S16 E10: Practical AI for Brands

0:28Here's something that should bother you. you're already using inside Klavia. So if your team lives by a one-day click, you can see exactly what Instant is adding up on a one-day click view. And believe me, when you see how much revenue your standard email setup is still leaving untouched, you're gonna want Instant Live today. Over 1 ,500 brands are live, including Third Love, Liquid IV, and Kind Patches. And this month only, you can get 50 % off your first 60 days at instant.one slash Sharma. Welcome back to another episode of Limited Supply. I'm Nick Sharma, your host, And today we are bringing back an episode from the AI Summit.

1:03And the reason I wanted to do this is, as you probably know, on June 25th, which is coming up here in just about a couple of weeks here, we have the AI Summit. And this was a panel where we brought True Classic, Jones Road Beauty, Unilever. And basically we're talking all about how is AI becoming practical within their businesses. So, you know, whether it's talking about how Jones Road is becoming AI first, how True Classic is thinking about AI search, how Unilever is thinking about AI media buying and automation there, you know, this episode brings out a lot more practicality. And so I wanted to put this out also to encourage you and excite you to sign up for this year's AI Summit at ecomfounders.com.

1:43That's going to be June 25th, New York City. It's free for brands to attend. And yeah, I hope you really enjoy this episode. So this year's panels, talks, keynotes are all actually going to be very, very hands-on. We're doing mostly keynotes this year and I think one or two firesides, no panels actually. And what we're going to do is basically teach everybody everything about AI. So whether it's finance, whether it's media buying, whether it's creative, whether it's website CRO, whatever it may be, whether it's setting up agents, all of that is what we're going to be going through this year. So sign up, ecomfounders.com.

2:16It's the AI Summit. It's June 25th in New York City at Webster Hall. And I hope to see you there. It's a free ticket. If you have any problem getting a ticket, shoot me an email. It's just nick at nick.co. And I hope you enjoy the rest of this episode. All right. Well, thanks for being here, guys. Super excited for this panel. Let's kick things off with a little intro. Say your name, what company you're with, and a little bit about yourself. So I'll go first. I'm Ben Schreiber, CMO at Latiko Leathers. It's a leather goods and accessory brand for women and super excited for this today. Personally, I feel a bit overwhelmed by AI.

2:54There's something new every day and we have the best experts here to cut through the noise. So Alexis, take it away. Hey, everyone. My name is Alexis Katzifanis. I work for Unilever Prestige, which is Unilever's premium beauty sector of the business. you may be familiar with some of our brands like Hourglass, K18, Tatcha, Dermalogica, Paula's Choice. The list goes on. I have a really fun role because I lead D2C and E-Marketplaces across nine brands. So there is never a dull moment. Hey guys, Brian Kano, head of marketing at True Classic, men's apparel brand. Hopefully you've heard of it. We will be launching at women's and kids line as well.

3:36So here in the near future, it's going to be all apparel, but recently raised an$850 million valuation and excited to continue growing worldwide. Hey everyone, I'm Andrew. I'm the founder and CEO of Athena. We're a technology startup based out of San Francisco. We help brands show up more on ChatGPT and AI search and drive traffic to your site. Hey guys, I'm Cody. I'm CEO of Jonesboro Beauty. We're a clean direct-to-consumer beauty brand. Just a direct-to-consumer, have nine of our own stores and excited to be here. Awesome. Thanks, guys. So let's start high level. Every day there's a new tool, a new workflow, a new life-changing automation.

4:22At this point, I think I need an AI to manage and organize my AI stack. Alexis, how do you cut through the hype and actually decide what's worth testing? That's a great question. I think for us, it comes back to what is going to add the most value to the customer. Prestige Beauty is at a really interesting inflection point where you have all of these mass brands trending up, we call it mastige. And so we have to convince and show and prove value more and more. And so when I think about the tech stack and implementing AI and what makes sense for our internal team members and our external customers.

4:59It really comes down to what is going to create an experience that helps them see and feel our value. Awesome. Brian, I know you have been diving headfirst into this. You've created a bunch of automations and custom GBTs. How do you cut through the noise? Yeah, I think the thing that's helped me out tremendously is just not spending too much time on things. There's so many tools out there. There's so many different ways that you can apply AI. Number one is create leverage by empowering your teams to do it on their own. And then number two, if you find yourself spending more than a day on trying to figure out how to make a tool work, just move on to the next thing.

