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Marcus Johnson: [00:00:00] Atmosphere TV is the largest streaming TV platform purpose-built for shared social spaces like bars, restaurants, gyms, and airports. Atmosphere TV is the creator of CHIVE TV and 30, more than 30 mesmerizing audio optional channels that entertain over 150 million monthly viewers. Built for business, but made for fun.

Marcus Johnson: Atmosphere TV

Marcus Johnson: Hey, gang. It's Friday, October 16th. Suzy, Marisa, Sarah, listeners, welcome to Behind the E-commerce Marketing Podcast, made possible by Atmosphere TV. I'm Marcus. Joining me for today's conversation we have, living in New York, VP of content, head of the retail desk, Reimagining Retail host, Suzy Davidkhanian.

Suzy Davidkhanian: Hello. Thanks for having me.

Marcus Johnson: Of course. Now calling Boston home, newsletter analyst Marisa Jones joins the show.

Suzy Davidkhanian: Hi, happy to be here.

Marcus Johnson: Also based out of New York, uh, VP and principal analyst covering all things commerce media, Sarah Marzano.

Sarah Marzano: Hi, Marcus. Thanks for having me.

Marcus Johnson: Yes, indeed. Thank you for being here.

Marcus Johnson: Today's fact-[00:01:00]

Marcus Johnson: Where is the world's largest independent bookshop? You each get one very quick guess, and I'll give you a hint 'cause the world's a big place. It's in America.

Sarah Marzano: Oh. Seattle. No. New York. Portland-

Marisa Jones: City ...

Sarah Marzano: Oregon.

Marisa Jones: Oh, God. Um, Los Angeles? I don't know. I was gonna say New York, but someone else already did.

Marcus Johnson: Sarah wins.

Marcus Johnson: Boston

Sarah Marzano: could be one. No. I think it might be Powell's. Is it Powell?

Marcus Johnson: It is.

Sarah Marzano: Yeah.

Marcus Johnson: Yep. Powell's- Wow ... City of Books- Yeah ... in Portland, Oregon takes up an entire city block. It's a cool store in Portland's Pearl District. It boasts- Wow ... very nice four floors, nine color-coded rooms, and houses a massive collection of, it's disputable, um, but at the very least, over, uh, half a million books.

Marcus Johnson: Uh, it's goes up to close to a million some sources say.

Suzy Davidkhanian: Um- Is that half a million individual titles, like, unique titles?

Marcus Johnson: It just says [00:02:00] book, so I don't, I don't imagine so, no. That would be... No. No.

Suzy Davidkhanian: Maybe that's the controversy, inventory versus-

Sarah Marzano: Breadth versus depth?

Suzy Davidkhanian: Yeah,

Marcus Johnson: that's it. Uh, yeah. I'm not gonna get into it.

Marcus Johnson: Um-

Sarah Marzano: Oh, my God, what do

Marcus Johnson: I

Sarah Marzano: get for winning that one?

Marcus Johnson: You get nothing. You get to hear the story of, um... It's a fascinating story about how it started. So usually it's the parent inspiring the kid. Uh, this is the, the reverse. You know, unique story of the kid inspiring the parent. In 1970, Michael Powell opened a successful used bookstore as a graduate student in Chicago.

Marcus Johnson: His father, Walter, spent a summer working in his son's Chicago shop, loved it, and so reti- uh, retired as a painting contractor, returned to Portland, Oregon, and opened his own used bookstore in 1971. Eight years later in '79, Michael, the son, moved to Portland to join his father, bringing the inno- innovative idea of shelving new and used books side by side.

Marcus Johnson: They buy back a ton. I think it's, like, thousands a day of, of [00:03:00] old books- Wow ... and put them alongside the new ones. Um, the store remains a family operation, currently led by Walter's granddaughter, Emily Powell, who took over management in 2010.

Sarah Marzano: I love that.

Marcus Johnson: Beautiful. Yep. Today's real topic.

