Latest / Talk Commerce / AI and Analytics: Transforming the Future of eCommerce with Ben Dutter at eTail Palm Springs
Transcript
- Speaker 2 (00:01.614) Welcome to this special Talk Commerce episode from E-Tail West. Today I have Ben Duder. He is the Chief Strategy Officer for Power Digital. Ben, go ahead, do an introduction for yourself. Pronounce your last name, if I've pronounced it incorrectly, which I should have covered, which I'm arguably always get it wrong. Tell us your day-to-day role and one of your passions. coming. Yeah, no, it's great to be here. I'm Ben Dutter. It's like butter with a D, I always say. But I'll answer to Duder as well. So I'm the Chief Strategy Officer of Power. We work with about 600 brands to help them grow across strategy, marketing, and data and measurement. My day-to-day really is responsible for helping our clients achieve their growth goals, as well as our internal teams achieve their personal goals. So something that Power really strongly believes in is that if our team is excelling in their personal goals and their professional goals, they're more likely to deliver great work for their clients and their clients are more likely to achieve their goals. So those are the two areas that I focus the most on in my data. That's great. So, I would like to talk a little bit about analytics, but let's talk about how AI has helped analytics for you and for the end user. Speaker 1 (01:19.95) Yeah, and I think one of the things I am passionate about right now is getting us to a point where if there is an objectively correct answer like a math problem or one plus one equals two I don't really want a human wasting a lot of time figuring that out and a lot of marketing analytics and media effectiveness which is what I oversee is a mathematical equation at the end of the day and so the benefit of agentic AI and just AI automations in general has been to really democratize a a lot of that work. It's made it a lot more accessible for smaller businesses and smaller agencies to be able to achieve these kind of previously almost impossible enterprise level analyses with the help of AI and with agents. Yeah, I know there's been a lot of talk about just the democratization of commerce because of AI. Have you seen that in terms of how your clients are accessing their marketing data and the ability for them? as a strategist, are you helping them to do that in easier fashions? Yeah, absolutely. The interface reducing the friction of accessing that data, I think has been the biggest boon in the last couple of years. Obviously the chat-based, LLM-based interface has been extremely beneficial for a lot of non-technical people to ask very technical questions of their data. so, for example, Power has a tool internally, and I know many agencies that do now, where a client or a team can actually ask a bot, an AI bot, to give me breakdown of the last month of data, pull out insights that you think are relevant or identify trends or anomalies and something that would take a team of analysts hours to do even just a few years ago can now be done by a VP of e-commerce in 30 seconds because that person can just query it and it all gets translated correctly and pulled back. The challenge has been in the ongoing challenge of all AI is the hallucinations and the veracity of what they say. Speaker 1 (03:23.672) So as long as you have the ability to QA and pressure test that data, then I do think it's a really valuable tool even today and it's only going to get better. Yeah, I mean it's an interesting perception on the hallucinations. In my experience, especially in the very beginning has been, it doesn't always add things up correctly. And so then you start doubting the data you're getting from it and then you have to do an audit and sometimes you feel like you're wasting your time doing your audit. How have you seen it now become a lot better and how it's delivering that data? Yeah, it's better in terms of if you can structure your... agents or your bots to be able to query the correct type of question essentially and that increases the likelihood that it's verifiable and that it's accurate. For any bigger business decisions though I still advise clients to not use that or to rely on that. It's really a tool for them to try to identify things that require further analysis and further diagnosis so you can kind of hone in a little bit quicker. We just recently are auditing the new Deep Research module, which is very impressive on the surface. It's able to pull together 30 or 40 page documents that seem extremely thorough and well researched. But when we QA and validate the data, it's still about 10 to 15 percent things that completely just don't exist. It will cite articles that have never been written or studies that have never been completed. So it still requires a bit of hand holding. But like everybody keeps saying, this is the worst AI ever will be. It's going to continue to get better. Speaker 1 (04:58.288) already seen significant improvements just in last three or four. Are you seeing clients using additional tools like perplexity as a plug-in to chat GPT to give them those actual citations and getting the links and then having you go back and verify? Absolutely, yeah. And many of our clients, now report out and we report out on traffic sources from chat bots and from LLMs. It's a meaningfully growing traffic source and it's also a meaningful portion of how customers answer in purchase surveys how they first learned about you. And I think it's only a matter of time before tools like Perplexity actually create shopper bots, agents that can complete a full transaction for you on behalf of a of basically a personal shopper assistant. And