Behind the Numbers: How the Rise of the AI Shopping Agents Is Impacting the Customer Journey
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Hey gang, it's Friday, February 28th. Jacob, Susie, Todd and listeners, welcome to Behind the Numbers, the e-marketer video podcast made possible by Zeta Global. I'm Marcus. Today we're discussing the combination of Gen AI and shopping and what happens when those two things get together. But for the conversation, I'm joined by three people we have with us. Our technology analyst based on the West Coast is Jacob Bourne.

Hello, Marcus. Thanks for having me today. Hey, Bella. Of course, of course. We also have with us our vice president and principal analyst who heads up our retail desk, living out life in New York City. It's Susie David-Kenyon. Thanks for having me. Of course. And finally, we have the global director of commerce, senior director, strategy and execution based in Chicagoland at Colgate Palmolive. It's Todd Hassenfeldt.

Hello, really appreciate to have the chance to be on the show. Yes, welcome, welcome. Thank you for the time. We start with a speed intro to get to know our guests a little better. And I informed Susie and Jacob that they're not exactly going to be part of this. And they were very upset and nearly left the episode. Very upset. Because you know those guys, most of the questions are for Todd. They'll get to participate on the last one. 60 seconds on the clock. Let's do it. So, Todd, you are based in Chicagoland, but where are you from? From Milwaukee. Okay.

Oh, very nice. So are you all the sports fan? Like a fan of all the teams? I'm a little bit odd. I have, I'm Packers for NFL and then I'm Chicago for everything else. So I'm Cubs, Blackhawks, Bulls, Illini. So, you know, depending what side of the family, my wife is all from Chicago. Depending on the season, I'm upsetting someone or bonding with them. What do you do in a sentence?

I help, you know, find and share and solicit solutions across the globe at Colgate-Palmolive as part of our global digital organization, really sharing best practice insights so we can outperform and accelerate our digital commerce growth. Very good. What's your morning drink?

I'm not a coffee person. I've only had a half a sip of my life. So I do, uh, Optum Nutrition's Amino Energy, one of their ready to drink. So, um, uh, used to work there. Uh, it's a great product. Not a drop. No, half, half sip. That's it. That was enough sample size for me. It's probably cause did you have it black? Is that what it was? Yeah, it was at an old country buffet. Probably. I don't know if I put a whole bunch of cream and sugar, if it was black. That's your problem. That's the problem. Um,

Last question. First record that you own, CD, cassette, a track maybe? Ooh. I was a cassette Beastie Boys License to Ill. So the Fight for Your Right to Party and many other songs that are

somewhat well known good choices uh suzy i mean of all the questions this is not one that i have a really good answer for because when i don't remember that far back it's like 35 40 years ago i think it was madonna it might have been cindy lopper might have been tiffany i don't know one of these

You're just naming artists who were popular back then. In the 80s, yeah. Okay, good. When I was a kid, with obviously cassettes. Okay, Jacob? Yeah, I mean, similar issue to Susie. It was definitely a cassette, definitely some sort of rock album. I think it maybe might have been Def Leppard, but I'm not 100% sure, just because it was a long time ago. Okay, good.

Very good. Well, they are the three guests we have for you today. Welcome to the show, folks. We start, though, before the actual content with the fact of the day. Cows have regional accents. Okay, let's do it. So language specialists from the University of London studied cows and they found that cows from different herds have different moo's.

Is this true or false? Yeah. It's true. What do you mean, is it true or false? You question the fact of the day. Well, it's true in birds. We know this about birds. Oh, really? So why would it be true in cows, too? Are they the same type of bird? Different access to different dialects, different languages. Wait, the same species or different types of birds? I think different species, different species, depending on where they are. That makes sense, though. Yeah. And so a newcomer needs to learn the new local language.

accent and dialect. I mean, being from Wisconsin, I probably should be more well-versed, but I am not. The other day we learned that cows have best friends, according to the University of Northampton, which is near my hometown. How are these university professors spending their time? You'd be like, the dean's like, oh, Professor Williams, how's your research going this semester? Cows have best friends. So I worked for that one.

This is insane. So here's a better fact for you. Cows have nearly 360 degree vision because their eyes are on the side of their head. Humans have about 180. You know where that fact came from? Cabot Creamery, who are apparently doing more serious research than English universities. How does that impact the phenomenon of cow tipping then? How do they not get out of this? I know.

