New insights on AI reveal consumer preferences, concerns and marketing implications
At a time when generative AI promises revolutionary change across industries, the pressing question is not about the capabilities of AI. Instead, you’re probably asking:
How can we best use AI to increase brand value and enhance the consumer experience?
How can we specifically and strategically leverage these capabilities to gain a competitive edge?
Understanding the impact of AI on consumer decision making is critical to optimize marketing strategies. However, it requires a nuanced approach that not only leverages AI to increase brand value, but also consciously addresses consumer concerns about AI.
The SKIM Trends lab recently conducted research to answer these questions across various sectors. Read on for the latest insights and learn how to tackle the dual challenge of tapping into the power of AI, while mitigating its perceived risks.
SKIM Trends Lab: A hybrid research approach to mapping AI’s influence across categories
Since our passion is in understanding and predicting decision behavior, the SKIM Trends Lab decided to dive deeper into AI’s current impact on consumers and brands. We used a hybrid research methodology, and dynamic three-tiered approach, to unveil AI’s broad impact on five key industry sectors: online shopping, health, travel, finance, and education. The research was conducted in Q4 of 2023 in the United Kingdom and Germany.
Understanding AI’s role in varied interactions provides a comprehensive picture of its widespread influence on daily life and decision-making processes. Also, it uncovers hidden insights where your brand can leverage AI to solve sector-specific challenges and enhance consumer engagement.
AI consumer trends: Four insights on how to drive brand success
Going beyond the hype of AI, we learned specifically where companies can seize the potential of AI and deliver more brand value. There are four areas where AI poses friction points in the customer experience, with potential implications for innovation, communications, and revenue management strategies.
1. Seize the AI revolution: Develop a nuanced, generational approach:
AI is not just a trend, it has become a lifestyle. A significant segment of consumers has seamlessly incorporated AI-based services into their daily routines. Digital assistants lead the charge in AI usage, with other AI-enabled devices and services (e.g. mobile wallets, smart home applications, wearables, AI search engines, chatbots etc.) closely following suit. This widespread adoption indicates a growing reliance on AI for simplifying daily tasks and application spanning sectors such as online shopping, health, travel, finance, and education.
AI applications can range from health diagnostics, fraud detection and itinerary optimization, to directly enhancing the consumer’s decision-making process and online shopping experience.
“AI assists in every aspect of our lives. I expect AI to appear more and more in everyday life. It will be just normal in the next few years.”
– GenX consumer, UK
However, despite its transformative potential, consider the nuanced generational differences in adoption and application preferences. For example:
- 73% of consumers are interested in using AI-based services for health and fitness. Millennials are spearheading this adoption, while 36% baby boomers remain skeptical, claiming they will never use AI in this context
- Millennials and Gen Xers, with high spending power and interest in travel, are key targets as 59% plan to use AI-based travel services in the future
Craft multifaceted marketing strategies that tailor AI’s benefits to specific demographics, addressing their unique needs, concerns, and preferences. One size does not fit all for the same AI applications.
2. Unlock growth potential: Prioritize value-driven AI Innovations:
Consumers indicate that some AI-powered solutions are “nice-to-have,” while other services satisfy their need for convenience and personalization. Consumers are willing to pay a premium for these AI services, which can also help increase adoption and brand loyalty. For example:
- When shopping online, consumers are willing to pay for AI solutions offering convenience, like a realistic product demonstration feature (just like trying it out) have high potential for increased use and profit, with over 30% of consumers open to paying for such services.
- The value of AI-driven health services is largely driven by the promise of personalization, with 36% willing to pay for AI services that monitor health conditions and proactively offer lifestyle advice to optimize health.
Introduce new offerings that resonate with consumer needs, ease frictions in personalized areas, such as online shopping experiences and tailored travel planning
3. Build consumer trust: Provide transparency in communications:
Unsurprisingly, consumers voiced concern around the collection, usage and sharing of personal data collected.
- 20% reject AI that monitors their health condition in real-time, and transmits data collected to health care professionals
- 36% of consumers see a risk of brands misusing AI for their own advantage, at the expense of customers when it comes to online shopping
Transparency will become your strongest ally by openly addressing consumer concerns, particularly in sensitive areas such as finance and health. However, the way in which transparency is pursued and prioritized must be finely tuned to the expectations, sensitivities, and regulatory landscape of each industry.
Optimize messaging and investigate trust-building measures to reassure consumers about data accuracy and protection.
4. Ensure consumer agency in decision making:
In addition to alleviating data privacy concerns, it’s important to respect the tipping point where AI becomes too much for the consumer. Across categories and use cases, consumers want to be able to be in control and make the final decision. For example, 34% of consumers reject automated purchase of routine, regular items (e.g. groceries, household products)
“I’ll book my travel through the recommendations of a robot. But that is all I’ll do.”
– GenX Mainstream AI user, UK
“The AI is becoming more and more human, but I need to have a say in the relationship, so I don’t feel powerless (when shopping online).”
– GenX Mainstream A user, Germany
For future AI service development – and messaging about – convenience, it’s essential that brands balance automation, with consumer control to avoid rejection due to over-automation.
Dive deeper and seize the potential of AI in your category
Want to learn more about consumers’ preferences, skepticism and opportunities in the online shopping, health/fitness, travel, personal finance, and education categories? Schedule a consultation with a SKIM expert for a 1:1.