Keep Ahead of Computer Algorithms’ Rhythms

A recent BBC posting cautions retailers and consumers about the ascendancy of computer algorithms. These are the decision engines consisting of software that can, among other things, recommend products to a shopper based on the shopper’s past choices or the similarity of the shopper to other shoppers who have made certain choices.
     A couple of years ago, Netflix awarded $1,000,000 to a team with members from Austria, Canada, Israel, and America for developing algorithms which substantially improve the accuracy with which Netflix can predict what movies a subscriber will like based upon the subscriber’s past movie ratings.
     At the time, the Netflix electronic recommendation agent was among the most sophisticated members of a family of software which helps consumers make item and brand decisions. Lots of your prospective customers are using online search engines to see how others rate the products and services those prospective customers are thinking about purchasing. Research at University of South Carolina and University of Texas found using an electronic recommendation agent about doubles the probability a shopper will purchase one of the products recommended.
     Shoppers who use recommendation agents spend more money than those who don’t use recommendation agents. Yahoo! reports TV and digital camera purchasers who’d first done search engine research spent 10% more in the store than those who didn’t do the research. And once shoppers start using recommendation agents, they don’t like to turn back. There are so many decisions to be made in life that delegating purchase decisions to the computerized device gets awfully attractive for shoppers.
     This is where a problem can arise for the retailer who wants to guide shoppers toward a choice the retailer believes will better benefit both the shopper and the retailer. The delegating shopper enters a flow state in which they are ready to accept whatever the computer says.
     How to interrupt the rhythm of this robotic-like flow state? Ask the consumer open-ended questions—questions which require more than a yes/no or multiple-choice answer.
     You’re on firm ground in helping shoppers to keep ahead of computer algorithms’ rhythms. Although becoming increasingly sophisticated, they still occasionally commit monumental errors. The BBC article recounts what happened with a book titled “The Making of a Fly.” Flawed algorithms used by Amazon to set book prices based upon demand and the prices of comparable books decided that a purchaser of “The Making of a Fly” should pay $23,600,000.

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