You have to come up apparently from directly behind them. Well, you do it at night. You do it at night. That's the difference. Or that. Yeah. What do you mean you do it at night, Jacob? Something to say? I have no experience. I've only heard about others. Yeah, this is definitely secondhand. What you want to do. Anyway, today's real topic, how Gen AI is changing the customer shopping journey.

All right, folks, let's talk about it. And Todd, I'll start with you and we'll start broad. We'll start with kind of the theme of the whole episode, which is how JetAI is influencing, is shaping, is changing the customer shopping journey the most. There's lots of ways I'm sure it's impacting it. But Todd, what comes to mind when you think of how it's influencing this space the most?

Yeah, I think the timeline to summarize would be from a consumer impact, it's been reviews, research and recommendations.

So you think about almost probably over a year ago now, Amazon and some others followed, summarized all the reviews. So now you didn't have to look at like the first page of six or seven or go scrolling through. It gave you a Gen AI summary, which is more convenient than the recommendations. You don't have to ask anyone. You can ask whatever questions you want. And depending on the accuracy, you got a lot of ideas that may have been different than a search term that you searched and you got some more information.

And now, you know, it's the, the record, you know, the recommendations and the, you know, from that, you know, from Rufus, let's say, you know, do people like them or not, you know, based on the research now that they've done that everything has been easier. So I think, you know, those are the three biggest ways. I think from a brand perspective quickly, it's the content, which does impact the consumer. You know, all, all the reports that you guys have done and others suggest that marketers are really using Gen I, Gen AI the most for content creation or optimization. Yeah.

It's interesting because I would have summarized one level higher, although I love the three R's, which is AI is just making the customer journey more efficient for consumers so that they get to the product that they think they want or that they were actually looking for faster. And the summary of the three R's is perfect because like that's the most tangible, the biggest wins there.

But I think it comes at a price in terms of losing the treasure hunt and losing the impulse purchases. But I'm sure we'll talk about that more. Yeah. I mean, I'm looking at this from two angles. One is just more shopping activity. Actually, Google, when they implemented their AI shopping features, they saw a 13% jump in digital shopping activity from that. But then there's also the coming AI agents where we're going to see the whole

Online shopping journey automated. So I think those are the two areas more potentially more shopping activity and then the automation aspect the Google one is interesting because I think we we would answer the question differently if you think about in-app AI tools so like the Rufus versus the Google's so like any genii that can tool that can transcend to the apps and

and like surf many different brands and many different retailers will certainly have a different value proposition than Rufus. Yeah, that's a good point.

Yeah, reducing the incredible amount of choice out there, right? And I think even going back to Amazon, a couple of weeks ago, they kind of put down and shut down Amazon Inspire, which was supposed to be their kind of social commerce piece. But in their pseudo announcement, it says, go to Rufus, use AI recommendations. So they're really pushing that narrative and shut down Amazon Inspire. So-

So in November, Chief Commerce Strategy Officer at Publicis and Forbes contributor Jason Goldberg wrote that Perplexity's launch of Shop Like a Pro, speaking of shopping agents, so it's this new AI-powered shopping assistant, may be the tipping point, he said, for a new era of AI agent commerce.

He presents a world where you ask Alexa to find the perfect winter coat. And instead of just offering a list, it considers the current season's weather in your location, your past style preferences, your budget, customer reviews to present the ideal option. Or a universe where you have Siri manage your grocery shopping by using your Instacart history, your calendar, your family's preferences to ensure that you never run out of ingredients for school lunches, he says, responding to a simple command. Hey, Siri, keep my pantry stocked.

Um, so Tyler comes to you first. What, what do you think will be the impact of AI shopping agents? Yeah. And I, I, I have tried out the perplexity one, I think just quickly on that one. It's interesting. Even when you do a search of like, you know, what's the best toothpaste for me or what's a different product. You know, I searched a lot of different products. Not all the results have that pro little tag that you can use the perplexity pro it's only certain retailers. So, you know, how should you think about that? And is that a blocker or not?

But I think overall with all of these, you know, there's still some hesitation from consumers to use these. It's that balance of trust and accuracy and then the convenience, right? If it's convenient but wrong or, you know, giving recommendations that aren't good, not great. So how can brands kind of ensure that AI approach? I mean, ultimately, you know, it's going to come down to like data quality in the back end too for brands, right?

