Building a Smarter Planet. A Smarter Planet Blog.

Mahmoud Naghshineh, Vice President, Services Research, IBM Research

By Mahmoud Naghshineh

I recently helped my 22-year-old son, who is vegan, pick out a vegetable juicer. He told me a bit about what he was looking for, including the fact that the machine should ingest leafy greens like kale effectively and it should not run so hot that it would diminish the nutritional value of raw vegetables. I searched crowd-sourcing product review Web sites and came back with a recommendation. His reaction: “That’s a good one. Everybody’s talking about it.”

He had reached the same conclusion that I had via my research by soaking up information and opinions from his own social network.

This experience brings home to me one of the salient truths in this age of the digital consumer: Social networks provide tremendous value not just for the consumer but for the creators of products and services who are determined to engage with people as individuals—rather than by catering to traditional market segments. With the right tools, a company can understand my son’s tastes nearly as well as he does.

These new customer-interpreting capabilities are roiling the world of business—challenging any company that deals with consumers, including retailers, packaged goods companies, insurers, banks, travel companies and on and on. At IBM, we’re creating an IBM Customer Experience Lab to bring together researchers, new technologies and consultants with industry-specific expertise to work with clients to develop solutions that have the potential to transform not just individual companies but entire industries.

The age of the digital consumer is emerging because of a confluence of technology trends. Smartphones combined with cloud services and social networks make it easy for people to learn about products and services that appeal to them, evaluate their choices based on features and prices and recommendations of friends, and, as soon as they’re ready, complete a purchase. Because so much information is available to people at their fingertips, consumers rule. Companies that want their business must bend over backwards to please them.

But the same technologies that give customers so much power also make it easier for sellers of products and services to reach and cater to them. They can use mobile, cloud and social technologies to engage with customers in ways that benefit buyers and sellers alike. Yet the essential technology tool for companies in the age of the digital consumer is data analytics. By gathering and analyzing huge amounts of information about individuals—everything from social networking information to transaction and customer service records—companies can understand their needs better and communicate better with them.

At IBM Research, we’re developing a futuristic technology concept we call the Virtual Closet. We envision a set of technologies, some of them already under development, that will make it possible for companies to target individual customers with pinpoint accuracy. Virtual Closet will gather information about your interests and tastes from a wide variety of sources. With your permission, the technology will pluck data concerning in-store and online purchases; your posts on blogs, Facebook and Twitter; and the pictures and videos you publish on Instagram, Pinterest and YouTube. The more people share with trusted companies, the more complete a picture those companies can assemble of their interests—using machine learning techniques to constantly refine their personal taste profiles. Then, using those insights, companies can offer individuals products and experiences that are nearly guaranteed to please them.

In another IBM Research project, we have developed technology that makes it possible to get a fairly accurate picture of an individual’s personality using as few as 200 Twitter tweets. Analyzing how people express themselves, we’re able to identify specific personality traits, such as openness to experience and conscientiousness, and create profiles that enable companies to predict the most effective approaches for marketing to individuals.

In a third project, our scientists have created software that observes the Web sites and cloud services that consumers use habitually, and infers from those choices the communications media and methods that individuals will find most appealing. Using these tools, companies will be able to truly speak the customer’s language.

It’s fun to think about the changes that these new technologies will bring. In the future, I can imagine that my kids will no longer bother to outsource their shopping research to me.  In the age of the digital customer, many of the things they want or need will “find” them—rather than the other way around.

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