Artificial Intelligence presents both threats and opportunities but it can be hard to understand the difference without a clear focus on how it can help improve your fulfilment and post purchase promise to your customers, says Rory O’Connor, the founder and CEO of Scurri
Like any technology, artificial intelligence (AI) appears to have the potential to transform the way we do business or wreak havoc on the human labour market. For some, both of these statements will be true and it makes sense to acknowledge this.
The difficulty is that the old hype cycle appears not to apply anymore – Innovation Trigger, Peak of Inflated Expectations, Trough of Disillusionment, Slope of Enlightenment, and Plateau of Productivity.
We can already see that any number of companies are already in any one of all five stages, which is making it very hard for any brand to understand where they sit. And seeing how AI has transformed the performance and fortunes of many software companies, brands are naturally impatient to get going.
As Accenture found, 36% of large, mid-size, and small businesses have successfully implemented AI for supply chain and logistics processes, whilst 28% were on the verge of doing so. The company also predicts that AI will boost logistics productivity by as much as 40% by 2035. Meanwhile, two years ago, Gartner said that by 2024, 50% of supply chain organisations will invest in AI applications with sophisticated analytical capabilities.
Time for a pause
All successful brands put their customers first and this is the place to start in thinking about AI adoption. First of all, the consumer continues to expect more.
They want to use more channels and devices than ever; based on research by Scurri among 1,000 consumers at the beginning of 2024, on average, the UK consumer now has between 10 – 11 interactions with a brand or retailer before buying domestically. For Gen Z, this was even higher – Food 19, Electricals 18 and Health & beauty, Fashion and general retail 17.
While the media reports rising consumer confidence and falling inflation, the consumer remains wary and cautious in their spending. There is talk of a second phase in the cost-of-living crisis as higher interest rates on loans, mainly mortgages, bite and as more middle and higher income households are affected.
And yet, these consumers are not dumping their concerns for sustainability in favour of lower prices; they expect both and this is just one factor that will put pressure on brands to offer value, sustainably and backed by excellent service pre and post purchase.
Specifically in fulfilment and post purchase, we are seeing further fragmentation of delivery types (boxes, same day, out of home, C2C,) as consumers combine a desire for both personalisation and sustainability.
For brands, this all adds up to potentially higher costs and below par service, particularly as some suppliers are now making greater use of part-time staff who often receive little or no training, both of which threaten the high-quality promise that brands make to their customers.
The first clue as to the importance of targeted adoption of AI comes from consumers – they want it. As Euromonitor reports, “As consumers keep testing the capabilities of this technology, they expect brands to do the same to create optimised and personalised customer experiences.”
Brands however need to ensure that they keep control over all the processes involved, from tracking to fulfilment backed by 24/7 support. They need to offer the best range of carriers and have the flexibility to switch them quickly in response to customer requirements. And they need to guarantee sustainability and regulatory compliance.
As the Scurri research shows, 71% of respondents have more confidence in the tracking /shipping update information if sent directly by the brand, while 69% of respondents are more wary of unbranded or third party delivery updates as they think they might be scams – increasing to 76% of Gen Z.
Here then is where the focus on AI adoption should be. Naturally, brands will also be looking to AI to help them increase productivity to maintain their margins and labour costs, but the primary motivator must be customer service and on having full control.
Beyond there, the challenge will then be to exploit AI-enabled apps as they start to deliver deeper insights on cost and performance, enabling brands to deliver even greater service levels.