Marcus Johnson: We make some more what if predictions. Okay, here's how this episode works. Suzy goes first. Uh, she gets 45 seconds to pitch. She goes first just because it turned out that way, not because she- That... It's like you knew what I was thinking ... she tried to insinuate it was because she was the best or whatever.

Marcus Johnson: That's not true. Um, Suzy goes first, uh, completely by chance. She gets 45 seconds to pitch a what if prediction she thinks is unlikely but could happen in the next 12 months or so. We discuss, Marisa goes next, then Sarah. Suzy, go.

Suzy Davidkhanian: Okay, so what if your fridge knew you had dinner reservations one day of the week, saw that your lettuce was about to wilt, and so decided to ping you to tell you to eat at home?

Suzy Davidkhanian: And so what I think is gonna happen is that [00:04:00] there will be a major fridge brand, probably Samsung with Google, who is gonna do... Well, they already have smart fridges, and it was, um, talked about at CES, and it's called the Family Hub Fridge. So all the technology is there. It's already out in the market. It's not a pilot.

Suzy Davidkhanian: So it was at the beginning of the year. In May, I think they fully launched it. And my prediction is that it's going to connect to Gmail, most likely, Gmail, Outlook calendars, whatever, some sort of way that it becomes your personal assistant driven by food. And this would not be new, because Google used to have a personal assistant, but it was a bit creepy, I think, so they took it down, like, 10 years ago.

Suzy Davidkhanian: But now I think the tech is ready. Consumers are going to accept this, quote-unquote, "intrusion" if it works in their favor. And in this case, I think it'll help them save money-

Marcus Johnson: Mm ...

Suzy Davidkhanian: waste less food, be more interconnected.

Marcus Johnson: So the initial question is why hasn't the smart fridge [00:05:00] revolution taken off? And to what you're saying, explain to people why you think the calendar could be the thing that unlocks the potential here.

Suzy Davidkhanian: So I think, like many tech things, like the QR code, the technology came out before consumers were ready, and then there was, like, an unlock that made people ready to use it. So smart fridges are not new. I think 15 years ago we were talking about this when I was at Macy's. What I think is new, it's now, it's the barrage of components within the fridge, and the technology is much more seamless and less clunky.

Suzy Davidkhanian: Mm-hmm. But I also think now with AI- The ability to, to have the context and to be able to make it more real for you. So it's not so much the smart fridge itself, but it's also the calendaring and the email and that proactivity, which it's not quite there yet. And just recently, I don't know, Marisa, if they talked- Mm

Suzy Davidkhanian: about this at Unboxed, but Amazon just said that it's about to launch a Ring with Alexa smart door. And so, like, that's another way it can interconnect to the fridge- Mm ... 'cause now it's gathering data, [00:06:00] it understands my habits, it knows when I'm home, when I'm not home. And imagine if the calendar is like, "Oh, Suzy's flying out to Nashville.

Suzy Davidkhanian: Make sure that you don't rec- rebuy the Instacart groceries." Right. 'Cause Samsung is already connected to Instacart from a fri- from a smart fridge perspective. Make my life easier.

Sarah Marzano: Is the consumer paying in some way for this? Like, how is this monetized?

Suzy Davidkhanian: So, uh, well, one, Samsung just announced that they're already making adjustments to their Family Hub fridge by having more advertising space.

Suzy Davidkhanian: So I think- Mm ... the key question is, who owns the data, and how do they unlock it, and is it a shared revenue stream, which is all possible. I think, like, my guess is that Samsung, Instac- Instacart share that sort of repeat purchase that's happening. I imagine that Gmail, Gemini, they're, th- they'll all find a way to make it sort of on the fridge if they know I'm going to Tennessee, [00:07:00] Nashville, Tennessee.

Suzy Davidkhanian: Will there be an ad that says like, "Go to this restaurant," you know what I mean? Here's

Sarah Marzano: my

Marisa Jones: question.

Suzy Davidkhanian: Yeah, tell me.

Sarah Marzano: I have so many questions. First of all, I wish your example had been, like- my fridge telling me to go out to dinner because my lettuce- Oh ... was rotting. You know what I mean? 'Cause I would be so annoyed if I had a dinner reservation and it was like, "Sarah, you gotta go home and eat some lettuce instead."

