononsulatus essidictur host auctum spienam quam tin rei tus et in simus for aperfec risque cortentim auce id se te ceps, Cateatorum hebuncessa quidemquid Catiliu squium orum, furnius movirmius, obultum oc rei patanultodit die iam sus; hortilia egerudentil us, se aperis bon nim renest faceris eo audendit, consula o et Catum videper finve, ut videm temum clego Catiemus audam nonte consimo visquem deporum mero, sigilica; nihicatui sendachum tam viverebat, nesenihilis nos fit; nonsus neque tam publii ius se ta, sendit. Guliam omnequam pubis viliquid consua imus? Oximpro bsendactus manti, pera norat, vis, nonitante tam is, Catum dierdiis aperfirius sulostius bondem Romnis cone cesedo, clum simihilicia et, omnimum ineriusse firmaiore pravest uastrae pero conclum mus, C. Ahabutea rei porum in sessulic re eorae vitusse diussi iam. Verdit clessili, ocus, quod re culudet cris, ma, praes acepsed remum quid me conterore cut porum pri pons patuspios ocut ressenihili, miurbit, sed noximor tilicam dienatius, sed C. Viverem enterem adem dium pessena tridem enam auciend epopulvit. Ihicuspera etodiem untios Ahalius, nonum movis occiam in dius rendam mor lintebatus consul consin tatudac tatquam se dienitem poraeconsil vem imus cam iur qua ponlostia ma, esitat verriamentem menihilis. Equam quam ac iam es es noccit; nones, nos mendien atiem, nimodin dit. Sultorunt ia qui senduci vivere nihicit, Catus? Aximus, omnem Manning Gottlieb OMD Challenger Conference  |  7 KEY THEMES EXPLORED AI PERCEPTIONS RETAIL BEHAVIOURS AI USAGE    07
  • 8. RESEARCH: OUR APPROACH OMD and the Goldsmiths research team at the University of London embarked on a dedicated research project to understand consumer perceptions of, and behaviours with, artificial intelligence across different retail environments. 12 MARKETS 14,960 NAT REP RESPONDENTS 1 HACKATHON 6 SUBJECT MATTER EXPERTS 18 TECHNOLOGIES TESTED 6 CHATBOTS CREATED 08
  • 9. The research used a mixed method approach giving insight into how consumers accept, understand and trust AI, exposing how brands can implement AI services that deliver meaningful human impact. STAGE ONE Setting the scene through extensive desk research into the field of AI in retail and initial consumer experiments testing a diverse range of bots with six UK participants from the general public. STAGE TWO Immersing 15 UK participants into the world of retail focused AI using exploration techniques to capture consumer experiences and expectations. A Hackathon and subject matter expert interviews were also conducted, providing us with valuable insight into the current AI landscape and future trends. STAGE THREE Quantifying our understanding of how consumers perceive AI in retail through a robust and in-depth survey, giving insight into the possibilities, potentials and pitfalls of implementing AI across 12 markets.    09
  • 10. 1. BRING THE RIGHT SKILLS TO THE TABLE THE APPLICATION As with all new and exciting technologies, there is a tendency to jump straight in and start ideating or even building. In conducting this research, we advocate a consumer-centric approach – putting the needs, desires, expectations and attitudes of audiences at the heart of the process. We have compiled a list of some of the key learnings from our projects in this area, predominantly in chatbots and voice. These rules will help you succeed in applying AI and creating systems that benefits you and your customers alike. APPLYING AI IN MARKETING, WHAT WE’VE LEARNT SO FAR 2. THINK ABOUT WHAT YOUR CUSTOMERS WILL INTERACT WITH, WHEN AND HOW MUCH 3. BE CLEAR AND TRANSPARENT WITH YOUR CONSUMERS 4. DON’T LIMIT YOUR IMAGINATION 5. THINK ABOUT AI AS A BRAND BUILDING TOOL 10
  • 12. AI TO REDUCE SHOPPER FRUSTRATIONS: Consumers recognise the benefits of different types of help in different sectors. So people shopping in a wide range of categories - including groceries, beauty & personal care, books & music and furniture & decor - would welcome assistance in making more informed decisions. In other categories - such as travel, events and movies & TV - they want to be surprised by new opportunities and ideas. Additionally, when shopping for beauty & personal care products, health & fitness or groceries, they would be open to personalised suggestions. However, AI is still in the early days of proving itself to mass audiences and needs be more than a novelty option for most purposes. Given that there is still something of an AI sales job to be done, it would be wise for brands to use AI in very practical ways and demonstrate functional utility; not just a frivolous gimmick. 12
  • 14. BRING THE RIGHT SKILLS TO THE TABLE Involving a wide range of stakeholders from your organisation and giving everyone clear roles in the process will ensure that you have a balanced and rounded view. This multi-disciplined team will help pose a range of considerations and potentials, as well as help you foresee and troubleshoot problems. It is paramount that the activation is in line with current brand perceptions and experiences. The role of the marketer is very much about owning the brand voice, the engagement with consumers and the packaging and promotion of such efforts. RULE ONE 14
  • 15. Consumers want AI services to help them do the things they already do in a more efficient and streamlined way rather than to replace and therefore automate their activities. This also highlights one of the key points where AI projects can fail; the moment that the AI becomes more difficult or slower to use than their previous approach is the moment customers will abandon it. 36% of survey respondents who wouldn’t consider AI said they “didn’t need AI”, while just over a fifth said it was easier to use their default option and just under a fifth said they didn’t understand the benefit of using AI. What’s surprising is that this “So what?” problem is particularly pronounced among younger audiences. 39% of 18-34 year-olds said they didn’t need AI, while 25% said it was easier to use their default option. BRANDS SHOULD INSPIRE PEOPLE AROUND THEIR EVERYDAY NEEDS A ‘SO WHAT’ PROBLEM:    15
