Latest / Retail Media Breakfast Club / AI Makes Shopping Easier, But Shoppers Still Check Receipts
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- AI Makes Shopping Easier. But Shoppers Still Check The Receipts. (Tuesday Oct 7) === [00:00:00] Kiri Masters: A couple of months ago now, my family and I returned to the US after a year abroad. We'd stored everything, our clothes, furniture, electronics. In a storage unit, and when we opened the unit, it was a disaster. [00:00:15] Rats had chewed through boxes and what the rats missed, mold had claimed. [00:00:22] And I soon found out that the insurance policy would cover only $250. Now, if you'd asked me what [00:00:30] I wanted when I first rented that unit, I would've said, I want a place to store my belongings that will be safe and protected. [00:00:38] That was my stated preference. But here's what I actually did. I went on Google and I [00:00:45] typed in what is this cheapest storage unit in my area, and then I signed whatever insurance paperwork they put in front of me. [00:00:53] There is a gap between what people say they want and what they actually do. And this is a big [00:01:00] problem with lots of stated preference consumer surveys that I see. Because people are very bad at predicting what they're going to do in the future, much less what they've even recently done in the past. [00:01:14] And that's why [00:01:15] some new research from the IAB Matters at the I AABs Connected Commerce Summit a few weeks ago in September. Jack Kosh, who is the I'S SVP of Research and Insights previewed some findings from a study that [00:01:30] didn't just survey consumers about their AI shopping intentions. [00:01:34] They actually tracked over 450 real shopping. Missions with screen recordings to see how people actually behave when AI [00:01:45] enters their shopping journey. That research is about to come out in the next couple of weeks, October 28th. I'll link up to the place to register for that in the show notes. But this is the first type of research I've seen of real consumer shopping missions being [00:02:00] observed and reported on. [00:02:02] So Jack shared a summary of that research that's coming out, and then immediately after that I moderated a panel with Adam Heimlich, who is the CEO of Chalice ai. Amy Owen, who is the Chief Commerce Officer at [00:02:15] IPG Media Brands and Nicholas Ward, who is the president of Cody. And we talked about what this research actually means and how brands and retailers should prepare. [00:02:26] So in this episode, I'm gonna summarize some of the points from that panel [00:02:30] discussion and tease a couple of the findings from the research. Let's jump in. [00:02:35] [00:02:36] Kiri Masters: So first of all, will AI replace the traditional shopping journey? This is what I asked, um, Adam and Nicholas on the panel to give [00:02:45] a one out of five score on how much they believe this would be true. One means not gonna replace anything, and five meaning end-to-end replacement. So Adam from Chalice AI landed at a two. [00:02:57] He said chatbots still aren't [00:03:00] accurate enough. Most of us are still stuck doing multiple searches and asking for clarification. And he also made a good point that I tend to agree with, which is a lot of people enjoy shopping. And they don't want it to be shorter. People enjoy [00:03:15] shopping, especially in specific categories like apparel, beauty, it's fun, it's a diversion. [00:03:20] Um, and I certainly agree with that. Nicholas from Cody scored it close to five, but for different reasons. He said 36 months [00:03:30] ago, none of this existed. The transactions that we find tedious are gonna get offloaded to agents, but we're not getting one AI shopping assistant. He thinks we're gonna get dozens of specialized buying interfaces that actually fragment the journey in ways that [00:03:45] we've never even seen before. [00:03:47] So I tend to agree with both of them. I think it's very category specific. There are shopping missions that we. Engage with because they're fun and we can experiment and it's a, it's a great experience. [00:04:00] And then there's also really tedious things that we have to do [00:04:03] where AI is a really great case for that. Now on this topic, the topic of fragmentation. I also wanted to ask this group about the walled gardens that we have in retail media. And [00:04:15] we're in the midst of there being so much data points, so many consumer buying signals, but it's all kind of fractured and chopped up and locked up behind these walled gardens right now. [00:04:27] I was wondering, in this new [00:04:30] era with AgTech commerce and AI enabled shopping, are we potentially entering the best targeting era ever for advertising or the worst? [00:04:40] And Nicholas from Cody went all in on it being the best time. [00:04:45] He says that the retailers and platforms with closed loop data now face what he calls a deterministic problem. You can actually identify every meaningful micro audience rather than targeting 12 broad segments. And he says, we're entering a [00:05:00] world where. [00:05:00] These are the millions of experiences that could really drive the outcome that you want. For 20 years, we've had path to conversion data showing 600,000 different shopping journeys, but we