The #1 Metric Retailers Need to Master in the AI Era

0:00I wanted to start by asking if anyone here, just of a show of hands, knows the significance of the number 6-7. Anybody. I'm making the Gen Zers cringe a little bit. Okay. This is the Gary Vee Audio Experience. 6.7 is actually the number of stores that Barnes & Noble opened last year. And I say that because to me it is an amazing story, a bright spot in physical retail at a time when there are a lot of grim stories about physical retail. We all know about Rite Aid and Big Lots and Joanne Fabrics and a number of them that went bankrupt. But there's Barnes & Noble did something right. Now, Barnes & Noble, about six years ago, they were taken private, and it wasn't a foregone conclusion that they would end up in this growth spurt that they're in now.

0:52What they did, one of the things that they did that really worked for them was take advantage of TikTok and the BookTok hashtag that the young kids, as they say, like to use. So my first question for Gary, since we're going to start this on the physical retail, is what do retailers need to do to be more like Barnes & Noble and less like Big Lots?

1:18Get good deals on their leases and operate those stores with a smart P &L and create demand through contemporary marketing that allows it to be a viable store. What do you think that the, what are the metrics now, if you're talking about, say you're a legacy retailer and you are in, we're all in this world now where there's all this information coming at us, what are the real metrics that retailers need to be paying attention to that they might currently not be? Well, I think for all businesses, bless you, for all businesses, I think we, especially when you get into the Fortune 5000 landscape, I think all of us are looking at metrics that are reporting and data for the sake of reporting and data.

2:07The great thing about being a retailer, unlike being a CPG or some other category, is it shows up at the cash register, right? One of the great mistakes of Fortune 500 land over the last 20 years was separating the media and the creative departments, both on the agency side internally, which allowed for a lot of fake reports to exist and doing a lot of this. You know, I grew up a retailer. You know, I, VaynerMedia, my entire career is based on how I did marketing at my father's liquor store 20 minutes that way over the river. I was never confused if my marketing was going well or not because I didn't have all the things that come along with the inertia and corporate realities you should be measuring if the working media dollars and along with the creative in one siloed environment is driving the short-term sales that you're looking for and you're looking at the LTV the lifetime value of the customers you're tracking to understand if you're having a brand effect overall.

3:14It's uncomfortably simple to measure. Corporate is bad at it. One of the talking points for this panel, the panel description was something to the effect that brand loyalty is earned and lost in seconds. I'm curious if you think brand loyalty even exists anymore in this world. Of course it does, in a very substantial way. In fact, I think we're all going to learn all about brand loyalty as we go over into this next decade of AI where your agents are reordering products for you without your intervention. You're going to set that reorder mechanism around brand loyalty and the only thing that will stop you from getting that repeat order of your mundane everyday items will be a brand that affects you with relevance It's enough that you decide to go into your tech stack and change the settings.

4:10We're going into a profound explosion of actual brand value. The problem is we have a whole landscape of executives all over the world that want to measure brand in a bullshit way based on subjective opinions and silly reports. You mean like consumer surveys? Yes. Brand lift studies. Like, I mean, our whole industry is built on fake reports. Yeah, well, I mean, the polling, I'm sure, is accurate to some extent. Polling is always wrong. Or maybe it's not measured. Maybe they're not measuring the right things. Well, but we also have to become more human and more common sense oriented. Like, go measure love.

4:56I would like you all to show me your report on how much you love your mom. you know like like your belief in god like brand affinity and loyalty and like we're trying to measure something that's not measurable and then we decide to waste a quadrillion dollars on it and sit in boardrooms and debate adjectives and hues of color we're we're delusional well repeat sales are measurable so if you have a returning customer that indicates some kind in a real way Chris, we're also living in a world where creative is measurable. The greatest thing about social media right now is that the AI algorithms are written based on relevance.

5:36Everybody in this room, if they've gone down some path of marketing in their lives, and in retail, it's marketing and sales. Obviously, there's so many other things, customer experience, but everybody knows that it's relevance to consideration to purchase. That stays super true. So to your point, you know, repeat sales or first sale is incredibly measurable. And we live in this world now where we can actually get true creative testing as a byproduct from a daily structured, strategic, social creative at scale production and creative engine. every single retailer sitting in front of us right now needs to have that capability, whether they build it internally, whether they have an agency partner do it, whether they do it in a JV.