Sarah Marzano: Um, but my other is just, like, I'm thinking about the work required on the end of the consumer to be like, "Is my calendar up to date? Does my AI agent have all the appropriate context to know what's going on in my life and what it should recommend?" And then I'm worried about the downstream impli- uh, consequence of consumers potentially buying less because of this.

Sarah Marzano: You'd have to make that up with advertising, right?

Suzy Davidkhanian: Oh, yeah. But you know what? The world is worried about sustainability and water and not wasting money. Allegedly.

Sarah Marzano: Allegedly.

Suzy Davidkhanian: Yeah, and I

Sarah Marzano: think- Consumers like to say they're worried about that. They, like, say they're worried about that and then do completely different things.

Suzy Davidkhanian: That is very fair. Miss everything. It would

Marcus Johnson: be just terrible.

Suzy Davidkhanian: I do think they are worried about their wallet, right? And so, yes, the, the [00:08:00] lettuce wilting, I think it's a very New York sort of situation that you're all, we tend to go out often. I'm going with the assumption that the technology will be relatively flawless.

Suzy Davidkhanian: It sounds like that Family Hub has many different parts and pieces like a camera, a CTV, like, a little, uh, uh, like, iPad-y kind of thing, but it's obviously not an Apple product. So I'm going with that and the fact that generally speaking, if you make the life of a consumer easier, they are willing to trust you.

Suzy Davidkhanian: But the minute you make a mistake, the minute you go into the creepy factor or the minute the milk that was supposed to come when you landed from Nashville didn't come on time and now you don't have milk for your kid the next day on cereal, whatever, blah, blah, blah. I'll give

Sarah Marzano: you another prediction.

Suzy Davidkhanian: Well, I mean, I think it's important to note that we have technology that goes out before people are ready. That's already happened. Mm-hmm. I think people are ready. The technology is imminent. It's available to do that whole 360 view. My prediction is [00:09:00] that's what's gonna be next for the smart fridge.

Marisa Jones: Mm-hmm.

Sarah Marzano: I don't think consumers want it

Suzy Davidkhanian: Oh my God, I want it

Sarah Marzano: I think there's- The

Suzy Davidkhanian: counter- So bad ...

Sarah Marzano: I think there's too much- Makes my life ... possibility for friction, to your point. Like, the tech has to be flawless is what you said, and I just think that's impossible to do with things like replenishment because there's just no way for the fridge and for all the technology to have the context that's necessary to know that, like, I started feeling sick today, so maybe I'm gonna eat less tonight, or that never happens, but I wanna make soup actually.

Sarah Marzano: Or, uh, my family's coming to town, so I actually needed way more and I never put that in my calendar, and now it's annoying because I don't have toilet paper. I don't know, that's not your fridge, but ...

Suzy Davidkhanian: Yeah. So I, I hear what you're saying. The, the, that particular m- Samsung model apparently has a built-in touch screen, it has AI vision inside with internal cameras, it has SmartThings integration, so it lets you be compatible to other smart home devices.

Suzy Davidkhanian: It helps you communicate with your family, including a digital whiteboard, and it also goes through, um, you can do [00:10:00] CTV, like Spotify, YouTube, web browsing. So it's already pretty all-inclusive.

Marcus Johnson: It's also, it almost feels like similar to driverless cars, is like people want it to be perfect before they are gonna try it.

Marcus Johnson: And if this just helps us waste a bit less, because it can do, I mean, it like automatically catalogs the groceries going in, it can track expiration dates, it can suggest recipes. And so if it makes things a little bit easier, I think it could be helpful, even though, to Sarah's point, I think people are gonna want a more seamless experience- Yeah

Marcus Johnson: perhaps than is available at the moment.

Marisa Jones: But I do think some consumers kind of would just buy into this just 'cause it's like this shiny new thing- Not many ... that sounds so cool.

Marcus Johnson: Yeah.

