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Ken Hughes Interview: How consumer behaviour will change in the future

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Artificial Intelligence is the next significant consumerist game-changer. As consumers, we are already living our life guided by the influence of everyday algorithms and machine learning. At the Shopware Community Day 2019, Ken Hughes explained to us how he assesses the current developments in artificial intelligence, how Millennials differ from Generation Z, and how this impacts their consumer behaviour.

Generation Z is the largest consumer group in 2020. How do Millennials and Gen Z’s differ in their purchasing and consumption behavior? Are there any differences in the way they deal with AI?

I think Gen Z is going to be the big show; Millennials were really just the warm up. So while the eCommerce platforms and the retail landscape were excited about what Millennials brought us, they were really only the warm up act; they were the support.

Gen Z have grown up inside the digital bubble - the “phygital” reality: half physical, half digital is their world. Their digital interactions are faster and more expectant than Millennials ever were before. We are about to see an explosive step change in consumers’ expectations. We are about to see a consumer who expects us to move faster than ever before and are less likely to tolerate any kind of mistake by a brand or business. They have fundamentally different values. They have less intention than ever before, are highly expectant, and demand everything hyper personalized. So yes, they are very different.

Many people see the benefits in AI but are also afraid of the consequences. Do you think the general public is aware of how much AI they are already use now in everyday life?

I think the amount of AI we use in everyday life as a consumer is probably quite blind to us right now. I am not too sure people are aware of the amount of algorithm checking going on in the background.

We are already being informed by Amazon what we should buy, by Netflix what we should watch, by LinkedIn where we should work, by Facebook who we should be friends with, by Tinder who we should love. These are algorithms based on what your behaviour was in the past and are then set up for you in terms of “here is what you should buy”. I think consumers are quite blind to that but they do trust the machine. They do have a trust of their smart speaker. It is like a game of chess. The pieces are all in place.

Natural language progression is getting better and better - people are now much more used to talking to Alexa and asking for things from Google Home. We are about to enter the next two years where we see a massive step change. 50% of households already have a smart speaker and the other 50% will added one in the next two or three years, so that accounts for everyone. Voice will become the primary interface between us and eCommerce and technology. When that happens it is really open access to all. The virtual assistants will take over and at that point we will have absolute trust in the machine. Until things go really wrong we will keep going.

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Ken Hughes on the main stage at the Shopware Community Day 2019

AI is developing at a rapid pace. When do you think the use of AI in everyday life will become as natural as card payment?

I think we are probably on that journey already. We are in that journey of embedding AI in our everyday life, we just don’t really know it. With the devices that are already in our pockets, we see them as smartphones, still they are not really smartphones and they are certainly not phones. I mean they are basically AI enabled data driven computers, enabling you to better connect with the brands and businesses and the needs you have as a consumer. We are already well down that road, if you add in the kind of work that is happening in natural language progression, robotics, and deep learning in labs right now.

I often think of Bill Gates, Steve Jobs, Jeff Bezos in their garages. I think today there are probably some people working on algorithms, not in garages, but in their bedrooms. And in about four or five years’ time that is going to come out and we are suddenly going to have all the data we have whipped together into one easy way. Add in some automation and deep learning and our lives will certainly be very different in five or ten years’ time.

The way we look back now on rotary phones and vinyl will be the way the future consumer will look back on our present with our smartphones. We think those are cool - they look back and laugh.

About Ken Hughes

Consumer & Shopper Behaviouralist / Glacier Consulting

Ken Hughes is now acknowledged as being one of the world’s leading authorities on consumer and shopper behaviour, blending his understanding of consumer & cyber psychology, digital anthropology, and retail futurology to explore the needs of the new consumer and predict changes to come.

Ken advises some of the biggest brands in the world on customer experience, omnichannel strategy, shopper marketing, retail trends, the millennial and Gen Z shopper and the peer-to-peer economy. As an accomplished author, TED speaker, part-time university professor and actor, his performances are not only insightful and thought-provoking, but are infamous for their sheer passion, energy and wit.