EP 239: How AI Is Changing The Ecommerce Landscape

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How is AI going to change the way that we all shop online? It's something, it might impact you a lot more than you think. You know, you might say, oh, okay, well, you know, I don't own an e commerce shop or, you know, I, you know, just shop, you know, online here and there. Well, whether you know it or not, Generative AI is going to completely change how we all shop online, how we all interact with the Internet, how we all interact with the products that we all love. All right, so we're going to talk about that today and more on Everyday AI. Thanks for joining us. My name is Jordan Wilson and I'm your host and Everyday AI is for you. We're a daily live stream, podcast and free daily newsletter helping all of us not just learn Generative AI, but how we can all actually leverage it to grow our companies and to grow our careers. So if you're listening on the podcast, thank you as always. If you're joining us on the live stream. Yeah, I might have a little camera problem today. No worries. We're still going to be bringing you the value that we always do. So let's go ahead and remind you to go to your everyday AI dot com, if you haven't already, and sign up for the free daily newsletter. I tell people it is like a free generative AI university. We have two, almost 230 back episodes. Now, no matter what you want to learn about, whether it's sales, marketing, entrepreneurship, e commerce, we, we have dozens of experts in each of these fields. So make sure you go and do that. But before we do, let's talk about the AI news today. All right, so there is a new Grok model. So Grok, the AI chatbot from Elon Musk's X platform, formerly called Twitter. Anyways, Grok is releasing a new version. So Grok 1.5 is testing right now much higher than the original Grok 1.0 chatbot and it's benchmarking closer to Mistral's models, but still much Further below Gemini GPT4, Claude, Etc. So Grok 1.5 will reportedly be available next week and can only be used inside of the Twitter platform. And I said this in my 2024 predictions, but Grok really might not be worth paying attention to. But we'll see when it's, you know, announced next week, week or release next week. All right, our Next piece of news. Pretty relevant to today's topic, at least the parent company but Amazon is investing billions more into Anthropic. So Amazon is making its largest outside investment in its three decade history, investing $2.75 billion more into AI startup Anthropic. So this represents their second batch of funding with their previous 1.25 billion dollar investment made in September, bringing up their total investment into anthropic to $4 billion. So this investment is Anthropics or this investment shows that Amazon's continued interest in the rapidly growing field of Gen AI, which has seen a record 30 billion dollar invested across more than 700 deals in 2023. So Anthropic's newest suite of AI models, Claude 3, has outperformed OpenAI and Google on industry benchmark tests, solidifying its position as a leader in the field. All right, last but not least for our AI news. The White House has released new guidelines on how the government can use AI. So the Biden administration here in the US has issued new guidance on how government agencies can use artificial intelligence with the goal of ensuring safe and responsible use of of the AI technology. So this includes appointing a chief AI officer, growing the workforce in AI and requiring agencies to implement safeguards by December 1st. The guidance requires agencies to also appoint a chief AI officer. Yeah, that's a thing. And to grow the workforce in the field. And if the safeguards aren't in place by December 1st, all of these agencies must stop using it. However, right now there are obviously still questions about the specifics of safeguarding, of the safeguarding process, and who even has the expertise to approve the AI technology for use. All right, so there's a lot more news and a lot of other things you're probably going to want to pay attention to in the world of generative AI on our newsletter. So make sure you go to your everydayai.com Sign up for that free daily newsletter for more AI news. But you didn't come in here to talk about AI news. You're here to learn about how AI is changing the e commerce landscape. All right, so you're not going to have just me blabbing on about this. We have an expert. So please help me. Welcome to the show. Bring her there. We have her. All right, so we have Joel Lambert, Ave. I knew I messed that up. Joe, the founder. The founder of Amazing Wave. Maybe. Joe, I'll have you introduce yourself and tell us what you do at Amazing Wave.

Sure. Hi, Jordan. Firstly, thank you so much for having me on the podcast. My name is Joe Lambertieva. That was a really good try there, Jordan.

It was pretty bad.

