Dion Chang, founder and CEO of trends analysis firm Flux.

From people maintaining relationships with GenAI-generated chatbot companions, to the rise of influencer farms, AI is deeply intertwined with customer experience (CX), and businesses must be aware of both the opportunities and challenges this presents.

So said Dion Chang, founder and CEO of trends analysis firm Flux, who yesterday delivered a keynote presentation at the ITWeb CX Summit 2024, in Johannesburg. 

Chang said it is important for businesses to understand how increasingly sophisticated AI technology has influenced consumer behaviour and experiences with brands.

To illustrate the extent to which GenAI has permeated the lives of consumers, he pointed out that globally, people are using GenAI not only to create digital companions or avatars, but also to engage in active relationships with these avatars.

Chang also highlighted the impact of 'hermit consumers', so called because of their preference for digital companies that offer instant, automated and seamless services.

This is a post-pandemic ripple effect, he explained. “This is a mindset shift according to which consumers expect businesses to ‘come to them’, where ‘everything-is-a-service’.

“But this is a $600 billion global mindset shift,” Chang noted. 

Service providers that want to compete have to be agile, flexible and customer-centric – and offer the consumer the means to buy and sell from any mobile device. “This is what I call the last-mile delivery battleground in CX."

The emergence of 'influencer farms' is another trend that is redefining the relationship between a business and its customers.

These are groups of e-commerce influencers who sell products on social media channels and live streams, redefining the infomercial format to target millennials and Gen Z.

According to footage presented by Chang at the CX Summit, these farms resemble factories, with interconnected booths where hundreds of influencers engage with their audience in real-time, aiming to facilitate instant transactions.

The trend has grown in the Chinese market to such an extent, that the country is “actually selling the new social media playbook” to markets like the US, Chang noted.

But while these 'farms' or 'e-commerce incubators' thrive, on the other side of the connected spectrum are those who abuse the system to create fake influencers.

Chang pointed out that this presents yet another challenge for businesses and customers. "AI technology has advanced so rapidly that the difference between the tools used to create fakes in 2023 and those in use today is significant."

Scary side of customisation

The difference between fake influencers and their genuine counterparts also impacts the issue of mass customisation.

The ability to engage mass audiences with innovative and easy-to-use customisable tools to enhance their experience was technically not feasible years ago. 

The situation has since changed, said Chang, who cited a clothing-related online offering from Walmart in the US as an example. “You can type in your height, weight, shape and skin tone, and you can see what a garment will look like on you, which I think is a really good thing.”

But the mass customisation we don’t want now is 'drip pricing or personalised pricing ', he warned. Drip pricing refers to the practice of advertising a service or product for a ‘bargain’ price, only for that price to incrementally grow with additional fees or charges not initially disclosed.

Personalised pricing is scarier, though, said Chang. He explained that this term refers to the use of algorithms to monitor a customer’s online behaviour, based on their moods, and adjust prices accordingly.

Chang stressed that integrated customer service is pivotal to CX and will become increasingly important as online businesses compete for ‘eyeball time’ and their bricks-and-mortar counterparts vie for ‘dwell time’ – the actual time spent in a store.

The reason? The uber-digital Generation Alpha – those born between 2010 and 2024 – who know exactly what they want and when they want it, and are already 'knocking at the business door' with higher demands.