WEBVTT - AI's Impact on Retail and Consumer Behavior 

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News.

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<v Speaker 2>You're listening to Bloomberg Business Week with Carol Masser and

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<v Speaker 2>tim Stenoveek on Bloomberg Radio.

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<v Speaker 3>Right, we do want to talk a little bit more

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<v Speaker 3>about artificial intelligence and how it could influence the retail

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<v Speaker 3>sector in the coming year. Our next guest says, AI

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<v Speaker 3>driven traffic to retail sites this holiday season surged by

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<v Speaker 3>five hundred and twenty percent over last year. So what

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<v Speaker 3>does it mean. Let's ask Kimberly Shanks. She is CEO

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<v Speaker 3>of nov It's a firm that uses AI to help

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<v Speaker 3>connect brands with retail customers.

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<v Speaker 2>Kim, great to have you here with Vonnie and myself.

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<v Speaker 3>Tell us a little bit more about your company and

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<v Speaker 3>what exactly the role of AI to connect customers.

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<v Speaker 2>What actually happens? Is it chatbots? Is it something more?

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<v Speaker 4>Thanks so much for having me. Yeah, So, Novie's technology.

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<v Speaker 5>We're actually helping retailers and brands increase their sales by

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<v Speaker 5>ensuring their products are found and trusted and then ultimately

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<v Speaker 5>recommended by AI models.

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<v Speaker 4>So thank chat GBT, Gemini and Claude and so we

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<v Speaker 4>do this.

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<v Speaker 5>We work with you know, leading retailers including Macy's Sephora,

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<v Speaker 5>target Alta thousands of CpG brands and they rely on

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<v Speaker 5>us to optimize their product data for AI driven discovery

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<v Speaker 5>by consumers.

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<v Speaker 3>So when you say that, it's basically a consumer who

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<v Speaker 3>does something and their data is processed and recorded and

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<v Speaker 3>they're saying, oh, you bought that pair of pants, maybe

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<v Speaker 3>you would like this pair of pants.

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<v Speaker 5>Is that?

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<v Speaker 2>Is it as simple as something like that or is

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<v Speaker 2>it more sophisticated.

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<v Speaker 5>It's a little bit different in terms of consumers now

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<v Speaker 5>flocking to chat, shipt or Gemini and asking questions to

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<v Speaker 5>actually do their shopping. So they're outsourcing a lot of

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<v Speaker 5>their research, discount hunting, you know, personalized gift curation to

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<v Speaker 5>the AI agent who's then gooing and finding products and

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<v Speaker 5>recommending it to them based on just questions and prompts.

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<v Speaker 1>So who are your competitors and how do you stand

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<v Speaker 1>out from them?

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<v Speaker 4>It's interesting.

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<v Speaker 5>So there's a couple of different up and coming competitors

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<v Speaker 5>in the tech space who are helping brands and retailers

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<v Speaker 5>stand out in AI shopping. But we also have a

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<v Speaker 5>lot of the older, more traditional data companies because we

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<v Speaker 5>are a data company and we feed data with through

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<v Speaker 5>our partnerships with our retailer partners. So think about Syndigo

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<v Speaker 5>or Salsify or even Nilsen IQ some of those older

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<v Speaker 5>data partnership players.

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<v Speaker 1>And how then do you get the edge over them.

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<v Speaker 5>Yes, So a lot of what we're doing in these partnerships,

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<v Speaker 5>and we'll be able to announce some of them really soon,

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<v Speaker 5>is feeding trustworthy personalized information to the models themselves, which

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<v Speaker 5>is what we have seen at NOV to increase your

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<v Speaker 5>potential as a brand to show up in AI shopping.

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<v Speaker 5>So we found that you know, products that have verified

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<v Speaker 5>trust signals are a selected two hundred and fifty nine

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<v Speaker 5>percent more often than random chance to think like certifications, reviews, badges,

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<v Speaker 5>third party testing. And we're feeding this directly to the

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<v Speaker 5>retailers and the models so that they help the brands

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<v Speaker 5>show up in AI recommendations to consumers.