6:25But we're living in a great time where we can finally measure brand, aka creative, in a way that we haven't been able to. And I think everybody here, I'm just going to go very practical with the hope that this brings someone value. Everybody here's number one measurement needs to be views achieved, views achieved by the creative in your social output across the seven or eight social networks, monthly, gross, and per post. That becomes the starting point to understand how your marketing mix can be successful. I've heard you say a few times that you believe we're now not in the age of social media, but interest media.

7:07Can you talk a little bit about what you mean by that? That's what I was just referring to. I've painstakingly worked really hard for the last 20 years to amass 50 plus million followers. And I'm starting to, on a daily basis, lose the leverage that I've created for myself because we're now down to a place where the individual piece of creative gets the reach, not how many followers you have. You were no longer - Back to the brand loyalty thing. Well, relevance thing. Or relevance, okay. This is important, right? It's the relevance thing. The creative gets views from the relevance. And to your point, if you see something that's relevant to you over and over and over again, now you start to create loyalty, right?

7:50Now you're like, oh, this is a brand I like. They talk about things I like. This is things I like. And all of a sudden you've gone from acquaintance to friend and eventually family. That journey that we do as humans, we do that with brands. Like, oh, that's interesting. Oh, that's interesting again. that's interesting again. Now the product has to be great. Now you get the product. You like it enough or you like it a whole lot. And now you're into real brand loyalty. So this is a relatively recent change with the way the algorithm prioritizes what it thinks you're interested in as opposed to who's in your friend network.

8:26Correct. How did this come about? Because the companies got smarter. It really was driven by TikTok. For all the OGs in the room, it was originally done by Tumblr years ago. You know, I was an early investor in Tumblr and I thought it was going to be bigger than Facebook and Twitter. Those were my first three investments. Thank God I wasn't making prediction videos back then because I would have definitely made that video. And it was because I believed, I knew that I loved the Jets and wine and other things that I would like them forever. I also knew that some high school friends, some former co-workers, some college friends would come in and out of my life.

9:04There was more consistency of what I was interested in than who my acquaintances or lightweight friends. Best friends can stick, they're family. And so I could really see when social exploded and I was very early on it, I was already 31. I wasn't 16 or 14. So I'd lived enough to see the social dynamics moved enough where I understood that social had some vulnerabilities if it was just based on who you followed. People change, interests change, lifestyles, life journeys, but interests, the core interests we all have here, they stick, new ones join, and when they join, like for example, if I got into phishing right now, Chris, very quickly all my social networks would be showing me phishing content because I would start to search and explore phishing content.

9:54You only have to linger on that one video and then TikTok suddenly realizes it thinks you want like 50 ,000 of the same kind of video. It does start to think you want that. We are in control to show the algorithms if we are interested in it. I laugh when people are like, oh, the algorithm changed me. The algorithm changed no one. The algorithm exposed everyone. So for brands or retailers starting now, Like if you're starting your social game right now, should you be prioritizing even building a following now or is it more about just creating content that you think people are going to really want to engage with?

10:30Number two creates number one. We are in complete relevance warfare. And for all the math kids in the room, the greatest part of this is that if you get committed to organic social at scale to bring relevance and awareness, the highest performing organic reached pieces of content, when you take that content back to the lab, slightly tweak it and put it into your performance, it outperforms your best AV meta testing by a country mile. That's the brain fuck right now. I want to talk a little bit about some of the... One second before we move on. Go for it. That's the brain fuck right now. There's a lot of people in here who are doing performance marketing, which could I ask everyone, could we all just agree to change the term to performance selling?

11:19because it's not marketing. It's performance selling. For people that are doing performance, if you haven't gone down the rabbit hole of organic social, re-edited for performance, it's one of the greatest additions to your tool belt that will grow your business. The creative has been validated by the algo. People like that creative. You bring it back home and slap on free shipping, two for one, you give it a performance element. Don't change it so much that you took the essence out of it that made it relevant. This is a huge addition to your game that I could not recommend all of you more. Sorry.

11:55No, not at all. I want to actually talk about some of the platforms themselves. I heard you were asked once which platforms should retailers be on, should businesses be on. You said all of them. Hey everybody, I hope you're enjoying the podcast right now. Make sure you follow the podcast. That's why I'm interrupting. Let's keep going on this show but follow the podcast. It'll make my mom super happy. Why? Why do we need to be on all these different platforms? Especially when you're a smaller company and you might not have the resources to... Well, I think that's very fair. If your resources are super low, there is some prioritization.