5:37You're going to create impact. You're going to be able to find something that's more worthwhile of your time. And you can always come back to the thing that you feel you have a high sense of conviction that actually drives impact for your business and, you know, find the time and make the space to figure it out. But yeah, for me, it's just ruthless prioritization, moving extremely quickly on if it's not working or if I can't figure it out, I'll punt it to someone else and I'll just move on to the next thing. Yeah, it's very cool. I think it's definitely important as well to keep all that organized and prioritize what you want to do.

6:09I know myself, I have like 100 things I'm looking to get to and every day there's something new. I'm sure a lot of you in the crowd feel quite overwhelmed in terms of, you know, what's legit, what's new, what I need to be trying. Cody, how do you feel about, you know, cutting through the noise and organizing how Jones Road approaches AI? At least for myself personally, I don't feel like there's like there is a lot of noise, but it's also exciting. Like to me, this is the most exciting time ever. And if somebody is not curious about it and like extremely excited to be building right now and just all of the opportunities we have, like they should probably find a new profession.

6:47So there, there is something new every day. Like if you're on Twitter, you'll see like a new AI product launch and announce their, their funding round. And sometimes I'll check it out. Sometimes I'm like, Hey, if this thing is really cool, I'll see a bunch of other people start talking about it. So I think that's it is like, let's wait for some social proof. Let's, let's see other people that are exploring things. What can we learn from them? And then you just have to be curious. And again, I'm trying to like, shield my team from it. I'm not going to send them every single tool I try and see, but like definitely playing around with things both for Jones Road and in personal life.

7:17And then when we can find a use case, then it's like, all right, how can I show this to the team? How can I encourage the team to start using this? Right. Let's dig a little bit deeper because you had a tweet that recently blew up. You said, has anyone else pulled a Toby and forced their team to go all in on AI IND to see that tweet blew up. It got a lot of attention. Um, let's go deep. Like what pushed you to get to that point? How's it going? Um, and how's that changed the way that you run Jones Road? Yeah, so we did, we did, uh, I essentially followed what Toby did and a few other like tech leaders have done.

7:53And again, like, I don't think by any means we're a tech company, like we're a physical product company and we make, we make our money selling physical products and we're actually expanding more into retail in our own stores. But in terms of just the technology to fuel our operations and backend and everything, like, it can't be ignored. Like, I fundamentally believe that like, not using AI today is like, the same handicap as like, using direct mail instead of email. Like, it's just a basic tool that everyone has to be using. And I think in two years or five years, we'll look back on it like that.

8:25So I want to make sure everyone on my team has the tools and the knowledge to be able to do so. And obviously, I also think, you know, as we grow, there's a lot of disadvantages of scaling a DTC brand, and operating leverage is really like the one thing that you have. And so I want to stretch my current team to not necessarily cut headcount now, but as we grow revenue over time, how do we do so as efficiently as possible? And I really believe this is the opportunity to do it. So I wrote an email was a super long email, I'm sure half the team didn't read it, but just like, we're going AI first, this is why this is how we're thinking about it.

8:59I wanted to also talk about the elephant in the room, which is job loss and replacing some of them because it's definitely on people's minds, but show how we're thinking about it, which is we're not trying to cut current jobs, we are trying to help people get more productive in their job, better quality of output. And then as we grow in the future, be able to do so while adding headcount less. So shared our plan how we're thinking about it. And then also did a little bit of a training. So I did like an hour long training. Yeah, I'm no expert, but just sharing some cool stuff. Because the thing I realized is like, you know, we're all obviously people are at a conference, like founders are constantly thinking about this, like, I'm building stuff on a Saturday for fun, like most people aren't doing that.

9:37And so yes, everyone knows chat GPT exists. And I would say half the people were using it daily, half the people weren't like, not everyone knows about deep research, not everyone knows about vibe coding and all this stuff. So I just wanted to like, kind of blow people's minds a little bit, everybody has probably had that experience and everyone here, I'm sure, where you just get red pilled and you see something and you're like, holy shit, this is like changing the game. So I just wanted to show that. So showed a bunch of examples. And then we're bringing in two to three like expert speakers to train the team and provide kind of like best practices.