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<v Speaker 3>So one of the things I always think about, Kim

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<v Speaker 3>is like, how much of what is spent on AI

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<v Speaker 3>to kind of attract consumers retailers or folks to retailers. So,

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<v Speaker 3>in other words, that AI driven traffic to retail sites,

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<v Speaker 3>how much of it is productive that results in actually

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<v Speaker 3>a consumer buying something?

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<v Speaker 5>Yeah, that's actually a very interesting question. So we're seeing

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<v Speaker 5>the traffic start to increase. There's actually we saw from

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<v Speaker 5>Adobe Analytics, like we just said, five hundred and twenty

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<v Speaker 5>percent over last year from AI.

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<v Speaker 4>But what we're not sure about yet is conversion.

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<v Speaker 5>And this is just because CHATCHABT, Gemini, none of them

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<v Speaker 5>are publishing the conversion results, but we at NOV What

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<v Speaker 5>we did see is that chatgbt's shopping research answers sent

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<v Speaker 5>consumers directly to the brand's website eighty six percent of

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<v Speaker 5>the time, which means that the remainder of traffic, you know,

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<v Speaker 5>only about fourteen percent was sent to the large retailers

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<v Speaker 5>like Walmart or Target. And so what brands are starting

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<v Speaker 5>to see is more and more direct consumer traffic to

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<v Speaker 5>their website, which is driving conversion in sales for them.

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<v Speaker 2>Interesting.

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<v Speaker 3>Okay, So would you say, based on the data that

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<v Speaker 3>you see, because you see so much data that the consumer's.

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<v Speaker 2>Doing well, that retail's doing.

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<v Speaker 3>Well, like how much you can obviously break it down,

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<v Speaker 3>probably a lot, So give us a little bit of

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<v Speaker 3>insight as we get ready to wrap up this holiday

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<v Speaker 3>shopping season.

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<v Speaker 5>Well, so what we're actually seeing is, you know, consumers

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<v Speaker 5>are using AI as their category manager. So think of

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<v Speaker 5>it as we all used to trust the big box

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<v Speaker 5>retailers for their ability to manage each shopping category, do

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<v Speaker 5>the curation for us, and that's why you walked into

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<v Speaker 5>a target, right. They scoured the earth for the best,

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<v Speaker 5>most compelling products and we trusted them.

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<v Speaker 2>To do that.

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<v Speaker 5>But now, and what we say saw play out this

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<v Speaker 5>holiday season, the consumer has shifted their trust to AI

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<v Speaker 5>to do the research and curation for them. So we're

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<v Speaker 5>seeing strong numbers and users using chat to bet and shopping,

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<v Speaker 5>but it's just not quite played out yet and we'll

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<v Speaker 5>see that in twenty twenty six.

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<v Speaker 4>Is where that conversion is going to happen.

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<v Speaker 5>If it's going to happen direct on the brand websites

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<v Speaker 5>are still in retail.

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<v Speaker 1>Kimbridy, just a word on yourselves. How difficult is it

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<v Speaker 1>to raise money? What are the key words that investors

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<v Speaker 1>are looking for these days? And you know the key ideas.

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<v Speaker 5>Yes, AI is definitely the hot topic. If you are

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<v Speaker 5>not involved in AI, doing something future with your company

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<v Speaker 5>that's progressing AI.

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<v Speaker 4>So for example, we're an agentic commerce.

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<v Speaker 5>That is what is hot for investors these days, and

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<v Speaker 5>that's what is raising money and getting the majority of

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<v Speaker 5>the capital in Soli Valley.

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<v Speaker 1>Well, the very best of luck. It sounds like a

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<v Speaker 1>fantastic endeavor, and I know you have a lot of experience,

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<v Speaker 1>so I think if anybody can continue to do it,

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<v Speaker 1>you certainly can. That is Kimberly Shank, CEO of nov