so the brands that are more innovative and cutting edge right now are preparing for that future where how can they create a product taxonomy or a site structure that allows a tool like Perplexity to not only research and come back with a recommendation to the query of the user, but actually complete a purchase and ship it to their home. So I think that's kind of the next frontier that we're seeing clients starting to play with a little bit. Earlier today I had an interview about that deployment of agents that are going to go and shop for you and then at some point you're going to have to have an interface on the merchant side to have an agent that interfaces with the agent, right? How far away do you think that is? Speaker 1 (06:28.542) I think that it's asymmetrical and so I always believe in, you know, there's about a 10 to 15 year kind of bell curve where there's going to be people who are leading edge, really, really, you know, forerunners in terms of any of these new innovative solutions. And that's going to be a vanishingly small percentage of businesses, less than 1%, know, fractions of 1%. The vast majority of the middle of that bell curve or maybe 80 % of the brands exist, they're never the first to the party, right? They're five or 10 years behind. And so I think we'll start to see some of those things help in retailer environments. So like very large retails. I wouldn't be surprised if Amazon does something like that or a Best Buy does something like that. Somebody that has a massive amount of data at Walmart would be an interesting one. But I don't think that your typical e-commerce consumer product brand with a couple of hundred SKUs is investing in that technology. And it's probably going to be several years away before that becomes mainstream enough for them to take it seriously. When you're talking about some of the bigger brands, I always think about Best Buy and how Best Buy was slow to the game in terms of marketplace and they still don't seem to be getting there, but they still have this huge retail presence. Do you think there's a place for legacy, and I hate to say they're a legacy, but they're an older brand now, in this new market and do you see some of those brands just not staying up? Yeah, absolutely. I think that we've gone through an interesting cycle where everything was mom and pop shops, and then there was chains, and then there was department stores, and there's been a consolidation where the user experience has been prioritized. It's easier for someone to shop at a Target or a Best Buy than it is to go to 15 different stores, right? That's the whole promise of a big box retailer. We then saw that emerge online, and I think that Amazon really pioneered a lot of that, where their assortment and their logistics Speaker 1 (08:26.38) and their speed was their differentiator. And so we've seen brands like Best Buy carve out a niche within that, a sub-segment within that, that's driven very strong partnerships. So they work very closely with a lot of the big merchants and the big sellers in that space, technology sellers in that space. And so I wouldn't be surprised if there was some kind of pressure and competitive advantage granted by, for example, I know Best Buy has a very deep partnership with Samsung. And so I would not be surprised at all Samsung is actually investing potential a joint technical business plan in Best Buy's infrastructure to better sell Samsung products, It behooves them what's a couple million bucks of data engineering costs compared to the billions of dollars of revenue that they generate per year. So that's where I could see legacy brands and retailers making a really strong play is because they have those really deep multi-decade long in some cases partnerships with specific high powered Fortune 500 brands or international brands. But I do think we're in an era where the assortment game is less and less compelling. And as shopper agents get smarter and that becomes more of real thing, they don't care if they have to go through 8,000 websites to find the right thing for you. They'll do it. Only people care about that labor. So I think that will become less of a compelling differentiator in the future. Do you feel as though SEO is going to change now and have to change because we're going to deal with bots that are potentially buying for people rather than people buying for people? 100 % yeah, I mean we're already seeing the preliminary stages of it happening now It's it's polarizing but HubSpot's recent debacle with how much traffic they'd lost because people are going to chat bots instead of to HubSpot now I think you know purportedly they've lost like 80 % of their organic search traffic this last couple of years and so That's you know call that AI call that change in SEO landscape. Whatever. I think ultimately the search engine environment has continued to Speaker 1 (10:27.664) value from consumers for a long time and it's right now tools like chat and perplexity are and even funny enough Google's own Gemini are a much better user experience. So even set agents aside and shopper bots aside we're already seeing a large swath of consumers prefer to move towards an LLM to do their research. They might go to a search engine to finalize that purchase but it's the research process started on the chat bot and that's really where lot of the value of SEO comes in is in that upper funnel research phase. From a merchant's standpoint, what sort of strategies are you recommending them now coming into this coming Black Friday, Cyber Monday, for investments now that they can make a difference? Yeah, absolutely. I think it's very hard to sell any product to somebody. app to check out line. Unless