The way I imagine it, I go back to uh um Devil Wears Prada and there was the scene at the at the Met Ball where um the Anna Winter character um you know, someone would come and whisper in her ear who the person was she was about to talk to. And that's that's essentially what we're talking about putting in place. you know, you're gonna then your best sales associates in a high in a premium luxury space, they they do that already for their best customers. But what it'll give you the opportunity to do is have get more personalization, you know, when you're not uh you know uh you know, whatever a billionaire spending $50,000 at a single single store visit. Welcome to the retail genic podcast where we explore the intersection of retail, e-commerce and AI agents which we call retail genic. Our mission is simple. We are shining a bright light on the new agentic AI shopping mega trend which will disrupt the trillion dollar digital retail market. The stakes are high. Google, OpenAI, Microsoft, Perplexity, Amazon, Apple, Meta, and Anthropic are all fighting to be the consumer AI shopping agent winner. There are going to be some tough decisions for online brands and retailers to make. What happens to checkouts? How should payments work? Should you continue to invest in retail media networks? What does the world look like when over half of your traffic is not from humans, but from AI agents? These existential questions are the tip of the iceberg. On this podcast, we're talking to industry experts, analysts, and influencers to get answers to these questions, identify trends, and best practices. This is Retail Jetic, your podcast partner in navigating our AI shopping agent future. And now, here's your host, Scott Wingo. Welcome to the Retail Gent podcast. This week, I'm excited to welcome Carl Howler to the pod. Carl is a partner at IBM Consulting and works in their consumer center of competency where he focuses on retail, CPG, and fashion verticals. Carl's been working on AI at IBM for over nine years and before that had 15 years of experience in the industry. In his current role, Carl is frequently meeting with the seuite of top retail and CPG companies to discuss AI trends and strategies. So he's a great person to check in on what he's seeing and what is top of mind with retail executives today. In this discussion, Carl shares that his clients are moving from AI experimentation to workflow transformation. Carl also believes we are going to see the rise of a new category called AI native brands. Everyone remembers digitally native brains. Well, get ready for AI native brands. Well, not only are they going to be digitally native, but because they're also AI native, they're going to be hyper efficient. So, they're going to be able to hit 100 million in revenues or more with 30 people or less. So, that will give them some interesting advantages we'll talk about. Finally, we go over the adentic shopping infle inflection point and where will AI take store retail and the advent of personalized pricing. I hope you enjoy this conversation with Carl as much as I did. Carl, welcome to the Retail Gent podcast. Excited to have you on. Thank you. I'm excited to be here. Uh, you and I have gotten to know each other well on LinkedIn and have a couple had a couple convos and I've I've really enjoyed your content on on LinkedIn that you've been you've been sharing and we've had a couple back and forths. So, I thought it would be good to get you on and you have a broad spectrum um through your position there at IBM Consulting uh of what's going on. But, let let's start back at the beginning. give us a little biography of uh where you're from and uh where are you right now and tell us what you do at IBM. Um so I am a uh uh I was originally a consultant back in the internet 1.0 era. Um I was then working uh at an ad agency and at a series of retailers and fashion companies uh throughout most of the 2000s and probably half the 2010s. And then I've been uh at IBM consulting since 2016. And it's very interesting because when I joined in late 2016 and into 2017 and 2018, we were talking to all of our clients about AI and we were the only ones talking to our clients about AI then. Um, and then you know I'll say gosh around the time COVID hit that those conversations all died out and then two and a half years later you know 2022 2023 it's now pretty much all we're talking about again. Um, and it's it's I think we're actually finally getting to the point where AI is not just a thing but it's becoming a piece of everything. And you know that took that took digital and the internet a decade or so and it's taken you know two three years for AI to progress through that pace. So what I do now um I lead our consumer industry center of competency. Um we're a global practice full of people like myself who came out of industry and um we work with clients in the retail space, the CPG space and the fashion space um to transform different parts of their business with uh data information and nextgen technology and capabilities. Got it. And when when people think IBM, they obviously think of the hardware company, but this is this is you're not out there um selling ThinkPads. So I take it we are not no we're uh we we have a we have a you know very strong partnership with the tech