Content is the New Commerce and Other AIR Takeaways, Andrea Leigh, Founder & CEO, Allume Group

Transcript

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Peter Crosby (00:00):

Welcome to unpacking the Digital Shelf where we explore brand manufacturing in the digital age. Hey everyone. Peter Crosby here from the Digital Shelf Institute. Every six months the e-Commerce Education Consultancy Allume Group consolidates the output of expert conversations, annual reports, and the latest data to create their Allume Insider report or air. It's Chock-a-block full of the most current insights into the present and future of commerce. Andrea Leigh founder and CEO of Allume Group, rejoins the podcast with the takeaways from their latest research. Andrea, welcome back to the podcast. We are so excited to dig into the latest air report. So I saw there are a couple of themes this time, including this thing called ai, which I can't wait to hear about. So let's dig into that into the first one. What do marketers think about AI search and is it a pit in their stomach or joy in their hearts?

Andrea Leigh (01:09):

I love that, Peter. I would go, I'm going to go with both because I think it's a real opportunity for marketers if leveraged correctly and if we're optimizing. So yes, these three trends we're going to talk about today are from our latest air report, hot Off the Press, this one, there's a lot of change happening with the shopper right now. I think that's kind of the big thing. The shopper is changing their behavior really quickly and a lot of that is due to ai, but it's also due to a lot of economic pressures and sort of this shift of shopping becoming less of a task and more of kind of an ongoing form of or integrated into a lot of our forms of entertainment. And I was saying this at the conference last week, but I have not seen anything this transformational since the launch of e-commerce, which I lived through and existed before we had e-commerce. I haven't seen the shopper change this much since then, so I have some data I can share about that. But really the first piece is about the rise of genai for shopping. I think some interesting stats I can share around that, that could either be considered pit in your stomach for marketers or opportunity. So 58% of consumers have replaced traditional search engines with Gen AI for product search and recommendations. That's from a Capgemini report that just came out

Peter Crosby (02:47):

68%,

Andrea Leigh (02:49):

58%.

Peter Crosby (02:51):

Wow. Isn't that

Andrea Leigh (02:51):

Incredible? Have you guys used it for any sort of product research or recommendation? Absolutely. I don't have enough

Lauren Livak Gilbert (02:58):

Time to find multiple products. I want to know what to buy.

Andrea Leigh (03:02):

Absolutely. And the stats seemed really staggering to me too, but when I am in front of audiences, I often ask the question and we definitely have most people in the audience raising their hand to say that yes, they are using it a lot of the times. So 58% of consumers replaced traditional search engines with Gen AI for product recommendations and research. 68% of consumers want gen AI tools to provide actual purchase options. So I think we've all had the frustration of getting some really great recommendations for brands or products, but lacking some links or some kind of call to action. Let's see. And then anticipated drop in search volume traffic, product search volume traffic next year, 25% drop estimated e-marketer report. And I love this quote from Doug Harrington from he's the CEO for Amazon Worldwide stores, and he said this in one of the more recent earnings calls. We really haven't had a technology revolution as large as this since the start of the internet. And I think he's

Peter Crosby (04:05):

Right, feels like I think he's right.

Andrea Leigh (04:08):

I mean we're not there yet. I think all of us have tried to buy something on Perplexity Pro and maybe found that experience to be a little bit lacking. I have tried all the tools and have been pretty disappointed. I think there's just a lot of nuance that the large language models have to learn. So for example, if you search, ask it to find you the lowest price on rainbow light vitamins, it will give you the smallest pack size things like that where it really has some work to do.

Peter Crosby (04:42):

It's too literal. Yeah,

Andrea Leigh (04:43):

It's too literal. Again. Well, it goes back to this idea of prompt engineering, which is something I've been spending a ton of time thinking about, which is you only, the quality of the output that you get from AI in general, not just related to shopping, is directly related to the quality of the prompt that you give it. And it's a lot like a really junior associate or someone that you hire right out of school where they have so much horsepower and so much energy and enthusiasm and knowhow, but lack some reasoning and some context and judgment. So there's long ways to go for sure.

