Latest / Retail Media Breakfast Club / Transactional Commerce Inside Perplexity: Ashley Furniture’s AI Bet
Transcript
- Ashley Furniture AI Shopping Pivot === [00:00:00] Kiri: A couple of months ago, I wrote that discovery is moving upstream, that shoppers are starting their journeys inside of AI tools, and that retailers were gonna have to decide whether to fight it, [00:00:15] ignore it, or follow them there. [00:00:17] Now, I just happened upon a podcast interview, actually from a couple of months ago, on the Total Retail Talks podcast, and on this episode, Ashley [00:00:30] Furniture's SVP of E-commerce and Marketing, Nick Lezin described what that shift actually looks like from inside the largest furniture retailer in the US [00:00:42] [00:00:43] Kiri: The newsy part, at [00:00:45] least as of a couple of months ago, is that Ashley is launching transactional commerce on Perplexity with PayPal handling payments and Stripe being teed up as what Nick calls the key bridge to other AI [00:01:00] surfaces. The interesting bit is how he talks about why [00:01:04] joe: What were some of those behaviors that you were seeing that pushed you towards really investing in AI-powered shopping? [00:01:12] nick: So we're listening to our customers. In this particular [00:01:15] case, our customers are not telling us directly, "Hey, we want you to offer the ability for us to shop in generative tools, Perplexity in particular, or others." [00:01:25] So that wasn't a direct signal. This isn't survey-based data, et cetera. [00:01:30] But we're absolutely seeing indicators in their behavior that would suggest that there's interest and relevance here. As an example, we've been watching referral traffic to our website from these sources pretty closely, and if you track that, it's really like an [00:01:45] exponential curve from the start of this year, and we just don't see that slowing down anytime soon. [00:01:50] The absolute volume of that traffic is still relatively small, but we see critical mass here. And so it's enough for us to make some investments to, to explore, to [00:02:00] provide the subset of current customers that are taking these shopping journeys easy and new ways to shop our brand [00:02:06] joe: Yeah, it's become in large part a, a discovery channel, right, Nick? [00:02:09] It's becoming sometimes like that, that, like Google is and still, you know. But it's becoming [00:02:15] also that first interaction, right? So they might be explaining to the AI agent, Perplexity in this case, a piece of furniture they're interested in, and that is kind of leading them down the path. Is that what you're saying? [00:02:26] nick: Yeah, and I'd say whether or not the consumer [00:02:30] prefers to shop within these, within these channels, I would say the verdict is probably still out a little bit. This is a new frontier, but we feel it's low risk and high reward to offer and to provide that potential. And so that we can learn [00:02:45] with our customers, with per- partners like Perplexity, is this a growing preference for our consumers? [00:02:51] And making sure that we have those insights that we can improve that experience over time. And so that's part of that sort of fast mover advantage of [00:03:00] jumping in here. But I'd say until there's a significant portion of transactions that are really coming through these channels, I'd say the verdict's probably out a little bit. [00:03:09] So we're watching and, and trying to be cautious, but also making sure [00:03:15] that we're exploring. [00:03:15] [00:03:17] Kiri: Now we've all seen these data charts floating around the internet showing that AI referred traffic to all publishers, but even specifically to retailers is growing really [00:03:30] quickly, but it is still a tiny portion of overall referral traffic [00:03:36] and that hedge of exponential but still small really matters. It's why, Nick describes it as low [00:03:45] risk, high reward rather than a panic button pivot. [00:03:49] Now there is some reason to believe that that traffic that is coming through from AI search assistants like OpenAI on the mobile app [00:04:00] and Google's Gemini has actually been undercounted, and that is due to dark search traffic and the fact that a lot of the times the outbound referral links to those websites [00:04:15] from a AI assistant don't include any referral tag. [00:04:19] So it is a shared thesis out there that a lot of this traffic has been undercounted in the past. But that aside [00:04:26] It is really interesting to hear how Ashley Furniture [00:04:30] is thinking about this. Look, it's still small, but it is growing so f- quickly that we really see the moment to get in and start experimenting to be now rather than when it gets really big and really serious. And if we [00:04:45] take a chance early, we don't have a whole lot to lose [00:04:48] Now, another interesting part about this interview is how Nick framed content hygiene, let's call it. Static PDPs, imagery, attributes that don't get [00:05:00] updated. This is the work that nobody wants to fund, that nobody wants to do, that has fallen off of the boardroom agendas because [00:05:12] Why? Well, it doesn't [00:05:15] immediately make money like a retail media program does. It's not urgent, but this is actually the, the moment, the catalyst for a lot of that retroactive catalog work that had [00:05:30] to be done years and years ago. Now is actually the moment to view AI-enabled shopping as a catalyst to go and do all that stuff that could never get funding, never get attention. [00:05:41] It was just a hot potato. And this is actually [00:05:45] a wonderful, wonderful gift to retailers and brands to finally get back on the map with this retroactive content hygiene work that want- needed to be done. And