side of IBM um and in fact you know the tech side of IBM and the work IBM corporation has done transforming our business with AI is probably one of the the biggest selling points we have right now. uh we went public at our investor uh meeting back in January saying that we were driving about $ three and a half billion dollars of annualized run rate savings largely due to AI and automation. And so just for perspective we're about a $60 billion company. So that's, you know, 600 650 basis points of SGNA savings, which, you know, that that that opens the eyes of any COO, CFO, CEO that I'm out talking to. Interesting. So you're you're you're dog fooding this capability internally to drive automation. Yes. We prefer to say drinking our own champagne, but you know, if you go dog food, that's fine. I'm a software guy, so yeah, I recognize that has a negative connotation. Um, cool. So then as a so as a center of competency you're are you doing mostly thought leadership kind of things and and helping um uh or or that just that's the definition of your vertical it's just the definition um what we have is we have the majority of our consulting practices live in the the what we call the geos so the US has a practice Canada has a practice Europe all the countries there uh you know Asia etc and then we have small global practices um that get deployed in where there are the specific level of industry depth required, you know, industry functional or industry technical depth that is required that might not exist in the market. So even though I'm based in New York, um a lot of the work I do ends up being with some of our smaller markets where they may not have as strong of either a retail practice or a CPG practice. Um, and so we, you know, we're a group that I'll say it used to be we always had to have a bag packed. Um, now we have to be ready for a 2 am or 3:00 am client presentation, you know, on on teams. Yeah. Okay, cool. And then because you're living in retail CPG and fashion um and and you talked about this wave like when you guys had Watson you had a lot to talk about and then then kind of it went down and now it's come back with the evolution of the chat GPT kind of you know new the GPTbased AIS as you go out and talk to clients in those those buckets what are some of the things that are are top of mind with people it it really depends on client by client there are some clients who are thinking about what I would call, you know, everyday productivity tools, thinking about how they upskill their, you know, 10,000, 50,000, 100,000, half a million associates. Um, there are some people who are very focused on specific areas of the business. So maybe it's they want to see what they can do in finance or they want to see what they could do in marketing or in store operations um or in you know the the whole product and merchandising space. Um and then some clients and I'll say this is a this is a big shift we've seen in the last six months. um clients moving from hey I'm going to create an AI lab or an AI garage and let's get you know 50 use cases running and let's you know spin up a bunch of PC's and MVPs and what they found is not all of those are going anywhere. So we we've seen a real shift toward um you know 50 PC's to let's focus on transforming four key workflows that matter. So maybe if you're a CPG company maybe that's my idea to launch my um my sales, my marketing and my data and analytics. and you'll you'll take a very strategic consultative approach um to how those might how those would change and build out a more integrated set of capabilities to use um I'll call it you know old-fashioned AI in the a IML space generative AI and agentic AI um in the different processes that make up kind of one of those broader workflows uh and that that's been that's been a really noticeable shift among kind of the more leading edge of our clients. Got it. So, they used to be kind of throw it against the wall. Let's kind of do some experimentation that wasn't wildly successful, but now they've identified some deeper deeper challenges and workflows that they can go and and create a lot of automation on. Yeah. And they want to they, you know, they want to drive, you know, topline growth. They want to drive margin. and they'd love to capture some of that uh similar type of, you know, 300 to 600 basis point savings in uh GNA cost. When you're doing that GNA cost, is it are you replacing people or augmenting people or a little bit of both? You know, it's both. I think there it's you really have to think about what the job function is. So right now one of the clients I'm working with we're looking at contact center and that's you know that's a widely known use case. A lot of people are talking about contact center and a lot of people have moved to put virtual agents in the contact center and what that ultimately may mean is it ultimately may mean you need fewer frontline agents. Um, but if you're if you're in a growth mode, what that means is you're not having to go out and hire as many frontline agents for a job that churns quite heavily. Um, and you might actually be changing the profile of what that frontline agent is doing because that frontline agent now is not handling, you know, in a retail sense, I don't know, 30% of a lot of calls are whismo, you