12:29Again, the brands that are represented here are more interested in throwing unlimited money at programmatic garbage and so many other behaviors that bring no value. And so I want them to take those monies back and reallocate them to, you know, the places where the attention of the people that buy things is actually. I've heard you mention LinkedIn as an underappreciated platform to build businesses. I'm curious, like, for people in the room, who's using LinkedIn to build their business actively? Raise your hands high just so people can see it around the room. You know, I think we would all agree that's probably more hands than many in the room anticipated and definitely more hands than would have gone up three years ago.

13:13I think what the hands in this room figured out that I've been on for quite a while is that, yes, LinkedIn is a more, first of all, if you're a B2B company, for all the B2B people in here, if you're selling SaaS, if you're selling to the people in the room, that is your Facebook, TikTok, Instagram, and one, every B2B company should be hot committed to LinkedIn. that's one. Two, even for us beta seers, you know, sure we might be going in there to recruit or learn something about what happened here, but we're still human beings. So if you see a piece of creative that's relevant to you, you know, you're gonna consider it.

13:47And if you're smart in this room and you make the creative contextual to someone who's in LinkedIn, right? If your piece of content is about, hey, are you traveling all the time for work? All of us in LinkedIn are like, yeah that's fucking me and so that's going to hook you and then you can kind of convert where you want to go with it even if you're selling sandals or candles or wine oops sorry so you know i think i think the smartest marketers are obsessed with context volume relevance at all cost humility around creative not leaning on your subjective opinion like your dom draper in 1965, but understanding that we are in a distribution model now where we can create creative at scale and get consumer insights and data affirmation that then allows us to deploy paid media.

14:43For another framework on this, friends, I think we've lived in advertising for 70 to 80 years in a model that is, let's use working media dollars to hide bad creative. I think we're now clearly in the era of let's use working media dollars only to amplify and scale good creative. And good is judged by did it actually achieve views, not four executives in a room saying that's on brand. I'd love to talk a little bit about live social shopping. I've watched a few videos of you talking about live social shopping. Probably about a year ago, you were talking a lot about this and saying it was going to be a really big thing here.

15:28I'm wondering if you think it's lived up to your expectations so far. This is the sort of buying stuff off of a social media website in a live situation, like QVC style. Friends, and please, I know it's early, but just please raise your hand just so the room can get educated. How many people in this room are aware of what not is the app? Raise your hands. Whatnot. Raise it high. Actually, can you stand up? I know that's a lot to ask. I know, sir, but please, could everybody who knows what Whatnot is stand up? Because I want people to get the context of the numbers. I really appreciate that. Thank you.

16:05You can sit. I'll stay seated because I've never used it. Whatnot. This is NRF. We're at NRF. Whatnot is an independent app. you just saw that about 3 % of the room even knows what it is it did 10 billion dollars 7 to 10 billion we don't have the numbers it's private 7 to 10 billion dollars in GMV last year it sold gross merchandise value it sold 7 to 10 billion dollars worth of stuff nobody at NRF26 knows what the fuck it is yes it's lived up to my expectations what's going on in live shopping and listen I apologize if I may I don't predict things I don't think anything I'm saying right now is so cool everyone knows what I'm about to say this has been going on in China for a decade everybody here knows I think eMarketer had a report in October saying it's a little bit it's been a little bit slower to take off in the United States just 11 % of creator driven shoppers have made a purchase on a creators live stream so that's 11 % but it's not but it's it's not the it's not the mass critical master that we've seen in yet yet yet it was nothing 36 months ago some of the success stories are interesting though the the the libubu dolls the pop-mart libubu dolls everyone everyone probably knows what those dolls are.

17:46They've been hugely successful at selling stuff live. And so has Ikea has done it on its own website, used its own website as a live streaming platform to sell things. I'm curious if you think, like, are there certain use cases that it's just better than others? Nope. I think this is social media all over again. A bunch of people in this room and a bunch of people in this industry 10 years ago said, social's not for us. We're a high-end brand. We're expensive. We have a higher AOV. This is all I heard in 2010, 17, 13, 12. Everything sells on social now, and everybody knows that. Live shopping is not built for tchotchkes like LeBubu.

