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Behind the Numbers: an EMARKETER Podcast
The Endless Aisle: Infinite Assortment to Real-Time Relevance—and Beyond | Reimagining Retail
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- [00:00]
A
The most valuable moment in e commerce isn't before checkout. It's the transaction itself. Rokt turns the transaction moment into a high performance revenue engine for the world's leading e commerce brands. Visit rokt.com that's R O-K T.com. Hi everyone. Today is Wednesday, March 25th. Welcome to eMarketer's weekly retail show, Reimagining Retail, an Emarketer podcast made possible by Rokt. This is the show where we talk about how retail collides with every part of our lives. I'm your host, Susie Deva Kenyon. And on today's episode, we're unpacking the idea of the endless aisle, a concept retail has spent the last two decades building and why the conversation is now shifting from infinite assortment to real time relevance. Joining me today is Bennett Carroccio, CEO of RockDC Catalog. Before we even get started, Bennett, though, let's do a speed intro in 30 seconds or less. Tell me, what do you do in a sentence?
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B
One sentence if you can.
- [01:05]
A
Maybe two. I'll allow two.
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B
No, no, it'll be one run on sentence.
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A
Perfect.
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B
So it's a pleasure to meet you. I'm Ben Caroccio. I'm the CEO of Rock Catalog. I previously founded a startup called Canal, which is acquired by Rokt eight months ago. And so I oversee all commerce initiatives here at Rokt. The Rokt Catalog team obsesses about helping leading retailers drive more relevant transactions with their consumers. And so to the extent that there are more products to sell, are more places to sell them across the entire consumer journey, that is ultimately our technology in our network of brands that are populating those experiences.
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A
Very cool. And if you had to pick your favorite TV show that you're streaming right now, I'm looking for inspiration. What would it be?
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B
Ooh. So my wife and I watch Shrinking on Apple tv and I was such a big How I Met yout Mother fan in high school that they have two of those characters. And I'll watch it for that reason alone. But it's great. I now I. My wife and I started a family recently. The main character has a daughter. And I think like, my level of empathy when it comes to those characters who actually run a household has increased. Household, Yes.
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A
I love that I'm adding it to my list. So at first, the endless aisle was meant to extend the store. If a customer couldn't find the size or color they wanted, associates could order it from the broader assortment and ship it to their home. The goal was really simple. Never lose the sale in store because of inventory and space constraints. But over time, that endless aisle became something much bigger. Massive online assortments, marketplace sellers, and now a key engine for retail media. Today, shoppers aren't just navigating more product. They're navigating sponsored placements, algorithmic rankings, and search results that can stretch for pages. So now the challenge isn't building the endless aisle anymore. It's really how are we organizing it to surface the right product at the right moment in the customer journey. And one moment that's getting more attention lately is that transaction moment right after a customer completes their purchase. Okay, but before we dig in, Bennett, do you remember the last time you went into a store or maybe shopped online and left without buying what you were looking for? Tell me what happened there.
- [03:18]
B
I don't remember the last time, but it happens all the time. As a part of the acquisition, my wife and I moved from north of San Francisco to Tribeca here in New York. And we quickly tried to furnish our new apartment, as you know, she was expecting at the time. Now we have a young son, and we immediately went to a series of outlets in New Jersey. So the RH outlet in Jersey and as well as Brooklyn are coming to mind. And when you walk in there, you see a ton of boxes. And I'm actually, I'm not the big shopper in the family. I'm really just my wife's security guard and driver when she. When she goes shopping. And I'll make sure she's fed, so, you know, she eats in between. So when I walk in, I see a ton of boxes, and I'm immediately overwhelmed. And you also have. You need such attention to detail to even figure out what's like in a box. There's like a little sticker and everything, and it's just boxes on boxes. And she is so good about finding the right store representative and just drilling them on exactly what she's looking for. And I think what's so interesting is that often what we end up buying is actually not on the floor. It's like in a back room. And she just knows to ask the right person. It's a really interesting experience because one of the things you said earlier is the products on a floor have to be perfectly curated because you're constrained. But there's even like another set of products that are. That are completely hidden. And I think that hidden component of what you could buy and discover, but it's not there in front of you, is actually a perfect analog for E commerce.