know, just a where's my order or how why did I get charged uh for for that? So as those start to get offboarded, you really need a more consultative agent um that is that is working with a customer and maybe that's resolving a more complex service issue or maybe it's shifting those contact those people in the contact center to serve customers in a place where that brand doesn't have physical presence. You know, maybe they don't have their own stores, maybe they don't have their own um you know, wholesale accounts that they deal with. And you know it's it's a way that you can extend and expand and augment what the contact center does. So I think you know yes there's there are there are cost savings that people can put in place by reducing headcount. However what we would say is that might actually be taking a you know a limited a limited scope or a limited view of what the real opportunity is. Cool. And then uh so you've read a bunch of the content we have on retail gentic. Any um is this kind of stuff coming up with your clients or or still a little too early to be on their radar? The the idea that that traffic is shifting the organic traffic is going to be decreasing. The Gen AI answer engines are increasingly capturing consumer share and therefore they're starting to pull the transaction up into the the Gen AI layer. Again, it really depends on which company I'm talking with and and who. Um, you know, I I was on with a client this morning. Um, he's a senior executive in a specialty retail uh company and he's focused on I say the intersection of stores and customer engagement. um and he was not fully up to speed with what's happening on the kind of agentic retail, agentic commerce, AI enhanced shopping side. Um and so we were just talking about that and you know his eyes are were gigantic and he quickly sees what the possibilities are. Um but that's not his focus area. Now, if I was talking to the person that is, you know, in charge of SEO at that same company, they're probably much more up to speed on that, I do think there is still a gap in what people are doing about it. Um, I think there's a lot of experimentation and a lot of like the ad dollars are probably the the first things that start to shift. Um, outside of a handful of companies, I'm hardressed to think of ones that are either developing their own agents to shop or embracing, you know, third party agents to come in and shop and who are starting to think about, you know, whether it's my my my site uh design and content and the way that is displayed for agents um or the the nature of the content itself and whether it is made to be consumed by agents, you know, there there's there are a lot of there are a lot of uh complex discussions and for most it's still very early. Do you guys um have a point of view on where this is going or you're that's not really how you work. You don't kind of put out thought leadership pieces. You you more work one-on-one with clients. So, we do we do a bit of each. So um we have uh I think what is now considered the top or second number one or number two ranked um thought leadership organization uh which is the IBM institute for business value and I'll say the thing that and so we put out a lot of um a lot of thought leadership pieces lately we've probably had a new piece every two or three weeks on how AI is going to transform X that it could be it could be your um digital product development process. It could be marketing content creation. It could be finance. It could be you know automation. It could be how um you know edge compute workloads are deployed. You know it really ranges. Um we've been running a uh CEO study now for 25 years. And one of the things that's that's interesting in that is some of what I was talking to about CEOs are are uh seeing that the the challenge of enterprise that that that enterprise AI is be is challenging. We actually had a interesting data point on that and and it's not specifically on Agentic. So I'll come back to that in a second. Um, a year ago when we asked CEOs where they were with AI, twothirds of them thought they would be beyond the pilot phase this year. Then when we went back and interviewed them this year, and this is, you know, two or 3,000 CEOs that we talked to, so it's not, you know, three people and their brother, um, 60% of them are still in the pilot phase this year, you know. So it's we we're seeing that the pace of deploying AI at scale is difficult for a lot of our larger clients, you know, and we're often dealing with certainly clients largely in the hundreds of millions up to the billions, tens of billions, and even hundreds of billions. Um, and it's not really the tech. It's much more the organizational the organizations they have in place, the embedded processes and having to reinvent how a process works. Um, and um, just the the ways of working that that exist that tend to slow things down and make something that, you know, could take six weeks take 12 months. Yeah. And all this stuff is based on data and just getting the data together is a huge front lift on on all these projects. Yep. And and it's off in these different pools and Yep. Yeah. And I think that's probably the one, you know, the the the one building block that I'll call say the smart IBM tell me that you