Alberto Pirrone

AI, a sandwich on the highway, and us: how new frontiers in data analysis will change marketing

Alberto Pirrone is Country Manager for Altroconsumo. Always fascinated by how new technology might impact consumers and consumer organisations, in this opinion piece Alberto shares his thoughts on how data, AI and algorithms have the power to go beyond the traditional marketing categories and see people more holistically.

 A trip across an AI enabled world

A few weeks ago, I attended an event where a renowned multinational company specializing in SaaS-based CRM software presented a demo of AI enabled products for some of its major Italian clients.   

Through the story of two friends planning a weekend trip, they showcased how powerful, AI-driven software could open up opportunities for businesses along their route to anticipate their needs and tailor offers to the travelers.  The software behind the service is based on data, algorithms and artificial intelligence.

Through one of the traveler’s social media feeds, and without the person being really conscious of it, the software was able to detect they were planning a trip to a particular location.  This then led to a prompt to the offer of a change of tyres and car service at one of their clients’ franchises at a critical point in the journey. Once this was complete, and now that their precise geolocation was known, was quickly followed up with a promotion code for a suggested restaurant as they continued on.

The demo was told from the point of view of opportunities for business, there are several elements that struck me regarding what an AI-enabled world means for delivering and marketing services to people in a holistic way, across all the realms they occupy – markets, workplace or family and public life.

First and foremost, the philosophy of relationship marketing adopted by these two companies: real-time, contextualized, and personalized. Additionally, I was interested in “how” this philosophy was implemented through data analysis and artificial intelligence algorithms.

However, let’s try to look at it from a different perspective. From the point of view of the two women, the important thing was to have a memorable experience (a relaxing weekend spent with a friend), and the actual transportation from point A to point B was simply a means that triggered business opportunities for the two product and service companies involved.  Of course, it goes without saying that the same business opportunities would have arisen for these companies if the trip from A to B had been related to two colleagues going on a business trip.

This raises an interesting question that I explore in this blog – can data, algorithms and AI drive market configurations towards relationships that enable stakeholders to go beyond the traditional categories of ‘consumers’, ‘citizens’ and ‘workers’ and therefore, better fit people’s needs and desires in their daily lives?  

What will it mean to be a consumer in 2030 and beyond?

These perspectives allow us to reflect on some key questions that will be central in the coming years. Let’s start with some key questions: what does it mean to be a consumer now in 2023? What will it mean in 2030 and beyond?

The familiar idea of a consumer is a someone who “purchases goods and services”. In legal terms, this is almost always a private individual. In consumer law, the category of ‘consumer’ is entirely distinct from other categories, like for example a ‘worker’, and different protections, rights and responsibilities apply.  The former category is considered solely in economic terms, whereas the latter is seen as both an economic and social category.

This concept of a consumer emerged in the post war period simultaneously with the phenomenon of “consumerism” and so became closely associated with the liberal-capitalist model.

In a consumerist culture, retailers and manufacturers  bombarded people with specific advertisements for their products, seeking to generate desires and aspirations and then turn those desires into needs.  Individuals in this new consumer culture purchased more and more, fueling production, employment and economic growth.  

What we see emerge is a concept of a “consumer” which is defined by how companies conduct marketing – and not the other way around. It’s reasonable to assume that the concept that ‘marketing defines what a consumer is’ will continue to hold true simply because companies have the means and resources to carry on generating desires and transforming them into needs.

However, people inevitably and naturally cut across categories in their roles as consumers, citizens or workers multiple times in a day – therefore, from the perspective of the person involved the above mentioned categories are mere superstructures. Thus, marketing will more and more propose experiences to people, rather than pure products or services for a specific need.

Enter the power of Artificial Intelligence, data and algorithms

The contribution that  artificial intelligence can make to generating desires and transforming them into needs is evident – regardless of whether it is the new more powerful generative AI or the more familiar cognitive AI. The continuous monitoring of a person’s activities (whether conscious or consensual) enabled by connected objects like the ubiquitous smartphones which individuals use to carry out these activities, be they work-related or recreational, allows for predictive analysis.

An advanced AI can identify data patterns from which it constructs what’s known in mathematics as an ‘objective function’, which allows it to identify and provide potential “desires” as an output to the monitored individual. It is important to note that such proposals do not necessarily lead to a transaction.

Brands want to continuously enrich a personalized relationship, which itself becomes a source of value for the company as it fosters brand loyalty. This loyalty arises from a desire that has become a need. The bet is that this loyalty will result in numerous transactions over an extended period: purchases of goods or services that, in addition to the inherent value of the product/service itself, generate perceived added value for the user due to the spatial, temporal, and situational context in which they can enjoy the goods/services in question.  Tailored, data-driven AI marketing could be an invaluable tool in creating an enriching, personalized relationship – and one that can cut across the different social and economic categories they exist in. 

From the individual’s perspective, the act of purchase is, in fact, a marginal event. What matters is the enjoyability and utility of the specific relationship an individual then has with their products and services providers within certain journeys or, better, life experiences. This relationship is based on an unwritten “agreement” between the buyer and the seller. It is, therefore, reasonable to assume that the dynamics of exchanges will increasingly revolve around the individual, regardless of the category in which a marketer might place them.  Instead of observing habits and behaviors through the lens of traditional functional categories (consumer, worker, citizen, etc.), they will be analyzed and valued through a holistic approach facilitated by the technological tools that have been gaining prominence in recent years and will become increasingly pervasive in the future.

Those  who today are still committed to conceptualizing and representing the interests of predefined functional categories need to evolve towards a perspective that overcomes these categories. They can instead become the pivot of secure ecosystems that place individuals at the center, allowing them to enjoy valuable experiences and providing operational tools to interact with the system  – whether that is with other individuals, companies or  institutions).

Responsible governance of data flows and AI systems

There is still an open question: does the intangible value perceived by the user in the aforementioned economic relationship come at a price? The answer is yes. The price for the user is the information generated during this relationship, which creates knowledge for the company in relation to the individual and, in principle, for the entire ecosystem in which that company operates. It is interesting to note that people are quickly assimilating this model. A recent Forbes survey of 2,000 Americans shows that more than half of the respondents have no problem sharing some information about their behaviors with Artificial Intelligence. 

However, we can contrast this with a recent Euroconsumers survey of around 4,000 consumers in Italy, Spain, Portugal and Belgium about Generative AI, which found that 34% of respondents expressed their concern that AI will lead to more abuse of private/personal data.

If innovation is to thrive, a strong and trustworthy framework needs to be in place that can empower consumers to get the best outcomes from their data, on their terms. This, as stated in Euroconsumers’ manifesto ‘My Data is Mine’ would mean making control and autonomy over data as important as securing privacy, security and fairness. 

I like to think that if Artificial Intelligence is governed intelligently and without ideological biases, it will be one of the drivers of development, not only on the supply side but also on the demand side. Its use will lead to the evolution of markets, still based on pursuing the optimal intersection between demand and offer in transactions and the clear distinction of rights between consumption, work, and citizenship, in logically circular environments with people and their experiences at the center.

***Euroconsumers showcases diverse perspectives and opinions from various stakeholders, however these do not necessarily reflect the views of Euroconsumers***