Amazon can already recommend you books and movies, and remind you that it is time to order more coffee or toilet paper. Many other services make recommendations for you. In these cases the service or online store has your data and makes recommendations. But we are approaching an era where you can have your own data and your AI that makes purchases your behalf. It will change the customer experience, purchase decision making and the balance of power between stores and consumers.
Now large companies, like retailers, banks and media companies especially own that data. They use this data to advertise, make recommendations and tailor offers to you. It is always in their hands to manage this process and optimize offers so that they can generate maximal value from you.
Most companies use a lot of money to build their brands, image and appeal to the feelings of consumers. It has been important – a consumer's feelings and image of brands definitely have an impact on purchasing decisions. Actually, brand versus data oriented marketing practices have divided marketing people and departments, some marketing professionals believe much more in brand marketing and some others in data oriented targeting and optimization.
In the future this can be very different. When you have your personal data and you can use engines (you can call it AI, personal assistant or data analytics) that actually make purchase decisions and orders for you. A good purchase assistant cannot only compare prices; it should know other qualities that are important to you in order to find the right products. It will definitely change a lot in terms of how retailers and other services offer their products, conduct their marketing, and offer data from their products.
We have two very opposite developments in internet services at the moment - one that is its very early phase, and another that is approaching its peak. Big internet giants, retailers and finance institutions are becoming bigger, with more and more of your data that they can use to win more market share. Some people even see that Amazon is already so powerful in the US that it should be split based on antitrust laws. But this development can soon reach its peak.
The new development in the internet is more distributed solutions. We have seen this especially with blockchain and cryptocurrencies. There is no central party or database to manage the data and transactions. This has started to have an impact on finance and especially fintech services. But it is not only limited there. Distributed models will change many other things on the internet, including retail, data management and ownership, and who and how to utilize data to make decisions.
There are old IoT visions, such as how your fridge in the future will know what food you need to buy and make an order. It is hard to say, if it is a fridge or some other systems that will really start to do it, but this day is approaching rapidly. The fundamental change is when can you have your own data and engine to make decisions and orders, not simply trust the analytics of a store.
We already have services that help e.g. to find flights, hotels, and loans based on your preferences. Especially with travel booking these services are significant. They are still quite manual services, when you need always fill your preferences and the compare different options, and some booking services even try to complicate comparisons by having additional attributes and secret prices that the comparison services cannot handle.
Most probably there will be always some purchase decisions we want to make personally. At the same time, there is a significant part of purchases and orders we would like to delegate to a machine. A lot of data is already available to enable this, it just needs some new solutions that consumers can manage and utilize their own data and some smart machines to start to make decisions and send orders. It will put retailers and services into a totally new position. It is not enough to optimize offers and customer experiences only for human beings, but also for smart machines that have a lot of data.
Maybe we will see an arms race between selling and buying machines and who have better data. Consumers get better AI that optimizes their purchase decisions and value for money, and retailers, finance services and other vendors have machines that target to maximize sales and profit. Regulation, like General Data Production Regulation (GDPR) in EU, has also an impact on this, when it empowers consumers to control his or her own data. It will be one more area where data is prevalent in the business in the future.
The article first appeared on Telecom Asia.
Est. 2009 Grow VC Group is the global leader of fintech innovations, digital and distributed finance services. Our mission is to make the finance services more effective, transparent and democratic. The Group includes leading fintech companies in their own areas.
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