No, no, no. I've had people butcher my surname much worse than you. So you did well. So I am the founder of Amazing Wave. We essentially help e commerce sellers and Amazon sellers to adopt AI into their processes and also we educate them on how to use AI AI in the best way possible to get best output for their e commerce businesses. So that's kind of in the nutshell.

I love that. And give us just an overview, Joe, of the type of clients that you work for.

Yeah, sure. So we work with a range of clients. So like for example, we work with Amazon sellers, so third party Amazon sellers vendors as well as Amazon agencies, actually bigger e commerce retailers, e commerce tech companies. So anything that has to do with e commerce marketplaces, we help with that.

I love it, I love it. And you know, how long have you been working in the e commerce space? Because I feel especially since the pandemic, it's really just blown up. But you know, how, how deep does your experience go in the space?

Yeah, sure. I mean I have been actually in the e commerce space for more than 10 years. So initially I actually work with variety of agencies to help their clients build e comm commerce strategies, how to grow. Then I set up my first Amazon agency called Emerging Retail to help vendors. And after that I set up an entire Amazon team for an Amazon aggregator. And so now it's actually just kind of the sort of the work and the learning from these 10 years combined with my geekery about AI, so which is my newest passion. So there you go, I love it.

I love talking. I mean that's what everyday AI is all about. It's a safe place for all of us who deal in the geekery of AI. Speaking of that, Joe, you know, with your experience in e commerce, how do you think you know that today? How has AI changed the e commerce landscape?

Oh, I mean, I mean this is why I got into this in the first place. So actually my journey with AI started obviously when ChatGPT came out and I got really excited and I started experimenting because at that point I was managing a team and we had a lot of complicated processes. Some take took a lot of time specifically around, for example, listing optimization for Amazon stores and say data analysis, etc. And so I started tinkering around and seeing, okay, so how can this tool help us optimize some of these processes? And a lot of my experience came from just learning and practicing like with actual case studies of okay, so can we make this process to an extent automated with ChatGPT? And so I think the first thing is just how much e commerce sellers can use AI to sort of automate a lot of current kind of more simple processes. You know, there's so much they can do with ChatGPT, integrations with Zapier, integrations with ChatGPT, and just that on one hand. But I think there is just a general bigger topic around E commerce and AI, which is about the changing landscape of how we buy products as customers and how the companies that we buy products from are reshaping our sort of like customer journey, customer experience. To give you one example, you know, my sort of bread and butter is Amazon. And Amazon has been sort of on a kind of a year long transformation, integrating more and more AI into the customer journey. As we move throughout 2023 and now in the beginning of 2024.

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Sure. I mean it's really, it's really fascinating. So if you are a consumer now and you want to buy something online, most likely you would have an idea of the product and you either go to Google and search for the specific keyword and browse through many different results on the Google search page. You click through many different results, you go and either use their shopping sort of feature on Google, or you just directly go to the specific results page and there will be a lot of browsing sort of interactions. So you go from one side to the other side and that way find a product. Alternatively you would go to say something like Amazon or Walmart. You type in a keyword, Amazon is going to give you a results page with different products. And then again the browsing happens. What AI now essentially creates is a completely different sort of behavior from consumers. So for example, Google rolled out their search generative experience, which is their AI powered version of Google search. And with that you would type in not just a keyword, but maybe an entire question. And, and as a result, Google is going to then aggregate and create a summary with recommendations within the actual search sort of interface. And so instead of actually going and clicking through many different websites, you would just get the answer to your question in already on the Google search page, which is a completely different experience. On the flip side, Amazon, which is what I think is going to be really impactful, is then it rolled out their chatbot called Rufus, which about maybe a month ago or a couple of months ago, that basically means that instead of you typing, let's say hair straighteners into Amazon, you would type in what are the best hair products for curly hair. Amazon would look at all of your previous interactions as a user in it will look at like who you are in terms of like what you have purchased before any other demographic data that it has and as a result is going to then give you like, you can essentially chat with this chatbot, find out more about features specific and then you will give you a set of different results. So instead of like okay, hair straighteners search, here's a bunch of hair straighteners. You, you have like a whole curated results from Rufus, which may not be just about hair straighteners. It can be like for example, products for curly hair. I don't use any hair products, so I am like completely clueless. Bad example. But like, yeah, it would just give you a whole curation of different results based on who you are as a person from all of the previous interacting Browsing and purchasing data. So it's really interesting and it's a completely different shift in terms of how to think about, about finding a product, even as a consumer.

