Digital environments have created countless layers of complexity in daily life, from what to post and who to follow, to what to buy and where to go. Now AI promises a remedy to the complexity. With that remedy comes a new lifestyle. AI brings a fundamental shift in consumers’ expectations of technology.
Whereas organizations used to focus on empowering users by adding new features and options, the advent of AI natives requires a different question: “How can we empower users by automating features and reducing complexity?”
Digital tech that’s visible, that proliferates endless choices, and that adds overhead can feel burdensome. It creates a sort of friction that makes invisible, effortless tech far more appealing.
Look at all of the things I can do now!” - Digital Natives
Look at all of the things I don’t have to do now!” - AI Natives
People increasingly expect platforms, products, and services to act like AI technologies.
“[AI assistants are] something that’s been really dynamic in elevating our home, to make it feel more like a home and a place we enjoy . . . beca use we can really transition the moods of the home.“
Denzel, Phoenix, AZ
Across the board, they’re very willing to engage with AI products and services in nearly every industry, from entertainment to education and from food to banking.
The foundation for profound industry change is already in place. The only limiting factor now is company adoption of the technology.
“We were l ate adopters of . . . Alexa, and I use that all the time now. And I’m like, there must be so much more out there that we could branch out into.”
As millions of people started working from home during the pandemic, they turned their living rooms into remote schools for their children. They shopped exclusively online. Through Zoom they hosted weddings, birthdays, and holidays.
Relying on smart services that ranged from grocery delivery to banking, entire nations of consumers suddenly experienced the breadth and power of AI all at once. Behaviors that might have taken decades to develop occurred in months. People adapted quickly.
What they learned was that AI can be an entirely new experience. And it’s one worth paying for, whether the currency is dollars or data.
When we’re successful, nobody’s even going to know they’re using it. That’s how you make a culture change. You get it to where people stop obsessing about it and they just accept it. They move into it and enjoy the benefit.”
Lead, Artificial Intellig ence and Machine Learning Center at Raytheon
Concerns about the potential of AI boil down to transparency and communication. AI natives see their experience with the technology as a relationship they’ve already agreed to. As part of that relationship, they expect the company that creates the technology to be responsible. They look for language and signals that give them peace of mind when they make purchasing decisions.
“I want [companies] to talk about their successes and challenges. [I want] transparency in terms of what's gone wrong and how . . . you resolved it or attempted to resolve it. How are you working to make sure that [problem] doesn't happen in the future?”
- Mark, Los Ang eles, CA
of people feel more comfortable when companies clearly explain how they protect personal data
of people feel more comfortable when companies clearly communicate details about their technology
of people feel more comfortable when companies demonstrate clear values and mission
Half of adults agree with predictions that advances in AI will give a small number of people too much power and that AI will give companies too much control over their lives.
More than a third of adults agree with the prediction that AI will become self-aware and pose a threat to humanity. This has become a mainstream point of view, nudged along by support from the media and influencers like Elon Musk.
9 in 10 adults say they’re at least somewhat concerned with the privacy of their data online. Nearly a third say they are extremely concerned. But no more than 20% of adults consistently take basic steps to protect their data privacy.
“I don’t care if people know the places I shop or the news I read [or] my political affiliation. I don’t c are if everyone knows that as long as my financial accounts are secure.”
- Stanley, New York, NY
Leading AI companies initially used transparency as a crisis-response tool. Now they see it as a competitive weapon. If you were an unlucky Alexa owner in 2018, you might remember hearing what some described as “creepy laughter” coming from your smart device.
Hundreds of owners who had that experience quickly took to social media, and Amazon was forced to respond.
Compare that experience to Apple’s recent App Tracking Transparency update, or ATT, which allows consumers to opt out of third-party tracking. Apple wants to put more power in the hands of the consumer, setting them apart from AI competitors, most notably Facebook.
Leaders are already staking out their communication and transparency practices, signaling to AI natives the benefits of their relationship.
The current state of the market and consumer expectations [is] beginning to force companies to be more transparent and better communicators about how they’re using consumers’ data. Market conditions, trends, legislation, and now even big tech player announcements are forcing all companies to be more transparent about how data is used.”
Senior VP of Data Solutions,
Companies that see AI initiatives as too risky or that relegate AI to small and narrowly defined projects to prove ROI are playing a dangerous game. To assess threats, they mistakenly watch only their direct competitors, not the AI titans of the world.
FAANG (Facebook, Amazon, Apple, Netflix, and Google) and companies like them have become direct competitors to every other company out there. These companies have amassed so much data and AI capability that they can move into seemingly unrelated markets almost overnight—and win.
AI has created a winner-take-all business reality that many companies won’t survive. The situation is even more dangerous given that AI natives already perceive AI-forward companies to be superior to others.
of people under the age of 45 feel that cutting-edge technology is the most important product characteristic to consider in new purchases, aside f rom the producer ’s overall reputation.
When asked how news that a randomly selected company was investing in AI would influence their perceptions, adults were far more likely to say they’d react favorably rather than negatively toward the company. This positive response was true for a host of factors, even core reputational factors not directly related to technology, such as being a good place to work and caring about customers.
The effect is more pronounced among younger people. After hearing about a company’s investment in AI, nearly half of adults under age 45 were more likely to believe the company positively affects society and cares about its customers (46% each).
Among the top reasons why people feel more companies don’t leverage AI are“Leadership doesn’t understand it” and“The company is old-fashioned or stuck in the past.” Among younger adults, these responses are more common than sympathetic views such as “The company prioritizes privacy of personal data.”Companies are already paying a high reputational cost for falling behind onAI transformation.
For incumbent businesses, this change raises a very real threat that upstarts and early adopters can leapfrog multimillion-dollar marketing and customer service budgets by leading with technology.
By the time many organizations recognize and respond to this profound change in perception, they might have already lost the market.
Consider the rash of companies rebranding themselves: Kia Motors became Kia. General Motors and MasterCard released new visual brand identities, creating space for a broader range of offerings. Google Research became Google AI. Many other companies added AI to their names or removed category identifiers.
What do all of these rebrandings have in common? They untether the company from the industry.
Organizations that fully embrace AI no longer have to fit into a single category. They can be anything to anyone. The proliferation of rebranding is just one signal that the business landscape is splitting into two factions: AI adopters and AI laggards.
Economic incentives for AI are here to stay. We’ve already passed the early-adopter phase.
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