Peter Crosby (05:25):

Yeah. So to sort of just switch super quickly to B2B marketing for a second, I was having a conversation with an awesome Forester analyst on this topic the other day, and IL Lai LAI really tremendous. And he was talking about that B2B marketers are panicking because they're often gold on traffic and that traffic is really starting to go away. The zero click searches are definitely thing. And what he said was that what conversational commerce is doing is it is moving the visit to the site further down the funnel so that mid funnel content is going to be much more important and B2B marketing and that's something that they can sort of own versus the beginning of the conversation. And one, I wondered if either of you had a response to that, but also secondly, is there a similar kind of thing to be thought in terms of B2C marketing or is that, anyway, I just thought that that was really interesting.

Andrea Leigh (06:37):

That is interesting, Peter. I think you're right. I think the keys to success are changing. So from a content perspective, so for brands, I think the big takeaway is you have to figure out how to optimize for the new search and the new search is Gen AI search and being able to have some agility within your organization is really key because it's kind of changing every day. And I can talk more about what I've learned about that some of the legacy brands are really struggling here, like smaller brands or more upstart organizations are able to pivot and change their content really quickly. And also something that I find is that legacy brands tend to rely pretty heavily on e-commerce marketplaces and advertising on e-commerce marketplaces relative to more upper funnel social activity. Whereas mid-market and smaller brands tend to be a little heavier in the social following and content there and spending a little bit less on retail media advertising.

(07:40):

And so those brands are already set up a little bit better for gen AI search because it's pulling content from all over the internet. So I think that agility is really key. And if you look at what the gen AI search engines are looking at, it's really interesting. So they're looking at content that's easy to crawl. They're looking at sites that are easy to crawl that aren't behind really heavy Java. And I know this because I went and asked them all, so I asked them to shop for me and then I asked them why they chose those recommendations and asked a series of follow-up questions. Chat GBT was pretty black boxy about it. Perplexity actually gave me a really complete answer about how it's crawling and how it's thinking about it. And so that was kind of interesting. But it's ease of crawling. I mean the AI is lazy, right?

(08:33):

It's trying to find the fastest path to the answer with the least amount of computational power. And so it's looking for sites with a really clear taxonomy, a really clear browse structure. They're looking at recency. So sites that have been updated more recently, they're looking at sites that are easy to cache. So for example, if you run a product search on perplexity, it's going to give you a lot of products from retailers you wouldn't expect, and really retailers you've not even heard of. And that's because those are easier to crawl. When I specifically asked why it wasn't returning more results for Amazon or Walmart, it told me that those sites are really difficult for them to crawl.

(09:12):

It's too much information to be cashed. They have a hard time with some of the dynamic pricing and inventory status of those sites, not often, not crawling in real time. They're crawling like a cash version. And so I thought that was really interesting. And then it's looking for really basic SEO stuff. How well does the content match the query? And that hasn't changed. Like old SEO was the same way on retailer sites or on Google, but the difference now is the way the customer's searching. So they're not searching like rainbow light vitamins for immunity. They're asking the gen ISO engine in a more conversational manner, what's a good immunity vitamin? For me, I've heard rainbow light's pretty good, it's a little bit more conversational. And so the content that has more of a conversational context is getting picked up a little more easily. And those keys to success are also true on.

(10:18):

So that's for brands. I think for retailers, the challenge is how do they keep the shopper in their ecosystem? How do they not lose the traffic to gen AI search? And I think for most of them, that ship sailed, it's going to be too hard for them to figure it out. I think for Amazon, this is why they're focusing so much on Cosmo search and on rufuss, the virtual shopping assistant is because if they can make the Gen ai, if they can make their experience very, very much feel as easy as using gen AI search, maybe the shopper won't search off the site and they can stay in the ecosystem and Amazon can keep all of their retail media dollars and invent more ways to generate retail media dollars. And so their onsite rufuss is looking offsite as well. It's looking at all of those things we just talked about on content, on blogs, on how-tos, on best of lists on social media, on reviews, on D two C sites. I think that's another thing for brand manufacturers is go dust off those D two C sites because those are getting crawl by,

(11:19):

Those are getting crawled by Amazon now and they're getting crawled by all AI search. And that's often where you have the most editorial control, so you can make that content, say whatever you want it to say. So I think that's interesting. And then from a retail media perspective, it's hard to even predict what's going to happen. Perplexity is already launched, perplexity Pro Shopping, that's just an integration though. It's like an API connection. It's not really a paid thing yet, but it will be. I mean if you look at the traffic that chat GBT has, I mean they've got almost 600 million users now. They're going to start selling media at some point,

Lauren Livak Gilbert (11:57):

And rufuss already has ads in it, recommendations. You can't buy them per se. They're not a part of a brand option to buy an ad on Rufuss. But I've seen them, I don't know about you Andrea, but they

Andrea Leigh (12:11):

Exist. I have, yeah. And I've heard only that you can't buy them specifically, but that they've more recently are starting to break them out in some of the metrics or something. But I mean, we're in such early days of this, but retail media is going to get really weird.

