Latest / Retail Media Breakfast Club / AI-Fueled Shopping for The Holidays
Transcript
- AI-Driven Holiday Shopping Inflection Point === [00:00:00] Kiri Masters: Last week I flew to St. Louis for a night to present to Purina's e-commerce team. On route to the airport, I did my usual inventory check. Passport phone, laptop, insulin wallet. [00:00:15] Oops. Nope. Forgot the wallet. Not a credit card in sight. [00:00:20] Just a couple of years ago, this would've been a disaster, but with tap to pay payments ubiquitous now and apps like Uber already having [00:00:30] all of my cards on file, the biggest issue was a slight side eye from the hotel. When I was checking in, they told me I would not be allowed to order room service without a credit card on file. [00:00:41] Tragedy noted. [00:00:44] A year ago, [00:00:45] traveling without a wallet would've been impossible this year, I barely noticed. That's how quickly new behaviors become normal. Once supply and demand click, once consumers want something and the infrastructure exists to deliver it, [00:01:00] AI enabled commerce is hitting the same inflection point right now, just in time for the holidays. [00:01:06] In 2024, AI shopping tools were mostly experimental, interesting toys that chap, GPT plus subscribers tested [00:01:15] while the rest of us watched from the sidelines. This year, a barrage of new AI shopping features launched. In November, right before Black Friday, and according to Salesforce's data across 1.5 billion global [00:01:30] shoppers, we're about to see AI's first real test at scale. [00:01:34] Let's jump in. [00:01:35] [00:01:37] Kiri Masters: Salesforce projects that AI and AI agents will influence $73 billion in global [00:01:45] sales during cyber week. That's 22% of all sales up from $60 billion last year. To put that in perspective, AI's influence on commerce is growing faster than commerce itself. Kayla [00:02:00] Schwartz, who is the Director of Consumer Insights and Strategy at Salesforce, spoke to me about some of their most recent findings. [00:02:08] She said that this year more shoppers are leaning on AI and agents to research products, help them budget and prepare for the [00:02:15] holiday season. And I just wanna recap some of the tools that have recently launched that are legitimately useful, not just novelties. [00:02:24] And these are things that consumers didn't have in their pockets last year. So first of all, Google's [00:02:30] updated AI mode. Now let's shoppers track a product's price, set a desired budget and be alerted when it hits that target. [00:02:37] And it can also call local stores on your behalf to check inventory, check product details, [00:02:45] and check on deals. Number two, chat. GPT now supports instant checkout with select sellers, starting with Etsy in the us. That was a couple of months ago. There are a couple of Shopify merchants live and Target, of course, just announced it will be live [00:03:00] this week, meaning that you can move from chat to purchase in seconds. [00:03:05] Right within chat DB t. Number three, Amazon's Rufuss assistant is also stepping up offering 30 and 90 day price [00:03:15] history views and also product price tracking features as well. A couple more Klarna let's you snap or type what you're after and watch for price drops . And Walmart has also stepped up with [00:03:30] their app offering, bringing AI into the store within aisle deal alerts and curated party lists. [00:03:37] These features solve real friction points in holiday shopping, like tracking deals across retailers, confirming inventory before driving [00:03:45] to a store and consolidating research. That's why Salesforce is seeing early adoption translate. [00:03:52] Now my big question is are consumers using retailer chatbots or are they preferring to [00:04:00] B-Y-O-L-L-M? And this is a big question that I had for Kayla because I've argued before that shoppers are gonna prefer to use their own personal AI sidekick, their chart, GBT, their perplexity [00:04:15] rather than. [00:04:16] Going and learning a different retailer specific chat bot, which may not have all the context that your personal shopping assistant has about you. Why would I talk to Macy's bot when chat [00:04:30] GBT already knows my sizes, my colors that I prefer, styles, I prefer my budget, my shopping history. So that is sort of to me. [00:04:40] A hunch really. And, uh, I was, I was glad to talk with [00:04:45] Kayla and have her challenge me on this, and it is a really good argument. She says, even if consumers are starting their journey in chat, CBT or perplexity, they eventually end up. At the brand owned property or the retailer.com, [00:05:00] and once they get there, that experience has to feel consistent. [00:05:04] When we think about the modern e-commerce experience evolving into more of a conversational format, it feels natural, like a logical progression. And the example that she shared with [00:05:15] me was, you know, when Google came out with the search bar, we didn't