Harvard Business Review Special Issues Winter 2022

TECHNOLOGY IS RESHAPING the relationship between brands and their customers. But each new social platform, AI assistant, and augmented reality app comes with its own strengths and challenges for companies: They can help you foster trust—or they can alienate your consumers. This collection offers HBR’s best advice on how to get the greatest value from the new marketing tools at your disposal. For example, it’s easy to succumb to the temptation to use social media only to promote your products and boost your earnings. But, warns Bain & Company’s Rob Markey in “Are You Undervaluing Your Customers?,” doing so without also building consumer trust will erode your customer value—and, soon enough, your earnings too. That’s in part because users are fed up with companies’ branded content in their feeds. Instead, they are…

A SEISMIC SHIFT is under way. Thanks to new technologies that enable frequent, low-friction, customized digital interactions, companies today are building much deeper ties with customers than ever before. Instead of waiting for customers to come to them, firms are addressing customers’ needs the moment they arise—and sometimes even earlier. It’s a win-win: Through what we call connected strategies, customers get a dramatically improved experience, and companies boost operational efficiencies and lower costs. Consider the MagicBands that Disney World issues all its guests. These small wristbands, which incorporate radio-frequency-identification technology, allow visitors to enter the park, get priority access to rides, pay for food and merchandise, and unlock their hotel rooms. But the bands also help Disney locate guests anywhere in the park and then create customized experiences for them. Actors…

THE AUTONOMOUS CAR dropped Lori at her home and then left for its scheduled service at the dealership. It would be back in time to take her to the airport the next morning. On the way into her house, Lori gathered the drone deliveries from the drop box on her stoop. The familiar voice of Eve, a next-generation smart assistant like Alexa, greeted her in the foyer and gently reminded her of the travel plans for her upcoming conference in LA. Lori hadn’t bothered to learn the details, since Eve had taken care of finding the best flight, seat, and hotel room that her company’s expense policy would allow. As she unpacked her grocery delivery, Lori saw that Eve had adjusted her weekly purchases, omitting perishables and adding travel-size toiletries and…

Thanks to AI platforms, the job of branded-goods companies is about to get much harder. Increasingly, AI assistants like Alexa will control access to those firms’ customers, and brand recognition will play less of a role in product selection than dynamic and idiosyncratic AI algorithms will. That doesn’t mean, though, that brands will no longer matter. They can respond in three ways: First, they must invest aggressively in understanding the algorithms platforms use to recommend and choose products, including how they weight each brand for each consumer. In some categories and for some consumers, brands may be more important than price (Apple is an example). In others (say, toothbrushes), brands may be less relevant. AI algorithms will take such differences into consideration. Second, brands should assess the value of maintaining direct ties…

Today there are perhaps a dozen serious contenders in the nascent AI platform industry. But we expect that this field will eventually be narrowed down to only a few. What will drive this concentration, and how will winners be chosen? For starters, the market has high barriers to entry. Large general-purpose AI platforms are extremely expensive to build and run. It took thousands of engineers several years to develop Amazon’s Alexa, for instance. Besides committing vast internal resources to development, each player must establish an extensive ecosystem of providers that supply data, services, skills, and apps. To succeed, platforms need a large installed base and a wide range of capabilities. Those that achieve scale and scope will have a natural advantage: The more a platform can do reliably and well, the…

1. Whom is the platform working for? Before answering this question, let’s apply it to traditional platforms. Consider credit card companies and brick-and-mortar retailers: Both perform functions—providing convenience, efficiency, and risk reduction—for the buyers and sellers they connect. AI platforms likewise work for multiple stakeholders, including brands. But bear in mind that if they don’t serve the interests of the consumer, they won’t be adopted. And the more consumers trust and rely on them, the more effective they are as a source of data and a channel for marketers. As with any well-functioning platform, creating value for parties on either side generates value for the platform itself. 2. What do we want from the platform? The obvious but incomplete answer is, we want it to sell our products. However, at the outset marketers…