Hello, everyone, and welcome to this talk on the future of merchandising. Today, I'm gonna take up about fifteen minutes of your time to take you through where we believe the future is going. And at the end of this presentation, there is also, a few takeaways for anyone in merchandising or any senior leaders within merchandising that you can bring forward to your business. So what is it that we'll cover today? We're gonna go through the macro trends that we are seeing. We're gonna explore what the customer expectations are today and how they're changing and how that impacts, merchandisers. And then, how we believe the role's going to change. And it's all for the better. There's nothing here that's, scary. But there are ways in which you can prepare yourself for the future of merchandising when it comes to the role of AI within that. And then how does the business become AI ready? And how do you as a merchandiser also become AI ready within your role, based on where we believe the future is going. So why does AI in merchandising matter? AI seems to matter everywhere at the moment, but there are some real applications to AI within merchandising. But at this macro level, what we're seeing at the moment is that it's the highest mentions of AI in retail earning calls ever, and that's to date. And also, McKinsey believed that there's about three hundred and ninety billion dollars of unlocked economic value, from AI coming in the coming years. And then also, the cost of OpenAI's latest models, just to give an idea of how cost going down usually drives usage up, has halved. So that's the difference between what was three point five, turbo and now to four o. So McKinsey believe that about thirty percent of business tasks will become automated, with AI. And I know that part sounds that part sounds concerning, if you're worried about your role and how AI could impact your role. However, what we believe at Coveo is that what that's gonna do is take away, a lot of the mundane tasks that merchandisers have to do, and instead free them up to be more strategic and creative in their day to day rather than having to, I don't know, fill out spreadsheets, upload products, change products in their product catalog. And instead we can think about how you can really impact the business even further with new strategies, that you can put in place. And then lastly, and I think this is really interesting for anyone listening in the role, is that fifty seven percent of the new skills required when it comes to AI within the business will be from upskilled employees. And that's why the takeaway at the end are really important because there's areas there that you can look to to try and, change the way in which you're working today and elevate what it is that you're doing, for the future. So that was all from McKinsey. And then the latest from Gartner is that retail retailers that don't implement critical AI led merchandising processes to support the business transition to customer centricity will not survive. And this report that they did was actually all around customer centricity and how that is actually powered by AI led merchandising. And so the the takeaway statement here, although it looks very stark, is actually the transition to customer centricity is extremely important, and AI is one of the levers for that within merchandising. So with that being setting the tone, and I don't wanna spend too much time there because it's very obvious that AI is gonna change the way that everybody works. How is it actually gonna change what customers expect from you in terms of the experience on the other side? So the areas of change that we're looking at at Coveo, and this will adapt as time goes on, are the following. So we believe that customers are gonna start with an idea rather than a need. And I'm gonna go into some of these in a lot more detail so you can kind of see what that actually means. But instead of thinking, oh, I need a new monitor for my screen, they might start with the idea of, I wanna change my work from home setup. I wanna make sure it's actually a bit more ergonomic for me. I think I need I think I do need more screens, but I'm not really sure where to start. That's what I mean by that, to start with the idea and start exploring it with a brand on their website, before they go off doing research in other places. Con conversational commerce will become table stakes, there's no doubt about that. The change is already happening, and we're starting to see this implementation across, Coveo customers as well as just generally within e commerce, where people are starting to be able to have a conversation with the website as it were and the brand in order to get things, and educate themselves on what it is that they want to buy. There's a high chance that customers will begin to expect more products in one place, and we think that's because of the fact that if they start with an idea rather than a need, it's more of a project based buying pattern rather than specifically going to one one retailer for one thing and then specific go going to another retailer for another. What if you could have more products in one place and, secure all of that revenue from the customer rather than them going off shopping in in various places. Just need to move myself here, but, less filtering and all around better search results. So the idea here is that if the results from the search as they're doing going through their product discovery process, are really good, they will not need to, filter as often as they do today. So this is actually from McKinsey, and the idea being that at some point, customers will expect a lot less