Peter Crosby (12:25):

Yeah. Oh, go ahead Peter. I was just going to say just literally a few days ago, OpenAI hired a new

Andrea Leigh (12:35):

Executive and

Peter Crosby (12:36):

That executive Instacart is the CEO of Instacart, and she's coming over and she obviously has a ton of experience integrating ads into experience, certainly at Instacart, but also I think she was at Facebook before doing that, if I remember correctly. So they are clearly making a bet to be the consumer friendly front end and a place to do your searching.

Andrea Leigh (13:04):

Well, and I think she was largely credited for building the whole ads business there, right? Yeah. Mean, so now that's Open is going to now have her maybe do that for

Peter Crosby (13:14):

Them. I would think so

Andrea Leigh (13:17):

That would be smart of them. If I were them, that's what I would do.

Lauren Livak Gilbert (13:22):

So Andrea, retail media is about to get weird, but for brands who are trying to think about how do we get ready for the future, what do we do with these dollars? How do we move these dollars? Where should we spend our focus? What are you seeing in terms of themes around retail media because it's already hard without AI agents?

Andrea Leigh (13:42):

Yeah. Well I think, so first I think it's, and this is maybe a little more about digital shelf, but a little more of a digital shelf answer. But I think that the ecosystem of vendors has really grown in the last, even just few months of providers that will help brands figure out are they optimized for AI on the retailer sites? Are they optimized for Rufuss and Cosmo search on Amazon? How well are they showing up across all gen ai? What's their share of voice? And so there's all these startups that have come onto the scene to try to help brands measure this and figure this out so that brands can work on their inputs, they can figure out how to optimize and they can look at competitive data to see relative to competition, how well they're showing up. There's some really cool vendors out there.

(14:36):

I've listed them in some of the ones I know about in the report, and I only know of some from clients that are using them or ones I've talked to personally. But I think starting to get a handle on that is really important. But if you don't want to work with a provider or you can't afford it, I think a really easy thing to do is to just take your top 10 products on Amazon, go to rufuss and all the questions that's suggesting that you ask because if you haven't used it, it recommends questions for the user and they're often pretty on point. And so click on them and see what the AI says. And if you're not satisfied with the answer, update your content. I don't think that's a couple of hour activity. Some of these companies will do it at scale across all your assortment, et cetera.

(15:24):

But I think just from a real hands-on quick and dirty solution is to just go do that and make sure those questions are being answered on the PDP. And then also if you've got a DDC site, making sure that you're answering all of those questions there. The images are also much more important now, and image really is worth a thousand words. I mean, you can put pack so much more into an image than you can into a bullet point. And the AI is also reading the images on Amazon rufuss and Cosmos. So if you struggle as, for example, if you're a CPG brand and you have claims that you can't make, maybe you can't say this product is suitable for ages five to 85. Maybe you can put make images that kind of convey some of the things that might be tough to get through. But making sure you're answering the five Ws I think is the most important thing. So where in the images and then in the bullets, all that

Lauren Livak Gilbert (16:20):

Kind. And I think to your point, Andrea Rufuss is now in the search bar on Amazon. When it first came out, it was just like the separate little assistant. Now they actually include the questions in the search bar. And I think for brands who are not really recognizing that this is such a fundamental shift, you got to take the lead from the retailers who are incorporating it into their fundamental search algorithms about your products. And I love your recommendation to just go ask Rufus some questions, see what it recommends. And those questions are also being built into Alexa plus. So connecting it to voice where I feel like we talked years ago that voice would become something like this, but it never did. Now it actually has the opportunity too, right? Because those conversational questions you ask your Alexa are similar to rufuss that need to appear in your PDP and will be recommended on all different devices.

Andrea Leigh (17:16):

Absolutely. Absolutely. I mean, voice is sort of the next, figuring out how to do some of this via voice. I wish someone was breaking out for the gen AI search, how much of it was happening, voice versus typing. I know a lot of people, I always type, I like the privacy, but I know a lot of people use the voice option a lot. They would be interesting to see what's happening there.

