Consumers Crave AI with Shopping But Want More Control Over How Companies Use Their Data!
The IBM Institute for Business Value, decided to survey 20,000 consumers across 26 countries on their digital habits, their use of AI and generative AI, and their expectations for brands. So, what were the results of the survey?
I invited the big IBM retail guy, Joe Dittmar, to join me to share what they found out.
Let’s just say, most consumers want to receive information, advertisements, and offerings from stores that are relevant to their specific interests, but a whole bunch say they really really really want more control over how companies use their data.
Joe Dittmar leads IBM’s Retail Industry across the company’s portfolio which includes Grocery, Department, Warehouse, Specialty, Discount, Convenience, Restaurants, and Online Retailers. He shared that consumers are unsatisfied with both in-store (9% satisfaction) and online (14% satisfaction) experiences. But AI’s making an effort to tailor communication more effectively to individual preferences.
Personally, though I appreciate the effort, as a consumer I’m obviously not alone feeling uncomfortable with one hundred follow up marketing emails from a company I’ve bought just one pair of pants from and had to return because they didn’t fit! Know what I mean?
I’m constantly amazed at the online return process which is very simple and which is the reason I even attempted to buy pants online witout trying them on! Joe Dittmar also pointed out that retailers are currently managing inventory conservatively, leading to less variety in stores—a strategy resulting from the need to reduce inventory post-COVID. The opportunity for retailers the said, is to improve customer experience by integrating online options when in-store selections are limited.
IBM has been a longstanding participant in the retail industry, inventing the cash register and credit card in case you didn’t know that. Now they are helping iconic brands leverage AI to improve operational efficiencies.
The survey showed that consumers are more open to adopting AI than expected, including interacting with virtual agents that can fast-track customers to human agents based on their tone and urgency. (Wow now I don’t feel so bad about occasionally yelling… ‘Give Me a Human!’ LOL)
Good insight by Joe and IBM!
Aspiring retail talent can learn from their expertise.
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About Joe Dittmar: He’s known for helping retail and consumer product clients worldwide to transform their business models and consumer-facing activities. He is a leader in implementing complex business and technology solutions that drive improved performance.
In 2022, Joe was honored with IBM’s highest industry designation, Distinguished Industry Leader, for his contributions to innovation in the industry and impact on IBM’s clients throughout his career.
Joe serves on various industry advisory boards including the National Retail Federation Board of Directors. He actively mentors aspiring retail talent around the world.
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Enjoy the podcast of our live radio conversation on The Debbie Nigro Show on WGCH Radio. If you’d rather read than listen the audio transcript is below.
AUDIO TRANSCRIPT:
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And now, back to the Debbie Nigro Show.
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Well, if that were the case, consumers would not be complaining, but they feel sometimes some pain from companies who want all their information and then like, okay, what are you doing with my life’s information?
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0:00:29
Oh, well, I’m sorry about that. All right, guys, here on the Debbie Nigro Show, which would be my show, I’m always trying to stay ahead of the curve. Technology moves very quickly. We’ve got artificial intelligence going on, and a lot of people are shopping and want more artificial intelligence to help them and guide them, and they’re happy with that part, but they want a lot more control over how companies use their data. So the really smart people over at the IBM Institute for Business Value decided one day
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0:01:20
they go, you know what, we’re going to survey 20,000 people all across 26 countries. We’re going to find out what’s going on here with their digital habits, their use of AI, their use of generative AI, and their expectation from brands. What were the results of the survey? I don’t know. That’s why I invited the next guy, the big guy, the IBM retail guy, Joe Dittmar, to join me to share what they found out. Hey, Joe.
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0:01:46
Welcome to my show.
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0:01:47
How are you doing today, Debbie?
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0:01:49
I’m good.
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0:01:50
I’m happy to have you.
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0:01:51
It’s a pleasure to be here with you.
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0:01:53
Yeah, you know, you’re a big, big brain. I already told everybody you were honored with IBM’s highest industry designation, the distinguished industry leader award for all your contributions over the years to innovation in the industry and the impact on IBM’s clients throughout your career, so congratulations on that.
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0:02:11
Thank you. I grew up in this industry, so the consumer is what I care about.
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0:02:17
Thank you. When I first got married, my husband worked for IBM. I just want to let you know about that. We’ll talk about that privately another time because he’s not my husband and he’s not working for IBM, so it’s not relevant to this conversation anymore. But what’s relevant is what’s happening in the world of shopping. I shop online, I use my phone, so do obviously many people in the world. And I always get a little weirded out when they want too much information.