- [04:53]
A
Totally. And it's like when I was at Macy's, we did a lot of buy in store, ship to your house. The red color of whatever you're looking for was not available in the store because we had space constraints. But you could have an associate send it to your house. And it always got me thinking around. So for you guys, you've pretty much always left with something because your wife is a genius. There are a lot of people who come into a store especially and they're looking for something so specific and they can't find it. And then there's. I don't know if you're familiar with that jam experiment with the, if you have 20. The experiment was if there were 24 jams, people stopped and took a look, but the conversion rate was much less than if there were only six jams because it was much easier. There is this idea of paralysis of choice, which I think is where you guys really come in. Well, to help sort of mitigate that
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B
paralysis, Suzie, that paralysis, the paradox of choice is always out here in Rocked because ultimately you need to balance how any consumer who goes to your site or goes into your store could be looking for anything. And so you're incentivized as someone who wants to sell as many pro as many relevant products as possible to have as many products as possible and cast the widest net to absorb that intent. But then how do you balance having this endless aisle, this wide assortment of products with actually a just by a heavily curated targeted experience. Finding that balance is extremely hard. But it's also, I think what it takes to really. It's the deciding factor of winning and are thriving and surviving.
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A
Right? And it's like walking someone who came to buy something red and you didn't have the red T shirt, you had orange and they're not looking for orange so they walk away.
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B
Or dare I say tomato red.
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A
Literally the names of colors are as well important as the item. But you know what? Somewhere along the way it really did go from a curated assortment to a marketplace of endless aisles and endless search results. And it moved online. What? Why did that shift even happen?
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B
Yeah, so it's funny in the, in the canal days. So this is the company that I had started with my two co founders before Rokt, before we joined Rokt, I should say. Our technology allowed for retailers to effectively source and sell any products that their consumers would buy from them. And we did so by matching them with a heavily curated and deep network of trending brands. Think trending on Instagram and TikTok desirable brands that are in the zeitgeist brands that all of whom are looking for distribution channels. And so we ourselves were a marketplace and whenever we would enter a retailer conversation within the, within the first five minutes of almost every conversation we began talking about Amazon and the Amazon Playbook and how they really proved out the concept of the endless aisle. One of the. I'm trying to remember these, these earlier conversations from, from years ago now. What was so interesting back then, and I'm sure it's only gotten better is as you know, like from Macy's. I'm not sure what the Macy's conversion rate is from someone who enters the site to ultimately converts in the transaction, but across E commerce it's somewhere between 2 and 3% is considered good. On Amazon, most of these sessions begin with search and of the traffic that goes to search, their conversion rate is. It was 12.9% a couple of years ago. And so this really speaks to, I think the 12 to 9% really speaks to the amount of value you can generate to consumers when ultimately you nail this endless aisle concept, which is effectively I have everything one might purchase from me with discovery, which is when someone does show their intent when they're searching for a product, I am successfully able to showcase the right product at the right time to them. So that could be in search, that could be elsewhere on the site, could be a cross sell experience. There's, there's a, there's a ton of possibility there.
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A
So I, I think we all agree in some ways abundance is really important and if you don't have what they're looking for, then they're going to go somewhere else. And so you really need this explosion of SKUs available. But as we're all shoppers, right? So as the shopper, when you go online, if you're going on the homepage, it's good. There are sometimes you have curated feeds, it helps you find what you're looking, sometimes even faster than you knew you needed it. There's a little bit of impulse happening. But to your point around search like I know for me, when I search for something as simple as a toothbrush, all of a sudden I have so many different options from organic results to the sponsored listings. There are ads, sometimes there are ads that are not even related to toothbrushes in any way, shape or form, it starts to feel really messy. My experience. So how do we stop that? What's going on there?