Peter Crosby (17:39):

So moving on to where consumers are right now instead of the agents that serve them, we know that right now consumers are price conscious, but you were saying that they are also focused on value, which is a different concept. So I was wondering how are you seeing brands sort of double down on demonstrating both things or choosing which one they're going to go for? Yeah,

Andrea Leigh (18:07):

Well, I think Americans have become full-time bargain hunters in recent months, and we've all gotten a lot of practice in doing this. So there's a recent payments report that cited 62% of consumers are cutting down on non-essential spending. 64% of shoppers now visit multiple stores to find the best deals. That's up from 56% the prior year. That's from the Capgemini report. And 57% of consumers say they're spending more time searching online for discounts and deals and better pricing. And that's also up significantly from last year. So this idea of consumers being more value conscious I think is really important. And there's kind of four little sub trends of that. But first I think for brands that are kind of straddling this idea, but consumers will pay more for a product that aligns with their values. I mean, that has not changed. And 89% say they'll stay loyal to brands that share their values.

(19:06):

They might even be willing to pay a little bit more, but you have to make sure that you're communicating that. So these brands that are kind straddling value and values, I think have to choose a lane right now. This is not the time to be kind of conflating those messages. So on the value side, I think a couple things we're seeing are secondhand is seeing a really big increase right now. So 20% of consumers say they've increased spending on secondhand items. It's expected to be a 276 billion market by 2028. 60% of Gen Z prefer secondhand items. And I can totally attest to this with my teenagers, the story around how they acquired something and the backstory of that item is sometimes way more important than the actual item. And it's really interesting. I got this at this flea market and this place, and it used to be this and having a backstory is part of their identity, but that stat totally threw me 60% of Gen Z prefer secondhand.

Peter Crosby (20:16):

So Andrea, your overarching point was brands can no longer conflate value and values, but that example seems like one where they, I dunno whether they're conflated, but they certainly are both present in the Transac transaction,

Andrea Leigh (20:31):

Right? Absolutely. Peter, you can sort of leverage a little bit of both. And we're starting, and I think probably you guys have seen this too, a lot of brands offering resale on their own sites. I mean, Patagonia has been doing that for years, but now you see Madewell and Clar V and a lot of other fashion retailers taking back their own goods and reselling on their platforms. I think for non-fashion brands and maybe more for hard goods, I think we're going to start to see a rise in the services economy. So now it's probably not cheaper to buy a new washing machine than to have a repair person come out. And so we're going to be bringing back the Maytag repair person model. I mean, I think for a long time Best Buy made more money on the Geek Squad than they did on their actual products that they sold.

(21:22):

So I feel like we're going, if prices stay high, we're going to start to see a resurgence in some product categories for services. So again, finding ways to add value to the consumer. But again, value's not just about price, it's about values. It's about delivering more value for a higher price point. But I had an example of a client recently who was a headlamp company in electronics, and they charging, they have headlamps that cost $150 and there are headlamps on Amazon for $15. So if you can't make it clear to the shopper in the search result, what's different about your product, this is not the time for that, right? The consumer is gravitating toward the better value products. So I think if you have a differentiation story, you need to be telling it really clearly and succinctly, and that's hard to do on the digital shelf in a bunch of search results.

Peter Crosby (22:20):

It needs to show up in the reviews I think is a super important place to have it show up, I would think.

Lauren Livak Gilbert (22:27):

And Reddit communities are really big for that too. Just to add to that, I know we've talked about the tattoo lotion, I think was the one that you

Peter Crosby (22:33):

Brought up,

Lauren Livak Gilbert (22:34):

Andrea, but I have found a new fondness of Reddit lately looking at clean products and getting recommendations from people. But that's another place that you can do that. But what I was going to say, Andrea, was I think to your point about the Maytag repairman, a lot of people are turning to DIY and I was actually having a conversation with the B2B company and they were saying that they're actually selling to more DIYers now instead of just contractors. And it is creating a different dynamic because you're having everyday people that are learning to be contractors. I'm air quoting on YouTube and want to buy in bulk to do these larger products, or excuse me, projects, but they need a little bit more guidance. So that's where an AI agent can actually read an order form and be like, Hey, here's the products you need, here's where you should buy them from. I've placed this order for you. So it's also really kind of shifting that DIY dynamic, even in the B2B space,

Andrea Leigh (23:35):

Well mean even in using the AI to help you figure out how to do the DIY, I mean my ability to tech support myself has dramatically in the last few months with chat GBT, because you can now ask it. Outlook's doing this weird thing, how do I fix it? And before you would've spent hours pouring over Microsoft's community forums and trying to find someone with the same problem as you that found a solution, and now you get your answer that it's like, go here, do this, try these three things. And so I think on the deal, I still

Lauren Livak Gilbert (24:08):

Get the phone call from my parents about the remote though, so I can't replace that.