need to have in place is you you have to have the data in place. Um now and we've got a bunch of tools to do that. But if you come back to the like the the the the that that intersection of retail and agentic commerce or agentic shopping um I think we're going to be in a situation not dissimilar to the late n mid late 90s when I was kind of first starting out um where consumers are getting ahead of the big companies that are out there. Um, I was I was going back and looking at some of this data, you know, and Forester had a report that from 96 to 99, e-commerce grew from about a billion and a half to about 20 billion. Um, you know, so whatever 130ish% annual growth rate over those over those three years. Um, we're, you know, this year we're probably starting from an even from a smaller base. I don't know if we're going to hit a billion and a half in aentic commerce. I don't even know exactly what that means. You know, is it the search volume? Is it do you have to actually click and buy? But, you know, the numbers I've seen um in ter um are, you know, the growth is, you know, either either triple digits or quadruple digits, you know, right now year-over-year off of a very small base. But I think we're going to hit with all the releases out that are out just in the last out and coming out. I think we're going to hit a big tipping point uh this this holiday. I think gift giving is ripe for letting an agent go and do some of the shopping for you. You know, if you know like like if I knew what your three of your hobbies were, I could go search for, you know, something that might align with that um and come back with with some great options and maybe I just go through and click to buy right on that and that that agent is just out there doing that leg work. Um, and I think we'll we'll get a lot of the, you know, a lot of the early AI adopters and then probably the first wave of fast followers to start, we're not going to turn all of our shopping into agentic shopping. Some of us like shopping. Um, many people like, you know, we still go to stores. Stores are still, you know, they're they're, you know, whatever 80ish% of the sales and roughly that amount of the shopping involvement. But it's gonna we will see agentic or I I've been calling it AI enhanced shopping um to to kind of include the search in with the agentic and I I think we're going to see you know a a significant tipping point this year and then probably another the bigger tipping point uh next holiday and then I think in 2027 it's like it's mainstream. Yeah, I agree. Yeah, I think that's a good timeline. The big the big outlier for me is we've got chatgbt 5 that everyone you know there's always people that that have played with it and are amazed so they always tease us with that and that's as of this recording they're saying that's coming in August so that'll be a big one and then um you know I think so at leaked that chat tpt is going to have a checkout and it's going to be interesting to see there where you know these in my in my vernacular there there's a world where they actually become marketplaces where the transaction happens on the answer which is it it's an interesting user experience. It's a better consumer experience because it all is just right there and encapsulated and and less chance for failure with an agent having to go do the checkout for you. Um but it creates complexity on the retailer side because now you've got this pool of inventory you've either committed or sent in some some digital fashion to a number of answer engines that are going to be checking out for you. So um it's going to be for me it's a replay of marketplaces all over again. It's kind of a funny to see that that play out again. I think I I saw your analogy on that. I can't remember when you put it out, but I think that is a very apt analogy for how some of this plays out and and I agree with you. It it offers a lot to the consumer. Um, one of the things that, and you see this with marketplaces as well, where the rub comes is on returns, you know, on the the it's the credit card payment and who's actually getting the payment, who's capturing the the information from the customer, who's your transaction actually with, um, and then what happens if something goes wrong, if a delivery is late, um, or if if you have to return something. That's that's where the you know I I would even say a lot of a lot of retailers still have challenges on that with the marketplace as they operate today. Yeah. Maybe there'll be some chat GPT trucks that come and pick it up or with robots. Humanoid robots will just come grab that stuff. We'll see. We'll see how they do in the physical goods space. Um I think a lot of people get very surprised when they go from the digital world into the world where you've got stuff. Yeah. Yeah. It gets complicated really. Yes. And that the whatever the whatever the pendant thing is that they're launching uh I think will be an interesting it will be interesting to see you know how quickly we're ready for an adoption. How quickly we're ready to adopt a new device. Yeah. that's going to be uh I've had Alexa plus for a while and it's actually surprisingly good with the the new the LLM the genai based um conversational thing. It's better at services which is interesting than the