PlayAbly Podcast Episode 12: How AI and Personalization are Transforming E-commerce: Insights from Playably CEO John Cheng

In this episode of the PlayAbly podcast, I’m joined by Playably CEO and founder John Chaeg to dive into the transformative power of AI and personalization in the e-commerce industry. John shares insights from his extensive experience building companies focused on personalization, discusses how AI is being used to enhance the customer journey, and explores the importance of empathy and authenticity in crafting personalized shopping experiences.

We also cover the basics every e-commerce brand should implement today, how to prepare for the future of AI, and the key role of data in powering personalized interactions. Tune in to learn how to stay ahead of the competition by using AI to serve your customers better.

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Thanks for tuning in to the PlayAbly Podcast! Ready to engage your customers like never before? PlayAbly turns your website into an interactive experience that drives results. Don’t forget, mention the podcast during your free demo, and get your first month free! Book now at playably.ai

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Transcript

PlayAbly Podcast Episode 9: How AI and Personalization are Transforming E-commerce: Insights from Playably CEO John Cheng

Kajal: [00:00:00] Back to the Playably podcast. Joining me is the Playably CEO and founder, John Chang. Today we're talking about AI and personalization and the effect it's had on e commerce. Welcome, John. 

John: Great. to be here. I'm excited to chat with all of you again. 

Kajal: So this is something that you know a lot about because you've done personalization at all of your companies that you, have started. I'd love for you to give us an overview of how AI and personalization is currently being used in the e commerce industry.

John: So probably about 15 years ago when I started my first company, really focused on, personalization for games and understanding gameplay through data. we've seen a lot of those same trends or movements, that happened maybe 10 years ago in games now starting to permeate in e commerce.

and I think what's really exciting about that is. The first tangible results that we've seen [00:01:00] from AI, have really been focused on automation, right? taking some of those tasks that were more rote and being able to, automate those in an intelligent manner. And we saw the same thing in game construction, where we're seeing personalization now, which is really the starting point and, at the more superficial level just being able to take, physical signals and incorporate that into the messaging or into the visuals, which is very surface level. But pretends to something much deeper, which I think over the next six to 12 months, we'll really start to see, it takes signals across a network. not just what they've done on your site, but other things they've shopped for and other behaviors.

the analogy that I love to use is, you know, There's personalization in that you might be able to send a postcard with somebody's name on it but when you walk into a neiman marcus or a high end department store they're able to [00:02:00] converse with you.

They're able to learn about you. They're able to show real empathy for you Your family understanding what you really are all about And creating a shopping experience that makes you feel actually warm inside. I think that's the potential for AI. And I think we're in the first and second innings of that.

Kajal: And how ready are customers for this? I know that some customers have expectations. Everything's personalized. I turn on my phone. Everything is. curated towards me. We were just talking about how I love to get my personalized ads because I often buy from them. and you know, but I know a lot of people love that in store experience as well, getting to be face to face with somebody and having a person on the other end of it.

So how ready are customers for an AI driven personalization? 

John: Yeah, I think it once again comes back to authenticity, right? And it's in the form of personalization for the sake of the shopper, not for the sake of AI or for the brand's own objectives, So the more we can use [00:03:00] AI to establish empathy, The less creepy it will be and the less jarring it might be, right? I think shoppers are always delighted when you can predict what they might be interested in or surprise them with a discount they didn't know about or a special gift that maybe their daughter might be interested in that they didn't even know was available, right?

using AI to find moments of authenticity and delight, will always resonate with different customer bases, when it's superficial and jarring, you see the pushback, right? are they tracking me?

how are they knowing about this? if it's more of a human interaction with questions, and answers, it becomes more natural for the AI or the salesperson, to know these things and use that. the most powerful. salespeople are those who remember things, right?

Who, remember to send you a card on, your kid's birthday, right? Well, that's authentic. and I think AI, if it's able to replicate, that [00:04:00] intention is how we'll unpack those same types of behaviors and same type of relationships, that you would have with a great salesperson. 

Kajal: A lot of companies have already started.

we're seeing it almost ubiquitously with e commerce shops, where they have some form of AI or personalization. What would you say is the basics everyone must have and be doing right now to not fall behind? And what would you say are the things that people can start doing to stand out from the competition?

