CIO Dive Trendline on Data in Action

While AI is enabling a new era of convenience, making it easier for customers to research products, it's also reducing the role a brand’s website plays in the customer experience. As users begin to use AI platforms to make transactions on their behalf, brands have the potential to disappear into the background.

In fact, agentic AI is reshaping customer behavior just as e-commerce did decades ago.  

“I am concerned for our retailers — that they're going to lose everything between trigger and purchase,” Nikki Baird, VP of strategy and product at Aptos, said. “Yes, the consumer knows that they need something, but you may not have any visibility into any of the journey that ultimately led to you.”

Some brands see a clear role for themselves in AI-powered experiences. Other experts voiced concern about how the rise of AI agents could put up barriers between customers and brands throughout the experience, from data collection to relationship building. 

“There is no customer journey if you are relying on agents,”  said Jon Copestake, global senior consumer analyst at EY. Companies would need to design journeys based on AI’s needs, and in the process they could lose control over the customer experience.

“If they can't generate that experience for the customer, then there isn't really going to be a sense of loyalty to the retailer,” Copestake said. “That means retailers face potential disintermediation because AI and the consumers themselves won't necessarily see strength in your brands.”

AI agents could also deprive brands of the data they use to craft and personalize customer experiences, according to Baird. Third-party AI already needs inventory and location data, and as they grow more powerful, search history and intent data could become necessary as well.

The third-party platforms may then charge companies for what they learned from customer journeys made using their AI, according to Baird. The relationship would be similar to how Google AdSense works right now.

“For ChatGPT in particular, OpenAI needs revenue sources,” Baird said. “I would be extremely wary as a retailer that they're going to turn that around and charge me for it. That's coming.” 

A matter of trust

Another major challenge that may arise from AI-led journeys is how it could affect consumer trust, especially when third-party agents make mistakes.

For retailers in particular, trust is usually just a matter of getting the customer experience right, according to Copestake. However, when AI guides the experience, the people in the company have less control over its accuracy.

“If a retailer gets it right 99 times and then gets it wrong once, then the consumer will remember the once,” Copestake said. “One of the big challenges is that generative AI may say the right thing or do the right thing for consumers 99% of the time, but it's the 1% that people will pick up on the most.”

How to find the perfect response to a bad experience is the “million dollar question,” Copestake said. The best route a company can take to regain trust is to react immediately and transparently and let the consumer see that they’re trying to repair the problem. 

This is less of an issue with associates using AI in-store, according to Copestake. In that case AI is shaping how workers serve the customer, but a human is right there to validate the information. 

The larger challenge may appear when customers let AI handle the shopping process for them without any external validation, such as when a shopper transacts through a third-party platform. 

It’s in vendors’ best interest to help companies serve as the merchant of record for their services, according to Anil Jain, global managing director for global strategic industries at Google.

“If the experience is poor, you've not only upset the consumer, but you've created conflict and distrust with the retailer, even though it's not the retailer's fault,” Jain said. “A big part of this is consumer consent and trust, but also the control that both the consumer and the retailer can have.”

Home Depot is one brand working to position itself as the merchant of record, maintaining its brand voice through its product selection and support. 

“There is a desire to have a company behind that,” Home Depot CIO Angie Brown said. “That's what we mean by the merchant of record. We feel like the brand aspect of that is still very, very strong through product selection and especially from there forward.”

Clarity can suffer when AIs meet

Trust and ownership become truly complicated once a customer is using a third-party AI to make a purchase that gets handled by a company’s in-house AI.

Mistakes happen, and it may be unclear whether the fault lies with the business selling the goods or the third-party AI. One approach to solving this problem is for companies to divide their communication around AI in two, according to Copestake.

First, retailers should establish what their capabilities are along with any promises they can make about their own infrastructure, according to Copestake. From there they can craft a second message that sets expectations for customers who arrive through third-party AI.

“It's probably relatively simple for retailers to do in terms of saying the buck stops here with our AI usage,” Copestake said. “We may have built a platform where if you directly interact with our AI, then that responsibility lies with us. If you are contacting our AI through a third party AI, then clearly that's something that needs to be addressed to this issue between the two AIs.”

Data is another potential point of concern. Companies will likely only want to share necessary details with third-party AI agents, not offer unfettered access to their entire system. They will also want to retain access to information about customers arriving through third-party sources. 

One way to regulate the flow of information from one company's AI to another is via specialized concierge agents, according to David Jennings, global leader of CX and agentic AI solutions at Cisco. Concierge agents are built specifically for communicating with third-party agents, including handling their requests and recording relevant customer data.

“These specialized agents can be built by the teams or they can be built by third parties, but you still know where the customer is living all the way through the flow,” Jennings said. “They're always living in that initial concierge, as opposed to if you had multiple agents where every single time you're interacting in a disparate way.”

Opportunities to stand out remain

While companies can’t control how customers shop through AI, that doesn’t mean they should expect to relinquish control over the experience.

Customers are less likely to hand the shopping journey over to AI for tactile goods like fashion, according to Copestake. In contrast, the weekly grocery trip is more likely to become automated.

Many categories will have some journeys well-suited for AI and others where customers will seek a personal touch, Copestake said. A purchase like socks is easily automated despite being part of the fashion industry, while consumers will likely want to choose expensive foods with a shorter shelf life like meat or cheese.

Companies can make their experience stand out from generic AI advice by positioning themselves as the arbiters of brand knowledge, according to Baird. A customer who has a strong relationship with a retailer is more likely to shop with them directly.

“You need to get in front of that trigger so that they're already predisposed ask, ‘Well, what about New Balance?’” Baird said. “I don't need to go to ChatGPT and get advice because I know and trust New Balance and I just want to go there.”