Robot writing on a pad of paper
Photo: Canva

It’s no secret that generative AI tools like OpenAI’s ChatGPT and Google’s Bard are poised to revolutionize how retailers communicate with their customers, from generating top-notch marketing copy to offering incredibly personalized landing pages. Solution providers, including Salesforce and Klarna, have already launched entire AI-powered product suites designed to improve both customer-facing and behind-the-scenes operations.

However, consumers are experiencing a mixed reception to the growing importance of AI in both their lives and retailers’ e-commerce experiences. Some of it is positive: According to Kathy Gramling, EY’s Americas Consumer Industry Leader, in an interview with Forbes, 61% of consumers trust AI to offer tailored promotions and deals, and 58% trust the technology to provide purchase reminders — a sign that they appreciate the technology’s personalization potential. 

There is also plenty of mistrust to balance it out. EY’s Future Consumer Index found that  31% of all consumers, growing to 54% among people who use AI at work, have concerns about losing control of purchase or delivery decisions to AI. Another 27% of all consumers and 48% who work with AI are worried about the tech being used to deliver product recommendations that are biased toward products and brands that may not be in their best interest.

Generative AI isn’t going anywhere, regardless of how consumers feel about its use. Gartner found that 64% of marketers are already deploying or piloting AI/ML tools on a wider scale, and 65% of consumers say they are mostly OK with marketers using generative AI, according to a recent Gartner Consumer Community survey. The trick may be utilizing these tools in ways that improve the customer experience without leading to potential misuse. 

Some companies are already experimenting with experiential, rather than marketing-focused, use cases for the latest AI tools:

  • 1-800-Flowers.com launched MomVerse, a tool that creates personalized poetry and songs for moms, in time for Mother’s Day.
  • Google is using AI to fuel its virtual try-on for apparel feature, which lets shoppers see clothes from brands like Anthropologie and Everlane on virtual models.

Approaches like these offer chances for consumers to try out AI tools for themselves and can serve as learning opportunities. Generative and other forms of AI hold incredible potential, and it’s up to retailers to ease any concerns consumers have about the tech’s use.

BrainTrust

“Retailers being transparent about their use in particular situations could be a great way to put customers at ease and inform them.”

Brian Cluster

Director of Industry Strategy – CPG & Retail, Stibo Systems


“There is plenty of fear about AI, but we as a technical culture are already looking for ways to mitigate the bad actors, deceptions and hallucinations.”

Ananda Chakravarty

Vice President, Research at IDC


“The rollout of AI is going to be an absolute minefield. And it will be a classic bell curve of experiences. Some brilliantly clever and entertaining, and some wickedly evil.”

Jeff Sward

Founding Partner, Merchandising Metrics

Discussion Questions

DISCUSSION QUESTIONS: What steps, if any, should retailers take to make shoppers more comfortable with their use of AI? Do you expect consumers to become more willing to part with their personal data for personalization as AI-powered tools provide more convenient benefits?

Poll

How quickly do you expect consumers to fully accept generative AI and similar technology?

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14 responses to “The AI Genie Is Out of the Box  — But What Does This Mean for Consumer Trust?”

  1. Bob Amster Avatar
    Bob Amster

    It is coincidental that Bryan Wassel and I used the same expression: ” The Genie Is Out of the Box [Bottle]” to describe AI. That is the perfect analogy for what has happened with AI, generative or degenerative. This is one monster that we cannot put back in the bottle. We cannot regulate its misuse by bad actors, and we cannot even be sure that when we trust the source, we are not being deceived. Regrettably, I don’t have answers to the question of how to keep AI contained (pun intended) so it is only used ethically by respected and trusted sources. Good luck to us all. May we be enlightened to find that answer. Between AI and CO emissions, we have our work cut out for humanity.

  2. Brandon Rael Avatar
    Brandon Rael

    Personalization at scale remains one of the most significant challenges for retailers to drive outstanding customer experiences. Consumers have been willing to share their personal data in exchange for personalized offers and a reduction of some of the friction associated with digital commerce and in-store shopping.

    However, this data exchange and business model has to have guardrails, rules, and regulations, along with a transparent policy on how companies will leverage your data. The emergence of integrated AI and Generative AI adds additional complexity and challenges to an already dynamic relationship between retailers and consumers. Consumers will certainly have to trust but verify how, when, where and how their personal data is leveraged, especially for generative AI content.

    The industry is brainstorming some potential ways we need to build guardrails and governance around the use of Generative AI.

    ▪️There are no easy answers for this, as it’s such an emerging capability
    ▪️The consensus in the group was that the US typically follows the EU’s lead around governance

    However, ultimately, it will be up to the private companies to provide trust and transparency around data usage and privacy.

