Opportunity

Note: Right after I started working on this newsletter, I got asked to join Gorgias for a webinar on the human versus AI customer experience. (Talk about a coincidence!) You can register for that here.

I’ve spent some time in this space talking about how I think it might take a bit longer than others are suggesting for consumer adoption of AI to impact ecommerce (and DTC brands more specifically).

The TL;DR on that, if you haven’t read those past issues: Consumer LLMs like ChatGPT won’t majorly impact most DTC acquisition funnels in the near term, but, as consumers begin to “catch up” to the technology, that adoption will have a positive impact on DTC.

There is another component to DTC, AI and consumer behavior, though: Brands using AI to improve consumer experiences and influence consumer behavior. And this, I think, is way closer to happening.

When you look at the ecommerce SaaS space, a lot of what now exists in the Shopify ecosystem from a technology vendor perspective is either a proven trickledown from legacy retail (where the scale of customers served creates a great proving ground for technology) or a creative solution that makes for a better customer experience that doesn’t always deliver a defensible ROI against the price tag (this doesn’t mean the product isn’t good; just that the fit with the brand isn’t great).

I’ve spent enough time in this space (both on the brand side and the vendor side) to know that opportunity cost is the biggest hurdle to improving things.

Do you want to improve your retention marketing when your ads funnel isn’t optimized? Do you want to test your PDP when the supply chain is—once again—something you have to pay attention to?

Priorities and resource allocation are the way folks sort through opportunity cost.

But what happens when resources scale at a cost that’s far less than we’re historically used to?

Suddenly, a technology vendor can produce more creative solutions faster. (We are getting ready to share our first major one of these very soon!) And a brand can say yes to more optimizations—throughout the lifecycle—at the same time. And when all that happens, the marketplace opens up.

More and more, we’ll see better experiences with better ROI, because the costs for those experiences will drop and the ability to execute on them will increase.

This, I think, will happen before consumers adopt LLMs. Brands—and their vendors—are already adopting them. And I’m very excited to see what this “in between” step looks like. It’s a huge opportunity.