Artificial Intelligence: The Future of Predicting Consumer Behavior

Many of our interactions are already powered by artificial intelligence today. As stated by Andrew NG. (Coursera Co-Founder and Computer Scientist), “Artificial Intelligence is the New Electricity “. He mentioned that there isn’t an industry that will not be transformed by Artificial Intelligence (Andrew Ng: Why AI Is the New Electricity, 2021). Research firm IDC had predicted that AI will help drive worldwide revenues up from 8 Billion in 2016 to 47 Billion.

Understanding what customers want and need — ideally, before they ask — is a constant challenge for marketers. Artificial intelligence (AI) has the potential to make that work considerably easier. As AI becomes more prevalent in the mainstream, more and more corporations and businesses are embracing AI to develop competitive strategies.

The applications of artificial intelligence span from voice-activated Google Assistants to Siri and Alexa, which transform your query into an answer using Natural Processing Language to?YouTube displaying data-driven results based on your behavior and interests.

Here we look at what is Artificial Intelligence and how it is influencing Consumer Behavior.

What is Artificial Intelligence?

Artificial intelligence (AI) is a broad field of computer science concerned with creating intelligent machines capable of doing activities that normally require human intelligence.

What are the four types of Artificial Intelligence?

Reactive Machines

Limited Memory

Theory of Mind

Self-Awareness

How is Artificial Intelligence Influencing Consumer Behaviour?

1)???Personalized Customer Experience

Predictive personalization has assisted the brands?in creating a more individualized consumer experience. Consumers no longer need to set aside time to visit a store in order to purchase products and services. With the data at their disposal, brands will come up with solutions to improve the consumer experience. Virtual Shopping experience has been trending, here the customers can shop products online with the benefit of same day delivery, easy exchange and return. With such practices in place personalization helps converting prospects into customers.

2)???Boost Consumer Spending

One of the core elements of Artificial Intelligence is namely Machine Learning, which allows teams to decode the massive data accumulation that narrows down the information in a way that helps them identify target audience, what customers are looking for, perform trend analysis, and then create funnels that are more user focused, thereby reducing time spent and ultimately converting prospect into conversion.

Customers' spending is more likely to increase because marketing teams can design marketing tactics around their target group after they've identified it. They understand when to send out email campaigns and when users are most likely to open the email. With increased competition, businesses are focusing more on what they offer and who do they offer it to.

3)???Increasing Consumer Loyalty

According to Microsoft, 97 percent of customers consider customer service to be a significant aspect when selecting a brand. Artificial Intelligence has helped to improve customer service even further. Customers benefit from speedy responses from chat bots since they can handle many requests at once and are available 24 hours a day, seven days a week. Clustering and data collected about clients allow one to quickly match their likes and dislikes and recommend them their specific selection of product or service they are seeking for. These minor details can turn a one-time customer into a repeat customer.

Here is an interesting video on how consumer behavior is being influenced by AI :

4)???Bridging the Personalization-Privacy Divide

Privacy should be the first issue of any industry, and it is recognized that customers want their information to be secured by companies, and it is a crucial analysis to design a data security policy utilizing AI technologies. Customers will develop trust in business brands if they are satisfied with the company's policies and discover that they are receiving many benefits as a result. AI tools and methodologies produce thrilling and interesting results for customers. The use of AI tools will boost clients' trust over various businesses in the market.

Conclusion

Without a question, artificial intelligence is playing an increasingly crucial role in all aspects of life, particularly in retail. Businesses are profiting more as a result of the competitive advantages provided by AI. However, there is a need to educate people about its applications so that more people can benefit from it, as AI is our future!