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0:02:40
They want to track me, you want notifications, you want to be texted. No. Do you want to be emailed? Maybe. Do you want to be tortured? No. So what did you do in this survey? What kind of questions did you ask people?
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0:02:52
So the survey is less about bombarding you with information and trying to market to you. The survey is more about how consumers want to be treated and how they want to be interacted with in the simple aspects of retail. So are you satisfied? Right? 9% said they were satisfied with store experience and only 14% with the online experience.
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0:03:22
So, I don’t know, are you happy with your online experience?
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0:03:25
Are you asking me personally?
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Yeah.
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0:03:28
I’ll tell you what I don’t like. I don’t like after I buy something that I get an email every single day from that company. So, that would be like, that to me is overkill. And I spent a good amount of time this week trying to unsubscribe from companies I bought from just because they were on my nerves. I love the company, I love the product, I don’t want to hear from anybody 16 times a day. Do you?
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0:03:52
No. And if a company was using AI, they would notice that the message they were sending to you is not driving an open rate, a click rate based on the messaging that they’ve sent to you, and they’d stop sending those emails to you. And they would only send you emails that you open. They would look at the tone and the content of the emails you actually open, and that’s all they would ever send to you again,
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0:04:20
if they were using AI. But they’re not, they’re just blasting. They’re using a blasting strategy for marketing. So what we’re saying here…
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Yeah, what are you saying?
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0:04:30
No, I didn’t mean to interrupt you. Continue.
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The opportunity is huge for retailers to start using AI to cut down on waste to improve the actual experience because consumers aren’t happy, but they’re willing to be adventurous. They’re willing to try AI willing to engage in different with different tools with you know Using their phone in the physical store Because you know some of the feedback we’ve we read from from consumers, right when I said we read it We read their responses, right? They want greater variety in the store.
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0:05:14
They want more information in the store.
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0:05:16
What does that mean? Give me a real-time example.
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0:05:19
Real-time example, over the last year, retailers moved into more of a scarcity model for physical stores. They’re pushing less inventory to stores because they’re carrying less inventory. They’re holding back more inventory and optionality from the physical stores because they’re trying to carry less inventory, which is something retail had to do coming out of COVID. They had to reduce inventory.
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0:05:47
No wonder.
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No wonder.
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No wonder. I used to be able to buy a pair of shoes here and there and some of these fun stores like TJ Maxx and Marshalls and all those places where you grab a cute pair of sneakers. I’m like, these are horrible. They have no selection. Why do they have no shoes anymore? Now you’re telling me why.
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0:06:05
Because the inventory levels are some of the lowest we’ve seen in more than a decade.
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0:06:12
Wow, that’s big information.
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0:06:14
That’s good management of inventory, but probably too good at managing inventory. That’s for the retailers, but they’re working on that too. That’s more of a scarcity model of inventory, but that’s not going to improve the interaction for consumers. What would is if they start building the experience that pulls in that incremental categories, the additional products that they do carry online, so that when you were in the store, they weren’t just leaving you with that empty feeling that you couldn’t find anything you were looking for when you were physically in the store, they say, hey, you didn’t see what you were looking for, look online.
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0:06:55
And we do have several retailers out there today that are, and the associate literally open up their own phone and say, or a mobile app that they have on their device, they look, we got a lot more online. If you don’t see what you want here, I will have that delivered to your home expeditiously in a sustainable fashion from either the closest store or the nearest fulfillment center or however the most sustainable way is to get
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0:07:24
you that merchandise quickly.
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0:07:28
Well the thing about getting stuff delivered to your home, say if it’s clothing without trying it on, that’s annoying too. Part of the shopping experience is touch, feel, sensory. sensory, you know, Ikea, I was just talking about earlier how they’re, you know, investing a lot of money opening more stores, they want you to come in and feel what they’re selling, which is a better home living experience, right? So sometimes you can’t feel a brand until you feel it.
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0:07:51
You know what I’m saying about that, right? I do. And one of the kind of experience I’m talking about is if they have red but not purple. Okay, I got you. So they have, or they have a medium but not a large. They have different parts of the assortment but not the whole assortment because they
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can’t fit it in.
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You can see the throw pillows and the pillows but not the entire couch.
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I find it fascinating that IBM has moved into this direction in such a big way. From what they’ve come as a company and what they used to be known for and what they are known for now, which they had to shift as well into digital technology from hardware. Am I correct in that?
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0:08:29
So IBM has been in the retail space for well longer than 60 years. We actually invented the cash register.
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Oh, forgive me for not knowing that.
