feature image

Digital Pulse

in·no·va·tion – A creation resulting from study and/or experimentation. The act of starting something new.

dis·rup·tion – An act of delaying or interrupting continuity. An event that results in displacement or discontinuity. The act of causing disorder.

Digital change is a journey, not a destination.
It requires agility and flexibility to underpin a continually evolving business environment.

Industry Change – The ongoing economic, technological and social development of commercial business and market sectors.

Are virtual assistants blind to brand?

Will virtual assistants kill your brand?Key takeaways

  • Virtual assistants – AI-powered intelligent agents – will reshape traditional interactions between brands and consumers.
  • With virtual agents doing the shopping for customers, what place does imagery, packaging or reputation have?
  • Marketers need to rethink their products, capabilities and channels to allow for the role of technology in the purchasing journey.

In a future closer than you may think, a middle-aged creative marketing executive called Dave is awoken by his virtual assistant, Hally. (Think Apple’s Siri,  Microsoft’s Cortana or, in the make-believe world of The Avengers, Marvel’s Jarvis)

“You look well rested, Dave!” Hally can’t actually see Dave, but she has Dave’s Fitbit data. “I was checking out different health insurance policies while you were asleep, and discovered you can save $50 a month on your premium, and still get chiropractic cover included in your policy to sort out your neck issues. Do you want me to make the switch?”

“Sure, Hally. Could you also find me a new electric razor? My old one’s broken”.

Dave’s in a good mood – he’s saved some cash and it’s not even 8am. He’ll need it. On arrival at work, he finds out that another client has gone elsewhere. His proposal for a new banking campaign has also been rejected. Dave is devastated – this one was finally going to convince the market that his client really did truly, madly, deeply love their customers.

Dave closes his emails and moves on to reading some old advertising articles, chuckling at the doomsayers who think that brands are dead.

Dave can’t see the problem. But perhaps you can?

The machines are coming (for your brand)

A brand is who you are. A set of associations that consumers use for guidance toward the right products.

In the past, organisations have been able to pull several levers to help define who they are in the minds of consumers – things like design, packaging, price, language and placement. Branding has been essential to pretty much every successful business since well before Don Draper tried his first Old Fashioned.

Why? Because these levers are all shortcuts to help people figure out the right product for their needs, when they are too busy or can’t figure it out via their own decision-making skills¹. Brands help bridge the gap between consumers’ desires and the ‘right’ product, in the absence of, or in conjunction with, research and complete information. In the past, a strong brand has translated into serious money for organisations ranging from Coca Cola to Apple.

Here’s the problem for people like Dave. All the levers that I mentioned disappear with AI virtual assistants. Voice-recognition technology doesn’t need packaging or a logo. This is an existential threat for brands in industries as diverse as financial services, consumer packaged goods, utilities and technology.

Three ways brands will lose their edge

Take Dave’s decision to outsource the purchase of an electric razor to Hally. To the manufacturer of electric razors, this scenario presents three very serious challenges:

  1. You can’t differentiate your product: Robots don’t differentiate on brands. They just take what they know about you, put that information into an algorithm and come up with an answer. As general product categories replace brands in our verbal requests, differentiation as we know it will be pointless.
  2. You become disintermediated from your end consumer: The electric razor company has always had to deal with being disintermediated in some way, generally relying on retailers to sell its product to consumers. But in that world, the manufacturer was at least safe in the knowledge that a consumer would see their products alongside everyone else’s. Not anymore. With the virtual assistant doing the ‘thinking’, the consumer may never see the breadth of options available or be directed towards the third party’s own products.
  3. You fall into the commodity trap: Brand has long been the magic dust that allowed companies to sell products at prices well in excess of their production costs. You’re not paying over $1,000 for the raw materials in an iPhone, you’re paying a premium for how cool or unique it is. When brands no longer have the aura associated with their look and feel, brand-led products will be increasingly commoditised and forced to compete on price. Insurers in Australia have long resisted partnering with online aggregators to avoid being commoditised in this way. In the future, they won’t have a choice.

 This isn’t just a problem for consumer packaged goods companies.

Mark Ritson, marketing professor and brand columnist, points out that Google, for all its power, operates a two-stage model of consumer information. I search for information on pens with Google, then I visit the retailer’s site and make the purchase. That’s much more efficient than having to go to the stationery store, but it’s not nearly as efficient as an AI-led virtual assistant that will be able to predict my needs without even having to wait for a verbal command².

Adjusting to a post-brand world

All’s not lost for Dave and the brands that he works for but he needs to shift his focus. In the post-brand world, marketing executives, chief marketing officers and adjacent roles like chief customer officers will need to:

  1. Rethink products: Does the product simplify the lives of its customers, or does it go further and fulfil deeper needs? Chances are, products which become part of everyday life will have their associated brands fade into the background and become commodities in an ecosystem controlled by the largest online seller. Think Hoover or Velcro, whose names have become synonymous with a product, even when, post-trademark or in the face of ubiquity, it is produced by others. Undifferentiated banks, telecoms or insurers whose brand is based on simplifying choice and providing just enough comfort to avoid the pain of exploring other options are facing a different future. They need to think of new ways to create an emotional connection with customers so they will sign up to them, stay with them and advocate for them³.
  2. Rethink capabilities: Modern marketing functions need to adapt to a reality where they will be marketing to machines more than they will be marketing to humans. Similarly, the best agencies won’t be the ones who win a Cannes Lion. They’ll be the ones who get their clients’ products to the top of search algorithms. To do this, clever CMOs will bolster their teams with data scientists, actuaries and analytics experience architects.
  3. Rethink channels: Many organisations are going it alone, setting up their own AI-powered chatbots and virtual assistants far away from the platforms controlled by the tech giants. This gives them the visibility over the end-to-end customer journey and protects them from the dreaded disintermediation effect. For example, the financial services group Capital One recently launched Eno. Unlike many other banking chatbots, Eno is not available on Facebook Messenger or other platforms but instead responds to customers via text message.

No-name food for thought

The post-brand world is coming. In fact, ‘Dave’ is already out there and his moment of truth is fast approaching. Virtual assistants will enable marketing professionals to do incredible things but they may just undermine the one thing they have long treasured above all else – brands.


Will Kingston is a management consultant in PwC Australia’s Experience and Insights Consulting practice.

 

1  www.youtube.com/watch?v=wdMgsvUXV4U
2  www.marketingweek.com/2017/05/16/mark-ritson-ai-digital-disruption/
3  www.huffingtonpost.com/advertising-week/brand-vs-ai_b_13051552.html

Leave a Comment

Share This