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B
I mentioned at Rokt, we quite literally obsess about the paradox of choice and really helping consumers overcome it. And it really comes down to showcasing the right product at the right time. And so one of the under the hood with Rokt we have the Rokt frame is essentially a ton of signal across the entire network that allows us to have this 360 view of who Suzie the consumer is, whether it's demographical data as well as transactions that you purchased to really allow for us to understand you and what you might be excited to purchase if only we showcase that product to you. One of the things you had mentioned is just the retail media and advertising experiences that currently exist across retailer sites. And it's funny, you said messiness or chaos. And that really has everything to do with how well the advertiser is performing in terms of driving relevance. Only when the product is deemed to be irrelevant and it's actually degrading the experience, that's when you're going to say things like, it's chaos, it's too noisy. It actually didn't help me find what I'm looking for at all. And it was actually counterproductive. But when the advertiser is actually showcasing the right product, given what they know about you and what they care about, my hope is that you wouldn't use the word chaos. You would actually just say, hey, I found the right toothbrush for me. And that's really, that's really what success looks like.
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A
I may or may not have fallen for the toothbrush head like Oral B searching for the replacement and all of a sudden I ended up with something super random in my mailbox because I didn't pay enough attention and it's some marketplace seller brand that when I searched literally for Oral B because that's what I used, something random came up and I obviously did not pay enough attention. And I should know better because I shop all the time and I do it for. I like pay attention to these things for a living. But when you're in a rush to that search filter, so I'm not even talking about the homepage or like extra moments after the purchase where you're going to showcase something different that's related to the data that you know about me and a more personalized experience. But even that messiness happens with the competing advertisement that's happening on the page. Where did retailers fall short on that? And how can they sort of rethink about search and filter so that it helps, to your point, get the right product to the right person at the right time, especially when they're searching by brand.
- [12:00]
B
That's a really interesting question that we could probably spend Hours talking about. Frankly, I think what's so exciting about retail media as just an offering for a lot of retailers is just the margin profile of these business units. And so retail media revenue is something like 90% margin. And so you could imagine, you know, to the point of what can we do to optimize the experience and how do we get here to the extent to which the experience does feel a little noisy or chaotic? My hot take is just that a lot of retailers rushed to unlock this very profitable lucrative channel across their site without really thinking too or hard enough about what does truly nailing the ideal customer experience look like. And so what they're left with are these short term revenue maximums, but at the expense of consumer experience. I think time heals all wounds. And as long as these teams are, you know, are really thinking critically and obsessing about what the ideal consumer experience is, that'll allow them to really diagnose the problems across the entire discovery journey. I will say, having talked to enough retailers and just seeing kind of what, what yields success across a whole swath of, of retailers, it tends to all fall back on relevancy. You know, at the end of the day, as long as you find what you're looking for, given what you care about, that is what success is. It's really in the absence of that when things again start to feel a little, a little chaotic.
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A
No, it's true, right? It was originally it was the biggest assortment, the longest aisle, the most brand so that you can try and monetize some of that data as well. And now the competitive advantage seems to be much more around relevance and that elicits trust, right? If you're getting the right thing to the right person as they're requesting in that moment that they're looking for it, then you win and it makes for a better.
- [13:53]
B
Yeah, please, no, that then, then you win. And I think the, there are so many compounding pieces of value to what, to exactly what you just said, which is everything you said in terms of the checkboxes that happen across the consumer journey. Those are all opportunities to develop deeper relationships with the consumers and that reinforce why they came to your site to begin with. Like un doesn't just mean they convert, but it also means that they think of you the next time you're looking for a product as well and they come back to you. And so there's really this self fulfilling, positive cycle that accrues when, when you have all the right levers really aiding the consumer journey across the entire funnel.
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A
Right? And so now it's almost like we're going to this mix of merchandising and algorithms working together. And the winners are those who are really in this organization era. How do I surface you? I mean, you said it. Relevance. How do I give you exactly what you need? Is that something that you're seeing more and more retailers and partners asking you about? Like, how do we surface the right products, not just more products?
