When algorithms recommend products, do you listen?
So why was it important? “Awareness is the first step,” Cian said. “If retailers aren’t aware of this, they could be wasting a lot of money.”
Here’s how they arrived at their conclusions:
The researchers divided potential purchases into two categories: “utility,” or something a customer needs; and “hedonic,” or something a customer wants — in other words, an emotional purchase or “a joy for the senses,” as Cian puts it.
Cian and Longoni found that customers willingly followed computer algorithms — robots’ recommendations — for products they needed, like garden tools. But they resisted the computer’s suggestions for things they wanted, like a bottle of wine. For pleasure purchases, customers crave a human recommendation.
The results are critical for retailers who are increasingly relying on artificial intelligence – or AI – to produce more accurate and profitable marketing strategies.
The research also revealed an interesting quirk: It turns out that recommendation bots are just as good as humans at guiding emotional purchases, like clothes and accessories, but customers don’t believe it.
“In effect,” the researchers wrote, “AI selects floral arrangements for 1-800-FLOWERS and creates new flavors for food companies such as McCormick, Starbucks, and Coca-Cola.” Yet when customers learn that a computer has made recommendations for an emotional purchase, they avoid the suggestions.