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We also invented the credit cards. So we’ve been at the cornerstone of retail since the beginning. We’ve been deep into the relationship with the National Retail Federation for more than 60 years as well. We do love retail, and we love our retail clients and our consumers equally. But right now is a chance for transformation. It’s really a pivotal moment and it’s a pivotal moment that we really are sitting
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0:09:23
at a precipice of and we actually have all the tools to help. Oh, that’s really good because I know you’re on the National Retail Federation Board of Directors and that you love helping retail clients. Let’s talk about Macy’s for example. A lot of Macy’s clothing and that was news this week, that’s an iconic retail brand, not in our area fortunately because I’ve come to love Macy’s more than ever, but is that an example of in-store having to shift because of inventory and do more online? So Tony’s going to do great things with
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0:09:56
I don’t want to talk directly about Macy’s. I try not to mention my clients directly. But I will tell you, Iconic Brands, they do leverage AI, and they’ll continue to grow in their adoption of AI to improve their operational efficiencies for how they operate their brand. So they will continue to leverage AI. Can you tell me the difference, yeah, can you tell me the difference, because I’m not that smart, between AI and generative AI?
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0:10:31
So…
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0:10:36
Oh my God, that means you’re not that smart too, please don’t tell me that.
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I’m trying to think of the best way to describe it. I’m sorry to put you on the spot, but I’m just without without giving you the PhD answer. Yeah, give me the give me the regular people answer.
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0:10:56
The regular people’s answer is when we’re dealing with generative AI, we teach, we teach it a we teach it its universe of thinking. We teach it a language addiction, a way of talking a way of speaking a way of thinking. And we train it based on what it what we’ve taught it. Got it. So it’s, it’s not completely different from AI, where AI is more a could be machine learning, where it’s be generative AI has a lot more variability and decision making based on percentages and most likely answers and most likely intended meaning. This is a lot of big brain stuff you’re involved with over there Joe.
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0:11:49
I don’t know, I think this would give me a big headache. Better you than me doing this because I know there’s a lot of pieces to the puzzle here and I know you lead the retail industry at IBM across the company’s portfolio, so that I mentioned earlier, grocery department, warehouse, specialty, discount, convenience, restaurants and online retailers. When you took your survey around 26 countries and 20,000 people, did you look for information in each one of those sectors that you could glean from the survey?
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0:12:21
We absolutely did.
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Okay.
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Is there anything that was loud, like really loud, like findings that you were like, ooh, even you went, ooh.
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I did.
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0:12:31
I was quite surprised at the participants’ willingness to adopt AI. That was news. Because we all have experienced the desire just to call into a call center and say, agent, and demand to speak to a human. The reality is now the bot, the virtual agent, if you will, can determine your tone as you’re talking to it
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0:13:09
and fast track you to an agent just based on your tone, your diction, the words you choose, but it can pre-populate the entire screen based on everything you’ve said to it so far and help you get better service from that
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agent. Oh, you just tipped me off to something really important. How to get fast track to a human. What is the tone we need, Joe, and what are the words?
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0:13:31
Well, the more information you provide it, but sound in a hurry, they will pre-populate the screen versus you having to tell the agent everything, only to find out that it fast-tracked you to the wrong agent.
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0:13:46
Okay, got it. This is actually making me…
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The problem is, in a call center, there’s many agents with many skills. If you’re trying to track your order, that’s different than pay your bill. That’s different than check on the availability of a product.
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0:14:00
Okay, got it.
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While those skills may be the same person, they’re not always the same person if you’re calling a bank versus an insurance company versus a retailer versus a grocery store versus
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a pharmacy. Douglas Goldstein, financial planner & investment advisor, interviewed Smith on Arutz Sheva Radio. Douglas Goldstein, financial planner & investment advisor, interviewed Smith on Arutz Sheva Radio. Douglas Goldstein, financial planner & investment advisor, interviewed Smith on Arutz Sheva Radio. Douglas Goldstein, financial planner & investment advisor, interviewed Smith on Arutz Sheva Radio. Douglas Goldstein, financial planner & investment advisor, interviewed Smith on Arutz Sheva Radio.
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love to do that and actually aspiring retail talent all around the world can look to IBM and Joe Dittmar and his crew for some intelligence on how to do it better and more successfully and more profitably. Thank you so much for being part of the show today, Joe Dittmar. Very nice to meet you. The pleasure is all mine, Debbie. Thank you. Thank you.
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0:14:50
Thank you. I appreciate it. I learned a lot just now from our friends over at IBM. Pretty fascinating. Okay, come on back. Okay, come on back. We’ll pick up where we left off as soon as I figure out what that was next.
Transcribed with Cockatoo
