AI shopping agents may take fees from both sides

Transcript

From the transcript TBPN publishes with the episode.

1. 1:07:35

   What about agentic commerce? Are you seeing traffic from Muse, traffic from Instinct, traffic from any of the AI platforms yet. It feels like with the Shopify integrations, you're set up to be one of the products this holiday season that gets suggested as if somebody goes in there and says, hey, I'm doing some Christmas shopping for my family or my husband or brother or something, you could pop up. Are you seeing anything yet? Are you anticipating anything?

2. 1:08:06

   What's the state of that? Yeah. We've seen very little traffic start coming from agentic platforms. Mhmm. But LLMs still drive, I mean, an exponential growing part of our traffic. Sure. So like... And the conversion rate on those is just so so high. Yeah. You know, a conversion rate from a ChatGPT search is like 25% or whatever. Yeah. Someone's clicking through, they're actually going to make a purchase. But I do think it's a great time to be one, selling everywhere and then two, as big as possible. Mhmm.

3. 1:08:32

   Because you know, I do think Muse will end up, I mean having 200,000,000 downloads or whatever like it's going to be you know super used and I think shopping is gonna be a huge use case. Sure. So being a top spender on Meta is incredibly popular like I think it's gonna make you more popular on

4. 1:08:46

   the Oh, sure. Sure. Sure. Can only get there for free. Yeah. And then Amazon's You're giving them so

5. 1:08:50

   much data via the ads platform. It's not even just about like making sure your landing pages are discoverable to muse because you've already have a relationship. Totally. Interesting.

6. 1:08:59

   And what I've heard from people at Meta is that like they're not going to monetize it anytime soon. What they want to do is if they can just get people to like make like purchase conversions like happening inside that app, it's just something they couldn't have done, you know, and all the data they lost over iOS 14. Sure. Like it's just gonna make your ads perform that much better. And so if you're a big spender, you'll you'll get that data cycle started sooner.

7. 1:09:20

   Yeah. Yeah. That makes sense. As as a brand, somebody that is selling products online and getting demand from a bunch of different sources, how do you expect the the economics to work out with these agents? Because like we've talked about this a bunch on the show and my my view is like if an agent wants to have a high take rate, they have to be generating like new demand that wasn't already in existence...

8. 1:09:43

   30% from the humble e commerce operator. No. But like if you're running if you're running a bunch of meta ads and somebody gets excited about a brand... About your brand and then they go to their agent and say buy this product, I want it. Yeah. You don't wanna pay again to acquire that customer because you already effectively did. Right? They have to like understand their user well enough to suggest Ridge at a at a point in time where they're not already like sold on the brand to drive like an entirely new customer.

9. 1:10:15

   Yeah. What I think they'll end up doing is they'll try to eat from both ends. So like they're going keep the meta business, you know, where they're generating all this demand for you and then how to actually monetize the agent, it'll just end up being payment processing fees in excess of 5%. Right? It's like Stripe is, you know, somewhere between a quarter of a percent if you're on debit card or you know, 2% using an AmEx.

10. 1:10:37

    I think they'll just say, hey, it's five or 7% payment processing through Muse. And maybe that stacks on top of the Shopify rates, so you end up losing 10% over there. But that way they're just... They can get half of your revenue off of just making you spend money on ads and then also treating it like a payment processing app. So I think that's how they'll they'll maximize it. Because I do think they'll have a problem. It's like how can you take more out of this Yeah. And they'll just position it as a different percentage coming out of the same pie.

11. 1:11:01

    And that would look like in the Shopify payments like dashboard, you would like turn on I'm accepting that payment at a higher rate just like stores can say, look, I don't... There's plenty of stores that are like, we don't accept Amex because it's a higher rate. Right?

12. 1:11:14

    Yeah. Well, yeah. Basically, essentially. But like you can just turn on sales channels like inside of Shopify. That would be one of those. It'd just be used to be a sales channel.... Higher rate. And it'll just have its own fees tied to it.