Marisa Jones: Probably not enough, but

Suzy Davidkhanian: My prediction is that that next sort of iteration of that particular fridge will include a personal assistant that's tied to my personal email and calendar life- Mm-hmm

Suzy Davidkhanian: so that when I come back home from a conference and it's late but I haven't had dinner, it's waiting for me. Maybe DoorDash or [00:11:00] Uber- Mm ... ordered food for me.

Marisa Jones: Mm-hmm.

Marcus Johnson: A big part of this is it trying to predictively, like, figure out what it, you know, it should do next or buy next or, or whatever. Um, there, there are things that it's doing.

Marcus Johnson: Uh, the, that LG signature smart, um, in- Instaview, uh, it uses, uh, predictive AI to anticipate when your home, uh, experiences a rush hour, so break- morning breakfast, after school snacking, and it will pre-call itself to certain times because you're gonna be opening it a lot. So there's that. And then there's also, I think a lot of it might depend on how easy is it for me to communicate with the fridge too.

Marcus Johnson: So if it's saying, "Oh, you, you're gonna run out of this, you need to do this," can I speak back to it? Um, and there is technology where a certain family member, it will be like, "Oh, that's the mom speaking. I can add that to the list because Mom said so." Um, but maybe it's the fridge says, you know, "You're running out of milk," and you can just say to it, "Don't buy, I'm heading out of town," or, "Add this to the list."

Marcus Johnson: So I, I think maybe if you could also a- um- [00:12:00] communicate with it and, um, have that be a, a source of input, uh, then that maybe could help. We have to move on. It's a really good one to start. Marisa, what do you have for us?

Marisa Jones: Um, so I have what if Paramount and Warner Brothers Discovery, now Skydance, is unable to pay off its $80 billion debt service?

Marisa Jones: Mm-hmm. Um, so now that the merger's complete, it- you would think it's kind of, like, greener pastures ahead, but there are quite a few problems that is still facing this company. Yeah. I think the biggest issue is that this massive debt load could force it to prioritize cost reduction over the investment that it needs to, one, reposition the business to actually be profitable and actually succeed in a streaming-led market, and two, to meet the commitments that it has made to make this acquisition possible, including releasing at least 30 movies theatrically for two years, and then 32 following that, which obviously takes its own investment.

Marisa Jones: Um, it [00:13:00] has to manage the structural decline of its legacy TV business that doesn't really show any signs of recovering, and it needs to prove that it's, um, now a legitimate streaming player by its eventual plans to combine Paramount+ and HBO Max, which, um, who knows how that's gonna turn out, what that's gonna look like.

Marisa Jones: Mm-hmm. Um, so they do have kind of all these challenges ahead of them, and currently are only discussing initial plans of 6 billion in cost cuts, which will probably come in the form of layoffs from the company mostly. Mm-hmm. Um, but will be far, far, far below how much they need, um, given the amount of debt they're in right now.

Suzy Davidkhanian: I don't follow this very closely. Mm-hmm. Is that the price they're paying? Is that the debt, or they ha- they came in with debt before the deal?

Marisa Jones: So they're coming in with debt. They're taking on Warner Brothers' debt, um, with this deal.

Marcus Johnson: Mm-hmm. It was 110, I think, right, they paid?

Marisa Jones: Yeah, 110 billion is what- Yeah

Marisa Jones: they paid for the acquisition.

Marcus Johnson: Yeah, it just closed.

Suzy Davidkhanian: And do we know if the debt is, like, [00:14:00] wh- where, where is it if it's not from purchasing other properties and brands? W- w- wha- is it easy to get rid of, like, if they go into bankruptcy and then reinvent themselves?

Marisa Jones: I wouldn't call... I don't know that I would call it easy.

Marisa Jones: They aren't really giving any details on what their plan is, um, to reduce this debt beyond initial cost cuts that I just said, like layoffs. Um, they aren't really giving any indication of what the plan to pay off all this debt is. Mm-hmm. But are also simultaneously making very ambitious claims about what the business is gonna look like now that it's combined, that might not really match the financial reality that it's facing right now.