you are an infamously easy impulse buy like a candy bar, almost every purchase has started in somebody's mind years ago. And if you look at the mental availability model pioneered in the 60s and 70s, essentially it says if somebody is aware of your brand, they're significantly more likely to purchase you. And so it really just comes down to is your product physically available at the time that they want to make that purchase. Speaker 1 (11:56.694) seen across our body of clients is that brands that have a successful Q4 or peak season, whatever that is for them, really start it. a year. know, it's basically we joke like Black Friday starts Jan first because for us it's about building that kind of inertia of mental availability and brand awareness. So typically it's top of funnel initiatives, things that are very rich in information, things that are strong representations of the brand. I TV, TikTok, YouTube, things like that. And as you get closer and closer to the actual purchase period, that's where you really want to invest more heavily in your lower funnel tactics. like your searches and your shoppings and things like that. From the consumer side then, what do you feel people would be looking out for for what the brands are going to do new for this coming holiday season? Yeah, I think that a lot of what brands are purchasing now is for their holiday drops. If they're an apparel brand, if there's some kind of brand that has a lag time on where they need to place purchase orders for materials and for production months in advance, a lot of the time you get a sense of what that brand is going to be dropping based on the kind of content that they release, as well as the collaborations or the partnerships that they heavy up into. So classic example. Speaker 1 (13:19.932) is if somebody is going through a very heavy athleisure influencer kind of phase right now where they have a lot of content creators who are in that space, think the Kardashian family or something like that, it's a pretty safe bet that those users, that those brands I should say are gonna be releasing something along that line during peak season. I had a debate earlier in the week on LinkedIn about how some brands or merchants aren't really selling anything online, they're driving people to stores. some of the strategies that say Adobe Commerce is doing is geared more towards AEM or some of the other technologies that they have and less on the e-commerce side. And I always find that surprising that a brand would give up the opportunity to sell direct to the consumer or have the ability to sell something. Are you seeing brands still turn down the opportunity to sell things online? think maybe turn down is a strong phrasing for it. I think the reality is that the vast majority of all purchases, even when you exclude gas and grocery, are in person. It's something like 80 % of all transactions in the US are done in retail. And so we're really talking about carving up that remaining 15 to 20 % of all the transactions across something like 3 million merchants in the US that are on e-commerce. And if you look at the top 10 of those merchants, they're mostly big box retailers or Amazons or retail networks, right? And so maybe you're really those 3 million merchants that aren't in the top 10. They're really all fighting over maybe 10 percent of the entire GMV of the year in the United States, which is just mind boggling to think about. So for bigger brands, especially CPG brands or brands where they care more about kind of category entry points and category saturation, I think it makes a lot of sense for them to focus on Speaker 1 (15:21.648) Being available and being sold on where their customers prefer to buy. I know most customers still would prefer to buy any sort of food type item in person because for whatever reason it feels Safer and better to be able to look at it than to order it online from a brand So I think in that case it makes a lot of sense. I think for certain products the value of the community that the user gets with the brand and the the amount of customization or personalization they can get is worth the extra hurdle of not just clicking buy on Amazon. But the vast majority of brands, that's not the case. So Ben, we have a few minutes left as I close out the podcast. I give everybody a chance to do a shameless plug about anything they'd like. What would you like to... Yeah, I love that. So Power Digital. just recently announced a public carve out of a new sub agency. We're calling it FusePoint and FusePoint is really designed to help brands with the before and after marketing. So what we mean by that is what's the go to market strategy? Who's the right customer? What's the right product mix and what's the right media strategy to capitalize upon that? And then just as importantly, measuring it successfully and was it incremental and did it actually positively impact the bottom line that Speaker 1 (16:41.04) new sub-brand is really important for us as an agency because it's both an internal tool and a way for us to use our corpus of tests and data that we have for brands that have an in-house team that maybe don't want to work with a full-service media agency, which is what Power Digital is. it of allows you to have the best of both worlds. You have all of our expertise without necessarily having the overhead of an AOR. Awesome. So, would people get a hold of you? Yeah, you can always find me on LinkedIn. I'm the only Ben Dudder, or Ben Dudder, in the world. I have great SEO. You can reach out to me directly. Or you can just Google FusePoint or Power Digital, and we'll come up. Perfect, Ben Dudder. Thank you so much for being here. Absolutely, thanks for having me.