- [14:54]
B
Yes. Oh, this is especially as, as we talk about a world of shopping agents and what, and what the future of agentic commerce looks like. This is definitely one of the hot topics du jour for sure. And I think every, every digital team at every leading retailer is thinking about this to some degree.
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A
So how is AI helping organize that endless aisle?
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B
So one of the things I had mentioned earlier is when Suzy, the consumer searches for a red product, ultimately the search needs to result in what you're looking for. If you think about things in terms of the consumer journey, ultimately a consumer comes to my site and to some degree they're looking for something. Now, it might be extremely tactical and you know exactly what you want to search for or you're hoping to discover a product that once it's shown to you, you'll be delighted to purchase it. The ability to find what you're looking for is ultimately a function of the, of the information that a retailer has in regards to a product. And so you had mentioned, Suzy, you're a previous life, you're on the merchandising team at Macy's. I think you know firsthand the number of attributes that are associated with every single pdp and they'll, and they'll even differ by product category as well.
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A
And so women's shoes, color, size, all of it. Yeah.
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B
So I remember when we were first integrating into Macy's marketplace backend, you know, all of a sudden we were filling out information for things like heel height and things like that. And so ultimately the ability to discover the right product has everything to do with the data that's associated with those products. And can the retailer given a search or filters on a site, actually showcase what you're looking for, given that attribution data? And so what I mean by attribution data is every time you click into a pdp, whether it's for women's shoes or a blouse or a hat, there is, I think for Macy's, there's upwards of 70 unique attributes that can be filled out that are effectively bits of information that are associated with a pdp. And that allows for your on site search engine to index that information and then show you the right product once you actually search. And then in the world of shopping agents or off site search, it's doing the same exact thing, but on someone else's site. And so the ability to showcase the right product at the right time, either on site or off site, has to do with whether or not you have those fields, those attributes filled out. And to what degree are you optimizing for search on your site and increasingly optimizing for search off site as well. And so in the rock catalog world, previously, the Canal Days, we helped retailers who had marketplaces source a ton of inventory from marketplace sellers. And so every seller has their own product data taxonomy. And what we did was we would aggregate that information into our centralized catalog. We would then work with folks like Macy's, Nordstrom, Target, Walmart, all of whom have different attribute taxonomies, which, Susan, I'm sure you can empathize with this. They have all rules, they police these rules. And we would use AI to normalize. Given a retailer's taxonomy, how could we map the field, the attribution fields, to each respective PDP's attributes, but not just map them, actually optimize them for respective on site or off site search as well. And so historically, you actually might know this better than me, but historically, what it would take for a marketplace seller to upload their catalog data into a retailer's marketplace infrastructure for like the, the time it would take from a seller to be approved by the marketplace to then go live was something like three months.
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A
Yeah.
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B
Had these disgusting CSV files where a human was going in row by row. And each row is not a product, it was a sku. So a variant of a product. And so I think Macy's now has something like a, like a million Marketplace SKUs. That's a million rows that have the columns are different attributes. So 70 columns and a human is filling out every single one. And so we turned that three month process into quite literally three days.
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A
Wow.
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B
Which, like, dramatically reduces the operational burden that these merchandising or QA teams have to take on in order to not just optimize the data. Like optimization is like a, is what it takes to thrive. It's like there was so much work that would just go to filling out the mandatory 14 fields, not the 70 fields as well. And so we allow for marketplace sellers to go live in a matter of days, not months. And the level and the number of attributes, the PDP being fully filled out and discoverable to consumers goes from 14 attributes filled to 70 attributes filled.
- [19:45]
A
And they're optimist for the consumer though also makes their life easier. Right? Because as we're getting more accustomed to conversational searching, you guys have the right backend data to help search support the signals that you're seeing on the front end of how the person is surfing or searching. So you're doing real time personalization and coming up with more relevant items than if I was going and doing a traditional search.