Andrea Leigh (24:13):

They just want to talk to you, Lauren.

Lauren Livak Gilbert (24:14):

Yeah,

Andrea Leigh (24:15):

That's true. Just an excuse to call you.

Lauren Livak Gilbert (24:19):

Sorry, I didn't mean to cut you off.

Andrea Leigh (24:20):

No, no, no. So I think for brands, it's really how do we emphasize, first of all, how do you emphasize value? And that idea of affordability, it's really critical in messaging to shoppers. And the example of that is this secondhand retailer called Cherish that I follow on Instagram and they serve me an ad the day after the tariffs were announced that said US Vintage is tariff free. And I loved that it was so timely. I mean it was so timely, it was so value driven. I thought it was really swift and clever marketing. So really emphasizing if you're a value brand emphasizing value, that idea of affordability, it's so critical right now if you're a values brand, and I think we talked about this on a previous podcast, the shopper is the brand Now, the brands are not the brands, the shopper is the brand.

(25:12):

They're building their own brand identity, they're building their own set of values, they're building their online personas, and it's up to brands to align with that. And we heard this, Lauren, I think you were with me at a conference where someone said this, they're like, we're not the brand anymore. The consumer is the brand. And so really figuring out who your consumer is and aligning your values with them I think is really critical. And then this idea of differentiation. So if you're going to charge more, if you have a higher quality or premium product, you have to say why?

Lauren Livak Gilbert (25:51):

Yeah, a hundred percent. And you need to do that with your content and with your storytelling. And we talked a bit about that, but I think content and creativity where maybe people would think in the world of ai, it's not as important. I think it's even more important, right? Because you have to differentiate yourself. You have to do the infotainment that we've talked about on past podcasts and really make it fun. So how have you seen brands really focus on content in a different way?

Andrea Leigh (26:22):

Yeah. Yes, I totally agree with you Lauren. Making it fun is so key. And I've also often heard from large brands, we can't create viral campaigns or online communities and especially for maybe brands that are in more boring categories, and that's really for upstart brands or brands that have a really strong personality or liquid death or whatever. But it's not simply not true. And in fact, at your conference at the digital shelf summit, we got to hear from Whirlpool. I don't know if you were in that session Lauren, but it was hilarious. So they did this big

(27:03):

TikTok campaign called Care Profiles. Did you see this one, Peter? Yes. They were talking about, yeah, so they did a social media campaign where they got a bunch of guys to sign up to update their dating profiles with images with, instead of holding the big fish that they caught doing the laundry or doing something dishes, doing dishes, putting them, emptying the dishwasher, and then they did interviews. It was such a cute video. They did interviews with each of the guys then asking them how it impacted their performance on the dating apps. And all of them said they got more likes and reach outs and all of the things and went on more dates. So it can totally be fun A brand. Would you think washing machines would have personality, right? That's a

Lauren Livak Gilbert (27:57):

Tough one. As someone who met her husband on a dating app, the pictures do matter. So I really related to that.

Andrea Leigh (28:05):

The big fish.

Lauren Livak Gilbert (28:06):

Yeah, there's a lot out there I will

Andrea Leigh (28:08):

Say. Or flexing the biceps, they flashed a bunch of the before images and then the afters, and it's a really cute campaign. You what

Lauren Livak Gilbert (28:17):

I mean? Just random fact. My husband had a picture of a fish on his

Peter Crosby (28:22):

Profile somehow. Not surprised, but he had. So it made a

Lauren Livak Gilbert (28:28):

Lot of sense. Well, people post married and happy, so it's fun.

Andrea Leigh (28:33):

People post pictures of their interests. I mean there's nothing wrong with it. I just think that this is funny. Oh gosh.