Marcus Johnson: The interest rates are high. Yeah. And that's why they're trying to pay this off so quickly. They're talking about trying to really turn things around financially within the next three years. Um, this, this is absolutely fascinating, this one, um, because they do have to, to what you were saying, um, Marisa, Robert Fishman, a senior analyst from MoffettNathanson Research, was also making this point, saying Skydance, they're operating in [00:15:00] a tough environment of balancing the need to grow the streaming engines, HBO Max, Paramount Plus, without starving the linear channels that still generate the majority of the company's cash flow.

Marcus Johnson: Mm-hmm. So it is a really tough balancing act. Um, they don't have long to turn things around. The debt payments, they're just unforgiving. Skydance is project- projected to operate all of next year at negative cash flow. Um, so already starting on the back foot there. There's lots of ways they can save money.

Marcus Johnson: Uh, Alex Wetmore of The Hollywood Reporter was, was, uh, pointing to Gerry Cardin- uh, Cardinale, I think is how you pronounce it. He's the founder of RedBird Capital, El- Ellison's operating partner in the deal, saying layoffs, but they're also looking to save money from tech stacks, more efficient marketing, streamlining vendors, shrinking company's real estate footprint.

Marcus Johnson: We'll see how well all that works. Mm. You mentioned the movies, we have to release 30 a year for the first couple, and then 32. I thought that was something they said, uh, that we'll promise to do this, and it didn't have any ramifications. No, no.

Marisa Jones: Yeah.

Marcus Johnson: It's [00:16:00] 30 million per missing film.

Marisa Jones: Yeah. That's what I was, I was just about to bring up that point- Yeah, please

Marisa Jones: so you got me. Um, just, you know, they're making all these commitments about what they're gonna invest in, that is obviously already gonna cost them millions and millions and millions of dollars. Yeah. Um, but not only that, if they fail to meet the conditions that they had to agree to to get this, uh, merger to be approved, they have to pay more, uh, more money that is kind of, they don't really have right now.

Marisa Jones: Yeah. Or that is a big strain on them to have to pay 30 million per missed film. Um, say they only make even like 25 to like 28 movies a year, that's still a lot of money that they would have to pay back.

Marcus Johnson: Yeah.

Suzy Davidkhanian: We were wondering, do you guys know where the money goes? Like, if they're all one big happy family, say it's month 11 and they haven't done three movies, who gets that money?

Marcus Johnson: So there is also a grace period. I think they have six months of a cure period, uh, to make it up. However, uh, the money gets [00:17:00] split between a bunch of people. About half of it goes to healthcare and retirement trust funds for entertainment industry unions. Hmm. Um, a bunch of those. 40% goes to motion picture and television fund, and then 10% to the National Association of Attorneys General-

Suzy Davidkhanian: Wow

Marcus Johnson: fund.

Suzy Davidkhanian: But what if they launch all 30 movies, but they're all bad, so they don't make any money?

Marcus Johnson: Oh, they just have to launch them. Yeah. But there's also a bunch of stipulations in term- they have to... 20 of them have to be wide release, four must be independent. There's a whole bunch of other stipulations in it as well.

Marcus Johnson: Um-

Sarah Marzano: So I guess my questions are, like, how soon will we know if there's a problem, and w- who stands to benefit if there is, right? Like, what opportunities does this open up in the broader landscape? 'Cause the whole goal of the merger was some more scale, more control, right? More opportunity to offset the declines in linear.

Sarah Marzano: We're also getting a little bit out of my depth here, so I genuinely have these questions.

Marisa Jones: Uh, so we do forecast there's an overlap of about 50 million subscribers to Paramount Plus and HBO Max.

Marcus Johnson: [00:18:00] Mm-hmm.

Marisa Jones: Which kind of limits the amount. I think when they first came out saying they were going to merge these services, they said, "Oh, now we'll have, like, 200 million subscribers," but that's not accounting for how many...

