We all know about AI and ChatGPT and its extraordinary advancements in generative AI.

However, some findings show that consumers are more afraid than perhaps expected. According to findings released today by Twilio Segment, a consumer engagement platform, some consumers are uncomfortable with its implementation.

About 92% of businesses are now using AI-driven personalization to drive business growth, according to the findings in the company's State of Personalization report. But despite this explosion in AI popularity on the marketing and customer experience side, “only 41% of consumers are comfortable” with its incorporation into personalizing experiences. Most consumers (59%) are currently uncomfortable with AI being used to personalize their experiences.

In short, while businesses are rapidly embracing the technology, “work needs to be done to lift consumer confidence in AI-powered CX," according to Katrina Wong, VP of marketing at Twilio Segment.

Twilio Segment conducted this survey from March 8 to March 24, interviewing adult consumers who had made an online purchase in the past six months. Respondents also included decision-makers at consumer-facing companies which provide goods and/or services online. Respondents were from multiple countries, including the following: Australia, Brazil, Colombia, France, Germany, Italy, Japan, Mexico, Singapore, Spain, United States, and the United Kingdom. 

Data Quality: No AI Without Data

Wong also focused on the idea that “AI and other personalization tools are only as effective as the underlying data they use.” In fact, Twilio Segment found that 31% of businesses say that poor data quality impedes optimal AI implementation.

The percentage of companies that report difficulties getting accurate data is increasing. Wong added, “To improve AI results and personalization overall, companies need to invest in data quality, leveraging effective, real-time data management tools and continuing to increase their use of first-party data.”

Marketers need to keep in mind the importance of establishing foundational data quality and not rush too quickly into AI implementation, Wong added. "Like an electric vehicle that hasn’t been properly charged," she said, "personalization that hasn’t been powered by robust data will only give you limited mileage."

Data is a critical component of every organization’s AI strategy, Wong added.

"Let’s say a retail brand uses a generative AI chatbot to manage customer inquiries," Wong said. "When it’s chatting back and forth with the customer, the AI is pulling that information and insights from a database. It’s critical that this database has the latest information on that customer. Suppose a customer bought shoes yesterday and wanted to exchange them, but the database doesn’t reflect that information yet. Then it’s wasting the customer's time and not helping them with the exchange. Businesses need high quality, real-time data to use AI effectively."

Learning Opportunities

Related Article: How AI-Driven Data Enhances CX

Striking a Balance Between Personalization and Privacy

One of the main concerns that consumers have when it comes to data is privacy. AI might have the ability to create incredibly personalized experiences. But this personalization comes at what cost? How much data is being collected and stored?

The key is to find a balance of personalization and privacy. Wong gives a simple solution here. “By using data consumers have consented to share, brands can infuse that data into their AI models responsibly and without compromising user privacy,” she stated. In this way, a choice is presented to the customers. Those who are uncomfortable having their data saved can opt out, while other customers can opt in and allow more personalization.

Related Article: Do Your Brand's Values Align With Those of Gen Z?

Generation Correlation: Gen Z Says Bring on AI

Twilio Segment also found that consumer opinions on AI differ drastically by generation. Gen Z is the demographic group currently growing into adult consumers — a major audience for businesses to keep in mind.

According to the findings, 72% of Gen Z respondents said that personalization had a positive impact on their consumer experience, encouraging them to make repeat purchases. Wong noted that “just 15% of Gen Z are uncomfortable with AI being used to help brands personalize their experience, compared to 24% of Millennials, 34% Gen X, and 43% of Boomers.”

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