e-commerce is about the same but the services has had a significant upgrade where you can have it book reservations for you and call an Uber and that kind of stuff. That's pretty neat. You must you must not have teen teen children in the house. Uh I do. Yes. But they don't have they don't know we have this yet. Oh okay. Well, yeah. I was going to say they will they will now. Yeah. Thankfully, they don't they don't really watch this pod, so we're we're safe. Um, when do you think uh for clients that talk to you about this, do you have any recommendations for them? Are you are you kind of saying a wait and see or are you kind of you fall into the you should lean into this or or client by client? Kind of depends on where they are. I really think it is somewhat client by client. Um, you know, I was talking with a uh grocery retailer uh a few weeks back and uh the the woman I was meeting with there, you know, was all up to speed on this, super excited about it, but she's like, "Yeah, but it's grocery." like it's it's it's it might not be the thing that we're going to embrace right away, especially given that we're still seeing, you know, frankly, we groceries where we started to see a little bit of a shift back postcoid into stores again. Um, and I think everyone thought that we were going to kind of hold and expand on the uh, you know, keep growing on the grocery ecom and we've seen frankly a bit of a bit of a pullback in that. Um so you know that might not be ready. I think the the a business that is dealing with um a consumer base that are full of early adopters you know then I would think you might lean into it. I also think it depends on what your legacy is what your legacy stack is and how easy it is it's going to it's going to um how easy it's going to be to build that up. I one of the things that uh we have not really seen yet but I anticipate we will especially as consumers adopt more quickly than large uh large retailers and brands. I think we will see a surge of um what I'm what I'm calling AI NBS. So AI native brands that are rethinking every aspect of their business AI first. So they're they're AI first from the shopping side and the you know the marketing sales and service side like the digital native brands were but they're also AI first in product development and in merchandising and in sourcing and supply chain and you know they might have a finance team of two at a hundred million dollars. you know, they because they they just they're gonna they're gonna take a lot of those back office functions where you need to get dozens of people at that at at that size and be able to do it in a more um you know automated automated agentic workflow manner you know for whether that's finance or HR or indirect procurement or legal services and I think that's going to give them a real cost advantage in the way the DMVs never had. Yeah. The the so the most famous DMVs were like Bonobos and Casper and and these kind of folks and you know they all they also had this pattern where they all shot to 100 million maybe 200 million but then they flattened out because the the direct to consumer piece ran out of gas when they ran out of dollars they could spend at Google and Meta. So something has to happen on the distribution side too. even if you have a cost advantage, you know, maybe you get to 100 million more efficiently um and you know and you have better pricing because of that or something a little bit more of an edge there. But at some point there's this distribution problem in our world where we just you know the consumers are locked up in in a couple of places. So uh I'm I'm cautiously optimistic that Genai creates a wedge. we've got a new set of consumers and and maybe that it creates more competition which is always good and maybe we'll see some of those not only use the advantage from the the AI cost savings um but also they can they can punch into the consumer and get to a bigger scale and it and it'll be interesting to see what happens to the companies that grew in the you know the companies that were born in the 90s and early 2000s and then grew since then that you know are now kind of legacy from a tech perspective. you know, the the mag most of the Magnificent Seven, many of the Magnificent Seven, you know, were founded between 95 and 2005. Um, and and kind of rode that first wave. And whether that's on the you know the tech side or whether that is on the um on the actual retail and product side I it it's you know anytime the consumer is going to get ahead of where the industry is it creates an opportunity to um you know disrupt uh what's out there and start to go stake a claim for share in a in a different way. Yeah. Let's let's peel the onion on that AI native brand thought experiment. Is it um in my startup world there's all this talk about a single entrepreneur single person unicorn right which is like this I think Sam Alman quoted that like in the next five years we'll have one person running a unicorn which would be a company with a billion dollar valuation which implies a hund00 million kind of in in a software world but even you know if we if we take that to a a brand you know is it is it your each of your functional kind of things your your your merchandising your your product development, you're managing a team