Yeah. And, you know, for those of us on the live stream here, and thanks as always for joining us. If you have a question, please get it in now. But you know, I'm showing kind of on the screen this Amazon Rufus and kind of this chat experience that, that Joe was just referencing. Joe at least, you know, I, I follow this stuff daily. It seemed like initially, you know, Rufus had kind of mixed reviews and I think this is probably at least, hey, where do I do the majority of my shopping? At least here in the us I think a lot of people, it's Amazon, but maybe just talk a little bit more about this. Is Rufus available to everyone? And maybe what are some of the pros and the cons that you've seen since you work in this space? And maybe what we should all expect.

Yeah, so Rufus is not yet available to all users. It's currently being rolled out in a beta across us. So, like it's not available in Europe or any of the other markets and generally it's being tested. I also read like, I think the Washington Post actually posted a really good article, essentially going through the experience of using Rufus. And what I would say is, yes, it's probably a bit rubbish right now, but you have to think about it this way. This is just the beginning. This is just the sort of the beta that Amazon is rolling out. And it's not. And it's not something that is just going to go away overnight. They will keep an. Obviously you need to think about it this way. This is a large language model. It learns from data. And so the more customer data there is and the more interactions there with the chatbot, the better it's going to get. And don't forget that Amazon already has this incredible insane wealth of data about everything that you have ever done on Amazon. It's not just purchases, but browsing. Like they record even. How long have you looked at one specific picture? The amount of data they have on every single customer is so rich that yes, maybe right now these chatbots are a bit garbage, but over time I think they're going to get really good and with more interactions, they're going to get more and more tailored. So I reckon we should expect that at least this year, by the end of this year, this is going to become a much more useful and sort of typical way to shop online.

How long do you think that this Transition is is going to be and what maybe are some of the for for us not working in the e commerce right space but we can learn from an expert such as yourself. So maybe how long until we all see this and, and what are maybe some things we might need to to look out for? Right? With all of this data, do we have to do anything to, to safeguard that data or is it just this? Is this is the future of, of how online shopping?

Well, I mean honestly like you in terms of the data question, reality is that Amazon already has this data about you. Like every time you go on Amazon you give out your data with every single interaction. So it's nothing, nothing new from that point of view. What is interesting is then how does the AI then processes and takes this data. But that is a whole different kind of like philosophical, ethical and whatnot questions. So I wanted to discuss this, but I think from timelines, my prediction is that by the end of 2024 this should be something that you would like basically at least customers in the US would definitely be able to use. And I'm fairly sure that by the end of the year it should be much, much better. In terms of actual usability, I think it's just about, I guess it's just about like the whole customer experience you're going to have. It would really shift the way we think about decision making. Like, you know, what Rufus is doing is, you know, right now, obviously as a consumer, you would go into Amazon and you would look at keyword and then you're going to start browsing through reviews, price points and sort of make your decision based on all of these different dimensions. But with Rufus, a lot of these are going to go away and actually it's going to be to the chatbot to decide based off the information you give it about features you're looking for, for it to decide what to show you and what to recommend. In a way it's much more customization and it's much more tailored to what exactly you input. But again, I guess it goes back to sort of the idea about prompting and knowing how to prompt. You will only get the best output if you know how to prompt prompt well the AI you're working with. And so I mean it's a question like, you know, would everyone like to do this? Maybe not in the beginning, in the future, maybe they'll be used to this and, and the AIs will be so good that they'll be spewing out the, the right answer, I guess.

