“The next most likely thing to do” – Real-time marketing
Segment-of-one is becoming a reality in China, and strategy and storytelling are turning into the new ultimate practices in marketing. In Part 2 of our interview, Prof. Dr. Claudia Bünte, an acclaimed marketing expert and, according to the trade magazine OnetoOne, the “Deputy Marketing Head 2020” shares with us why that is the case and what these trends mean for marketing professionals in Europe.
What is happening in marketing in China? Are new developments emerging?
China is on its way to real-time marketing. They collect and analyze consumer data in real time. AI recommends the “next most likely thing to do,” such as a Starbucks coffee coupon for the upcoming visit to the coffee shop. The significant advantage: AI makes the much-touted “segment-of-one” a reality. The advantage: Brands can interact with customers in a very personalized manner – precisely the right offer at precisely the right time and precisely the right price. It is a dream for consumers. The disadvantage is that all competitors have the same data available and thus can also personalize their customer interactions. As a result, consumers become more and more demanding, and companies must meet these rising expectations as well.
Using the keyword New Retail, the Chinese show us how to link the online and offline worlds skillfully. For example, with Hema/Fresh Hippo, Alibaba creates an entirely new hybrid shopping experience, which includes 24-hour delivery, digitalization of the entire value creation chain, and payment by facial scan (see photos). Also, it is becoming apparent that marketing focuses more and more on strategy and storytelling. Consumer insight, product adaptations, advertising and sales, as well as marketing ROI, are becoming increasingly automated. This means that the marketing professional’s area of responsibility is changing quickly and radically – it’s an opportunity and a great challenge at the same time.
And what does that mean for marketing in our part of the world? What are the consequences of the developments in China for customers and companies in Germany and Switzerland?
Our European data protection laws prevent detailed data analysis that is available in China. But Chinese companies are now learning how to get the maximum benefit out of AI in marketing. Once the Asian markets are saturated with their products, Chinese companies will be looking for new markets. Of course, Europe is of interest because of its wealth. It goes without saying that Chinese companies, too, have to comply with the GDPR and thus have to do without about 50% of their opportunities in the field of AI. However, they can close this gap with their vast knowledge of and experience with customer behavior in Asia. Therefore, what Chinese companies offer in Europe will be better and more customer-oriented than what their European competitors will have to offer. They have learned with AI and have optimized along with it. And, the way things are, most of the time, customers will take the path that is more convenient for them, i.e., they will likely prefer offers from Chinese companies as those are better tailored to their needs.
And what does this mean for marketing professionals now?
My most important advice is this: Do not hide behind the data protection regulation. Start your AI projects now and test them! While customers still forgive mistakes now, that will no longer be the case once AI-optimized performance has become a hygiene factor. European customers, too, will be more demanding and harder to please, as they already are in China now. It is essential to know what AI is supposed to achieve for a company. What is the use case, and what is the goal? It is helpful for tool and vendor evaluations to ask these questions. You can find the 20 most essential tips for all marketing tasks in my new book. It’s worth browsing through it.
The book on the topic
Bünte, Claudia (2020): “Die chinesische KI-Revolution: Konsumverhalten, Marketing und Handel: Wie China mit Künstlicher Intelligenz die Wirtschaftswelt verändert“ [The Chinese AI Revolution: Consumer Behavior, Marketing, and Trade: How China is changing the business world with artificial intelligence]