  3. Jeff Sward Avatar
    Jeff Sward

    The rollout of AI is going to be an absolute minefield. And it will be a classic bell curve of experiences. Some brilliantly clever and entertaining, and some wickedly evil. In the middle we will see a lot of good intentions trying to use AI to be incrementally smarter and more focused. This is going to be both joyful and painful. Buckle in.

    1. Bob Amster Avatar
      Bob Amster

      Yes, yes, yes.

  4. Brian Cluster Avatar
    Brian Cluster

    Consumers become anxious about AI when they don’t know if it is being used in a particular situation and if they are being unknowingly manipulated. Retailers being transparent about their use in particular situations could be a great way to put customers at ease and inform them. Perhaps, a little logo or statement on emails or within the customer service chat box could be a way to start to share when AI is utilized. It may also be helpful to create a customer group that would meet quarterly to discuss AI and where it is being used to ensure that the retailer understands the current consumer sentiment and value of various use cases.

    I also wanted to shout out to Katie Thomas from Kearney who shared some very enlightening information about AI and trust a the CGF event last month. I hope she can weigh in on this important topic with that research.

  5. Gene Detroyer Avatar
    Gene Detroyer

    Do I expect consumers to become more willing to part with their personal data? More willing than they are now?

    The complaints are loud, but when you get down to the action, it is buy, buy, buy, and not a second thought about personal data.

    We give the consumer too much credit. They will not care or even be aware of the best implementation of AI.

  6. Ananda Chakravarty Avatar
    Ananda Chakravarty

    Consumer trust is a finicky topic. One day shoppers are loving a product, the next its being embargoed. Its the consumption of AI in content or engagement that will outline the outcome. There is plenty of fear about AI, but we as a technical culture are already looking for ways to mitigate the bad actors, deceptions and hallucinations.
    For retailers using AI for whatever purpose, whether it’s predictive AI algorithms or customer facing generative AI, the only answer is full transparency on its use. AI can become an easy to point to scapegoat, but it will still be the retailer’s science team that sets up the scenarios and uses the tools.
    AI power should bring more value to customers as we mature the tech and its application- until then we’ll be thrashing about trying to find reasons to end it. Why? Because we are always afraid of what we don’t know. The only answer is transparency and shoppers will join retailers in this experimentation to find an equilibrium for data sharing.

  7. Oliver Guy Avatar
    Oliver Guy

    (Full disclosure – I work for Microsoft and have regular conversations with retail and consumer goods companies about how to benefit from AI and specifically generative AI.)
    Like any new technology the key is to start small and plan so you can scale quickly. However with something that could have such a major impact on your customers and customer experience it is important to learn on a ‘friendly audience’ first. A perfect friendly audience is your internal teams – so for example before positioning a chatbot externally you need to prove it internally first but also determine a clear way to solicit feedback that is easy for your internal teams to provide.
    When it comes to personal data, Generative AI can work alongside a personalisation engine in order to provide an improved response. Personal data has always been ‘traded’ by the consumer for something in return – if they feel they are getting a better generative response and can see it they may well be more willing to provide it.

  8. Shep Hyken Avatar
    Shep Hyken

    For the consumer, AI, ChatGPT, and other AI-powered tools will take the CX to a new (and better) level, but not before some turbulence. There will be concerns, rumors, etc., that will make some consumers uncomfortable with the technology. There will be some retailers (and other nefarious people/companies) that will take advantage of the “wild west” days of AI/ChatGPT, and it will be a matter of time before regulations and guidelines kick in to make the technology safe and trustworthy. Retailers must show an easy-to-read-and-understand policy that gives their customers a sense of trust and protection. It’s not different than what they currently do with a customer’s data.

  9. Michael Zakkour Avatar
    Michael Zakkour

    I think that if consumers, like all citizens, feel that AI is being used to further erode their privacy and treat them not as customers but 10,000 data points, resentment and backlash will follow. If AI is used for creative ends, and better service they will embrace or ignore it.
    Much of this depends on how AI ends up changing/disrupting the world at large.

  10. Craig Sundstrom Avatar
    Craig Sundstrom

    RW’s preoccupation with AI seems all out of proportion to either its use in retail, or the public’s interest in it; at least as it pertains to retail: most of the interest/concern I’ve seen focuses on dystopian visions of ‘bots taking over the world. or AI corrupting elections and producing bad outcomes (worse, even, than humans have produced on their own) Mom-verse doesn’t seem to describe either of these scenarios, nor, for that matter, does the software on RW that keeps trying to fill out my sentences…as annoying as it can be at times.

  11. Alex.Siskos Avatar
    Alex.Siskos

    I am all for celebrating remarkable strides in artificial intelligence. AI is now integral to our lives, transforming industries, enhancing productivity, and unlocking unimaginable possibilities. Recent developments in generative AI are particularly astounding, signaling AI’s further potential.