10:06So bringing somebody like Alex Cooper is going to do a training for us on just general AI workflows and building agents and stuff like that. And then we also did a bounty. So we're doing a$10 ,000 bounty end of the year, just was like, hey, whoever builds the coolest shit with AI that has the biggest impact on the business. And that was really cool because the next day, like our procurement manager sent over like two calculators that she built and vibe coded that like was a ton of manual work ahead of it. So I'm really excited to see what people build. And I'm sure that$10 ,000 is going to be like a really good investment because we're going to get unlock way more value out of it.

10:38That's super cool that the bounty to whoever creates the best automation or agent is super cool. I'm sure people are coming up with some awesome things to help Jones Road. I just want to double click on one thing, which is, you know, a lot of the employees will obviously be concerned about job loss, automating themselves out of a role. How do you ensure like that they know this is to make the organization more efficient and better as opposed to, you know, automating themselves out of a role, whether that's creative direction, copywriting, whatever that may be. Yeah, that's probably what I say.

11:16And then, you know, I can only hope that they take it at face value. And I think I have to make sure that our actions as a company align with our words. But yeah, I fundamentally am not trying to, we would like to be more efficient over time as we grow. we think this can help again make help people get more productive in our role in our role you know current role so we have one copywriter right now for the whole organization and instead of hiring a second i would rather pay our current copywriter 20 more if she can then be 10 times more effective and efficient with ai so i i would actually prefer to pay our keep our current team pay them more because their value that they can provide to the company is now so much greater um i think i think there's that there's obviously automating busy work.

12:00And so there's a lot of manual things. And I think we've been a little bit stuck behind with technology, but there's a lot of manual things that can easily be automated to allow team members to actually focus on higher level strategy, things like that. And I did give a little bit of a wake up call, which is like, everyone is probably going to have another job after Jones Road. And like, the way that work is changing is totally going to change. And these lower level tasks are potentially going to go away or get automated. And I highly encourage everyone to get really good and like, just know where skate to where the puck is going and know that like, the way we work has to change.

12:33And instead of managing people, we're going to manage these AI agents. And we were in order to be valuable in this new world, like, it's much more of a strategy role. Yes, you have to understand AI tools and use them. But like, you can't, there's always going to be people that are needed for the strategy, and kind of managing the overall direction. And so just encouraging people to kind of work on those skill sets as well. If I could just add, I think that last point's the most critical because it's less about the adoption within your organization, but it's just how the industry and how society as a whole is moving.

13:05So get paid to learn, get paid to do really cool stuff, make the organization better, but then take those skills then to your point earlier, apply those at the next job and your next career versus being the person that is kind of like waits and then falls behind in the industry. Yeah, I agree with that. Yeah, I also wanted to make it clear, like, we're also investing in people and like, kind of like Google, I don't know if they still do it, has that like 20 % time where they can play around with stuff, like, giving people budgets for softwares and encouraging them to actually spend time on a clock where they're playing around with stuff.

13:35Hopefully it's Jones Road related, but they're also working on those skill sets, like Brian said, which hopefully helps them as well. So let's switch gears for a second and talk about AI search, which I know is on everyone's mind. Andrew, you're on the software side with Athena tackling AI search. Why don't you give us just like a 30-second rundown as to how you're tackling AI search and what you're seeing brands doing that are having success? Yeah, happy to. And Cody used to be at Google, and that 20 % time is still very much a thing. So what we do at Athena, we work with a lot of brands across different verticals And in e-coms specifically, we see that we're at this cusp of bridging the gap between research and shopping on ChatGPT.

14:27Just to get a quick pulse check, how many people here are using ChatGPT on a daily basis? That's a lot of hands. How many of us are aware of ChatGPT shopping coming out? Fantastic. How many is aware of perplexity checkout using Venmo coming out this summer? Okay, so some background. Perplexity is adding Venmo checkout onto their search console where anyone can check out on Venmo. And the implications this has on brands is that these AI search engines are going to be, in some cases, bypassing your website. And if you spent the last five, 10 years optimizing your website for humans, you just start thinking about how you optimize your website for AI.

