Latest / Retail Media Breakfast Club / My highlights from the new 'Retailgentic' podcast
Transcript
- 81BB7BBE-C104-4FA3-BCDC-2790314FF14A === [00:00:00] Kiri: If you blinked, you probably missed it. We're already Googling less and chat GP Ting more. Shopping is next. Very soon the first place a consumer says, find me a birthday gift for my sneaker obsessed nephew. It won't be a search box or even a retailer website. It will be an AI agent that shift ricochets through every corner of Commerce one brands. Brands have to figure out how to surface themselves in an algorithmic discovery layer that they don't fully control. Two retailers, retailers have to decide which LLMs they invite into their hen house and on what terms or they risk becoming a mere fulfillment node in somebody else's ecosystem. And three retail media networks. Those high margin sponsored product ad slots could essentially vanish when a [00:01:00] language model, not a human eyeball, is the interface. Now, I've been writing and podcasting on these topics for a while now, but I was thrilled to see a new newsletter and podcast entirely dedicated to this topic from Scott Wingo. And as a disclaimer, I'm an advisor to Refi by Scott's new venture in this space. I've been devouring the content over there, and while I recommend you definitely read the newsletter and listen directly to the podcast, I wanna share my personal highlights and aha moments from the series so far. Let's jump in. Kiri: Highlight number one, how early is too early. The Agentic AI wave is coming at us at blistering speed. Waiting on the sidelines is no safer than it was when retail marketplaces first appeared. The only real decision is whether you want to ride the curve or be flattened by it. And this is where [00:02:00] Scott's direct experience in founding his first company, channel advisor, way back in 2001, really helps to inform what he's talking about on retail Gentech. Scot Wingo: Um, this is gonna create, uh, this AI curve that we're on is faster than anything we've ever been on. It's gonna happen on a logarithmic scale, which many humans aren't really prepared for and most businesses aren't prepared for. And this presents, uh, both a strategic risk. So I do think this is gonna be an existential risk, just like Amazon slash marketplaces has been for a lot of retailers. Some of us, some of us didn't make it to the other side of that, you know, rip to Borders and JC Penney and, uh, you know, all the folks there that, that did not make it. But I do think it's an opportunity as well. So what we learned from that big wave of marketplaces is the folks that, that embraced it and rode the wave tended to do better than those that fought it. Kiri: And what we've seen so far is retailers have taken different stances towards ag agentic shopping. [00:03:00] Amazon is building its own walled garden and preventing AI agents and bots from accessing it while Walmart is open to an agent to agent Pathway, and if you miss that, I'll link up to some further context on that in the show notes here. But if you're asking whether it's too early history suggests that the party is already. In full swing Kiri: Highlight. Number two, agents could be an existential threat to retailers. Before building any roadmap, retail leaders need to choose their religion. Around agentic ai Are agentic systems a partner? A channel or a parasite. The stakes run from lost loyalty data to outright disintermediation. Scot Wingo: So that's the first kind of, that's almost theology at that level, right? As a company, you need to start thinking about this. What, what is your theology on this, this [00:04:00] issue? The second one is. Is this a new channel that's forming like a marketplace? Is this an opportunity or is it risk? Is this something coming between you and the customer that will make you basically just a fulfillment center for, you know, whatever engine up, up top, you know, for open AI or something like that. That thought experiment becomes really concrete when the agent asks for loyalty data in exchange for better prices. Scot Wingo: Imagine an agent comes to your website and you say to it, Hey, uh, you know. Can you tell me about your user? Um, you know, I'd really like to know their name and email and it says, my users prefer to, my user prefers to be anonymous. They could say, okay, I get it. That's, and we do that today, right? Guest checkout. But what if you said, well, tell me, is it, is it their first time to our web to, to our, have they ever transacted with us before? And maybe they'll say, oh, sure, yeah, they have. And they could say, well, what's their loyalty number? And, you know, maybe the agent then goes back to the user and says, Hey. Or, you know, gimme their loyalty [00:05:00] number and I'll give you, uh, you know, some better pricing type of a thing. So it's gonna be like this kind of information exchange. I think that's gonna be really fascinating to see On this third order level, and if bots not humans start to dominate traffic, the revenue model behind retail media networks could start to erode something that we'll get into in a bit more detail later. Kiri: Number three, agentic payments and new checkout rails. Usage of LLMs for shopping research is surging, but most shoppers are still stuck in research mode. We're not really at the point yet where people are taking that final step of