Nick names this in public. He [00:06:00] talks about a catalog at Ashley that is thousands and thousands of items deep. [00:06:04] They still need to fix it, and now they have a real motive to do so. Let's listen [00:06:11] joe: Now there's this whole other realm of, of these AI platforms that [00:06:15] you're trying to generate traffic from. Does that impact how you think about the content and copy, including product data on your site? [00:06:23] nick: It does. I would say this is an area where introspectively we feel we have a [00:06:30] ton of opportunity for improvement. [00:06:32] I think, you know, one of the factors that has probably been a bit of a lower focus or consideration, but I think is gonna be really important moving forward, is just how dynamic that content is for inline product [00:06:45] and, like, how often that's getting refreshed, whether it's product imagery or descriptions or social mentions, the like. [00:06:53] I'd say we've probably been overly static to date, and this is an area where we see a huge [00:07:00] opportunity to be much more dynamic and keep content fresh for products that, you know, may stay online for, you know, three to five years. And maybe historically we're a bit more static. How do we keep that fresh and sort of rejuvenated over time? [00:07:14] And so [00:07:15] that's a pretty considerable effort when you talk about a product catalog that's thousands and thousands of items deep. But it will be an exciting opportunity for us to solve for, and we think that's gonna be really key moving forward when it comes to shopping, particularly [00:07:30] within some of these AI tools like Perplexity Retailers know that a marketplace model can dramatically boost product assortment, shopper engagement, and [00:07:45] total revenue. But to get the most out of your marketplace, you need an ad tech solution that can really engage sellers. Miracle Ads is powering the future of retail media for leading retailers to activate both [00:08:00] three P Sellers and one P brands. [00:08:02] Kiri Masters: Learn more@miracle.com. That's M-I-R-A-K l.com. [00:08:10] [00:08:10] Kiri: Now Nick makes a really important point here, both for other retailers and for [00:08:15] brands, that AI is an amplifier, not a crutch. [00:08:20] Retailers that treat it as an opportunity to augment customer buying patterns and signals, and be where the customer is, and think [00:08:30] about the future, and think about their catalog, and think of this as a catalyst to improve product content, supply chain, Customer service is something that Nick mentioned as well, needed to be f- sort of addressed with this [00:08:45] move as well. [00:08:46] This is a real catalyst moment, And perhaps instead of dismissing it, retailers and brands can look towards this as an opportunity, however long range it is, to get [00:09:00] permission and investment to go and fix the things that needed to be fixed for a long time. [00:09:05] nick: I think our actions, they kinda signal that we're believers, that we think that there's a huge rapid transformation that's happening right now, and [00:09:15] that we don't want that to happen to us. [00:09:17] We wanna be a participant in, in shaping that. So that's our point of view. I would say, as a recommendation or what we think, you know, other brands need to do to really show up and be relevant, I'd [00:09:30] say within our company, this has lit a major fire, like to look in the mirror, have honest conversations around wherever we can raise the bar on our overall guest experience. [00:09:40] That could be infrastructure, data, talent gaps, but overall [00:09:45] just like massive action for continuous improvement in just the guest experience in general. And, you know, that flows through to, to everything, whether that's ratings and reviews or MBS and recommendations. But we need obviously [00:10:00] the capabilities, like the technical capabilities in order to enrich and deliver a better guest experience. [00:10:04] But we also need to make sure that we're just prioritizing that and, like, really driving that forward. And we think AI or without AI, that is just table [00:10:15] stakes for good retail. And so those are big focal points, and I'd say there's just a lot of excitement around that within the organization of leaning in there and, and improving it, and also an acknowledgement that there's just many areas that we aren't as good as we want to be or that we know that we can be [00:10:30] I think that the evolutions in commerce that we're talking about, they're huge opportunities to deliver richer, more relevant shopping experiences for our guests. [00:10:39] [00:10:40] Kiri: What's really interesting about this announcement, and I, after this I'm gonna go [00:10:45] check out what this looks like on Perplexity today, is that this was initially launched with just one AI model partner, Perplexity [00:10:54] And that's how it really can start. One partner, one [00:11:00] forward-thinking e-commerce leader, and a whole bunch of initiatives get dragged along with it for the better. So this to me is an ancillary but wonderfully [00:11:15] optimistic and perfect use case for embracing some AI optimism if only to benefit personally, politically within your organization [00:11:27] Listen, don't we all need to [00:11:30] hype what we're doing sometimes? I think this is a really great case study in utilizing momentum to get things done that have needed to get done for a long time. I'll link up to the full episode in the [00:11:45] show notes. There's actually way more interesting things that Nick and the host of the podcast, Joe, discuss. [00:11:52] I've just touched on a couple of them. Definitely recommend checking it out. Thanks for listening, and I'll catch you tomorrow. [00:11:58]