15:21And that's how we're thinking about this problem is that humans, we understand content differently than AI does, right? AI has different biases towards different structures of content, different sources of content. And that stage right now, we're talking about Reddit and how Reddit is one source. Where we're seeing brands seeing the most success is where they're able to be very targeted in how they approach AI search. I'll give you an example, right? For Reddit, a Reddit strategy could be not just targeting, you know, blanket firing, shotgun approaching Reddit as a whole, but using a tool like Athena to be very pinpointed on which subreddit you should be caring about, where there's like users on Reddit, there's like comments that are influencing AI for your product, for your vertical.

16:10Awesome. Thank you. You know, Aletico, we started diving in headfirst to AI search about a month ago. We're seeing about a 10 % increase in brand mentions across our top, middle and bottom of funnel. So we're really trying to be first movers there. The ChatGPT Shopify integration where you can check out within ChatGPT is in beta. And so that's coming soon. The Perplexity Venmo integration, super excited about that. So I think for any brand, this should be a first priority. Brian, do you want to talk a little bit about how you guys are approaching AI search? Yeah, definitely. I mean, number one is we're starting to actually track it now.

16:54I think over the past in q1 I started tracking and I see a couple sessions and see like seven visits 14 visits but I want to say around April April 12th we just started to see this hockey stick growth in terms of sessions new customer purchases and then we the platform we use are we use triple well so we can distinguish between first click and last click or any any journey and shockingly, a lot of those conversions are actually first click. So this is what's like now forced my attention to say, okay, I need to get in on this and sort of amplify this and 10X it because there's momentum here. So one of the things that I'm looking at is one understanding how and what search engines or sorry, AI is using as a reference or a citation to make a recommendation to a user on product.

17:45The one thing that I'm seeing that is frequently cited is Reddit. And so right now I have an initiative with my team that every week we're going to give$500 of store credit to Reddit users at random. And I have a specific criteria, but these are going to be people that are active. They seem to have a lot of trust in their local community and they have expressed some sort of desire to a problem that we solve or we just want to make their day. This is someone that's very wholesome and it's aligned with our brand values. Let's just make their day. So we're giving away the store credit and this is an early initiative, but the goal is to take these Reddit users that are already active in the communities that have what I would consider domain authority in the space to get them to talk about the brand.

18:32And then over time, we end up having a widespread volume of citations that AI can reference and hopefully pull into and responses around what's the softest T? What's the best T-shirt? Is it durable? What's the best price for value? And those are ideally quotes that are in the post itself. Now, Andrew and I were talking about whether or not it's a viable strategy. And he says, yeah, it's definitely a viable. But one advice that he gave me was being very intentional because it's one of the problems I face is that$500 does not go a long way when you're talking about a Reddit community. It's a lot.

19:08It's massive. There's so many different communities. So Andrew's feedback to me was get more intentional about which communities specifically have the highest engagement, the highest domain authority, and which ones are going to be the ones that actually rank you up higher. So you don't waste your time and energy in some of the communities that aren't as high of a consideration for AI. Another thing I'll add is that the user base who are coming from ChatGPT, I'll set a stat, which is 90 % of people who earn$125 ,000 or more a year are using ChatGPT. And what we're finding across the board with companies we're working with is that the types of users are getting from ChatGPT, they're converting at a higher rate.

19:51They have lower bounce rates, they're higher engagement. And that's because they've gone through this whole buying journey on AI search before even landing on your website. So the types, you know, one visitor from traditional Google is worth less than a user that's coming from ChatGPT because these users are already going through this journey that you might not be aware of. You might not have any way to track it. Awesome. Awesome. So when brands are, you know, strategizing for AI search, Andrew, what can they look for in terms of key strategies, pitfalls to avoid? And what are some metrics that matter when you're looking at GEO AI search compared to traditional SEO?

20:33Yeah. So I'll give you a tip that's generally applicable to everyone here, which is when you go back after the summit and go back to your teams, make sure you look at your robots.txt files. It's a very simple fix. A lot of companies I see where they shoot themselves in the foot is where they're blocking the boss from crawling the website. That's a very simple fix, very simple mistake you could be making, but is causing a website to not even be picked up by AI search. So that's a very general tip I can give. In terms of other advice I'd have for getting onto AI search, I think it really is about being very targeted, as Ryan is saying, about every company, you have a digital footprint on the internet, right?