just say, oh, just 'cause Google has a search bar, we're not going to have one. [00:05:23] Because their search bar is like, better and richer with results than, , our could be, no, [00:05:30] every website basically added a search bar that replicated that experience that people became used to. So this is kind of like the, you know, the, the chat. Bot is the new form factor of commerce. [00:05:45] Did you know that leading retail media networks drive 85% of their ads through mid and long tail advertisers? [00:05:58] Miracle [00:06:00] Ads provides full funnel ad formats tailored to both one P and three P advertisers leveraging unique AI capabilities that provide unprecedented levels of relevance and engagement. Retailers who want to capture ad [00:06:15] spend from the long tail of three P Marketplace sellers use miracle ads in their tech stack. [00:06:21] Learn more@miracle.com. That's M-I-R-A-K l.com. [00:06:29] [00:06:30] Another interesting thing that she pointed out is that 80% of e-commerce traffic comes from mobile according to Salesforce data. [00:06:38] Scrolling, typing, conversational interfaces. This is how people interact with their biases now. So if that is the [00:06:45] expected interface, retailers need to deliver or risk feeling dated. The data backs this up. Retailers with AI chatbots saw 13% US sales growth this fall compared to 2% growth for retailers. [00:06:58] Without them, that's [00:07:00] seven times higher growth. Now for me, I, it makes sense logically the numbers are there, the. I just, in my personal experience as a shopper, I, I remain a little skeptical, at least with the current state of [00:07:15] onsite chatbots. I just find they deliver vastly inferior results. , I tried out the Williams Sonoma chatbot to ask for gift recommendations for my mother-in-law, and I said she loves to cook. [00:07:28] She has a thermo [00:07:30] mix, an air fryer, and she likes to grill. And the Williams Sonoma chatbot. Gave me recommendations for an air fryer. Which she already has, and I told the chat bot, she already has that. So that was very underwhelming. When [00:07:45] I put the same request into Chatt BTI got what I was looking for. I was, look, I, I got suggestions for complimentary accessories. [00:07:54] So I think, you know, the takeaway here is. If retailers do invest in their own [00:08:00] onsite chat experiences, they need to build experience that actually know their customers and deliver genuinely helpful recommendations. And, uh, most retailers, at least that I've seen, aren't quite there yet. And [00:08:15] a final trend to watch, which is super interesting, is that Gen Z is shopping in stores, but with a twist. [00:08:22] So Once again, physical stores are the number one preferred channel for holiday shopping, but what's interesting is that Gen [00:08:30] Z is leading the charge three in four Gen Z shoppers plan to shop in store this holiday. They are the number one generation for Black Friday in store shopping. Isn't that fascinating? [00:08:44] There is this [00:08:45] nostalgia for something that this generation has never had and a craving for immediate gratification, the ability to touch and feel merchandise and the social experience of being in store. But this isn't your grandma's shopping [00:09:00] spree, more than half of Gen Z shoppers using ai. Say that they use it while in the store. [00:09:07] They're taking pictures of product shelves, they're asking follow up questions. They're getting recommendations from AI assistance as they browse [00:09:15] physical aisles. Caleb brought up a great example when I spoke with her. She said that Target is giving the first 100 customers at each store on Black Friday, a gift bag worth at least a hundred dollars, bringing this nostalgic doorbuster [00:09:30] treasure hunt experience back to Jen Z, [00:09:33] and apparently there's a huge TikTok phenomenon around Black Friday doorbuster chaos, and this generation really wants to have that experience this year. This is where [00:09:45] optimizing for AI agents and assistance goes far beyond just like doing SEO for LLMs. [00:09:52] This research phase is not just happening before customers go to the store. It's happening while they're in the store doing product [00:10:00] comparisons. And this reinforces the point I've made before, which is that physical retail media IT store might be the most AI proof part of the retail media landscape. [00:10:12] So wrapping up here, here's what I'm watching [00:10:15] over the next week. How much of that $73 billion in AI influence sales translates to actual behavior changes versus correlation? Are people genuinely shopping differently or are we just measuring existing shoppers who happen to use [00:10:30] AI? Now? Either way, this is AI's first commercial stress test. [00:10:35] By December, we'll know whether this is another mobile wallet moment where the behavior clicked and became ubiquitous. Or whether we're still waiting for the [00:10:45] supply and demand to fully align. [00:10:47]