Peter Crosby (28:43):

Well, I love that it was Whirlpool that told this story because it was unexpected. When I think of buying washers, it's the specs and the what does it do and maybe the fancy button that it has that nobody else has or something like that. And to put it in the context of what it does in the context of the person's life and an unexpected, sometimes user of the product in a way that would impress others, it is just a very clever but natural thing that, I mean, I thought it was such a great story. And to hear from the people who had worked on it was just really cool.

Andrea Leigh (29:29):

It was really cool. I love this really old quote. I've used it a whole bunch of times from Emily Weiss, who's the CEO of Glossier. They're a beauty brand. She said the interesting thing about is they've solved buying, but in the process they've kind of killed shopping.

Lauren Livak Gilbert (29:47):

And Pinterest said that when we were at NRF, right? They were like, we need to put the fun back in shopping

Andrea Leigh (29:53):

Because e-commerce kind of flattened. It has to date sort of flattened the whole experience. And I think only with the growth of social commerce have we been able to put the fun back in shopping. So some stats, 82% of shoppers use social media for product discovery and research, and nearly a third of shoppers bought on social media last year, and that's up from 25% the year prior for Gen Z, it's half for Gen Z, it's half of them have bought something on social media. And TikTok ISS on track to be like an 18 billion business this year. TikTok shops, which is insane

Lauren Livak Gilbert (30:35):

Influencer. And then the beauty category, TikTok has more market share than some of the big beauty brands like Sephora saw a big hit from a lot of what's happening on TikTok shop.

Andrea Leigh (30:45):

It's nuts because it's more fun. It's more fun to see someone using the product and talking about it and then versus the utilitarian searching, searching in the search, well this is

Peter Crosby (30:57):

Where you already are. That's the environment that they communicate with. It's the environment they discover in. Whereas a brand site is just largely not going to be that in this new context. It it's true to your point, it's also super important to have your brand site because that can become the trusted source for AI agents. So it's really weird. You have a new audience that you have to be thinking about.

Andrea Leigh (31:27):

It's true. One thing I do wonder, and I haven't been able to find any research on this, is that Gen Z whose half of them have bought on social media, they're not list-based shopping yet, right? They're too young, they're not buying for their household. And so I wonder as they age up, if they will continue buying so much on social media or if they will start to turn to more utilitarian sites like Amazon and Walmart as they start shopping off of lists. It's just something I've been thinking about. We talk about, now I'm countering my own point, but we talk a lot about how important social commerce is, and it is, and it's especially important for the youngest generation, but they also have the least amount of money. And so I'm curious to see as they age up, does that behavior continue or do they continue to be opportunistic shoppers like that? Or do they change their behavior the way millennials did? Because we all thought this about millennials too. We were like, oh my god, they're the first digitally native group and they're going to only buy on social. And that's just not how it turned out.

Peter Crosby (32:38):

Well, because life gets complex and so the amount of time you have to spend to just even just be on social to a certain degree is constricted by usually other small human beings or pets wanting your attention

Lauren Livak Gilbert (32:55):

Or grocery shopping

Andrea Leigh (32:56):

Or grocery shop, right, my kids or putting the teenager the laundry, yeah, they're not having to do those things. So it'll be interesting to see. But I think for brands, you're not a brand anymore. You're a content factory. You have to be producing so much content right now to be a successful brand successful or said differently. Successful brands are producing a ton of content for TikTok, for Instagram, for YouTube, for social media, and now for ai, I think you have to think of yourselves as a content factory and how can you generate the most amount of high quality content as fast as possible? I think for retailers, you're not a retailer anymore, you're a media platform. So you're competing with social media for the shopper's attention. And if you want to keep those ad dollars, you have to think about how do you continue to expand your media ecosystem? How do you make it fun? And I think for everyone, a good takeaway from the Whirlpool campaign is we don't have to take everything so seriously. I love that the more authentic and real your content is, I think the more engaging and viral it has the potential to become.

Peter Crosby (34:06):

And Andrea, you were just at the path to purchase institute show, and I was just wondering the did content come up a lot, do you feel if you had an anxiety score from one to five about how people are feeling about this challenge, what would you say based on the last couple of conferences you've been to?