How well did you set up that new item setup form? How well are you really updating, whether it's keywords or addressing questions now? And then even how do you see it through the consumer's eyes so that you can see what are the follow-up questions? And does my content relate to this? And am I getting recommended, let's say, at my market share? And this may not be just an online thing.

This could be an in-store thing when you think about smart carts or in-store navigation apps, where maybe you take a picture of your shopping list or upload it, and then it gets that for you. You just go look for some new stuff. Or the smart cart just kind of guides you to certain products. So this isn't necessarily just an online thing. That's where everyone's looking now. This could be an in-store thing as well. Yeah. I mean, to Todd's point about the importance of data quality, I think with AI agents, we're really looking at

having to now optimize for an AI audience in addition to the traditional human audience. I think that's going to be, it's going to be a learning curve and a balancing act. But I think AI is just a really, probably going to be the biggest shakeup in, in, you know, digital commerce since social media. Wow. It's,

It's interesting because from my retailer perspective, I don't know. I think if you don't have an interface that's universal, so like let's take perplexity versus the Rufus, you already have to start with a universal one, right? That you as the consumer trust, like Todd was saying, enough perplexity.

to give it access to all kinds of apps so that it could answer the question of like, buy a birthday present for my mom and make sure that she likes it in this price point. And it reminds you, like it makes her life better. And it's like, oh, your mom's birthday is in two weeks and she lives in Toronto. Haha, I answered where I'm from. You know, so she can get her present on time. Like that's all well and good. But does that not replace the idea of,

as Todd had the recommendation, so the personalization, are we just trading off personalization and then the dollars are going to start being spent in this sort of like have a perplexity or some other, you know, AI agents start servicing ads, but in a different way. So it feels personalized, but it's also not, I don't know. I think there's, there's a little bit of,

potential of mistrust that could happen that if a customer is not, if consumers are not 100% comfortable with the recommendation being organic, they will have a bad experience and not come back. Yeah. And I wonder, a lot of this is going to be based on your shopper history, your glance views, what you've searched, right? And that's already baked in.

But I wonder if it can, if consumers would feel better if they had the opportunity, something they saw on TikTok, something they saw in a store, wherever, and they could almost like snap a picture of it and send it now instead of Google to look for it, you send it to your shopping assistant or your shopping agent. And now it finds us that way. You got skin in the game, right? And they're finding it. And does it help? Or here's, here's what I like because it's,

One, that's a little bit more trust on it. But I think also from the brand speak part of it, like how do you get your innovation in front of consumers now? If you're thinking like on a retailer site and with these shopping agents, it's kind of like subscribe and save or auto ship, you know, just accelerated now. You know, what you want if you're the product on subscribe and save, but how do you get those new items, those new SKUs in front of them? You have to get creative with the content probably. And you have to really think about maybe, you know, paid, you know, Rufus recommendations. Maybe that's where that comes in.

Or even like, how do you get someone to even know that there's a shop.com Colgate shop Colgate.com, right? If you're only using the AI, you know, in your wholesale channels, then you're not going to get that direct to consumer sort of traffic. And so like, if you could have your own agent, then that would be the coolest, right? That understood you. And I think Google's tried to do that a few times in different iterations, right?

So Jacob, I want to ask you about that real quick because I mean, what we're talking about is so interesting. Mr. Golbo from Forbes Contributor was also saying the rise of AI agents are challenging traditional retail websites. What you guys are talking about, they've been the primary digital interface for consumer engagement, but for routine purchases, AI agents kind of rendering them less relevant, kind of shifting their roles to moments of inspiration and trust building where those are going to be more and more paramount.

sites are also where you upsell and where you push impulse buys as well and collect data about your customers. So it doesn't seem like something that retailers or brands are going to want to give up easily.

Are we going to live in a world of multiple agents? And Nicole Silverstein of Retail Touchpoints was noting that there are all kinds of companies who either have one or working on one, saying Walmart, Amazon, Target, Victoria's Secret, Ikea, Instacart, etc. Are we going to just live in a world where we have like 50 different agents working for us at any moment?

Yeah, I mean, I think it's important to point out here too that this technology is not at all mature. I mean, it's still under development. But I think in the future, this notion of one or more agents is going to be, the lines are going to be blurred. I mean, you're going to have an agent that really is probably multiple agents in one, or at least able to interact with other agents to complete some type of complex task. So I think...