couldn't act on it. Now, we actually can. Adam [00:05:15] also agreed that it's the best targeting era. He says it's almost like free energy. [00:05:20] Any big company has access to enormously rich data. But he also immediately added the warning that it's also the worst. He says, I'm not encouraged by what I've seen in the [00:05:30] market. People are having a hard time making the shift fast enough. He pointed to Amazon's insurmountable lead in e-commerce that was driven by their huge advantage in prediction and data. [00:05:41] And this is a gap so large that no online retailer can [00:05:45] really realistically catch up to Amazon. And he thinks that the same pattern could play out. Across other industries where early AI adopters pull so far ahead, that innovation becomes concentrated in single dominant players in a category. And [00:06:00] that's when Amy from IPG Media brands thankfully entered the chat with a bit of a reality check. [00:06:07] She says, we have the right data in front of us. But there's a catch, a little catch called implementation. [00:06:15] Even with perfect data, household level targeting breaks down in practice. She shared how her son was asking Alexa, about bay blade spinners, and now she's getting her recommendations on [00:06:30] Amazon polluted by, her son's requests to Alexa. Did you know that 60% of shoppers abandoned carts [00:06:45] when product info is wrong? Before you ramp up your ad spend, fix the shelf Acosta group's. Award-winning connected commerce crew is trusted by brands like Coca-Cola and Sanofi to deliver [00:07:00] critical content updates. [00:07:02] Acosta Group handles it all. Then layers on media buying. Learn about Acosta group's connected commerce capability at Acosta Group and tell them Retail Media Breakfast Club sent [00:07:15] you. That's A-C-O-S-T-A group [00:07:21] All right. Let's move on to another highlight from the session, which is about what mid-tier or mid-market brands need to do. The IAB [00:07:30] research reveals an opening for consumer brands. 64% of missions surfaced a new to me product. Via ai, and that represents a really great discovery source, [00:07:45] creating consideration that didn't exist before. [00:07:47] But at the same time, 71% of shoppers said that AI is most effective at narrowing down broad categories. And when agents can cut the field down to just four or five options, that [00:08:00] means that mid-pack brands might get squeezed. So I turned this question to Amy at IPG media brands and asked what these premium and mid-tier brands can do besides discounting, ~and her answer was.~ [00:08:10] ~Very, ~and she didn't hesitate with her answer. She says, you have to be ready with your digital assets. [00:08:15] That means organic websites explaining product characteristics and availability, optimize PDP pages, retail media keywords, and understanding exactly how your catalog is gonna show up in AI search results. [00:08:27] Now let's turn some of this conversation [00:08:30] into action. One thing that my storage unit disaster taught me is that stated preferences are worthless, and the IAB research proves that at scale, consumers say that AI helps them to make decisions faster, and they say that they'll [00:08:45] rely on it more for future buying decisions. [00:08:48] But then 95% of these consumers still take extra steps to verify what AI has told them. So I really think that the brands and retailers who win won't be the ones [00:09:00] with the most sophisticated AI necessarily. [00:09:03] They'll be the ones who stop optimizing for last year's playbook and start preparing. For the journey that's actually happening, and it is just changing so quickly. That's the thing that's difficult to keep up with here. So I asked the [00:09:15] panelists what they suggest starting or stopping in the next 90 days, and I love how they answered because most people will suggest starting something new. [00:09:22] But these panelists all suggested stopping one thing, Nicholas from Cody said, stop continuing on the same path. [00:09:30] His thought exercise was, what would you do differently if your ability to drive impressions became boundless? Hmm. And this question forces different decisions around team structure, data strategy, and partner engagement. [00:09:44] Adam [00:09:45] from Chalice AI said, stop thinking you have enough help. There's never been a moment where it's this hard to tell what next year will be like. His call to action was. Speed up your NDA and RFP [00:10:00] processes to test more partners, especially startups. He said they're proliferating and popping up every day doing amazing stuff, and that big companies especially need to become more nimble at testing out new opportunities. [00:10:12] And Amy from IPG Media brands said, [00:10:15] stop talking about the past. Most of the time teams. Can do big presentations and everyone says, wow, that was great. And then the planning season comes and the conversation reverts back to, what did we do last year? That old model should be [00:10:30] dead if companies are actually embracing what is coming. [00:10:33] The gap between stated and revealed preferences isn't going away, but neither is the opportunity for brands who show up where consumers are actually going, not where they say they'll go. [00:10:44]