filtering. It's still in a very important part of today, but there's a high chance that that is going to change as customers expectations change of how good the search results, are going to be. The other interesting element is that customers will start to expect the products that are shown to them, be on the search results page or be it within the recommendations carousel on various parts of the site, to have the reason behind why it's being shown. And it's an interesting concept because this is about trying to remove some of the black box element of recommendations and any AI and ML across the website and e commerce store, to showcase a bit more of, you know, why it's being shown to me. And this will help build trust in the system. It will also enable, the customer to understand that the brand does really get their context and what they need, to further fuel that trust within the suggested elements of of any given customer experience. And the last one is around generated product cues with guided selling. And we've seen this on the likes of Amazon already where, even just their AI summary of reviews, is a way in which, AI is changing how people go about making a decision when it comes to buying a product because they're able to synthesize information faster rather than having to go through the entire, review schedule to see what's in there and what people are saying about it. It really pulls out those key elements. So Gartner's point earlier was that transforming merchandising from a product centric approach to a customer centric approach is extremely important. And AI will sit in the center of that transformation, and that's largely down to the fact that it is impossible to scale this to a customer centric approach unless you have some form of AI, ally that can help you do that. There's no way to do that in any sort of manual capacity today, with any, you know, any big enterprise business. So the idea of customers starting with an idea. And what that really is is they go on a website, they start to have a conversation with the with the search, and they say that I in this example, I want some tips on how to build an outdoor barbecue. The website can then respond with all of the information about how it is that you would go about that project, and it can detail the steps required and the products that you're likely to need to get that project done. And all of this information can be grounded in all of the content that's available on that e commerce store today. It can make sure that it doesn't start recommending products that aren't possible to use, it certainly won't link to anything that isn't possible to to use and buy on the given store. But this is a way in which people can start to refine how it is that they're going about their idea that they want to buy something, and buy it all from one store. The the next element is around customers expecting this type of conversation when it is, when it's when they're at the time of discovering a a product. And so at Coveo, we believe that we're gonna get to this point where the search box transforms into an intent box, and that intent box is where a customer can go whenever they want anything. It could be I wanna go in here and I wanna find out the latest information on my order. I want to I need some help with the product I've recently bought. But if we're talking more steps back than that and about the actual product discovery experience, they can ask any question they want in here in order to educate themselves on the product catalog of the given, e commerce store. So it becomes a different experience, but it's great because the search box is present on every single page. It's, part of the anatomy of, like, the header of an e commerce store. So they can keep going back to it to find this information. And they can ask as long a question as they want, and we can generate an answer back to that customer and, use an LLM to to make that possible. And it enables them to understand and educate themselves on the catalog. And as ever, it would always have all of the citations and everything of where that information's come from. It can suggest next best questions to that customer so they can go dive deeper into what they might need. And it will still enable them to show, you know, filter products, have a look through what it is in a normal search fashion. But this could be the future of how a customer interacts with an with an e commerce store and goes about discovering the brands. So there you can get all of the recommendations. You can talk about category level recommendations all the way down to specific products that it is recommending within its generated answer for that given customer. It's a brand new way of exploring a product catalog and very likely to be the future. There are options outside of doing it within an intent box like this. A lot of people have adopted, a chatbot option. We're not very keen on that at Caveo. We think that the chatbot is an additional distraction when somebody's already trying to go through a process of discovering products. And especially on mobile, having just something else on the screen that is already quite tight real estate is not the best user experience option. There's already potentially GDPR, cookie up, selections. There's CCPA ones as well, there's usually some form of pop up as well to explain, sign up to our newsletter. It's we don't wanna add more layers to that. We wanna integrate this product discovery experience into the way in which people like to search and discover products today. Now I said before that people might start to ask why am I being suggested these products. And just got a