I was just watching a CNBC news item on the success of Dick’s Sporting Goods (DSG): Why Dick’s Sporting Goods Succeeded When Sports Authority Failed.
One of the reasons given for their success was their ability during COVID to get in-store pickup live in 2 days, which helped them sell stock trapped in stores when customers could not go inside. They had a solid IT team, and they were able to pivot quickly. (Impressive!)
(Pick up in store makes sense for a chain such as DSG. Rather than relying on delivery trucks and painful returns, customers could drive up to the store, get the product put in their boot, and drive away. Fast delivery, multiple locations close to customers, good insight into stock levels (all nicely laid out on shelves in stores). Getting that going faster than competitors definitely helped.)
How do people find DSG products online today? Well, Dick’s Sporting Goods already had great brand recognition, but I would assume Search is an important source of customer acquisition.
What then will be the impact from the latest rage of AI based Chat systems if Search traffic decreases?
My thoughts (with a standard disclaimer that these thoughts are my own opinions):
- I am watching with interest how much AI Chat system adoption will impact traffic to websites. Search will not go away, but most users like getting answers without having to read a full web page. Will it be as financially beneficial to a website to publish great informative articles if they are not shown to users and instead an AI Chat system summarizes the wanted information from the page?
- Oh, but great AI Chat solutions will include links to the original web page! So all is good! Yeah, well maybe. People will get used to having the answer and only follow the link a small percentage of the time if they want to validate the answer compared to the article. Let’s face it, nobody trusts everything they read on the internet, so reading source articles delivers only so much additional value.
- So its clear the economical benefit of publishing useful content will change if significant volumes of traffic moves from Search engines to AI Chat engines. (Can anyone say “disruption”?) No, I don’t think Search is going to disappear, but if Search traffic decreases, then potential revenue from traffic will similarly decrease.
- Another change is AI Chat (today) does not return multiple results in the same way as Search. It tends to returns an answer. Prod it, and you can get a second different answer. One at a time. This can lead to less diversity in answers, and less need for diverse content.
Okay, they were some general thoughts. But what about ecommerce sites in particular? How might they be impacted?
- Product pages share information about a product. The importance of this sharing may decrease, but it will still increase user trust in your site and brand.
- Product pages are also where you *buy* products. Site owners will continue to get value having product pages on the web (so they can sell a product to a user) even if the value of describing a product is reduced.
So I think product pages will continue to be important on an ecommerce site.
But what will happen if AI Chat is what now directs traffic to product pages?
- It could be that AI Chat, without care, runs the risk of harming smaller businesses as AI Chat likes giving one answer – not hundreds of alternatives. Getting to the top of “the list” could become even more important than before, and who knows how a Chat system would choose what is “best” when someone wants to purchase a product? That is not a language understanding problem.
No, I don’t have all the answers, but my crystal ball gazing leads me to think reasons for having product web pages will not impact merchants as much as the potential impact to pure information publishers. I think AI Chat will find an answer to questions to help people earlier in their purchasing journey, but to find merchants selling a product feels more like a traditional Search problem. So I expect AI Chat systems to hand requests for sellers of products over to a Search engine to answer.
However, I may be deluding myself because I don’t know if I like the alternative. I don’t like the idea of AI Chat offering up “the best merchant” to shoppers, driving more sales to the top few lucky sellers. (I like having a diversity of smaller merchants!) Rather than ads, will merchants have to buy slots in AI Chat results to get found? That may be the real truth of the future if AI Chat takes over enough traffic from Search. AI Chat engines may become the next round of marketplace sites where sellers have to bid against a new set of algorithms to get traffic.
But what is clear is those merchants with solid IT knowledge, like during COVID, are more likely to come out on top.