of agents and u you know or is it what do you think that looks like? I so it's interesting. I was with um a couple weeks ago I was with a handful of, you know, I'll call other, you know, senior execs working in and around the fashion apparel space. Um, and where we got to was it's somewhere between 20 and 30 people to have a business that's doing, you know, a hundred to $200 million. Um, and that probably needed to be 75 to 100 people um, previously. It's it's especially if you're making your own goods um you know and and not I don't and I don't actually mean producing with factories. I mean s you know doing the design the technical design and sourcing that um so I do think there is a like that that's where that cost advantage comes into play. So kind of a 3 to 5x multiplier. Yeah. And it and it won't be you won't get all of that because the people will need to know what they're doing. you know, you have to it's like it's like if all the agents were really smart interns who, you know, who kind of knew their function, but you still had to manage them and they occasionally make mistakes. Um, so you you kind of I always say like you need you need to know enough about what the output is, whether that's, you know, whether that's a um a prompt output or whether that's an agentic output to know when to call BS on the BS. So, so these 20 to 30 people are kind of o orchestration and oversight and maybe they're and then you know genis are not good at creative things. So they're they're probably on the creative side as well. So the product idea, the design and that kind of thing and then they're they're super augmented by the more junior functions that are are agents doing that on their behalf executing on the design and the plan and the build and the merchandising and all that. Yeah. And what you might have, you know, you you'd have someone like in if you just take in product design, you'd probably still have someone who is in charge of um, you know, delivering on the vision of the brand with actual products. And maybe that's one or two people, but and you would have agents that are out doing actual design work and then you're you're reviewing and curating and making changes. You might have agents that are creating the, you know, what are called the tech packs, the technical specifications around that. You might have agents looking for sourcing and production and then working, you know, doing uh the negotiation back and forth on production and cost of goods. Agents overseeing and monitoring that production. Um, and then monitoring the inbound uh sourcing of that. you know, reviewing. You could have an agent reviewing the um you know, reviewing digital samples to make sure everything is up to spec uh and in alignment with what you were setting out, you know, and then pulling that in. You probably have, you know, again, someone someone on top of most of those functions that knows what they're doing, but the the teams of people would be replaced with teams of agents. Yeah. I have a small investing fund and sometimes people in their deck they'll include an org chart that has agents in it now. So there's like the human side and an agent side or or they'll be interspersed with different colors and things. It's pretty pretty strange world that you know we're we're starting to think about these digital workers and and they're on the org chart and a lot of them have names and functions and because they need a little bit of a job description to stay in their lane and that helps with the prompting and and all this other stuff. It's it's it's a really if if a and I find when you talk to people about this that haven't thought about it, it's kind of they it's super mind-blowing that this is happening. I I was with a client in Canada uh back in June and we were talking about this was like to their senior executive team and we were like, you know, some of you will be doing reviews for agents next year. you know, you'll be sitting you'll be, you know, not sitting down across the table and doing the annual review, but you have to think about what are your HR policies, you know, how do you do a review for an agent and is that a continuous thing? Is it a pulse thing? And it starts then you rethink, well, gosh, how should we be doing it for people as well? And you you it starts to as we were talking about kind of in the contact center it changes the nature of how the work is done in a more uh significant way than just okay now I have an agent doing this. How about um so that that that's that's super interesting. The uh IBM's known for whenever I go to the NRF big show, you guys have a huge booth there and you you obviously do a lot of the that may be more on the hardware side, but um how about at the store level stuff? Have you had conversations with with folks that have stores where this is going to be applied? because it seem seems like it'd be harder on one level because but yeah on other levels I I'll say it's harder mostly in that there's more complexity involved because you know let's say you've got a thousand stores now you you have to think about the workflows that are happening a thousand times over like in HR you don't usually have a thousand HR departments but when you have a thousand stores you have to you have to think about not just the overall