    However, to harness its power responsibly, we must implement safeguards and well-defined laws. Accountability should lie with AI designers, owners, and governments. Let’s act now without over-complicating the process.

    Two of my colleagues recently drew inspiration from Isaac Asimov’s Three Laws of Robotics for a set of simplified laws for AI that can serve as a guiding framework in this rapidly evolving landscape:
    Law 1: Preservation of Human Life and Dignity
    Law 2: Transparency and Explainability
    Law 3: Safeguarding Privacy and Data Protection

    While we embrace the benefits and potential of AI, we must also acknowledge the risks and challenges associated with its rapid development.

  12. Anil Patel Avatar
    Anil Patel

    I don’t think the willingness of customers to share their personal data is the more pressing issue here. The practice of collecting customer data is already governed by several legislation and regulations such as the CCPA and GDPR. Collecting such data is not new, retailers have been doing this for a long time, even before the ChatGPT era, only now there are a variety of data mining techniques available as technology has improved.

    The question is, what will retailers do with such data? Customers have many options when it comes to shopping on the Internet, and it doesn’t really matter if their data is processed by an AI or a human. However, if AI can extract something relevant from this data that actually assists customers in their buying, then all of these efforts will be worthwhile.

  13. Ben Reich Avatar
    Ben Reich

    When it comes to concerns about data privacy, transparency is key. Not only do consumers need to know exactly what and how their personal information is being collected, but how exactly it will benefit their day-to-day lives. Will it speed up their shopping process? Make it easier to find the best prices? The possibilities are endless, but we must start with education and public awareness.

14 Comments
oldest
newest
Bob Amster
Bob Amster
17 days ago

It is coincidental that Bryan Wassel and I used the same expression: ” The Genie Is Out of the Box [Bottle]” to describe AI. That is the perfect analogy for what has happened with AI, generative or degenerative. This is one monster that we cannot put back in the bottle. We cannot regulate its misuse by bad actors, and we cannot even be sure that when we trust the source, we are not being deceived. Regrettably, I don’t have answers to the question of how to keep AI contained (pun intended) so it is only used ethically by respected and trusted sources. Good luck to us all. May we be enlightened to find that answer. Between AI and CO emissions, we have our work cut out for humanity.

Brandon Rael
Brandon Rael
17 days ago

Personalization at scale remains one of the most significant challenges for retailers to drive outstanding customer experiences. Consumers have been willing to share their personal data in exchange for personalized offers and a reduction of some of the friction associated with digital commerce and in-store shopping.

However, this data exchange and business model has to have guardrails, rules, and regulations, along with a transparent policy on how companies will leverage your data. The emergence of integrated AI and Generative AI adds additional complexity and challenges to an already dynamic relationship between retailers and consumers. Consumers will certainly have to trust but verify how, when, where and how their personal data is leveraged, especially for generative AI content.

The industry is brainstorming some potential ways we need to build guardrails and governance around the use of Generative AI.

▪️There are no easy answers for this, as it’s such an emerging capability
▪️The consensus in the group was that the US typically follows the EU’s lead around governance

However, ultimately, it will be up to the private companies to provide trust and transparency around data usage and privacy.

Jeff Sward
Jeff Sward
17 days ago

The rollout of AI is going to be an absolute minefield. And it will be a classic bell curve of experiences. Some brilliantly clever and entertaining, and some wickedly evil. In the middle we will see a lot of good intentions trying to use AI to be incrementally smarter and more focused. This is going to be both joyful and painful. Buckle in.

Bob Amster
Bob Amster
  Jeff Sward
17 days ago

Yes, yes, yes.

Brian Cluster
Brian Cluster
17 days ago

Consumers become anxious about AI when they don’t know if it is being used in a particular situation and if they are being unknowingly manipulated. Retailers being transparent about their use in particular situations could be a great way to put customers at ease and inform them. Perhaps, a little logo or statement on emails or within the customer service chat box could be a way to start to share when AI is utilized. It may also be helpful to create a customer group that would meet quarterly to discuss AI and where it is being used to ensure that the retailer understands the current consumer sentiment and value of various use cases.

I also wanted to shout out to Katie Thomas from Kearney who shared some very enlightening information about AI and trust a the CGF event last month. I hope she can weigh in on this important topic with that research.

Gene Detroyer
Gene Detroyer
17 days ago

Do I expect consumers to become more willing to part with their personal data? More willing than they are now?

The complaints are loud, but when you get down to the action, it is buy, buy, buy, and not a second thought about personal data.

We give the consumer too much credit. They will not care or even be aware of the best implementation of AI.

