AI Shopping Hits Critical Mass | Fast Five Shorts
Adobe's October data reveals a game-changing milestone: generative AI traffic is now converting 16% BETTER than traditional sources—a complete 180 from three months ago when AI traffic converted 9% WORSE.
This episode breaks down what Kelly Carey and Waqas Khan from the A&M Consumer and Retail Group think retailers need to know about this inflection point.
With AI traffic up 1,200% year-over-year and shoppers spending 44% longer on sites when arriving from AI sources, the experts discuss why this shift makes sense, how consumers are using tools like ChatGPT to cut through digital clutter, and what retailers should be doing RIGHT NOW to prepare for an agentic omnichannel future.
Sponsored A&M Consumer and Retail Group, Mirakl, Ocampo Capital, Infios, and Quorso.
For the full episode head here
#AIcommerce #GenerativeAI #RetailTech #AdobeAnalytics #ChatGPT #ShoppingTrends
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Transcript
US consumers spent $88.7 billion online in the month of October, up 8.2% year over year, according to Adobe's new Adobe Analytics E commerce data for October.
Speaker A:Mobile drove the majority of the online spend with a 51.4% share, $45.6 billion, up 11.6% year over year compared to desktop shopping and most surprisingly, generative AI traffic.
Speaker A:This is the one to pay attention to, folks.
Speaker A: traffic sources in October of: Speaker A:This marks a dramatic reversal from just three months earlier, when AI traffic converted 9% worse than traditional channels.
Speaker A: s, shows AI traffic increased: Speaker A:And shoppers arriving from AI sources are now 13.6% more engaged, spending 44% longer on sites and with 31% lower bounce rates.
Speaker A:Kelly, we're going to go to you first on this one.
Speaker A:What should the retail and CPG executives listening make of Adobe's reported higher conversion statistics from all of those people who shopped via generative AI in October?
Speaker A:Massive change.
Speaker B:Yeah, huge change.
Speaker B:And great question.
Speaker B:And I think that this is, if anything, the sign that executives are waiting for to start planning for energentic omnichannel experience, if they haven't already.
Speaker B:You know, when I heard about this headline, I was not surprised.
Speaker B:The magnitude of growth was certainly shocking, but also we've been seeing so many signs that this was coming both on the consumer side and on the industry leaders.
Speaker B:So, you know, back in the spring, spring, our consumer sentiment survey that we run at CRG was already starting to show that 24% of consumers are strongly influenced by AI purchases.
Speaker B:You've had Walmart, Sam's, brands like, Skims, Glossier, all these companies starting to partner with ChatGPT platform over the summer.
Speaker B:So there's just been such a move to partner with these AI platforms and start to figure out how you can have that seamless shopping experience that, you know, it seems to have clicked and now's really the time where people need to figure out how to make that work for them.
Speaker B:And also from a consumer angle, I think it makes sense too.
Speaker B:You know, digital shopping can be so overwhelming.
Speaker B:There's so many options, assortments are huge.
Speaker B:So to be able to just type in, you know, here's exactly what I'm looking for and have Chat CBT send you three links and that directs you right to the site.
Speaker B:It's it's so easy.
Speaker B:So I'm not surprised conversion has skyrocketed.
Speaker A:Yeah, it's really giving consumers like online the ability to get the service that they would in some of the or the specialty service they would be getting in some of those retailers too.
Speaker A:You know, all the confidence that ChatGPT is able to provide them in why and how it narrowed down those three options totally.
Speaker A:Waqas, what do you think from a digital perspective?
Speaker A:You spent a lot of time in digital commerce.
Speaker A:How does these stats, how do they impact your thoughts about how retailers and CPG should be thinking about the future of shopping online?
Speaker C:Yeah, so I think we, you know, even in one of our lunch and learns recently we had a company founder who came and talked to us about what's what technology sits behind some of the one click buying that we see and some of the agentic buying that we see.
Speaker C:There is a, the current environment even online is full of friction.
Speaker C:So there is, you know, you have to go from one click to another to another to another.
Speaker C:If you have a profile set up and what you'll start to see is that even the large platform like Amazon, their homepage is cluttered with recommendations, it's hard to tell what is sponsor, what is not sponsored.
Speaker C:There's a thing called relevance, you know, how does relevance get decided?
Speaker C:You can imagine that for a buyer who wants something maybe sorted by price, you know, it's hard to decipher, you know, where to go now the agent kind of declutters all that for you and now you can, you know, in our next question we'll come to it with the perplexity discussion.
Speaker C:It declutters all that for you so I can see and you get the answer that you need.
Speaker C:It's like the old Google times, right, where you know, you get one answer and it's, it's just so spot on that you don't want to go anywhere else.
Speaker C:So, so I can see the, the conversion and, and I think there's much to learn and, and I think, I think this, this is like, you cannot unring this bell.
Speaker C:This, this has happened.
Speaker C:I think we have to adapt and, and, and retailers will have to learn to, to work with generative engine optimization and many other similar, similar situations.
Speaker A:Yeah, Wakas, you bring up a really good point too.
Speaker A:There's a headline that we covered in the Retail Daily minute this week talking about a company called Constructor that's going in and they're actually helping.
Speaker A:So once the generative agent of your choice has gotten you to the page they're able to help retailers kind of deploy some technology so that you can continue that conversation with an agent versus going to the Glossier site like you mentioned, Kelly, and then a conversation with their agent.
Speaker A:And so I, I think that's going to be an interesting component to this discussion too, is how, you know, behaviors are changing.
Speaker A:So once I get perplexity directs me to that page on Glossier.
Speaker A:Now I have an agent that I can start to interact with with this constructor technology that is going to help me solve other problems about that, that product at the PDP level.
Speaker A:So I think there's a lot that the retailers and CPGs listening need to think about when it comes to how they're preparing their own sites for some of that, who they're partnering with to help support, you know, continuing that experience for consumers.
Speaker A:And then, you know, how, how they're kind of rethinking this whole consumer journey to your point, because this isn't something you can go back on.
Speaker A:This is, this is the only forward motion at this point.
Speaker A:Chris, close us out here with your thoughts, though.
Speaker A:What do you think that, that you would tell the, the retail and CPG executives listening about this?
Speaker D:Yeah, I think, I mean, I don't have much to add.
Speaker D:I think the train left the station.
Speaker D:I'm really excited, actually, to talk about headline number two in terms of what is Amazon's response to whether or not they want to get on the train or not.
Speaker D:But, you know, the experts we've been talking to have predicted this.
Speaker D:We had David Dorff on the show a few months ago.
Speaker D:He said that the holiday season would be the reflection point.
Speaker D:It turns out that he was correct in doing that.
Speaker D:So stick with us.
Speaker D:You'll hear all this in advance if you're avid listener.
Speaker D:So we've crossed the chasm.
Speaker D:It's no going back.
Speaker D:And if you step back every 30 years, there's a big innovation in retail.
Speaker D:And AI is that innovation.
Speaker D:It's the game changer.
Speaker D:It was ecommerce in the 90s, now it's AI.
Speaker D:And you can go back through history, the patterns there.
Speaker D:Yeah, there's no turning back at this point.