workflow flow that's happening, but the tasks that are happening in each store and how you are observing things, you know, activity that's happening in the store and then how you're triggering um how you're triggering either tasks or jobs that off of those things that are happening. Um, and maybe that's coming through computer vision or maybe that's coming from IoT or RFID devices. You know, it could be information from seeing how many cars are coming into the parking lot or how many people are backed up at the checkout. um or a signal that you know a um you know a freezer is running 3° high and you know but then that can actually start to trigger a workflow um that some of that workflow might be agentic and some of it might be human. Um but the the opportunity for um improvements and effectiveness is gigantic because that's probably in terms of staff. Most retailers probably run, you know, 90 to 95% of their overall employee count, you know, works in a store or maybe in a DC, um not in the corporate office. So to be able to make them more effective, you're going to deliver better service and frankly, you're going to give customers a reason to shop the store. Um, I don't actually think this is about cost savings. I think this is about being able to do all the things you need to do in a store to manage the product, manage the operations, you know, actually serve customers, help them when they come in. Um but do that in a way that is is more efficient and effective based on events that are happening rather than based on you know the routines and daily schedules that that take place today. But that is a that is a big area that we're working on right now. Yeah. Yeah, cuz anything that has a human in the process will have a human that's sick that day and they don't get the alert the freezer's about to break or something or Yeah. and then then things go ary when you're dealing with in it in like an event orchestration or an event automation way. If someone doesn't pick up that that job or that process, it'll bounce. Like so you you can you can take the the thing we talk to a lot of retailers about is being able to take their um their SOP their standard operating procedures and how can you actually put those into code. Um now the end job might still be done by a person. It's we're not really great at pulling things off the back room, you know, out of a box in the back room and loading them onto the to the right shelf in grocery or, you know, folding sweaters just the right way in apparel. Um but the but if you can start to uh if you can better organize and orchestrate and automate the work that needs to happen um you you've got a lot of uh you know labor hours that you can use more productively. Do you see I was talking to someone recently who said they think this leads to a really interesting instore you know so so the thought the thought pattern goes people are going to they're you know the more AI you use you're going to crave some human context on other ones you'll go to the store for that and then this will empower the store and I think they call this retailing where the store associate will now kind of know more about you right where um because uh the AI should be able to have personalization down to the store and individual associate level. Do do you think that's going to be a thing? I think so. I think if you're let's assume you're per you know let's assume everything is permissioned um you know you're you're in the loyalty program. You've accepted that um you know location uh location management and um you know all your your push notifications and everything. So you then should be known when you walk in. Um and the way I imagine it, I go back to uh um Devil Wears Prada and there was the scene at the at the Met Ball where um the Anna Winter character um you know, someone would come and whisper in her ear who the person was she was about to talk to. And that's that's essentially what we're talking about putting in place. you know, you're going to then your best sales associates in a high in a premium luxury space, they they do that already for their best customers. But what it'll give you the opportunity to do is have get more personalization, you know, when you're not uh you know, you know, whatever a billionaire spending $50,000 at a single single store visit. You know, for someone that came in and maybe hasn't been in in three months and you don't have your own sales associate, you'll be able to come in and get a personalized touch based on what they're seeing in your profile and the con maybe even something about the context of your visit because they understood what you were looking at online or that you that you um got a uh something in the the email or the physical mail recently um and that you had responded to an offer and you've got three things in your in your digital cart uh and two things on your wish list. So, you know, they can take all of that information and then think about what those next best actions are of how to best serve you in the moment of the transaction and and how to how to do that with a journey, but also even more importantly in the in the that stage in the lifespan of your relationship with that store or brand. How about I noticed you also seem to be thinking a lot about pricing and dynamic