Ananda Chakravarty
Ananda Chakravarty
17 days ago

Consumer trust is a finicky topic. One day shoppers are loving a product, the next its being embargoed. Its the consumption of AI in content or engagement that will outline the outcome. There is plenty of fear about AI, but we as a technical culture are already looking for ways to mitigate the bad actors, deceptions and hallucinations.
For retailers using AI for whatever purpose, whether it’s predictive AI algorithms or customer facing generative AI, the only answer is full transparency on its use. AI can become an easy to point to scapegoat, but it will still be the retailer’s science team that sets up the scenarios and uses the tools.
AI power should bring more value to customers as we mature the tech and its application- until then we’ll be thrashing about trying to find reasons to end it. Why? Because we are always afraid of what we don’t know. The only answer is transparency and shoppers will join retailers in this experimentation to find an equilibrium for data sharing.

Oliver Guy
Oliver Guy
17 days ago

(Full disclosure – I work for Microsoft and have regular conversations with retail and consumer goods companies about how to benefit from AI and specifically generative AI.)
Like any new technology the key is to start small and plan so you can scale quickly. However with something that could have such a major impact on your customers and customer experience it is important to learn on a ‘friendly audience’ first. A perfect friendly audience is your internal teams – so for example before positioning a chatbot externally you need to prove it internally first but also determine a clear way to solicit feedback that is easy for your internal teams to provide.
When it comes to personal data, Generative AI can work alongside a personalisation engine in order to provide an improved response. Personal data has always been ‘traded’ by the consumer for something in return – if they feel they are getting a better generative response and can see it they may well be more willing to provide it.

Shep Hyken
Shep Hyken
17 days ago

For the consumer, AI, ChatGPT, and other AI-powered tools will take the CX to a new (and better) level, but not before some turbulence. There will be concerns, rumors, etc., that will make some consumers uncomfortable with the technology. There will be some retailers (and other nefarious people/companies) that will take advantage of the “wild west” days of AI/ChatGPT, and it will be a matter of time before regulations and guidelines kick in to make the technology safe and trustworthy. Retailers must show an easy-to-read-and-understand policy that gives their customers a sense of trust and protection. It’s not different than what they currently do with a customer’s data.

Michael Zakkour
Michael Zakkour
17 days ago

I think that if consumers, like all citizens, feel that AI is being used to further erode their privacy and treat them not as customers but 10,000 data points, resentment and backlash will follow. If AI is used for creative ends, and better service they will embrace or ignore it.
Much of this depends on how AI ends up changing/disrupting the world at large.

Craig Sundstrom
Craig Sundstrom
17 days ago

RW’s preoccupation with AI seems all out of proportion to either its use in retail, or the public’s interest in it; at least as it pertains to retail: most of the interest/concern I’ve seen focuses on dystopian visions of ‘bots taking over the world. or AI corrupting elections and producing bad outcomes (worse, even, than humans have produced on their own) Mom-verse doesn’t seem to describe either of these scenarios, nor, for that matter, does the software on RW that keeps trying to fill out my sentences…as annoying as it can be at times.

Alex.Siskos
Alex.Siskos
16 days ago

I am all for celebrating remarkable strides in artificial intelligence. AI is now integral to our lives, transforming industries, enhancing productivity, and unlocking unimaginable possibilities. Recent developments in generative AI are particularly astounding, signaling AI’s further potential.

However, to harness its power responsibly, we must implement safeguards and well-defined laws. Accountability should lie with AI designers, owners, and governments. Let’s act now without over-complicating the process.

Two of my colleagues recently drew inspiration from Isaac Asimov’s Three Laws of Robotics for a set of simplified laws for AI that can serve as a guiding framework in this rapidly evolving landscape:
Law 1: Preservation of Human Life and Dignity
Law 2: Transparency and Explainability
Law 3: Safeguarding Privacy and Data Protection

While we embrace the benefits and potential of AI, we must also acknowledge the risks and challenges associated with its rapid development.

Anil Patel
Anil Patel
14 days ago

I don’t think the willingness of customers to share their personal data is the more pressing issue here. The practice of collecting customer data is already governed by several legislation and regulations such as the CCPA and GDPR. Collecting such data is not new, retailers have been doing this for a long time, even before the ChatGPT era, only now there are a variety of data mining techniques available as technology has improved.

The question is, what will retailers do with such data? Customers have many options when it comes to shopping on the Internet, and it doesn’t really matter if their data is processed by an AI or a human. However, if AI can extract something relevant from this data that actually assists customers in their buying, then all of these efforts will be worthwhile.

Ben Reich
Ben Reich
13 days ago

When it comes to concerns about data privacy, transparency is key. Not only do consumers need to know exactly what and how their personal information is being collected, but how exactly it will benefit their day-to-day lives. Will it speed up their shopping process? Make it easier to find the best prices? The possibilities are endless, but we must start with education and public awareness.