Yeah. Yeah, just taking more of Our money. Right. Just quicker, you know, for, for those Joe, that are working on the E commerce side. So maybe they, they have an E commerce shop or they're trying to, you know, turn their side hustle into something profitable. What are the big changes that they should be putting into their own operation? What should they be looking at? Because it seems like a lot of this, it's, it's the big giants, the, you know, Google, Amazon, etc. Are just making these changes. So what should those working on the E commerce side be doing to prepare and to not get, you know, crushed by all of these new gen AI advancements in the E commerce space?

Yeah, I mean I genuinely think that this is a really amazing time to be alive and to work in any sphere because AI just gives us so much capability. I mean, you know, Sam Altman himself sort of predicts that in the future there will be billion dollar solopreneur companies because AI provides you with so much capability which before you wouldn't have as sort of you will need to hire person A, B and C to like do all of these different tasks. While now with AI you can offload so many different tasks. I don't think you can completely sort of remove the human out of the process but you can definitely take a lot of sort of the more basic tasks and automate them. So as E commerce sellers I think one of the coolest things that I've seen recently is how E commerce sellers start using AI to inform like or develop their products. So a lot of product development is happening in a combination when using let's say chatgpt to like understand really features and products and when you start for example feeding something like ChatGPT or Claude3 like product reviews and getting this rich data about what customers like and don't like about product and what kind of current products are missing and then getting these insights and then feeding them into like let's say an image generator like midjourney. You can imagine how powerful this is. Like before you would need let's say a product developer to actually go and develop the prototype of the product. I mean I'm not saying that you don't need that right now, but you can have a pretty good idea about exactly what you want and then work with a manufacturer to develop it. So that's just one way. I think another way is just anything to do with written content. I mean soon, very soon like product image content and actually there's already really good tools out there that develop images for products but specifically like copy based content is a no brainer sort of integration with AI. Whether it's your website content or your email campaigns or your social media posts, anything like that, you can absolutely offload it on, on AI. I think there's just, there's just so many different users I can, well, fill up the whole hour.

Well, you know, I'm curious even for, you know, you gave us a couple there, helping in product development I think is something that, you know, all companies selling online could at least use it as a sounding board or second, you know, second set of ears, so to speak. And you just talked about any website content. I'm wondering, even for, for you or for your clients, what is that one generative AI feature that you've gotten the most return on? Maybe it's something you've already mentioned, but maybe not. What would that one thing be for you?

I can't pick. The thing is like you can't pick just one because everything is connected. If you actually, if you are an E commerce sellers, a seller, you would for example, look at all of your rich data about customer interactions. You can use that as a basis to sort of train like your, like let's say your AI and then have different types of outputs. Whether it's for example, advertising optimization or it's like optimizing, let's say your product listing on Amazon or any E commerce website or it's basically understanding your customer better. I think one of the major shifts that since AI is around, let's say Amazon sellers and just E commerce sellers started like paying much more attention to the customer Persona. So before that I think the really advanced sellers would really understand who their customer is because you know, they maybe will have more rich data about their customers. They will have, let's say customer service or let's say a lot of traffic that will give them a lot of that rich data. Now you don't even need that. So this is again democratization of E commerce I would say, because you can use AI to like feed whatever data you have extrapolated and then actually understand very well who that person that you're selling is, is and then target your content and everything else you do from that point of view.

You know, Joe, I'm wondering because you, you know, you kind of referenced this thing that you know, Sam Altman said that, you know, know, hey, with AI there's going to be single person billion dollar companies. And you kind of walked us through all, you know, some of the different ways that generative AI can help, you know, people who maybe aren't as Experienced as you. But on the flip side, is there a problem maybe to this all like that? Maybe it's too easy for anyone, you know, with, with no product experience. No. No background in sales. No, you know, E commerce, know how to. Is there maybe a downside to all of this? And might there be a backlash from companies that use too much AI in their E commerce efforts?