  • 16. THINK ABOUT WHAT YOUR CUSTOMERS WILL INTERACT WITH, WHEN AND HOW MUCH Embracing a consumer focused planning approach ensures that you will consider the lives and routines of one or several of your target audiences, and importantly the rights and role of the brand in these moments. In early phases of AI application, many brands are finding consumers do not necessarily work through experiences in ways that they expected. It is important to incorporate and test branded AI with questions such as ‘tell me a joke’ (one of the most likely questions to a branded chatbot), ensuring that responses deliver a good brand experience. Marketers must be the guardians of the frequency of communications and the moments at which they feel the brands can add value to consumers’ lives. RULE TWO 16
  • 17. Shoppers are open to getting “expert” advice via AI. That can mean personalised recommendations, but it could also simply be a matter of automating basic operations in order to free the humans in the team for more complex customer interactions. The way retailers use AI also has to align with their brand personality. As well as a brand strategy, they need a conversation strategy that informs not only what their human employees say but what their robot employees say too. Additionally, they also need to be transparent about what they are doing and how they are doing it, in order to build customer trust. While it is true that shoppers are open to interacting with AIs, their major concerns are around who is collecting data about them and how that data will be used. AI WILL DRIVE A HEIGHTENED ROLE FOR RETAILERS WHO COMMIT TO TRANSPARENCY AND SHARED POWERS WITH THEIR CONSUMERS. THE VALUE EXCHANGE:    17
  • 18. BE CLEAR AND TRANSPARENT WITH YOUR CONSUMERS Signposting and setting the expectation in consumer-friendly language and being honest from the outset about what technology is being employed is key. Our research found that respondents have different levels of comfort across methods of delivery and platforms, which vary significantly by age group. With this objective in mind, you should consider the type of data and processes required to deliver your desired experience which are in line with your audience’s comfort levels. For example, saved multiple choice answers can be used to tailor future communication and rescue users from re-inputting information. Different platforms also allow you to easily access consumer information, such as using Facebook Messenger to gleam location data which can be used to promote nearby sites in a way that feels natural and seamless. RULE THREE 18
  • 19. FOUR TRENDS BRANDS SHOULD CONSIDER WHEN CREATING AI SERVICES FOR RETAIL ENVIRONMENTS. LOOK TO THE FUTURE: AUGMENTED INTELLIGENCE: AI working with the user in the consumer experience. AI that enhances user experience in retail activities - a partnership. Segment AI to highlight the space of supervised learning and collaboration between people and smart machines in the consumer interaction. FRICTIONLESS EXPERIENCE: The paradox of seamless friction. Interactions that approximate seamlessness in the conversation – such as a pause, a point of friction to the machine, but a feeling of natural encounter for humans. Seamlessness should also happen behind the scenes as smart machines turn data into consumer insights. GLOBAL SOCIETY: A rise in communities of users and experts coming together. AI that provides opportunities for creating and sharing experiences both online and in-store environments. People still want the human touch, and seek expert knowledge sharing. Don’t replace the human expert. ADAPTIVE & RESPONSIVE: The new personalisation. Emotion detection capabilities that deepen a sense of affinity with brands. The evolving power of AI responsive technology will not reduce options, but it will increase targeting potentials.    19
  • 20. DON’T LIMIT YOUR IMAGINATION Planning subsequent stages of development is key to ensure improved functionality and new experiences for your consumers. Whether it’s choosing your technology partners or sourcing a number of best-in-class APIs to power your experience, it is crucial that you are building in flexibility to continuously optimise and evolve. It is worth paying keen attention to the developments of both established players, such as Google, Amazon and Facebook, as well as start-ups in the marketspace – try to think like a start-up that is challenging you. This understanding will help ensure that you can slipstream their efforts, spot emerging opportunities, as well as learn from their attempts to cater to and direct consumer behaviour. RULE FOUR 20
  • 21. The risk, as with so many earlier technologies, is that companies will focus on what the machines are capable of, rather than what customers want. Going forward the key is augmentation rather than just automation. Machine learning, natural language and other AI services are poised to help retailers offer better interactions, solve problems and achieve common goals. Humans and machines both play a part, and this is where we get the best of the technological potential. The over-riding drivers will be delivering value for customers, winning their trust by being transparent about who is collecting their data and how it is being used, and making them feel like they’re in control of their interactions. RETAILERS NEED TO THINK ABOUT HOW THEY CAN USE DIFFERENT INTERFACES AND DIFFERENT APPROACHES TO ATTRACT DIFFERENT CUSTOMER DEMOGRAPHICS. AUGMENTATION OVER AUTOMATION:    21
  • 22. THINK ABOUT AI AS A BRAND BUILDING TOOL Our research gives insight into what type of interactions may be most appropriate, taking into account different consumer groups, sectors and behaviours. This information can help you decide what the best methods of distribution are, from developing a beta test to trialling a specific audience soft-launch or creating a targeted paid promotional campaign. You should also think about how implementing AI will affect your staff, suppliers and partners. The right AI solution for one brand, may be the wrong solution for another. RULE FIVE 22
  • 24. FOR MORE INFORMATION CONTACT JEAN-PAUL EDWARDS Jean-Paul.Edwards@omd.com CHELSEA HORNCASTLE Chelsea.Horncastle@omd.com VIRGINIA ALVAREZ Virginia.Alvarez@omd.com