Latest / Retail Media Breakfast Club / An Ad Told Me the Only Thing I Already Knew About Bolts
Transcript
- The Ad Told Me the One Thing I Already Knew === [00:00:00] Kiri Masters: Yesterday I was standing in the bolts aisle at Bunnings, which is Australia's answer to Home Depot, and I was talking like a mad woman to myself, or more specifically to my ChatGPT assistant, talking about how I [00:00:15] needed a bolt for my at-home studio setup, and I didn't know which type of bolt to get and what all these sizes meant, et cetera. [00:00:23] I was trying to find the right bolt for my microphone stand. And in the [00:00:30] middle of this conversation with ChatGPT was an ad on ChatGPT from Bunnings ever so helpfully letting me know that I could buy bolts at Bunnings. So the ad did what [00:00:45] ads were supposed to do. It found me, a in-market customer inside of an AI assistant where I was having a contextual conversation about what I needed, and just as an advertiser [00:01:00] would hope that that's where it's gonna find me, in a seemingly relevant conversation about hardware. [00:01:06] But I am not gonna buy a $1.50 bolt online and wait days for it to be delivered. I wanted to [00:01:15] buy it while I was right there standing in the aisle at the store. What I wanted was for my assistant, which already knows the details of my project, to ask Bunnings' systems one question: [00:01:30] "Is this bolt that I need here, or do I need to order it?" [00:01:35] Now, that's AI shopping as most people are gonna need it for quite a while yet. It starts in a generalized [00:01:45] horizontal assistant and it ends in a physical store. But many retail ad businesses are still built around the search box [00:01:55] [00:01:56] Kiri Masters: This aisle was on my mind when I [00:02:00] revisited a conversation from a few weeks ago that The Drum just published, uh, this week, which was recorded after the Ad Club of New York's inaugural Commerce Media Exchange. And [00:02:15] me and the founder and editor of The Drum, Gordon Young, and Mark Wolkin at Cusick sat down and debated the concept of a retail media playbook. [00:02:25] And Mark argued that the industry has spent years [00:02:30] following an Amazon-inspired revenue model, even though most retailers run very different businesses to what Amazon does. [00:02:41] I agree, and actually the reason behind this is ultimately a good one, that [00:02:45] most retailers depend far less on their ad business than Amazon does. I've heard this argument be made before. I'm not the one that, uh, came up with this for sure. [00:02:55] But Amazon's core retail business would be far less [00:03:00] viable as a going concern without its media revenue. But for almost every other retailer out there, media is margin rich, but it is still a side quest. If you take away the m- media business, the [00:03:15] retailer will still be a solvent retailer. Retailer's job is moving pallets, getting customers to come back, and they're not going to change how they serve shoppers [00:03:30] to squeeze a little bit more ad margin out of them, for the most part. [00:03:35] I had a great conversation this week with someone who built a retail media network across independently owned locations, [00:03:45] and they told me what that looks like up close. They told me how every store operator in their network, who had long been used to a certain level of independence, had to be signed up and convinced one by one [00:04:00] for this new in-store media program. [00:04:03] And the network had to pay for those in-store screens to be installed and the hardware and everything. But they also had to offer those owner-operators a financial [00:04:15] incentive to have them get set up in the first place. That's because some of those wily operators were already monetizing their store services in various tax-effective [00:04:30] ways. [00:04:30] Now none of that is in the Amazon Ads playbook poor audience targeting is frustrating, but for retail media teams it can be costly [00:04:45] too. With Growth Loop's composable commerce media solution, you can turn your first-party data into hundreds of high-value audience segments and launch campaigns faster. After [00:05:00] partnering with Growth Loop, instant commerce pioneer Gopuff scaled from a hundred syndicated audience segments to more than six hundred, and now it takes less than forty-eight hours to turn around a custom [00:05:15] segment for one of their brand partners. [00:05:18] Learn more about how Growth Loop is powering Gopuff's best-in-class retail media operations at [00:05:30] go.growthloop.com/breakfast. That is go.growthloop.com/breakfast The alternative is an idea that I set out in my profile for The Drum this week of Gopuff's Head of [00:05:45] Ads, Michael Peroutka, and I talked about how it's finding what's holy about your retail media network. What is the moat? [00:05:57] What is the thing that keeps customers coming [00:06:00] back? And those are things that the ad businesses should exploit and never damage, never get in the way of. And for Gopuff, that meant partnering with Instacart on its on-site ad tech. It's working with a company [00:06:15] that ostensibly it competes with in some areas so that it could focus and protect what actually makes it different In the era of AI-enabled commerce, what's holy includes [00:06:30] the things that ChatGPT can't know. [00:06:33] What I bought last week, what's in stock at my local store, which delivery slots are open for in-store pickup. Stock on the shelf is exactly what Bunnings [00:06:45] knows and ChatGPT doesn't. The ad that got served to me told me the one thing that I already knew, that I could get bolts at Bunnings [00:06:57] In the conversation with Gordon and Mark at The [00:07:00] Drum, I said that shoppers today are bouncing around to all these different channels using different sources to validate and decide. That makes things very difficult. I tuned into a webinar showcasing the latest findings from [00:07:15] Kantar's Media Reactions study Which put some numbers on it. [00:07:19] So globally, a third of consumers already use AI assistants to research brands and products, but only twenty-four percent of those trust the [00:07:30] brand recommendations that those assistants give them, so they go on to check somewhere else. And that finding foots with research that I co-authored with Bazaarvoice a few weeks ago, which also then [00:07:45] asked consumers, "Hey, where do you go to validate those AI-recommended products?" [00:07:51] And here's what we found. After deciding to potentially buy an AI-recommended product, sixty-eight percent of AI shoppers [00:08:00] go to the brand's website to look further, and sixty-five percent check social media. Fifty-eight percent visit a retailer's website. So more often than not, two-thirds or more of people are actually going and [00:08:15] validating at the brand's website or other places. [00:08:18] A media playbook that is built around a retailer's search results page wasn't designed for a shopper that starts in ChatGPT, they go and find a tutorial from an [00:08:30] influencer on social media, they go and check reviews on the brand website, and then they buy in the aisle. Which brings me back to Bunnings. [00:08:39] Now, Bunnings has an AI assistant, but, and I'm [00:08:45] very sorry to admit this because I know that people at Bunnings work very hard and that they are loyal listeners to this podcast, but honestly, I never even considered using it. ChatGPT had all of my [00:09:00] project knowledge and context about what I was looking for, and the ability for me to verbally dictate my rambling questions into it and upload photos. [00:09:10] I didn't have the time or the patience to [00:09:15] demo a new AI tool right there in the store. I didn't have the confidence based, completely unfairly, on other subpar interactions with other retailer assistants. I didn't have the confidence that it could tell me what I needed to [00:09:30] know. The most useful thing that Bunnings could have told me that day was which bolts were on the shelf in front of me. [00:09:37] That's what's holy for a hardware store with a massive physical footprint, and that's the [00:09:45] part that Amazon's playbook could never replicate [00:09:49] that's where I'm gonna leave it today with more questions than answers this time. Thank you for listening, and I'll catch you next week [00:09:58]