18:27In China, they sell cars at scale through live shopping. Live shopping is attention. Consumers see something, and they act on it. It's a frictionless environment. You're in your feed. It just shows up. You like purses. You buy a purse. it's easier than any other e-commerce. Every single company here, every retailer here, if they are not spending an enormous amount of time debating their live social shopping strategy in the U.S., that's predominantly TikTok Shop. Whatnot is still predominantly collectibles with a little bit of clothing. Whatnot has not gone broad yet. TikTok Shop is the real player.

19:04Twitch just launched their shopping. eBay Live's product is very strong. There's an incredible app that you should all look into called District. It's like the Shopify of live shopping. This ecosystem is building. Anyone here at a Fortune 5000 level that isn't spending an enormous time trying to figure out their live shopping strategy and figuring out their GEO and AEO strategy, if they're not doing that, they are setting themselves up for very challenging 2027, 2028 realities. realities. We're actually running a little bit low on time already, and we barely talked about AI. The reason I want to bring it up is because you are an influencer.

19:45I don't know if you embrace that term or not, but you are an influencer. You also speak a lot about the idea that companies and brands should partner with influencers in a way that gets their brand out there. Do you worry at all about what AI is going to do to the influencer economy and how we're moving into this world where you can't tell what's real and what's fake and how much easier it is now to create, you know, quote unquote, virtual influencers? Does that concern you? No. Not at all. Because I did. I also have a quote here from you saying, I think it's going to cause a decade of confusion.

20:21I think just talking about AI. Yeah, I just believe in human beings. So let's break it down. Nobody felt bad for the A-list celebrities that the influencers have come along and taken money out of their pockets. You're right. And so I don't feel bad for the people that create AI influencers and bring value to the end consumer. And if they start getting brand deals and they come out of the influencer's pocket, I think this is evolution. I think this is just what happens. You know, listen, I'm like any other sane human being. Anytime there's profound technology, you try to think through the good and the bad that can come along with it.

21:00Many inventions through the history of time are demonized up front. Electricity being my favorite historical story of how we tried to not accept it. We were big on candles back in the day. And so, you know, am I concerned? I'm not concerned in the macro. I believe in the human spirit. We've navigated atomic bomb invention, I think will navigate the AI invention. But do I think a lot of BCD list influencers, if somebody was making a list on how much they make or how many followers or how per font, do I think that they have a vulnerability on losing brand deals to AI influencers? I know they will.

21:42Yeah. You can already see the use cases. I mean, you can go to certain travel websites now and see that a lot of stuff clearly looks like it was created by AI. Yeah, this is one of the profound inventions in the human race, and we will all live through it. And there's many things that we can't even anticipate that they will create. But I would also argue, like, when I look at this crowd, I get so happy knowing that so many people's parents, children, spouses, and themselves will live 10 to 15 years longer because AI in medicine will detect a disease earlier than a die. There's so much remarkable joy that's coming.

22:21Some business commerce reshaping, I think, is frivolous in comparison to the upside. You were early to YouTube. You were blogging on YouTube in 2006, right? Yes, sir. YouTube basically just started at that time. If you were just starting out now, would you be embracing AI in the way that you embrace YouTube? And how would that look? Like if a young Gary Vee starting out now and trying to... No different than old Gary Vee. But except YouTube is already well established and you can't just jump on there and easily get the attention that you – I'm not saying you're – I totally understand what you're saying.

22:57No, no, you're absolutely right. I think of attention like real estate, right? If you bought beachfront property in Malibu 39, 59, 63 years ago, you did better than someone buying it today. First mover advantage on platforms that have attention is always a good idea. but that doesn't mean that you can't get attention even though it's mature. There are people that are going to explode on YouTube, Substack, Twitter, Instagram, Facebook, Snapchat and every other platform that are literally going to start tomorrow because they have figured out something of value that the end consumer is interested in.

23:34In fact, my friend, I would argue it is easier today to break out because when I was going, you had to amass followers. And so when I used to sit on a stage like this, 2006 it started. In 2016 I would stand here and be like, hey, you gotta start really making content. It's gonna take three or four years. Now somebody here could literally make their first TikTok ever. And it could be the start of the whole game. We're in a profound opportunity. The level of merit and opportunity for the individual human because of where the algos are in social right now and for every business is profound. profound and I want more people to take advantage of it well I think that's a great place to leave it we are really low on time Gary Vaynerchuk thank you so much for joining us thank you everyone for coming out for the first session this morning I hope everyone enjoyed the conversation everybody if you enjoyed this podcast please go back and look at the prior episodes they're loaded I appreciate your attention and thanks for being part of this journey see you later