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B
I'm so excited about the topic you just mentioned, which is how search is evolving on the consumer side from like hyper tactical couple of keywords that just like run on sentences that are a function of just truly what's on my mind and how I feel. And so you could imagine searching for products and the census has something to do with, you know, it's now March, it was a horrible winter in New York this year, but it's finally warming up and I'm looking forward to going to Central park with my family and you know, I don't know the right pants to wear. And like all of that context is being thrown into a search. And AI allows for not just us to populate data that is more likely going to be relevant to that type of conversational search. But quite literally one of the things I said was spring is coming. And so we could also constantly replenish the information as well to allow for it to match to changes in this conversational search as the year goes on as well. It could be the same pair of pants that we would talk about completely differently if it's March versus April versus October.
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A
Right. For occasions or just a regular day. And I think this is the back to the endless aisle. It's one of my favorite topics. It's like we went from the endless aisle was good, then it exploded and that wasn't so great. But now AI is helping it become much more relevant for you. So the idea that a merchant, like a retailer has so many different skus now is not quite as scary as it was, let's call it a year ago because you're going to get what you need as a shopper much more quickly.
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B
Yeah, I completely agree. I think historically in retail you said not so great. A lot of that usually has to like somewhere around that term is operational burden.
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A
Yes.
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B
Like it's not so great because someone had to do extremely un inglorious. Is it unglorious, non Glorious work?
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A
Difficult. Yeah, thankless.
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B
Yeah, thankless, difficult, laborious work that no one wanted to do and it would take forever and so AI has like the, the opportunity to allow for that person to focus on more strategic things and allow for the laborious work that would have taken months to be days that I think that completely streamlines a lot of these processes that the consumers are not aware of at all.
- [22:24]
A
Totally. And as a side note, I was in the Merchant office like 20ish years ago and back then it was individuals keying it in. And so like if a certain, you know, national brand was sold at multiple retailers, sometimes that didn't even jive together because each retailer, so it was, it was very messy in so, so many ways. But I'm so glad that there are lots of great solutions to try and make it better for the shopper because at the end of the day, when the shopper finds what they're looking for, the retailer wins.
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B
No, I think nothing matters if the consumer, if the shopper doesn't find exactly what they're looking for in a delightful experience.
- [22:57]
A
Yes. So speaking of, you guys spent a lot of time thinking about the transaction moment after someone has made the purchase. Can you tell me why that's so interesting for you guys? Because from my perspective, I kind of don't get it. The person's already spent their money, so they've already, they've done their budget, budgeted out. So like, why is it so interesting that this is another intent moment?
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B
Yeah, it's really interesting. So, you know, we've discussed a little bit about retail media today and why it exists. And ultimately, I think advertising is really a function of where attention is, where intention and intent exist. And so retail media we've discussed, to the extent we've discussed it has existed so far in the discovery, when folks are browsing, there are ways to suggest products and the suggestion is actually behind the scenes, a brand trying to promote their products in front of you to drive better relevancy. And one of the insights that Rock discovered is that during the transaction moment, that is the perfect blend of attention and focus where someone just bought a product and they are zoned in and focused on the experience with intentionality as well. So now that I bought a product and, and my credit card is not literally out, but figuratively, my it's out. I'm thinking through, I'm thinking through, what else could I be buying? What are other opportunities? What are other opportunities to expand my assortment as well. And so Rokt realized that this is a high intent, high focus time to merchandise relevant products and services as well. I think what's so interesting with Rokt is that, you know, in Macy For Macy's, across selling would be extremely endemic. It would be, you know, for shoe, it might be a sock. But when you have a much more complete picture on who the consumer is. So demographics, so like demographical information, what have you purchased not just on Macy's but across the entire ecosystem which to be clear, ROKT is a massive ecosystem of leading retailers and E commerce players and advertisers who were who and were
- [24:59]
A
able to that it's beyond like oh you bought a lipstick, now you need a mascara.