It's going to be different than thinking about an individual consumer. I think it's going to be more of a hive mind working in the background. And from the consumer lens, right, without the tech aspect of it, but do they look at agents and assistants differently, right? And depending on the product category, maybe even the length of research, right? Agents maybe do more of the, what you would do is subscribe and save for more center store stuff where assistants, hey, I want to research it. I want to make the decision. Both are helpful, but in different ways for different categories.

And I think it depends on how you're defining, Marcus, the 50 agents, right? Because if you shop at three different stores and they each have their own agent, then already you have three. But will we have multiple individual stores

you know, brand agnostic agents, I'm not sure that anyone can handle that many, right? You'll just go to your preferred platform. What I think is more, from my perspective, what I think is most important is if the agent can identify, so agent or assistant, whichever, can identify the purpose of your trip before you even start going down the search rabbit hole, then they can help direct you to Impulse Funds.

Versus like, get it done. I need a new toothpaste. So give me the whitening one, put it in my basket. Let's move on with my life, you know? And I think because AI is, gen AI particularly, is supposed to be smarter and more human-like, they might be able to understand some of those nuances and move you in that right direction, which would be a win-win for a retailer.

And I think that's kind of the dream of having an AI agent and also can kind of act like an assistant in that it understands the consumer it's working on behalf of. So it knows the person's interests, it knows its kind of consumer profile and can kind of

act with that in mind. Yeah. And can you get, can you get increased conversion rates on the same traffic and reduce your returns, which are a constant issue all over the place, right? So will it help with that? Potentially. I think there's an option, but also retailers and brands, how do you negotiate this? Like in a JVP, joint business plan where,

know could it be leveraged where the retailer could turn off your SKUs uh you know as a punitive thing uh you know for for time being for a shopping agent or an assistant results maybe um but uh yeah I think it's it's going to be interesting just how you negotiate for data how you uh you know work with this and then who helps the consumer

ask the right questions of their shopping agent, right? We haven't done a good job as consumers with Alexa. We ask it to play music, set a timer and an alarm. How do we know what are the right questions? And do I want a lot of reviews or do I want a little reviews? Cause that's a newer item. You know, what is the price? You know, what are the kinds of the questions I could ask of my agent? Like how does that get disseminated throughout the, you know, the consumer community? Yeah. Yeah. Jacob, how close are we to, to having agents that, um,

are ready to perform at a level that they need to, because we already mentioned this about the data piece of it being paramount, but Maxwell Zeff of TechCrunch was saying real-time information is key. Shopping agents, they're scraping retailers' websites and giving you information about their products, but there's a disconnect between what perplexity tells you and what stores actually have in stock because of a time lag. How close are we to agents that actually act as though kind of humans shopping for themselves? Yeah.

I mean, I think the technology is close. Part of the issue is that there's a lot of risk. There's heightened risk with these agents in terms of digital privacy and cybersecurity. And that's, for instance, why OpenAI really delayed the launch of its operator agent. And so I think that...

Part of getting the technology to where it's mature that we can say we really trust it to do all this online automation is really trusting that we're not going to have, this is not going to result in more security breaches and privacy lapses. And I think that's a big thorny issue for this technology.

Todd, let me start with you for this final question. So going back to that Forbes piece, Mr. Goldberg wrote, quote, today brands spend billions on search ads and retail media to capture shopper intent at the point of purchase. He says, what happens when AI assistants eliminate that step altogether? If a consumer asks an AI to reorder peanut butter, where does the brand go?

place its ad close quote. So, so Todd, how do you maintain brand messaging in a more conversational universe? Yeah. And I think, I mean, I agree to the point it can happen to a degree, but it's not going to go away completely. Right. I just stood in back of someone writing a paper check the other day at the grocery store. So, so this isn't going to really disappear that, that quick, but yeah,

as I think about it, well, then it's, you're more, you know, if you still believe in the funnel, it's more top of funnel. Then you get it out there to get your bright name out there. Remembrance, you know, kind of get your name out, whether it's social to connect to TV, et cetera. Um,

But then also I think it's, this is probably building a case for the in-store retail media piece, right? Because let's say there is a big loss of spend for onsite retail media. Well, retailers and, you know, and maybe brands are going to say, well, where do we reallocate this money in-store where they're still shopping? The point of purchase is there depending on where the smart card's doing for them. But I think this is a case for that. And it'd be interesting how that shift happens. Yeah. Susie, any thoughts there?

