Mumbai: At MMA India’s Impact India Summit 2024, BCG MD, partner Parul Bajaj delivered a keynote address titled ‘AI Powered by Marketing and Commerce’. She highlighted that 70% of an organization’s success in using AI will depend on people, processes and culture. This will involve rethinking business processes, organizational structure, creating a digital culture and recruiting the right talent to then move things forward.
She said that even if Netflix gives specific recommendations, the image given to a user on the homepage to promote a series may not be the same image as that obtained by another user sitting nearby. This is the power of AI and personalization. This is a strategy followed by other companies like Starbucks, L’Oréal.
“AI has very disruptive implications in marketing and commerce. This can increase efficiency, reduce labor and reduce repetitive work that does not inherently require expertise. This can give businesses a competitive advantage where none existed before. She said BCG had spoken to marketing directors. 70 percent are optimistic about AI and its applications in marketing. 85% plan to launch a Gen AI application, whether a product or service. The emphasis is on personalization. This will be the most impactful use case for AI in marketing. But CMOs ask themselves a series of questions when thinking about Generation AI. They want to be clear about what it is and how they should approach it. Across all functions such as product innovation, marketing funnel, marketing operations, one must see where one can unlock the highest productivity or use of AI generation.
They are trying to find the right strategy, she explains. Should it be an end-to-end solution or an end-to-end transformation? Or should it be about specific use cases? Are partnerships necessary or can you do it yourself? There are risks associated with the AI generation and horror stories have come to light, she noted. There are concerns about privacy and fairness that can lead to bias. The question is how, as a first adapter, you can overcome some of these pitfalls and risks.
Six use cases: Underlying all of this, she explains, is the application of AI throughout the organization and in ways of working. “This adoption is the only thing that will truly impact these organizations. » When looking at applications of AI across the consumer experience, the entire consumer funnel BCG identifies six primary use cases, areas where AI can make an impact significant. The first is to create dynamic content and optimize marketing workflows to be able to develop content at scale very efficiently. The second is to detect customer demand and then use it to drive superior product innovation. One can use the entire market research process, such as survey, interview planning, analysis, and leverage the insights obtained to drive higher content engagement.
The third area is customer service. Many applications exist, such as Chatbot and AI, that can provide superior customer service. The fourth area concerns personalization at scale. This is a segment of one. AI in the fifth area can facilitate sales and help the in-store salesperson deliver a set of results more efficiently. The sixth is conversational commerce. This means leveraging a consumer’s preferences, trends, and past behavior in the current context to have an intelligent conversation with the customer and get them to convert. This is the whole arc of possibility.
Conversational commerce: She talked more about conversational commerce. Previously, it was human-based. You now have a rules-based Chatbot. We get standardized responses. Some companies have now moved towards Gen AI-enabled chat. Based on a consumer’s past behavior, the right recommendations are generated to convert the customer, she explained. The next step would be fully voice and video enabled Gen AI chatbots. BCG spoke with consumers to understand the categories in which they would be interested in trying conversational commerce and the method of engaging in that category.
There are three clusters at play. In one of them, customers have a very strong interest in leveraging AI generation in conversational commerce. These are high-involvement purchases. Travel is a category here in terms of customers thinking about flights, hotels, destinations, etc. “This is actually an important use case for conversational commerce. On the other hand, there are categories and products that consumers find very complex to purchase.
Here, consumers are very skeptical about the use of Gen AI chatbots. For example, buying a car. Here you still want to do some human interaction and take a test drive. In the middle are categories where a consumer doesn’t want to think too much about the product, like daily shopping or daily food deliveries. Depending on the categories in which they operate, businesses should consider the level of investment they want to make in conversational commerce.
Customization: She talked about another use case for personalization in terms of creating content at scale using Gen AI. In the past, it took six weeks to create a campaign from consumer insight to actual content. This is done in less than a day using the power of AI generation like ChatGPT. It can be used to generate different combinations of content, production, surveys and information analysis, etc.
For CMOs, personalization is important across the entire funnel, including consideration and loyalty. There are clear use cases. As mentioned at the beginning, different images are used and micro-marketing level targeting is taking place. But it’s expensive to produce without AI. It is now possible to deliver hyper-personalized ads at scale and at a very low cost thanks to AI. Chatbots can be used to offer personalization to low-interest categories.
Conversational search: Part of a marketer’s budget is spent on research, including discovery and optimization, she added. But it is not always relevant to a brand and the desired objectives. It is therefore possible to carry out a conversational search. Consideration should be given to optimizing search using Gen AI.
She also said much email marketing has been done in the past to drive purchases and loyalty. Consumers would not engage with these emails. Now one can consider targeting the consumer not only through emails but also at the right time when they accept the brand. In the United States, Starbucks targets its objectives based on consumer habits. So, if they know that every day a consumer walks to a Starbucks at 7:45 a.m., an alert can be sent to their mobile to inform them that since it’s cold, they might want to try a hot chocolate. This obviously has more impact than if the consumer receives an email that they may not see until later that night. “The AI generation thus makes it possible to unlock hyperpersonalization in the right way across the entire consumption funnel. »