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B
Yes, exactly. So like when. So the more complete of a picture you have of the consumer, the more you realize the more opportunity is to actually drive relevant goods and services and products to that consumer as well. And so for a retailer like Macy's, you really just see a lot of information of transaction history. And so your ability to drive a relevant cross sell might be shoes for, excuse me, it might be socks for shoes. But when you're able to see across an entire ecosystem like ROKT is you actually realize that this consumer, yes, they bought shoes from Macy's and yes socks may be relevant, but there's also a ton of non endemic inventory as well that, that's relevant as well that might actually convert at a higher level than say those socks. And so think like say hellofresh or Hulu subscriptions or I mentioned shrinking before, that's an Apple, that's an Apple TV subscription as well. And those non endemic inventory types actually might yield better conversion than endemic content or inventory given who the consumer is.
- [26:12]
A
Right. And for me this was really interesting idea around I was thinking about it more sort of in the moment. I've already spent the hundred dollars I was ready to spend. But it's not just about upselling. Although I imagine if you did show me a pair of socks that are must have and you made it really easy for me to just do like a one hit wonder button to get it in the mail at the same time as the shoes that would work. But it's that sort of contextual offers, oh, you're going to the Macy's Day parade. Here's something for Curb or for Uber or whatever. You know what I mean? It's like that, that whole idea of thinking beyond your immediate sale is a really interesting one.
- [26:47]
B
No, it really is. So in the canal days we had an amazing engineering team but we weren't like a, like a hardcore ML team. ROKT has a fantastic ROKT brain team which is real deep tech ML. And what I will say just from the exposure there is we care so Much about that powerful blend between you said contextual data, but also marrying that with the consumer data, that demographical data as well. Like when you combine those and you have that inform what's most relevant to consumer. We measure things in terms of conversion. The conversion just skyrockets.
- [27:18]
A
Kind of amazing. So now if I look a few years out, does the endless aisle still exist or are we going to be thinking about it differently? Is it still going to be a giant catalog or what will it be like if I'm shopping on one of these big marketplaces?
- [27:33]
B
So it really depends on who you ask, if you ask a retail operator. Absolutely. The endless aisle increasingly exists at the end of the day like a consumer set. A retailer wants to make sure that if you're look, if you come to me and you're looking for a specific product or you want to discover a certain type of product, success is that not only do we have the product, but we could actually merchandise or not only do we have the product, but we could help you discover it and ultimately you convert it and purchase the product as well. The ability to showcase a product has everything to do with whether or not you have it. And so behind the scenes, I think increasingly retailers will try to broaden their catalog. But to the consumer, the experience is going to increasingly look very personalized. And so if I go to Macy's.com, increasingly it's going to feel like Macy's.com Bennett for me, the consumer, because when I go in, Macy's might have I said a million marketplace products or Walmart I think has like tens of millions marketplace products. But when I go to Walmart.com or Macy's, I just want to see what is relevant for me. And I think increasingly we're going to move into a world where these shopping experiences feel relevant to the consumer, but they are consistent with the retailer's branding, their ethos, their merchandising principles. And so the retailers will still keep what makes them, what's make, what makes them them. Macy's.com, but the experience is hyper curated. And the broader the assortment, the more endless my aisle is. That allows for the actually it oddly allows for the more personalized these experiences can be because we have more inventory to merchandise for the specific consumer.
- [29:13]
A
I love that it's like it's going to be a more intelligent aisle. At the end of the day you need all the products. So from a retailer lens, they're going to have everything. But from a consumer lens, I'm not going to see the 24 gems I'm going to see the ones that I usually buy or the one that I'm specifically asking for, and maybe a multiple brands that you already know that I love.
- [29:32]
B
Exactly.
- [29:33]
A
I think we're going to have to leave it here. There's so much more to talk about, but that's all the time we have for today. Thank you so much for joining me. Ben, It's.
- [29:40]
B
Thank you for having me. This was, this was wonderful.
- [29:42]
A
And thank you listeners and to our team that edits the podcast. Please leave a rating or review and remember to subscribe. I'll see you for more reimagining retail next Wednesday. And on Friday, join Marcus for another episode of behind the Numbers, an E marketer podcast made possible by Rod.