Marisa Jones: And that's in the US alone that we forecast 50 million overlap. Yeah. Um, how much overlap there is between those services. So I think the imperative for them now is to ensure that enough subscribers are on, um, are staying with the service and are, one, either willing to pay the higher price or are switching to ad support plans because they do need, um, to recuperate some of these losses through- Yeah

Marisa Jones: ad revenues.

Marcus Johnson: Also, Sarah, to your question, um, I think they'll know within the next year. Mm-hmm. Yeah. 'Cause next year they're gonna run at a negative cash flow. Mm-hmm. The year after that, they're hope- they're expecting to make money, so if they're not by 2028, even if it's just some money, then people will realize that, that- Yeah

Marcus Johnson: things aren't on track. Um, the other penalty as well for missing any, uh, movies that they are supposed to put out is the company could be forced to sell its 49% minority stake in Miramax, the [00:19:00] independent film studio. Um, I've gotta move on. Sarah, what you got? Very nice, uh, Marisa.

Sarah Marzano: I have what if conversational commerce breaks the third-party marketplace flywheel?

Sarah Marzano: And I will explain that by giving the example that for years, third-party marketplaces have been a very attractive growth strategy for retailers. Amazon and Walmart are the most scaled, uh, examples here, but we've seen a lot of major retailers follow in their footsteps. Best Buy and Ulta are two that have announced, uh, broader third-party marketplace initiatives recently.

Sarah Marzano: And what they do for retailers is that they expand the assortment considerably without having the retailer take on, um, the inventory risk, right, of what to do with aging inventory if it doesn't sell quickly enough. They allow retailers to collect fees on transactions, uh, but most importantly for my world in commerce media, uh, they enable retailers to monetize the growing competition that occurs when you have a broader assortment.

Sarah Marzano: Um, and sellers need to pay for [00:20:00] discoverability within that broad product assortment. Um, and so this is sort of an established phenomenon in retail, but what challenges that is that conversational commerce, uh, and the way consumers are a- interacting with AI intermediate interfaces are changing the way consumers expect to navigate, uh, in digital environments, right?

Sarah Marzano: And so we have retailers developing AI agents and assistants to help consumers navigate their assortments. Hypothetically, this could result in a more curated experience in which the consumer evaluates fewer products on their search to purchase something. Which has a lot of downstream, uh, implications for the economics of monetization, right?

Sarah Marzano: It means fewer impressions. It means those impressions could be worth a lot more to advertisers, but also changes the mechanics of whether long tail sellers can afford to become part of that consideration set.

Suzy Davidkhanian: I, so I think it's interesting on the flywheel piece in that it all sort of symbiotically works together.

Suzy Davidkhanian: What I [00:21:00] think retailers will still need to do, and so figure out how to monetize it in a different way, is in order for, for you to show up on the LLM, you still need that breadth of products. Mm-hmm. And so, like, you're still... If you still wanna win that sale, you're still gonna need them all, but you just have to figure out a better way to monetize around that, which in- inevitably will happen.

Sarah Marzano: Yeah, I think there's a lot of assumptions about the way to grow your online retail media revenue that are just gonna come into question, right? Yeah. Because retailers are sort of chasing both strategies at the same time. They need to, right? They need to deliver on what consumers are looking for and what they expect, uh, from their digital experience.

Sarah Marzano: Um, and they also need to think through how do we, uh, offset the cost of doing business in e-commerce, right? Um, there are a lot of benefits that are gonna remain in terms of having a really broad product assortment and being the destination, like, come to us no matter what you need, right? But the monetization, uh, might just end up looking different, right?

Sarah Marzano: And I think there's a lot of different scenarios that retailers have to be planning for right now because we don't [00:22:00] technically know how all of this is gonna shake out.

Marcus Johnson: What does conversational commerce mean in practice? Like, what does that look like?

Sarah Marzano: Yeah, so, uh, you know, it, it looks different depending on the retailer that you're talking about.

Sarah Marzano: Um, Amazon has, uh, Alexa, m- what is the phrase? Na-

Suzy Davidkhanian: Alexa

Sarah Marzano: Shopping ... it cannot be Né Rufus. Previous- Yeah. What's the French term? Um, Walmart has Sparky. What's interesting about, um, Amazon's Alexa when you're shopping on the site is it's, uh, an, uh, sort of assortment of AI tools that are embedded within the, uh, traditional shopping flow that you might picture.

