Over the past 12 months, the adoption of generative AI (GenAI) among brands has witnessed an unprecedented surge. In a rapidly evolving digital ecosystem where attention spans are fleeting, competition is rising and consumer expectations around personalisation and relevance seem unattainable, GenAI promises to be the potential game changer that brands need.
According to a 2023 report published by McKinsey, GenAI can potentially create between $2.6 and $4.4 trillion in value to GDP across industries. But it's still early days in the GenAI maturity curve. Whilst headline figures suggest that GenAI adoption by brands is extremely high, when you dig deep into the data, it's mostly the adoption of GenAI in its most basic forms that is occurring in market.
A recent study by eConsultancy revealed that GenAI adoption is highest in task automation areas like content production, keyword research, meeting notes, translation and image generation. This stands to reason, as the low cost and no cost tools have afforded brands the ability to drive efficiency, and the use cases are quite easy to execute with minimal training or onboarding.
But GenAI affords much greater opportunity than automation of tasks and many brands don’t realise yet just how powerful GenAI can really be.
Lack of clear strategy holding brands back
The 2023 eConsultancy study found that whilst GenAI is high on the agenda for many, what's holding brands back is a lack of clear strategy in the space, with nearly 47% of brands citing this to be the number 1 challenge. Too often too much emphasis is placed on the tools, and brands dive in giving little thought to the true opportunity.
When it comes to GenAI, part of the challenge for brands is that it can play many roles and support many activities and initiatives for the business - and this can create confusion and cause paralysis. What’s more, some brands are not truly aware of what's possible within the space. When crafting a strategy to best leverage GenAI, it should always come back to what the organisation is trying to achieve first and foremost, and how GenAI supports the ability to deliver on key organisational and departmental outcomes. To better explore the opportunities GenAI affords and how that links to strategy, we at Arktic Fox like to think about it broadly in 4 opportunity domains;
Augment product innovation and product development – GenAI is becoming the new recruit in the product team, synthesising trends and data to inform product development, reducing the time for NPD initiation to launch through faster iteration and removing some of the ambiguity about what will resonate with the market.
Improve customer experiences – from streamlining customer service to enabling scalable personalisation, GenAI is underpinning use cases across the customer experience spectrum.
Enhance creativity and content generation – often the obvious place where brands start experimenting, GenAI can enable content and image creation at greater speed and to higher quality standards. But it is the opportunity to democratise creativity as illustrated by Coke (below) and enable consumers to cocreate that also shows great promise beyond the ability to simply improve processes and efficiencies in content creation.
Boost productivity – the allure of reducing costs and maximising efficiency is high on the list for brands, but GenAI is proving most value when it's seen as a co-pilot, doing some of the "grunt work" (such as taking notes, generating code and automating regular manual processes like data cleansing activities) and being used as a resource to draw inspiration from and challenge.
Innovators are reaping the rewards of first mover advantage
So what does it look like in practical terms? A number of leading brands have already been pushing the boundaries on GenAI and whilst it's still early days for many of them – testing and experimentation is building capabilities to put them in a better position to take advantage of the opportunities GenAI affords as it matures, vs brands who have opted to wait.
Powering new Customer Experiences through GenAI
As one of the first applications of GenAI in the automotive sector, Mercedes-Benz rolled out a beta test via ChatGPT to power voice assistants in more than 900,000 vehicles in the US. It was enabled through an opt-in process via the Mercedes app, or from their car, where consumers could ask to join a beta trial by saying “Hey Mercedes, I wanted to join the ChatGPT beta program."
Mercedes-Benz has indicated plans to continue expanding the integration of this technology more broadly in the near future. Whilst voice assistants in car are not a new phenomenon, adoption by Mercedes Benz is all part of their ambition to offer a more human and personalised experience, with its assistant offering tailored suggestions such as playing the latest news in the morning and adjusting the in car experience based on your mood and driving style.
Enhancing product design through GenAI
Toyota is another automotive brand deploying GenAI, but in this instance it is to enhance their product design capability. In June 2023, the Toyota Research Institute (TRI) introduced a ground-breaking GenAI technique aimed at enhancing vehicle design capabilities. Designers utilise publicly available text-to-image generative AI tools as an initial step in their creative process, which allows them to integrate preliminary design sketches and engineering constraints. GenAI then supports designers serving up alternative designs that better deliver on aspects like being aerodynamic to drive fuel efficiency. All of which cuts down the number of iterations for design of a new vehicle.
Nestle, Pepsico and other leading CPG brands are increasingly adopting GenAI tools to be able to reduce lead times and maximise success of launches. Tastewise (a solution provider to the CPG space) has created TasteGPT which helps brands to discover dish concepts, validate new product ideas, and generate market research reports. Tools like TasteGPT are helping these brands to analyse information on trends, ingredients, flavours, and health benefits from social media, online publications, and other web sources.
Personalisation at scale through democratisation & UCG
Coke has been one of the brands who have dived head first into the adoption of GenAI, partnering with Bain & Co and OpenAI to experiment in a host of spaces, and appointing a head of GenAI for the business. Over the past year, Coke has deployed an array of activities leveraging GenAI, one of which was their festive Christmas initiative which enabled consumers to design bespoke digital holiday cards using the latest AI technology.
On its CreateRealMagic.com page, consumers were able to experiment with the holiday-themed content available to make their own shareable holiday cards, which included the infamous classic Santa Claus brand. By sharing these storied assets with consumers and allowing them to be seen through the prism of new technology, Coca-Cola hoped that these images can be re-discovered by a younger generation.
The holiday activation was built off the back of the success of Create Real Magic, the first AI platform of its kind to combine the capabilities of ChatGPT-4 (which produces human-like text from search engine queries) and DALL-E (which produces images based on text).
Although there isn’t any data we can find on results, Selman Careaga, president of global Coca-Cola stated in December: "what I can tell you is that everything that we've done with AI generates double the engagement of any other content that we create".
It also hits new audiences – 60% of those who engaged with previous AI marketing initiatives had not previously engaged with the brand through other digital channels (such as social media).
Priming the organisation for success
Whilst having a clear strategy is paramount as it allows brands to narrow their focus on the opportunities that matter, brands also need to consider the operational framework to govern GenAI. Over the coming years we are likely to see regulation by governments evolve in the AI space to protect the general public from harmful practices. We'll equally see consumer sentiment and concern rise around the misuse of GenAI - in everything from image generation to algorithms deployed that provide recommendations, across many other domains.
GenAI comes with risk which needs to be managed and therefore brands need to consider how to put the right checks and controls in place to allow GenAI to thrive. Embedding a committee to oversee innovation in the GenAI space is a useful start, as is developing a framework to ensure that models are utilised in a way that is ethical and appropriate to mitigate brand risk and maximise potential benefits.
But whilst governance is key, it isn’t the only ingredient for success. Like with many things in the digital space, embedding a culture of learning, failing fast and iteration is important for GenAI to thrive. In the example we saw with Mercedes Benz above, Mercedes had deployed its initial beta for ChatGPT within a series of months. Keen to remain at the forefront of innovation as it always has been for its customers, speed to market alongside of great experience delivery was important for the manufacturer.
Finally, executive buy-in is key. Endorsement and reinforcement from the top that GenAI is important and will likely change the business landscape will result in the organisation's appetite to embrace the new and different, and see a greater likelihood of breakout innovation to solve key problems and challenges the organisation and its customers face.
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