I mean, for me, the ads start to feel a little bit more like fake personalization, right? Like bot personalization in a, I don't mean it in a ugly way. I just mean, you know, like,

retailers and brands start to share information. They know so much more about the people that are there and the ads are there to help make my life as the consumer easier. And I, as the consumer fully trust this process now. And so that's why there is a lot of data that shows that consumers don't actually mind the ads. And they find when you think about this retail media world, that they actually find it helpful to get to what they need faster. And so when I think about Gen AI and where the ads will sit, I think,

You know, privacy is an issue. Risk is an issue. At the end of the day, whether it's in store or online from a consumer perspective, if you can make my day go by faster, like take out some of the tasks, make them easier with less friction.

And to Todd's point, like not everybody understands how to use it. Help me understand how to use it. And I see value in it. Then I'm more likely to adopt it. Right. I think maybe five, 10 years ago, people hated the ad sponsored stuff. Right. It just felt like clutter. But retailers have understood how to take that away and make it part of the authentic messaging so that it feels more familiar and easier to navigate. Yeah.

Will there be a, you know, will it evolve to a point of, you know, we have sponsored brands and sponsored products now on traditional onsite retail media. Will you get to a point of, I don't know, sponsored bots or sponsored choice, you know, AI choice that somehow the bot, you know, the shopping agent is seeing something there instead?

And if they do, well, should that be a different CPC, like a cost per click than a human looking at it? Now we have good bots versus bad bots. And, you know, because of the invalid traffic concerns, we always say, no, we don't want it. Now we'd be encouraging it. So you have like a new layer and acronyms, but of measurement and potentially, potentially, you know, cost, you know, from a CPCs or CPM perspective.

Yeah. I mean, to kind of piggyback on what Susie was saying, I mean, yeah. So, you know, consumers don't necessarily mind the ads. They don't necessarily mind the personalization and actually expect it as long as a privacy is maintained. But I think in the AI era, the essential thing is that you have all this automation. I think the, the,

The mistake is to think of it as just a productivity tool versus something that enhances the human element in crafting the content. And

If you're able to really keep the human voice within the content and able to still connect with the human consumer in an authentic way, I think that AI is something that just adds value versus detracts from the experience. There is something here. There was a survey from AI-powered SEO platform Chadix. 70% of consumers feel emotionally manipulated by AI shopping assistants. Yeah.

I didn't go into why the reasons for that, but just the fact that so many feel emotionally manipulated, maybe not realizing or understanding where these suggestions are coming from. Are they paid for? Are they not? Et cetera. Yeah.

is going to be something that industry's going to have to figure out. But you know what? Once people understand that, oh, you're only showing me ads that, you know, there's inventory for because you have that computational capability of doing it so quickly that you're not showing me an ad for something that doesn't, isn't available right now for me to purchase in my location. And they start to see how it makes their life that much, you know, reducing the mundane tasks and making it faster. Then I think you'll, you'll see that number go down significantly. I think people just don't understand yet. Yeah.

the power of these, this helper. Yeah, I agree with that. And I think also just,

just because people feel manipulated by something also doesn't mean that they won't use it. They might continue to use it even while they feel negatively about it. Yeah. So this is similar to like 25, whatever, you know, two, three decades ago where we didn't trust online banking, banking. We thought all our money was going to get stolen. Now people rarely go inside of a bank or online dating. It was terrible to meet someone online. Now it's the norm. So I think, yeah, it's a progression here. Yeah. Yeah. Um,

All right, gang. That's all we've got time for, unfortunately, for this episode. Thank you so, so much for hanging out for the conversation. Thank you first to Todd.

Thank you so much. Really enjoyed the conversation. Yes, sir. Thank you to Susie. Thanks so much for having me. Yes, indeed. And thank you, of course, to Jacob. Thank you so much. It's been a pleasure. Yes, sir. Thank you to the whole editing crew, of course, Victoria, John, Lance, and Danny. Stuart runs the team and Sophie does our social media. Thanks to everyone for listening in. We hope to see you on Monday. For all Behind the Numbers, an in-market video podcast made possible by Zeta Global, happiest of weekends.