Andrea Leigh (34:34):

Well, the one I went to because I gave this talk, I would say before my talk anxiety was low. I would say after we shared all this data about AI shopping, anxiety got higher

Peter Crosby (34:45):

Wake up

Andrea Leigh (34:46):

Call. Yeah, a few people came up to me afterwards and said that, but it was kind of freaked him out. I don't think people working in retail media are worried enough about this, honestly. I mean, if you think about we didn't have a retail media ecosystem 15 years ago. This is all a new industry and it really struck me at the conference, how many people work in this industry. And I told him, I was like, all of your jobs are about to change in some way. It doesn't mean they're going to go away, but they're going to change. You're not going to be buying and selling media just on retailer websites anymore. Retail media is going to be other places too. And the people who work on all the technology for that are going to have to figure out how to put the ads on other places.

(35:32):

And so it just also struck me how many companies and people there are in the whole value chain of, between the time that you decide you want to advertise something and the time that it actually shows up on the retailer website and then after that being able to measure it and all the things that you need to do. There are so many companies in these value chains. There's whoever works with the retailer to get the ads on the platform. The retailer often works with multiple companies for measurement, for advertising, technology for the advertisers, have to work with people that bid on the ads. I mean, there are so many service vendors in this value chain

Peter Crosby (36:14):

And

Andrea Leigh (36:14):

They all are going to have to change justing to see what

Lauren Livak Gilbert (36:21):

Happens. I dunno how. I totally agree. I mean I could go on a tangent here about org structures. I've just did some research around what the org of the future will look like. And a large part of it is that you'll have a strategist who will have agents who are supporting you. So you'll have an activation strategist and you'll have a retail media buying agent who will go and buy the media for you and then you'll have a consumer research agent. And it's just going to fundamentally change how we work. We're going to be more efficient, but it is going to remove roles, it's going to condense responsibilities. It is really going to change. And I don't think people are really thinking about what that looks like, but the reality is not too far away.

Peter Crosby (37:05):

And I completely agree with what you're saying, and I can't wait for that paper to come out, but I

Andrea Leigh (37:11):

Can't wait either.

Peter Crosby (37:12):

I know What I would say is that there is time. I don't want to over index. That's fair. On panic sometimes we and our bursts of enthusiasm, we sometimes most of all about what is possible. Again, I was talking with a different analyst yesterday who was reminding me that no matter what, these kinds of shifts, even in this one, take a long time to get set and actually gel into what they're going to be where it's really useful. So I think I view this podcast as in a sense, all of this year's conversations to be about just trying to get lumbering beasts to wake up and starting to build the cross-functional connections for these changes because there isn't a switch to flip right now. It's not like, oh, we have all the answers and here's the tech you should be using. It's that you need to be ready to receive those answers and to have conversations that arrive at those answers, knowing what the questions are, knowing that this is where, this is the environment in which the winning game will be. Those that invest in becoming the content engines that they need to be, that prioritize the partnerships that are going to lead to these things. So that's all I want to say is just this is the moment to

(38:46):

Rally the troops and using data like this to really start to poke away at it with your friends and neighbors at your organization.

Andrea Leigh (38:58):

I agree with you, Peter. It won't be overnight for sure. And I think what brands can do right now is go optimize your content. Go ask Rufuss all the questions, figure out if you've got the right stuff there and start thinking about are you answering the five Ws? Are you providing context? Are you talking about your products in a conversational manner? That's the first thing I think brands can go do. And then on all the other pieces with retail media, I think that it'll be a little while before all those people's jobs change that at the conference. A

Lauren Livak Gilbert (39:31):

Hundred percent.

Andrea Leigh (39:32):

But I'm curious, Peter, how long do you think if you had to put a time window on when you will start seeing retail media budget shift to gen ai, if you even think that's going to happen?

Peter Crosby (39:47):

Well, I guess right away the answer was six years, three months and 27 days and 43 minutes was what came into my head. But that's just me so accurate, mark my words. But seriously when I think about retail media, because when you said that sentence retail media is like they're not paying enough attention here. I guess I wasn't quite sure what to do with that. I feel like the need to make money in advertising is not going to go away. The whole ecosystem depends on it. So it just feels like monetization will always be there. The question is what form will it take is what I was thinking, but I dunno whether that's true or not. When you say retail media is you should be worried about retail media. Do you feel like it's going to disappear because of agents or do you just feel like it's going to shift?

Andrea Leigh (40:48):

No, I think that it's going to move and change for sure. It's not going to disappear. There's too much money in it for everyone now, but I think it'll move and change.