Sarah Marzano: Some retailers like Kroger have, uh, something that appears a lot more like a traditional AI chat bot that's like a completely separate experience. Um, and so I think there's a lot of different ways retailers are exploring giving consumers a way to use more conversational interactions to navigate to what they're looking for, right?

Sarah Marzano: Um, and so you've got a bunch of different examples here, so we don't know exactly what it's gonna end up looking [00:23:00] like. My theory is that in a few years' time retailers' websites are gonna look really different than they look today. You might not have that really familiar, um, sort of infrastructure of like a keyword-based search bar or a left-hand navigation.

Sarah Marzano: Uh, it might become a lot more, again, like conversational inputs, it might become a lot more visual, um, and a lot more contextual.

Suzy Davidkhanian: But Marcus, I think you're ... I don't know if you actually w- were one step higher in terms of the question. It's not voice commerce. 'Cause me too, originally when we were talking about conversational commerce- Well, that's possible, yeah.

Suzy Davidkhanian: Mm-hmm ... I was thinking about voice commerce. Mm-hmm. It's when the whole gen AI bit has brought everybody to write full sentences without actually be- being structured, and then all of the tools sort of try and understand the contextual component- Right ... of your question- Mm ... and surface the things that you're looking for, versus

Suzy Davidkhanian: 'Cause me too, originally I was like, oh, are we talking about, "Hey, Alexa, I need..." I don't have Alexa, everybody knows I have Google. "Hey, Google, throw some toilet paper in my cart."

Sarah Marzano: Or, "Hey, smart fridge."

Suzy Davidkhanian: [00:24:00] Yes. See? That's the, that's ... Yeah. Yeah. Voice commerce. I guess we now call that voice commerce.

Sarah Marzano: Yeah, I bet, yeah.

Marcus Johnson: Hmm. Right. So, uh, Sarah, are you imagining these websites look a lot more like a, like a ChatGPT, like a Gemini?

Sarah Marzano: Not even like what ChatGPT looks like now, but, uh, maybe a lot more sort of visual, a lot more like, "Hey, I'm gonna open up with a prompt of, like, what you're here to do today." Mm-hmm, mm-hmm. And maybe it's, "Hey, I'm just doing my weekly grocery shopping, so help me understand, like, what I've been buying for the past few weeks," or, "I'm planning a dinner party," or, "I need a, a wedding dress because," or a, a guest of a wedding, uh, dress, uh, for something I'm getting ready for, and it's in this place, and I think it's usually cold that time of year, and I wanna wear, uh, a color, but I want to avoid red.

Marcus Johnson: Yeah,

Sarah Marzano: yeah. And so you're gonna surface the three best dresses or maybe, uh, the, the chatbot's gonna ask me, like, "Oh, okay, like, what size do you typically wear? What are brands that usually fit you well?" Right? And then I'm gonna be surfaced hopefully a curated set of more relevant options than if I were to go to a, a keyword-enabled chat bar and, and have to type [00:25:00] in w- w- wedding guest dress, not red.

Marcus Johnson: Yeah. So this might be a bit of a controversial take, but There's the argument that conversational commerce will yield fewer options for people, right? Is it fair to, to argue that even today's world, like if I'm searching for something on a site, let's say on Amazon, on the marketplace, and I'm scrolling, I have those thoughts already in my head.

Marcus Johnson: Like to your point about I want it to be, look like this, cost about this much- Mm-hmm ... be reviewed by this many people, have this many star. That is already in my head. So realistically, even if I'm scrolling through hundreds of different options, I'm not paying attention to most of them. So is there a world actually where conversational commerce presents more realistic kind of, um, options that would be part of my consideration in the end?

