The future of eCom is aCom
If you haven't already heard algorithmic commerce (aCom*) is going to revolutionise the way consumers buy goods. Endless choice and the cognitive load of selection is being replaced by zero-click subscription models, underpinned by trust in all-powerful and personalised algorithms.
Sounds great so far, but if you want to join the revolution, you must first overcome a tiny problem. Developing the required level of consumer trust, and gathering enough data to personalise an algorithm is no easy feat.
So what exactly is aCom and what role will automated comms play in providing the frictionless and always-on feedback loop required to make it all work?
To understand aCom and its revolutionary potential, we need to first remind ourselves why a subscription model is an attractive thing for consumers in the first place. The appeal is simple, it saves us time, and in a world full of endless choices (and the resulting cognitive load) outsourcing even one of them to a trusted partner is rather appealing.
Historically, subscriptions have been rather basic and focused on a single product or services; think milk and your weekly cleaner, both providing you with an easily understood and repeatable experience. Where aCom differs from this simplistic traditional approach is in its use of machine learning, AI and the complexity of resulting algorithms.
With the right algorithm, brands can offer more nuanced subscriptions and attract consumers with the promise of a far greater reduction in cognitive load and far more time-saved. Perhaps the most likely candidate for this kind of offering is the dreaded weekly food shop.
For any family, a weekly food shop is a nightmarish event of colossal cognitive load - rows upon rows of grouped items with a marginal difference each vying for our attention. The challenge for the algorithm is creating subtle variations in what is required from one week to the next.
Old fashioned e-com has attempted a partial solution, namely online ordering, but this still requires an investment of time to amend each order or its Spag. Bol again tonight kids. What aCom aims to do is use your historic purchase data, and an active feedback loop to subtly shift your weekly order and provided something new. A powerful enough algorithm will be able to identify the regular needs - eggs, bread etc.… but also provide the surprise and delight of something unexpected.
To illustrate what the power of a good algorithm can do you need only consider TikTok. The wildly addictive app does an incredibly good job at holding a users attention with daily ave. usage at around 45 minutes! It does this by capturing every available piece of data on a user's viewing habits and feeding them back into the algorithm to iterate and improve what appears in their feed.
The reason TikTok has managed to develop such a powerful algorithm is partly due to the short length of its content. At only 15 seconds, TikTok can capture new user data at an astonishingly fast rate. Compare that to Netflix who have an ave. content duration of 43 minutes, you start to understand why although good, it's suggested for your list is far from perfect!**
So a feedback loop where the behaviours and preferences of each consumer are captured and fed back into the algorithm is going to be critical for the success of aCom. But how can that be achieved if you are not TikTok nor in possession of an always-on customer service centre? - Not to worry there is a bot for that.
Providing an always-on, automated channel allows consumers to easily interact, update and amend their preferences mitigating the fear of relinquishing choice. This builds the all-important trust required to lead to a monogamous relationship with a brand and well as provide user data to further fuel and personalise the algorithm.
There will also be a change in the role played in these automated conversations from passive to active. Automated channels today mostly play a role as passive assistants, providing a streamlined way to access information. For brands wanting to take advantage of aCom, this positioning will need to be readdressed with experiences designed to take a more active role and instigate conversations.
This move from passive to active is going to mark the next big change in the role automated channels will play for brands and their data collection needs. A conversation activated by a bot that would allow a user to easily update their profile with the items they liked and disliked, as well as providing a streamlined returns system will be vital.
If you are not TikTok or Netflix, getting your automated experiences right is going to define the success of your aCom recurring revenue strategy. Conversational design that provides an effortless bridge between a brand and its customers will be the only way to build the required trust and feed the algorithms with enough data to truly personalise them.
With Apple, Adobe, Microsoft and many more shifting their focus to recurring revenue models, it is impossible to ignore the potential of aCom. However, before you rush out and develop your first algorithm, remember that without a customer feedback loop powered by automated conversations, you're going nowhere.
*Credit where credits due, ‘aCom’ is an abbreviation I first heard, I believe, by that excitable genius @ScottGalloway
**I have little to no interest in Gloop and its scented candles, what the hell have I watched for that to make the list?