quick example here, but they wanna know the reason why they're being, you know, suggested these products in the in the checkout here. And so instead, what we think is likely to happen is that the the terminology will change. So rather than a little something extra in this example, picked exclusively for you. And what it does is it's trying to explain to the customer that we think you're into streetwear that's good value. So we're not gonna show you anything that's really really expensive. We're not gonna show you something that's super smart and meant for work because that's not the context that you're in right now. But we are gonna show you our three products that, one, enable you to complete the look because that bag is what, the person the model here is wearing with the with the, knitted jumper that's already in the checkout. You can wear something underneath that, knitted jumper, just a simple t shirt. It's good value. It's not expensive. And then if it's a streetwear sort of style that you're going for, here's something that matches that, that again, is not gonna break the bank, but it's a match some some cargoes that would fit nicely with that look. This is just a, you know, full on fashion example, but that you can see how this can start to build trust with a customer, instead of it being something different. So when it comes to the role in general, there is so much that a merchandiser does. And you can see why the merchandising team is so integral to the heart and soul of any retailer. You know, they are how the commercial team keeps their heartbeat going, responds to any problems, helps increase, revenues and margin all the time. Because every aspect of the role, and I've haven't got all of it here, but every aspect of the role is core to contributing to the bottom line of the business. Now, which areas do I think are subject to change? The answer is, unfortunately, pretty much all of them. And I don't mean it unfortunately in a bad way. I mean, unfortunately in like, it's a bit of a cop out to put everything here is likely to to, be subject to change, but it really is. And this change isn't isn't in a bad way. You know, this is where a lot of these things can sometimes be extremely manual, extremely time consuming, and AI will help you take away some of those tasks or reduce the time required to complete that task so that you can spend more time on things that are more strategic as I said at the start. So how do we actually see that changing? What does that what does that really look like? You can imagine interacting with your merchandising platform in this way. This week, I want to maximize my top line revenue and maintain a twenty percent gross margin as a minimum and expose ten percent of my visitors to our bags category because it might be a new category we've got new stock in. Or the AI will say to you, whilst you were gone, we allocated ten percent more traffic to your winning variant of a test that you were running. We created a new listing page based on your promo plan that you gave us before, and we noticed that you have five stale rules. Do you wanna review them and see whether or not you wanna remove them or keep them? And a good example of that is you might have some rules in place for Halloween or holiday shopping period, and actually those need to be removed in order to not impact conversion rates, post those events. And then you can imagine a world where it starts to do analysis for you. And over the last three months, the revenue attributed to your search and product discovery has been twenty seven point four million pounds or dollars, and that's up twelve percent year on year, and the profit is also up three percent year on year. So relative to other brands, you're in the eighty ninth percentile for, people using your generative experiences engagement. So that's that chat, option to discover products. Just to give you something to showcase to the business that all the effort you're putting in on your on your day to day is paying off when it comes to the results you're seeing within the platform. Now, things are gonna go even further, than this because right now, some people use quite a lot of AI and have quite a lot of models at the and some people do not. And it really depends on which search provider you're using and which merchandising platform is attached to that. And there's no doubt in our minds that the future only progresses in a way where there's more and more models. And those models are all specialized at doing specific things within the search and product discovery experience. Now, be it whether you have a lot today or you don't, there's no future where you won't have loads. And that's where having some sort of ally within your merchandising platform that's powered by AI will help you conduct all of those models in one in one motion. Because what you don't wanna do is have to start to manage all of those. You know, you can get to a point where you could have up to twenty models, even more, running at one particular time, and you need to make sure they're all in harmony in order to get towards a particular business goal. So what will happen in the future is there will be, a meta model that sits on top of all of these AI models, and it will understand the context of everything required. You know, what's happening from a customer experience perspective? What's the behavioral data telling us? What does the business wanna achieve? How much inventory is there? What's the attractiveness of a product? How much margin is associated with each one? And then when you say to that model that is sitting beside you and empowering you with the AI, we need to