Sarah Marzano: Yeah. No, I think there's, it's such a good point and I think there's two sort of competing forces here, right? Because conversational commerce gives, uh, us an opportunity to potentially monetize like longer [00:26:00] tail queries that were hard to monetize with keywords alone, right? Mm-hmm. So maybe there's an opportunity-

Suzy Davidkhanian: Mm-hmm

Sarah Marzano: um, again, for those impressions to count for more. Um, but I think you're also like overestimating your ability to just scroll through, through things and not discover something that you didn't know you needed, right? Um, or consider something that you maybe weren't originally planning on, which is what- Fair

Sarah Marzano: uh, the endless aisle and retail media monetization really depends on right now.

Marcus Johnson: Yeah. Yeah.

Sarah Marzano: It's sort of forcing you to look at all that stuff.

Marcus Johnson: Mm-hmm.

Sarah Marzano: And also giving advertisers an incentive to appear as high up on the page as possible.

Suzy Davidkhanian: I do think on the non-retail media side, but on the retail side, the pages will look really different.

Suzy Davidkhanian: But I think there will still be some element of like, I go to a macys.com because I want to see and be inspired. And so like I do think that there will be less formal landing pages and more stylized product pages, and that maybe in the short-term- When you're shopping ... yeah, maybe in the short term you'll get pushed to a bot, [00:27:00] like a like, like Amazon does now, right?

Suzy Davidkhanian: You'll, you'll get pushed to a bot who like makes it so fast for you, or you get to scroll through- Amazon is the wrong example for that. Sorry, I should take that back. More like a Ralph Lauren, how they have the Ralph Lauren helper be, right? Or you'll go to the Ralph Lauren pages to see, like, "Oh, I didn't really need, know that I needed a cowboy hat, but, uh, now I have one because it's on that front page."

Sarah Marzano: No, I think there's gonna be this sort of continued balance that we've always had in e-commerce- Yeah ... between, like, inspiration and discovery and efficiency, right? Because- Yeah ... I've always argued, and this has been my argument whenever anyone tries to convince me that people wanna outsource all their shopping to an agent, is, like, shopping is fun.

Sarah Marzano: Part of the joy is searching for the thing, uh, doing the treasure hunt, um, getting inspiration from browsing. So I think that we're going to be sort of, um, as we see retailers iterate here, they're gonna be optimizing for the ultimate consumer experience. Um, and that's gonna really shape how this, uh, develops.

Marcus Johnson: Very nice, folks. Uh, another good one. Who

Sarah Marzano: won?

Marcus Johnson: Time f- No- nobody.

Sarah Marzano: I would never have come if I knew that there were no more winners.

Marcus Johnson: I [00:28:00] know. That's why I didn't tell you. Uh, our top takeaways today, really just what we've been covering. So Suzy had, what if your fridge knew you had dinner reservations, saw your lettuce was going bad, and told you to eat at home tonight, or Sarah's version, uh, made you go out.

Marcus Johnson: Uh, Marisa's is what if, uh, Paramount, uh, Warner Brothers Discovery, now Skydance, can't pay off its eight, $80 billion debt load. And then Sarah had, what if conversational commerce breaks the third-party marketplace flywheel. Uh, that's all we've got time for, but thank you so much to my guests. Thank you to Suzy.

Suzy Davidkhanian: Thanks so much for having me. I always love coming on the show.

Marcus Johnson: Thank you for being here. Thank you to Marisa.

Marisa Jones: Thank you for having me, Marcus.

Marcus Johnson: Thank you. And to Sarah.

Suzy Davidkhanian: Yeah, I'll come back when you do have a

Marcus Johnson: winner. Okay. J- just cut Sarah out of me responding. Just be like, yeah, just, let's, yeah, let's cut her and maybe a bit more enthusiasm.

Sarah Marzano: AI, you say something nice.

Marcus Johnson: Uh, no one will believe that. Uh, thank you to the production crew. Uh, we've got Mike and Lance helping us out with this one. And thanks to, uh, everyone for listening and supporting the numbers. E-commerce Podcast made possible by Atmosphere TV. We're back on Monday with Suzy talking [00:29:00] about why muse can and can't be the shopping agent people want.

Marcus Johnson: But until then, happiest of weekends.