pricing as it relates to this. What what um you had an interesting thing where I forget the name of it but where you know you had like some some moisturizer was like a different price for everybody. How uh it gets kind of insane what you know will the will the consumer tolerate that and and where do you think that takes us this like real-time pricing mechanism that that's going to be available? I think I think the most practical thing that will happen is that there will still be listed prices. Um, and I think most states require at least shelf shelf listing of prices. I think one or two states might still require uh individual prices on items. Um, but I think the personalization that will take place will be hidden behind the scenes. So there will be right now a lot of places have loyalty pricing. You know almost every ger has the price that you get when you're in the loyalty club. What I believe will happen is that price you will get in the loyalty club might vary. That might not be the same 3% off on these you know whatever 50 items this week. It might be um you know you might be a customer they're trying to get to buy more more of ones type of product. So they incentivize you to do that. And if they don't need to give me that discount, they might not give me that discount. Um, I thought it was really interesting what uh I think I remember the article you were talking about. It was on uh what Delta is doing. So Delta is saying I think they're going to have 20% of their prices will be individually driven right now rather than like right now it's based off of day of week, time of day. I think some something about the device but if you and I were sitting next to each other I don't think we would get you know using a similar device in a test and control manner I don't think we would get a different price but you know that the chance of us getting a different price um is going way up just based on what they know about us kind of quote unquote in their file. Um, and I think that's what'll happen for, again, it'll be for loyalty club members because truthfully, consumers have too much backlash that there's going to be surge pricing, you know, at their grocery store, at the McDonald's, and they think they think like the price is going to change from the time you're in the back of the line to the front of the line. Um, and they don't realize, one, that's terribly hard to execute, and two, retailers don't want to do that. like like they just don't want that headache. Yeah. I've u I went to a visit I've got a kid going to school and we went to one of the department stores and they had all the digital tags everywhere. Uh and I was thinking sure is easy for them to update those prices now. Yeah. And they will and they'll update them. They'll uh what they'll be able to do is they'll be able to update them nightly um and with much more frequency and they'll be able to update them store by store which most do not do. most e are are zone priced right now which kind of goes back to whatever your you know back when you used to get circulars in the Sunday paper you know the zone would be based on that that trading area and it was usually driven around newspaper or media um because that's where you would control what the prices are um but now you would be able to do that at a do do that pricing at a store by store level and if you Let's say, you know, you've got um, you know, meat that you see your your normal demand is saying you're not going to sell out of the meat before it goes bad. You can actually trigger just for one store the lowering of a price. It's it's I mean, it really it goes back to the the uh the Kmart blue light special. You know, you'll be able to offer people store specific local prices that are complete surprise and delight. um that you know give it's again it's one of those reasons people love to go into the stores. Well, I I uh I know you're busy. You've got a lot of customer proposals to get done. Um so I appreciate you taking time. Anything any last thoughts before we wrap up? The one thing that I keep coming back to is consumer behavior changes very slowly right up until the point that it doesn't. And and I think on one hand we see gradual change and then we see this big inflection point um and having lived through kind of what happened with ecom I think that's what we're headed to over the next I'll say two to two to three years um in the you know AI enhanced shopping space. Awesome. That's a good thought to leave it on. I I I 100% agree. So we're aligned on that. Um thanks for joining us today and sharing your thoughts. If uh if folks in the listening or viewing audience want to learn more about your thought leadership, where's the best place for them to follow you? Uh you can find me on LinkedIn. Um it's Carl Hower. Carl with a K h a l e r. Um and uh my company has a very complex URL. It's ibm.com. Thanks Carl. We really appreciate you taking time. And we'll put uh links to that in the show notes uh so that people know how to follow you over on LinkedIn, but we won't put IBM in there. I think people can figure that one out. Yeah, your spell check will never get it right. All right, thanks very much. Thank you. Follow, rate, and share to stay uptodate with Retail Genennics, your guide to the future of AI shopping agents.