increase profits this week. It will be able to fine tune and tweak all of the experience that's shown to the customer based on the output of all of the models running to make them work in harmony and achieve additional project, profit. So it's a really exciting future because this is something that can sit alongside a merchandiser and, empower them to utilize all of the amazing technology that's out there. And it's just about elevating the role even further with something like this. So I think it's really exciting. I think people should be, sort of gearing themselves up for this future, because it's gonna make a big difference to how competitive the business that you work with, can be within the market. So if you're a merchandiser, how do you become AI ready? The first one is be open to the change. You know, you're not new to AI. You most likely use it today in any way, shape, or form. This is just another step in the journey, and it's not gonna replace your role. It's just gonna be added on on top and empower you to do more, interesting and exciting parts of of merchandising. When it comes to identifying things that you want to do within, you want to apply AI to, focus on the specific well identified use cases and don't go too broad. We see this a lot where people try and boil the ocean and have AI do everything. It never works. You just need to focus on the things that you know specifically it's likely to impact the business in a positive way that can be communicated around the business to say it's worth investing further in this because we've seen x uplift or we've reduced the amount of time you've had to spend on x. So it's really important to keep it focused. I would highly suggest people go out there and develop their Gen AI skill set. It's really easy to do. There's actually lots of free courses that you can do, and there's also relatively, low cost options as well on the likes of Coursera, where you can do a prompt engineering course. And it sounds intense, but it's not. And what that means is it teaches you how to ask, a generative AI model to an LLM, how to ask questions in order to get really great responses back. And it's not necessarily that you will need to do that in your role, but by going through that process, you understand how these models work. And when you understand how these models work, you can understand how to harness them even better in your role. So I think it's a very useful way to, future proof yourself as those changes come and as, the team is gonna need to be upskilled on how to use these things. If you don't have access to a usable behavioral segmentation, system at the moment, so that you can understand what it is that customers are doing and what they want and what they need, you need to make that your mission within the business. It's extremely important with this transition to customer centricity, that was mentioned at the start, and Gartner is very, very strong on that. So, if you can't get access to that, you need to speak to senior leadership and make sure that there's a way in which you can understand what it is your customers are doing. And with that, work with the team on making the customer the center of your merchandising processes. It's clearly very important. You can't really do that without the stage before, without lots of manual work. But if you do that, you will be future proofing yourself, as per Gartner's thoughts. If you're a senior leader within merchandising, then my suggestions here are to be part of the change, be the catalyst, help rewire the organization, and upscale your teams in order to make the most of AI in the future. You need to feel like some sort of, pioneer or trailblazer here, and you need to make that happen. So, it's on you to empower the team to make these changes. Focus on these well identified use cases again, and don't let a team go too broad, with the options that could be possible. So focus them down, make sure you're understanding what value you're trying to drive out of this new implementation from AI, and what's the outcome gonna be for the merchandising team. You also need to make some decisions on how you're gonna consume all of these new gen AI capabilities. It can be off the shelf, it can be customized, or you can self build. And so you need to decide as a business how you're gonna go about consuming, this new technology. There's no doubt that you need to, so it's just how. And we would always highly suggest a customized approach, so that you can make it work for the business, but also you don't have to maintain all of the technology in the background, because it's significant amount of work. And generally speaking, there is a skill sort shortage to get that done. So that's our strong suggestion, but you need to decide as a business how you're gonna do that. Then help your team focus on being customer centric. Make sure they have the tools that they need in order to do that, you know, going forward. And everything is going to change constantly now as things adapt with new AI options, new generative AI models, and the application of those to the customer experience. So you need to future proof your business, which means a compostable commerce approach is probably the only way you can do that. So that you can work with technology, switch them out, make changes, in order to future proof everything that it is that you're doing to invest, in what's coming. So, we're Coveo, and we believe the future is business to person. And we power all of the AI search recommendations and generative experiences for all of our commerce customers. So thank you very much for for listening, and hope to speak to you soon.