Peter Crosby (40:58):

I don't know. I know I said six years, whatever I said, but kind of a five year.

Andrea Leigh (41:03):

Yeah, that's kind of what I was thinking too. I'm like three to five years. If you look at, okay, so chat, GPT got to half a billion users in half the time that Facebook did. So definitely a stickier technology than social media and a much broader appeal.

Lauren Livak Gilbert (41:21):

And they did that comparison against Instagram, Twitter, and all the other social media networks and chat is twice as fast. Yeah.

Andrea Leigh (41:27):

Yep. Yeah, Gemini Perplexity. I even looked up MySpace just to see

Peter Crosby (41:33):

Oh, my space. Wow. I

Andrea Leigh (41:35):

Looked them all up.

Peter Crosby (41:36):

Raping.

Andrea Leigh (41:36):

Yeah, chat. BT got to half a billion users and half the time of Facebook. And so it's happening fast. But I mean it also is, I think the speed at which it changes is going to depend on how much the shopper has to change. Because if the shopper has to change a lot and if it's not natural for them to change necessarily, it'll be slow. And that was why e-commerce has taken so long to really ramp up in particularly grocery buying groceries online and why we got a nice little bump from the pandemic because that sort of forced people to change their behavior. But I remember that from working on Amazon Fresh at Amazon, we were trying to get people to change their behavior. It's slow going and unless it's incredibly compelling, it takes a while.

Peter Crosby (42:26):

Which I,

Lauren Livak Gilbert (42:27):

It's been,

Peter Crosby (42:28):

Yeah, go ahead Lauren. Sorry.

Lauren Livak Gilbert (42:29):

No, no, I was just going to say e-commerce has been around for 31 years. So I look at that number and then I think, okay, in terms of budget shifting, it has to start happening because of the way that shoppers are shopping today, right? Yes, we're changing behavior, but it's starting to shift. I think

Andrea Leigh (42:49):

The and the ad dollars follow the shopper. So wherever the shopper goes is where the ads are going to go

Lauren Livak Gilbert (42:53):

And wherever the retailer is investing is where the ad dollars are going to go. So you see the retailers investing in ai, especially conversational search. So I see that budget shift in the next five years, but to me it took, e-commerce has been around for 31 years, not in the same way, but I think in the next 15 years we're going to see actual org structure change jobs changing. This report that I'm talking about, I'm going to go back to it when I was interviewing people, there are some people that have agents doing this stuff now. So if there's people who are starting to do it now and there's no world where you can add more and more and more resources, especially in this economy. So I just think the need for more AI capabilities and agents and less of the human centric organization, we're just going to move to it because we need to in order to create all that content forced exactly.

Andrea Leigh (43:53):

We're to the economic environment will be a macro trend that will force it. Similar to how COVID forced more buying online.

Lauren Livak Gilbert (44:01):

And if you need to create customized content for every SKU on every retailer, you cannot do that with a human or humans, right? I think it's going to be a necessity. That's just my prediction.

Andrea Leigh (44:14):

Yeah, I would agree. I think we're all coming up with somewhere in the meaningful changes in the next five years,

Peter Crosby (44:22):

Which

Andrea Leigh (44:24):

Is fast in the next 10 or 15. We might not even recognize the old way. We won't be able to believe how far we came.

Peter Crosby (44:31):

Well, we'll be in the trough of disillusioned by then five cycle. Yeah. We'll be irritable and trying to go back to tents. I love it. Alright, we have gone way over, but this was totally worth it. So Andrea, thank you so much as always for bringing all this great knowledge to us and everyone should know. It will as always be in the DSI partner resource section on our site digital shelf institute.org, so you can find it there. Thank you, Andrea, for the generosity of sharing it with our audience. We really appreciate it. And as always, for joining

Andrea Leigh (45:06):

Us, thank you for having me. And you can find this report in all of our past reports on our website, ilum group.com, and you can reach me on LinkedIn if you want to talk to me

Peter Crosby (45:15):

And we'll see you in six months. Six years, eight months. No, I don't even remember what I said. 43 seconds. Exactly.

Lauren Livak Gilbert (45:23):

Thank you, Andrea.

Peter Crosby (45:25):

Thanks again to Andrea for all the wisdom. Their reports are also available in the partner content section under the resources tab on our website, digitalshelfinstitute.org. Become a member. While you're there, why don't you, thanks for being part of our community.