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Retail Media Breakfast Club
Transactional Commerce Inside Perplexity: Ashley Furniture’s AI Bet
00:12:01
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Transcript12 lines
- [00:00]
A
A couple of months ago I wrote that Discovery is moving upstream, that shoppers are starting their journeys inside of AI tools and that retailers were going to have to decide whether to fight it, ignore it, or follow them there. Now, I just happened upon a podcast interview actually from a couple of months ago on the Total Retail Talks podcast. And on this episode, Ashley Furniture's SVP of E commerce and marketing, Nick Lezin, described what that shift actually looks like from inside the largest furniture retailer in the us. The newsy part, at least as of a couple of months ago, is that Ashley is launching transactional commerce on perplexity with PayPal handling payments and Stripe being teed up as what Nick calls the key brid to other AI surfaces. The interesting bit is how he talks about why.
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B
What were some of those behaviors that you were seeing that pushed you towards really investing in AI powered shopping?
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C
So we're listening to our customers. In this particular case, our customers are not telling us directly, hey, we want you to offer the ability for us to shop in generative tools, Perplexity in particular, or others. So that wasn't a direct signal. This isn't survey based data, et cetera, but we're absolutely seeing indicators in their behavior that would suggest that there's interest and relevance here. As an example, we've been watching referral traffic to our website from these sources pretty closely. And if you track that, it's really like an exponential curve from the start of this year. And we just don't see that slowing down anytime soon. The absolute volume of that traffic is still relatively small, but we see critical mass here. And so it's enough for us to make some investments to explore to provide the subset of current customers that are taking these shopping journeys easy and new ways to shop our brand.
- [02:06]
B
Yeah, it's become in large part a Discovery Channel. Right, Nick? It's becoming sometimes like that, like Google is, and still, you know, but it's becoming also that first interaction. Right. So they might be explaining to an AI agent and Perplexity in this case a piece of furniture they're interested in and that is kind of leading them down the path. Is that what you're saying?
- [02:26]
C
Yeah, and I'd say whether or not the consumer prefers to shop within these, within these channels, I would say the verdict is probably still out a little bit. This is a new frontier, but we feel it's low risk and high reward to offer and to provide that potential and so that we can learn with our customers, with partners like Perplexity. Is this a growing preference for our consumers and making sure that we have those insights, that we can improve that experience over time. And so that's part of that sort of fast mover advantage of jumping in here. But I'd say until there's a significant portion of transactions that are really coming through these channels, I'd say the verdict's probably out a little bit. So we're watching and, and trying to be cautious, but also making sure that we're exploring.
- [03:17]
A
Now, we've all seen these data charts floating around the Internet showing that AI referred traffic to all publishers, but even specifically to retailers, is growing really quickly. But it is still a tiny portion of overall referral traffic. And that hedge of exponential but still small really matters. It's why Nick describes it as low risk, high reward, rather than a panic button pivot. Now, there is some reason to believe that that traffic that is coming through from AI search assistants like OpenAI on the mobile app and Google's Gemini has actually been undercounted. And that is due to dark search traffic and the fact that a lot of the times the outbound referral links to those websites from a AI assistant don't include any referral tag. So it is a shared thesis out there that a lot of this traffic has been undercounted in the past. But that aside, it is really interesting to hear how Ashley Furniture is thinking about this. Look, it's just still small, but it is growing so quickly that we really see the moment to get in and start experimenting to be now rather than when it gets really big and really serious. And if we take a chance early, we don't have a whole lot to lose. Now, another interesting part about this interview is how Nick framed content hygiene. Let's call it static pdps, imagery attributes that don't get updated. This is the work that nobody wants to fund, that nobody wants to do, that has fallen off of the boardroom agendas because why? Well, it doesn't immediately make money like a retail media program does. It's not urgent, but this is actually the, the moment, the catalyst for a lot of that retroactive catalog work that had to be done years and years ago. Now is actually the moment to view AI enabled shopping as a catalyst to go and do all that stuff that could never get funding, never get attention. It was just a hot potato. And this is actually a wonderful, wonderful gift to retailers and brands to finally get back on the map with this retroactive content hygiene work that one need needed to be done. And Nick names this in public. He talks about a catalog at Ashley, that is thousands and thousands of items deep. They still need to fix it and now they have a real motive to do so. Let's listen.
- [06:11]
C
Now.
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B
There's this whole other realm of these AI platforms that you're trying to generate traffic from. Does that impact how you think about the content and copy, including product data on your site?
- [06:24]
C
It does. I would say this is an area where introspectively, we feel we have a ton of opportunity for improvement. I think, you know, one of the factors that has probably been a bit of a lower focus or consideration, but I think is going to be really important moving forward is just how dynamic that content is for inline product and like how often that's getting refreshed. Whether it's product imagery or descriptions or social mentions the like. I'd say we probably been overly static to date and this is an area where we see a huge opportunity to be much more dynamic and keep content fresh for products that you may stay online for, you know, three to five years and maybe historically we're a bit more static. How do we keep that fresh and sort of rejuvenated over time? And so that's a pretty considerable effort. When you talk about a product catalog, that's thousands and thousands of items deep. But it will be an exciting opportunity for us to solve for. And we think that's going to be really key moving forward when it comes to shopping, particularly within some of these AI tools like Perplexity.
- [07:38]
A
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- [09:06]
C
I think our actions, they kind of signal that we're believers, that we think that there's a huge rapid transformation that's happening right now and that we don't want that to happen to us. We want to be a participant in, in shaping that. So that's our point of view, I would say as a recommendation or what we think, you know, other brands need to do to really show up and be relevant. I'd say within our company this has led a major fire, like to look in the mirror, have honest conversations around wherever we can raise the bar on our overall guest experience. That could be infrastructure, data, talent gaps, but overall just like massive action for continuous improvement in just the guest experience in general. And you know, that flows through to everything, whether that's ratings and reviews or mps and recommendations. But we need obviously the capabilities, like the technical capabilities in order to enrich and deliver a better guest experience. But we also need to make sure that we're just prioritizing that and like really driving that forward. And we think AI or without AI, that is just table stakes for good retail. And so those are big focal points. And I'd say there's just a lot of excitement around that within the organization of leaning in there and improving it. And also an acknowledgement that there's just many areas that we aren't as good as we want to be or that we know that we can be. I think that the evolutions in commerce that we're talking about, they're huge opportunities to deliver richer, more relevant shopping experiences for our guests.
- [10:41]
A
What's really interesting about this announcement, and after this I'm going to go check out what this looks like on Perplexity today, is that this was initially launched with just one AI model partner, Perplexity. And that's how it really can start. One partner, one forward thinking E commerce leader, and a whole bunch of initiatives get dragged along with it for the better. So this to me is an ancillary but wonderfully optimistic and perfect use case for, for embracing some AI optimism, if only to benefit personally, politically within your organization. Listen, don't we all need to hype what we're doing sometimes? I think this is a really great case study in utilizing momentum to get things done that have needed to get done for a long time. I'll link up to the full episode in in the show notes. There's actually way more interesting things that Nick and the host of the podcast Jo discuss. I just touched on a couple of them. Definitely recommend checking it out. Thanks for listening and I'll catch you tomorrow.