21:21And the difference between AI search and humans is that on traditional Google, I think 70, 80 % of humans click on the first three links, right? We know that from the old SEO days. And if you got to the first three links, ideally number one in the keywords that you care about, you know, job's done, right? With AI, what we're finding is that across all the companies we're working with, they're seeing hundreds of different websites that are influencing the AI responses and the distribution of how influential they are is more so even. So there's not this like skew towards the first three websites, but rather it's the first page of Google, the second page of Google.

22:01All of these websites are influencing the AI responses. And what that means is that you should be looking into not just how you're ranking, but how you're showing up on these off-page, third-party websites, which are also talking about your brand. And AI is trusting them as well as these kind of thought leaders, right? Because humans, we have our own thought leaders. AI has a different set of thought leaders and uncovering who the thought leaders are, thinking about how you can influence these third-party websites. That's another strategy. Yeah, it's one thing that stood out. I think you mentioned this to me.

22:39It was like with GEO, it's not whether you're mentioned. It's also how you're mentioned. So it's a different way to think about it and to strategize when you're thinking about AI search. I also read a crazy stat, which is that 50 % of traditional search traffic will be replaced with the generative AI by 2028. I think maybe that is too far out. I think it's coming a little sooner. It's not sooner. Yeah. Cool. Time for the retention tip of the week brought to you by Instant. Quick gut check for every founder listening. Do you know your real repeat purchase rate? Not the Shopify dashboard number that includes subscription renewals and auto charges, I mean your real organic repeat rate.

23:19Customers who actively come back and place another order on their own. Most founders I talk to overstate their repeat rate by 15 to 25 percentage points because they're still bundling subscriptions. That number matters, but it masks whether your brand actually has pull. The organic repeat rate tells you if customers love you enough to come back without being on autopilot. Here's how to find it. Pull your total repeat purchase rate, then subtract subscription renewals. That delta is your real retention. If it's below 20%, you've got product market fit issue or a post-purchase experience issue. If it's 20 to 35%, you're in a healthy range.

23:52Above 35%, you've got something special and you should be investing way more into retention infrastructure. Once you know that number, you can start building smarter flows to grow it. Instant helps brands do exactly that by combining AI to identify and re-engage shoppers who might otherwise never come back. Check it out at instant.one slash Sharma for more. So switching gears to more so like how this AI impacts media buying analytics, you know, Brian, specifically at True Classic, you probably spent more on creative testing than many brands spend in the entire year period. How are you approaching implementing AI in your media buying and ad creative strategies?

24:32Yeah, I think of AI use and applications in three buckets. My brain just works in systems. And so I love to like bucket and label things. But number one is operation. So the thing that we're trying to solve for right now is how do we operationalize media buying? And that can be in the sense of uploading the ads, changing the bids, changing the budgets, identifying fatigue and calling that out and sending updates in Slack. The other is an insights, which is actually predicting and giving some sort of root cost analysis into why something is working or not working. That's another thing that we're trying to work on right now.

25:09We are probably like 20 % there, right? We're using a lot of data and it's very manual. And the vision that I have is something that's proactive. Rather than me having to prompt and upload a spreadsheet and say, analyze this. And then me kind of coaching and being the guardrail. I want there to be kind of a 24-7 on at all times AI employee that is flagging, hey, hey, CPM deviations, cost per click. This ad has been identified as having fatigue because over the past three days, the click through rates decreasing 20 % day over day. All of that proactive communication where it doesn't require any prompting, that is the vision that I'm working to bring to life, but we're really behind on that one.

25:53And then the last one is generative, which is just like making the ad. So where I'm spending a lot of time right now is on sort of a combination of insights and generative. Right now we have operations. I have teams working on operations. So as an example, we have an AI agent that views all of the creative, the ads that are uploaded. It checks for URL links. It checks for tracking parameters. It actually views the ad and then it goes to the website and takes a screenshot and it sees that the offer and the product is matching. And if it doesn't match, it'll send a Slack message. And then the media buyers have 24 hours to address that issue.