exchanging money. Scot Wingo: So once people get into this commercial bucket, which is I'm looking to buy something, then how many make it to the research phase, and then how many make it into the find and then the buy phase. Today we're basically at zero on buy, but the top part is getting big very quickly and stuff's starting to spill over into this. Rapidly as well. And, [00:06:00] uh, people are, are really moving a lot of their shopping behavior to the L LMS because it is a much better research experience. In fact, research new products is up to 48% now of usage. Um, especially on. Gemini. And now let's hear from Michelle, grant Director Strategy and Insights, retail and consumer goods at Salesforce, talking about some recent Salesforce research into consumer habits around ai. Michelle Grant: And the next one is the ability to turn it off and on easily, and then approval for any purchase. So like, it's cool, but I don't think people are really ready to like completely outsource their shopping without any sort of input into that. Scot Wingo: They want to kind of stay human in the middle and have the agent go and kind of ping them back and that kind of thing. Interesting. A lot of the new wallets that have been announced have that they have a consumer facing piece to them where the agent has, uh, you know, kind of like a budget, if you [00:07:00] will. And then you can set a flag, you know, before you spend your budget. I, I wanna. Check off on everything kind of a deal. It'll be interesting to see how long we go before people get comfortable enough that they start to take those rails off and, Michelle Grant: exactly. And Kiri: but just like in the early days of e-commerce, the payment system is going to be a fundamental piece of this puzzle. Highlight number five, an existential threat to retail media networks if half of traffic soon comes from the bots, ad buyers won't pay for impressions that no human sees. , which will force retail media to reinvent itself. Scot Wingo: So this goes back to retail media networks. If, if, if it's not humans and it's bots coming, an advertiser's not gonna want to pay for a bot to see an ad because it's gonna be basically blind to that. Uh, certainly not influenced by it. And this is where a recent conversation on the podcast with suture reader Ali, retail industry [00:08:00] analyst at Forrester, proves really insightful. Scot Wingo: . I would say that a lot of it, um, originated with Amazon. What is different about ads and retail media versus marketplaces I think is that, um, it is, there's a lot of the effort that is being led by agencies, um, that are coming to the table promising brand dollars to the retailers. And I think that for retailers. Um, there's a perception that it's easy money, that all they need to do is hang up a shingle, um, with their ad network and call it whatever they call it, and, and they can get a part of that pie. I think the biggest existential threat here is for sponsored product ads and ads shown onsite on a retailer's website. It seems like, offsite retail media [00:09:00] opportunities still seem very relevant. And of course, we haven't even started talking about how ads are gonna show up in the LLMs and agent interfaces themselves. And finally highlight number six, the future of retail websites. In an agentic world, there's a debate about whether websites will become obsolete or merely fancy product data . catalogs. Let's hear from Michelle. Grant from Salesforce. Michelle Grant: I'm hesitant to say that everything is gonna be done through one of these agents that we're all going to just shop on chat GPT. Um, certainly not in the near term. I don't think. . Uh, I also like to, to remind people that shopping for many is like a leisure activity. It's a fun activity. You know, I, I go back to those recommendations and how people were hesitant to outsource that, you know, when it comes to beauty or fashion, it's personal style, right? [00:10:00] Scrolling multiple websites is not a pain for some people. It's fun. So I'm really hesitant that, um, that maybe the catalog version of the website goes away entirely in the near term, given like the user interfaces that I've seen now. So when I go to, um, Sephora, uh, when I go to that website and I'm logged in with my loyalty program, they're able in real time to. Really personalize it. Like these are the categories that I shop, these are the brands that I shop. Um, and so, you know, when I do see something, it is hyper-personalized to me, and then I'm able to like talk to it and there's gonna be all this amazing content for me to really sit back and, and enjoy the online shopping experience instead of just kind of like, oh, I need this. I'm gonna search for X thing. And then whatever results pop up, pop up, whether they're relevant to me or not. So that's kind of my, like, [00:11:00] vision of the, of the website. It stays, there are product catalogs, heavy on content, really interactive, hyper-personalized, , experiences. / Websites won't die. They'll either level up into intelligent brand portals that delight humans who still browse or fade into rich data hubs. So those are my personal highlights from the new Retail Gentech podcast that launched just a couple of weeks ago. I'll link up to it in the show notes as well as the Retail Gentech newsletter. Thanks for tuning in and I'll catch you next week.