Technology-Augmented Choice: How Digital Innovations Are Transforming Consumer Decision Processes
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Technology-Augmented Choice: How Digital Innovations Are Transforming Consumer Decision Processes Shiri Melumad 1 & Rhonda Hadi 2 & Christian Hildebrand 3 & Adrian F. Ward 4
# Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract This paper provides an overview of recent research that explores how digital technologies such as mobile devices, wearables, voice technology, and recommendation agents are transforming consumer decision-making. We advance a conceptual model of technology-augmented choice that describes how the three Ms of technology—mediums (i.e., device types), modalities (i.e., interaction interfaces), and modifiers (i.e., intelligent agents)—are becoming increasingly integral elements of consumer decision processes. For instance, today’s new technologies often help curate consideration sets, shape how options are evaluated, and even guide choices themselves. As a result, market choices must now be viewed as a joint function of both consumer preferences and the characteristics of the technological environment in which those preferences are expressed. Examples of empirical research are reviewed that characterize the interdependencies between technology and decision-making, including how smartphones transform user-generated content, voice technology affects consumer search, haptic interfaces shape product preferences, and search engines alter confidence in choice. Keywords Artificial intelligence . Smart objects . Wearables . Voice technology . Search engines . Mobile devices . Chatbots . Human augmentation
1 Introduction Recent advances in technology are reshaping how, when, and where consumers make choices. For example, 81% of US adults now own a smartphone [1] and increasingly rely on these devices not just for mobile communication but also for shopping, banking, information gathering, and entertainment.
* Shiri Melumad [email protected] Rhonda Hadi [email protected] Christian Hildebrand [email protected] Adrian F. Ward [email protected] 1
University of Pennsylvania, Philadelphia, PA 19104, USA
2
University of Oxford, Oxford OX1 2JD, UK
3
University of St. Gallen, St. Gallen, Switzerland
4
University of Texas at Austin, Austin, TX 78712, USA
Emerging technologies are being designed to further augment and automate many of the behaviors and decisions traditionally reserved for human decision makers. More than 20 billion “smart” interfaces such as Amazon Echo devices, chatbots, and sensors are connected to the Internet, already dwarfing the 7.35 billion people on the planet [2]. As these technologies continue to connect both with humans and with one other, they are increasingly transforming how consumers think, interact, and decide. The purpose of this paper is to explore the nature of this transformation and its implications for firms and consumers. Our central thesis is that new technologies have done more than simply expand the variety of platforms through which consumers can access information—these technologies
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