Yeah, no, absolutely. I think this is the scary bit that I think is going to come. My prediction is in the next six months is a lot of companies are now getting really excited about using AI and even there was about three months ago, there was a perfect example of like how AI can backfire. So there was an article that came out which basically showed all of these Amazon listings which had a title, I'm sorry, as an AI model I can't. Blah blah, blah blah. Right. And so it was, it was basically a bunch of sellers who had used ChatGPT to like optimize their listings, bulk upload them without at all checking what the output is. And then that thing was live. And so this just shows that, you know, when you use AI without necessarily putting, putting the effort to like do like, you know, get a good output and really put the human in the loop, that basically leads to terrible, like really awful generic results which are then like kind of spewed to consumers and over time. Thank you. This is exactly what I mean. And I think over time this is just going to mean erode a lot of customer confidence. So I think customers will get really, I guess, fed up with like awful like generic AI generated content, AI generated images. I think people would generally revolt against this. And I think because of that, because of this sort of, how can I say, snow, like sort of avalanche of poor content like customers, consumers would really crave like human genuine interaction. And so I think brands and like E commerce brands and actually just generally companies should use AI, but you should always have that human touch and you should always understand the customer in the end wants genuine interaction and not everything to just be robocreated. Sorry, I don't know if I'm allowed to say that.

Hey, it's, hey, it's all good. We're a live show, so it doesn't matter. Yeah, and, and kind of what we have on the screen here is what Joe was talking about, you know, listings. And I'm sure there's thousands of them where literally the title of the listings is I apologize but I cannot complete this task. So it's not, you know, a description of a chair. It is, you know, it's, it's a error message from chat GPT. So you know, I'm wondering Joe, for you know, consumers, right, because you're, you're an industry insider so you understand how you know, different companies are using AI. And I even know some people, you know, generate images and they're like hey, you know, I don't have this product yet but I'm going to use an image and kind of pre sell it. You know. So what steps maybe should the average consumer go through to even make sure that you know, whatever E commerce seller that they're, you know, working with is legitimate and putting out a good solid product?

Oh, I mean that's a tough question. I mean honestly I think generally if you are say shopping from Amazon, having like looking at like the reviews for, for a product would generally help. And obviously this is where we actually like then go into this sort of like the really important point around building a brand and like consumers trust brands. And so this is, this is actually not just E commerce, this is for any industry. And so the point around having a solid brand, having multi channel interactions with your customers that are really authentic will become much more important in the era of AI and sort of AI generated crap.

So you know, as we wrap everything up here Joe, because we've talked about a lot, you know, we talked about you know, how AI can be used in product development, better understanding customer Personas, written content, all of those things. But maybe you know, what's, what's your one biggest kind of takeaway? You know, not asking you to see into the future but we are talking about how AI is changing the E commerce landscape. What is your biggest takeaway maybe for consumers? So we can split it up into a two part question. What's your biggest takeaway for the average consumer and your biggest takeaway for someone working in E commerce about how AI is changing the landscape?

Yeah, sure, I think for consumers like prepare yourself for a lot of what you used to in terms of when you go online and find products and shop for products a lot of that process to completely change. I mean again brave sort of forecast or brave prediction but I genuinely think that keywords are going away and you will be interacting with essentially with like AI powered chatbots or shopping like co pilots that will be able, they'll guide you through the journey. And so it's going to change a lot from that point of view for E commerce sellers I think is don't waste time like start getting and using AI because there is like the more, the more you delay the more you, you sort of miss out. And I think AI can help pretty much any sort of area of an e commerce business. And so yeah, get on with it, get on it.

I love it. And hey, while, while you're at it, if, whether you're in the car, listening at the gym, whatever, wherever you're listening, get on Going to your everyday AI.com and sign up for the free daily newsletter. We're going to have a lot more information in there from Joe and her company as well as I think she, she has a newsletter in there as well. So if you're an e commerce expert, we'll be putting that in there. But Joe, thank you so much for spending the time to walk us all through how AI is changing the e commerce landscape. We appreciate your time.

Thanks so much, Jordan. Thank you for having me.

All right, well, hey, we hope that you learned how AI is changing the email or the e commerce landscape. But in the email we will be recapping today's conversation with main takeaway. So make sure to go to your everydayai.com and make sure you join us every single day for more Everyday AI. Thanks y'.

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