What's happening?
Continuing on from previous years, the level of trust in governments, institutions and the media remains at an all-time low. Brands are also suffering, with 78% of consumers having no confidence in big brands, according to a 2023 survey by GWI. If only as an act of self-preservation, the default position for consumers to take remains one of distrust.
What’s causing it?
Fuelled by often unhealthy relationships with social media, algorithms that prioritise virality and profit over accuracy and genuine connection – and now the rise of low-quality AI-generated content – new layers of disinformation are further complicating an existing environment of mistrust. This is now warping our sense of reality to a point where people no longer feel that they can believe much of what they see online, while misinformation runs rampant on social media feeds. A 2023 survey by Ford found that 78% of people globally believe that as a society we no longer agree on what is and isn’t true.
Outlook for 2024
In this post-truth era, brands and retailers must look to take back control of the narrative, reclaiming trust by connecting customers with real communities and reliable content, as well as using AI to unlock greater efficiencies and provide more personalised experiences.
01. Craving the Real
Against this background of misinformation and distrust, it’s no surprise that consumers are craving something real. There’s a strong urge to find genuine connections that anchor them to tangible experiences that feel relatable and reliable. A survey by Social Media Today found that 86% of consumers say authenticity is important when it comes to deciding which brands to support. And while marketers might believe that their content resonates, 51% of consumers say that less than half brands make content that comes across as authentic.
Meaningful long-term influencer partnerships can be a hugely effective way of connecting with new and existing customers on a deeper, more personal and trustworthy level. Make-up brand Nudestix is doubling down on its influencer strategy by entering into a two-way symbiotic relationship with key influencers. As part of its ‘celebrity stock option plan’ model, influencers Olivia Ponton and Stephanie Valentine (aka ‘Glamzilla’) were named not just as partners and brand ambassadors, but as investors with a certain amount of equity in the brand. By forging a lasting relationship with influencers that have a vested interest in the company’s success, the brand is also building a lasting relationship with an audience that’s motivated and engaged on a more human level.
New live streaming formats offer brands a way to connect with consumers in a genuine way, and in real-time. In November 2023, fashion brand Zara debuted a new livestream format on Douyin (the Chinese TikTok equivalent), hosted by supermodel You Tianyi. A far cry from the frenetic pace and FOMO-fuelled shopping livestreams usually found on Chinese social platforms, the five-hour stream showcased high production values and delivered a more elevated take on livestream shopping, helping to position the brand as stylish and sophisticated. Instead of being centred simply around pushing product, behind-the-scenes footage and a slower pace presented a more human side to the brand.
On the product front, authenticity can also be about taking a stance and siding with customers on the things that matter to them. In September 2023, French supermarket Carrefour introduced ‘shrinkflation’ warnings on in-store signage, highlighting products that had been reduced in size without a corresponding drop in price. The retailer says the warnings will stay in place at all of its French stores until the targeted suppliers agree to reduce their prices.
Also in 2023, French electronics retailer Darty launched its ‘long lasting reviews’ initiative, encouraging consumers to leave a review only for products they have owned and used for a year or more. The company found that 77% of reviews are written only a week after purchase, with the aim of this initiative being to help create more useful reviews that take into account a longer period of use.
We’re seeing the rise of new tools that look to counter this atmosphere of general distrust, aiming to restore consumer faith in retailers and online content. In 2023, Mozilla introduced its Fakespot Chat browser extension. The AI-powered tool helps consumers sift through online misinformation, weeding out fake reviews and scams to help users to make better informed decisions when shopping online. Google DeepMind has also introduced its image watermarking system, SynthID, which adds pixels to AI-generated images that are invisible to the human eye, allowing users to determine if an image was created by AI.
02. Agent AI
Generative AI is set to become a driving force behind growth in the retail industry. While in 2023 it represents only 9% of the industry’s bottom line impact, by 2029 generative AI will soar to represent 78% of retail’s financial impact, according to 2023 research from IHL Group. In 2024, brands and retailers will continue to use recent advances in the technology to build trust with consumers, tapping AI-powered tools to elevate the shopping and discovery experience and to create brand interactions that feel more human.
Improving personalisation delivers real benefits, with 56% of consumers saying they will become repeat buyers after a personalised experience (a 7% increase year-on-year), and 62% of business leaders citing improved customer retention as a benefit of personalisation efforts, according to a global 2023 survey by Twilio.
Zegna X 360 is an AI-powered shopping tool that exemplifies how AI can help brands provide a deeper understanding of their offerings to customers and create a more personalised, human experience at the same time. Developed together with Microsoft, the system used by the Italian men’s luxury fashion brand integrates AI-driven recommendations, allowing store associates to engage with customers on a more personal level. The 3D configurator within the tool offers a staggering 49 billion outfit combinations, opening up an incredibly deep new realm of personalisation options. This allows Zegna staff to provide a unique and personalised service even while communicating with customers through digital channels.
“Generative AI like GPT-4 will be as big a shift as mobile, in terms of how our customers are going to expect to interact with us.” - Desirée Gosby, vice president of emerging technology, Walmart Global Tech
AI is also helping to transform the search and discovery experience, providing more intuitive interfaces for customers to interact with retailers and allowing them to anticipate customer needs more effectively. In November 2023, fashion retailer Zalando launched its ChatGPT-powered Fashion Assistant, allowing users to ask for help with anything related to fashion or beauty, including advice for special occasions (for example, ‘I’ve been invited to a wedding in Barcelona this October’) and even describe the feeling they want to have when wearing the item. In their conversation with the assistant, users are prompted to tell it whether they liked or disliked the suggestions by giving a thumbs up or thumbs down, or asking for alternatives. This feedback loop allows Zalando to continuously work on improving the tool to bring it more in line with customers’ expectations. While this example covers the fashion category, similar tools could be used to effectively serve grocery shoppers.
Learning and anticipating needs can transform the role retailers play in consumers’ lives. Following its initial launch in 2022, Walmart’s Text to Shop feature incorporated ChatGPT in April 2023, allowing customers to add Walmart products to their cart simply by texting or speaking the names of the items that they need. Desirée Gosby, vice president of emerging technology at Walmart Global Tech, highlights the potential breakthrough: “Generative AI like GPT-4 will be as big a shift as mobile, in terms of how our customers are going to expect to interact with us.” Gosby explains that the ultimate goal for Walmart with the tool will be to leverage AI to anticipate customer needs, while implementing it safely and responsibly.
These tools represent a shift from conversational commerce to a way of shopping that’s more intuitive and invisible. Large language models like GPT-3 and GPT-4 let retailers go beyond task-based chatbots (which might, for example, add a product to the basket when prompted) to problem-based chatbots that allow retailers to anticipate what consumers might need based on natural language voice inputs and other data that customers give them access to, such as a calendar.
Bill Gates predicts the far reaching impact AI tools could have: “Everyone will have an AI-powered personal assistant within 5 years – whether they work in an office or not: They will utterly change how we live.” AI-powered travel itinerary assistant Triplay provides a glimpse of what this could look like. Triplay allows users to input their personal preferences, including destination, budget, cultural interests and desired mood to produce a personalised itinerary that also proactively adjusts in real time. The AI provides recommendations for what to pack based on the weather, likely costs of restaurants, and even real-time translations.
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