Many companies today are using artificial intelligence to bring new levels of personalization to the customer experience. Netflix famously deploys advanced machine learning algorithms to recommend the next movie or TV show you should watch, just as Spotify uses AI to suggest the next song for you to hear. Companies born before the advent of digital also take advantage.
A Harley-Davidson motorcycle dealer in New York City used an AI-based application to increase qualified sales leads by close to 3,000% – enough to send him rushing to set up a call center to handle the new business.
However, this is only scratching the surface of AI’s value. The technology will increasingly help companies streamline the process by which customers choose and pay for products. That process is a perennial source of customer frustration – think store checkout lines – and thus is ripe for reinvention.
One great but largely untapped application for AI is in making sense of ‘unstructured’ data: the handwritten documents, images of customers and products, and other information that require advanced computer vision, voice and text recognition technology to digitize them, and enormous amounts of computing power to process them rapidly.
The value of AI in retailing and other industries goes far beyond the most widespread uses, which are largely based on the kinds of ‘structured’ digital data that companies have used for decades: customers’ past purchases, product specifications including pricing, and the like. Airlines, for example, use AI to dynamically price seats for each customer who purchases online. Digital-native Uber applies the same principle to people waiting for rides.
The AI Advantage
Massive amounts of structured data, processed using AI, have enabled companies to enhance personalized marketing messages and help employees lavish attention on the most profitable products—and customers. One major retailer gave every store employee a smartphone app that provides instant access to purchasing trends on specific items, along with in-stock status. In addition, geo-location software tells employees where customers are shopping in a store, so they can help them find what they are looking for and inform them of any promotional offers. The app also shows employees which items are most profitable to the store.
Based on this information, this retailer can segment customers based on profitability and provide consistent marketing messages tied to their visible preferences. The result: an 8% revenue increase and a 20% decline in marketing expenditures.
But there is more to the customer experience than personalized offers. By using AI to better understand preferences and behavior, companies can create more efficient ways to interact with customers.
Imagine shopping in a grocery store without a checkout stand. Customers pull products off the shelves, put those items into a bag, and then walk out – paying automatically without having to swipe a credit card or hold a smartphone to a reader.
Not surprisingly, Amazon is among the first companies to transform the shopping experience this way. This January, it opened Amazon Go in its home city of Seattle. The grocery store has digital cameras in the ceiling and AI technology running behind the scenes to make sense of the action in the aisles. Customers enter the store and use their Amazon Go app to scan a QR code. Then they travel down the aisles, taking the products they want. The cameras, the AI software, and a digital connection to the customer’s credit card account enable the store to recognize which products the customer left with and charge their credit cards.
No checkout stands or clerks. No lines. And no shoplifting. Customers can do their grocery shopping faster, and without the bottleneck of checkout lines, Amazon can handle more customers and sell more products.
AI that can recognize images and video, not just numbers, will challenge companies to rethink everything about how they interact with customers. Companies that take advantage of the power of AI to reimagine the entire customer experience will be reap the competitive benefits.
About the author(s)
Krishnan Ramanujam is President and Head of Business & Technology Services at Tata Consultancy Services (TCS). He leads Consulting and Services Integration, Cognitive Business Operations, Cloud Platform Services and Digital Transformation Services globally. Krishnan drives forward the vision, direction and go-to-market strategy for TCS’ Services Lines. In addition to fostering the development of new services and solutions, he also guides the complex global transformation initiatives for the world’s leading enterprises.
He also drives growth and profitability for companies by spearheading and leading their evolution to next generation, agile operating models and transforms business functions. Krishnan has successfully positioned TCS as the industry’s leading expert in enterprise transformations by developing and leveraging best-in-class experts and offerings in Consulting, Cloud, IoT, AI, Analytics, Enterprise Applications and Interactive Services.
In addition to helping TCS’ clients transform their businesses, Krishnan is focused on transitioning TCS to be fully agile by 2020 – upskilling and reskilling thousands of employees, building collaborative workspaces, enhancing the management of contracts and partnerships and improving customer service.
Krishnan has been a part of TCS for the past 28 years and has rich experience in business and technology consulting. He has held several key leadership positions such as the global Head of Consulting Enterprise Solutions, Chief Operating Officer of TCS Financial Solutions, Director for the State Bank of India Group Core Banking Program, and head of TCS’s Global e-Commerce & Enterprise Application Integration practice. He also had a brief stint with Tata Internet Services as its Chief Technology Officer.
Krishnan joined TCS in 1991 after completing his Master’s degree in Electrical and Computer Engineering from the Rose-Hulman Institute of Technology, Indiana, USA. He also holds a Bachelor’s degree in Instrumentation and Control Engineering from the Government College of Technology, Coimbatore, India. Krishnan is an excellent speaker and as a thought leader, he speaks in global conferences and actively interacts and shapes opinion among industry analysts.
Krishnan lives in Mumbai, India with his wife and two daughters. An avid reader, he enjoys non-fiction books, music, movies and tennis, and is passionate about promoting education in India’s rural communities.