John: that's a great question. If you use gaming as an analogy or roadmap, there are the basic tools that you could be using around, personalizing, names and product selection. But the most important thing you could be doing right now, especially if you have an ongoing and growing business is to be collecting data about your specific customer base, The thing that's going to set you apart in terms of your ability to be successful with AI [00:05:00] is the data used to train the model specifically for your products and your customers, right? putting a generic AI tool is fine, but that's just table stakes.

within the next three to six months, it will be competed away, Instead, you need to be able to feed in your own data into these models, website clicks, your customer records, and how they interacted with your product catalog use that to train these tools in a way that gets back to authenticity.

Right. Most brands we talk to do not have A structured way to collect their data, or a place to store it. We talked about this, previously around their sites themselves, from source control, to instrumentation capturing both anonymous and identified users.

That data set is going to be gold. that data is what many tools will ask you for. if it takes another 12, to 18 months to collect that data you'll be behind the number one thing I would tell brands today is sure, play with the [00:06:00] tools that are available if you want to make a lasting investment in this and you really believe in the future where, Data is going to be driving the outcome. Then you have to be collecting data in a much more structured, deliberate manner, because that's the thing that's going to set you apart and how you're going to win this AI game.

Kajal: And what's the best way to go about collecting data? There's been changes in data privacy laws. You need data for the personalized marketing efforts. What should people be collecting and how should they be collecting it? 

John: at Unity, my last company, we collected billions of keystrokes, from, the players of every game, 

You don't need to go to that depth, but where I would start and where, I think it's best practice is to have a clean, analytics implementation, whether that be Google analytics, Mixpanel, or whatever you might have. And to make sure that, you have the key.

behaviors within your site, tagged [00:07:00] so that analytics platform is collecting. Every time somebody clicks on this specific product page or on this specific, checkout, That you're tagging that and remembering that, so you can compare that to all the other behaviors that led up to that specific outcome.

these packages are very user friendly a lot of times it's just making sure that these, events are tagged. then you don't need to do anything for the next, let's call it three months. you can look at the reports but you'll be building a corpus of data, that you can feed into even a chat GBT to start training, in terms of your user behavior, you can take it too far, but I would say as much granular data as you can get, even if you don't know how you're going to use it today is always worth it, Data storage is very cheap. these services don't charge by the byte. So you're better off collecting more rather than less.

But having a clean analytics [00:08:00] implementation, I think it's just foundation. 

Kajal: I think one of the challenges that a lot of e commerce shops are facing right now is, customer loyalty and being able to, bring people back to the site buying. there's so many different brands. It's so easy to launch your own brands today.

How can personalization help with that? 

John: Yeah, I mean, we believe that there are different personas of shoppers what motivates people, is a spectrum, but the more that you can serve them based on their fundamental characteristics. the more the personalization is going to be authentic right?

the thing that I look for with brands is how can you tap into, Oh, this shopper is an explorer. They love to browse. They love to look at everything. They often don't buy on the first visit. [00:09:00] But once they've explored your entire product catalog, they will buy often and over time, whereas maybe there's a different shopper type, like more myself where I know what I want.

I want to check out, two or three options. I'm going to make a purchase. you need to have that ability to put anonymous visitors into one of these buckets because the personalization, That's suited for them is very different. your ability to identify the shopper type, create a customer journey for them.

is. crucial. how can you find authentic ways to make them want to come back, Retargeting, has gotten incredibly expensive on meta and everywhere else. emails, SMS, everyone's inundated with them, and open rates have fallen.

So when they are there, you have to have real time personalization to provide an incentive, for the explorer. Here's a new collection. That's going to come out next week, just for you. If you come [00:10:00] back on this certain day, we have an advent calendar perfectly suited for this shopper type where every day there's something new to explore.

she's going to bring herself back instead of you spending a bunch of money trying to bring her back. If you can identify her upfront and personalize that specific journey for her. The deeper you go into your customer base, designing personalization that fits their shopper type, their persona type, and using AI to look at those patterns, see what works and doesn't, and making sure you have a system in place to deploy those offers or that messaging in a cost effective manner.

Kajal: And you touched a bit on, anonymous visitors, anonymous traffic. How can you go about categorizing these people into personas when you don't know anything about them? 

John: a lot of that happens in real time. in the first couple keystrokes you can start to identify who people are 

Privacy laws are going to continue to be more restrictive. people's sensitivities [00:11:00] are heightened given all the Cambridge Analytica and, other scandals the number one thing you can do with your anonymous traffic is to make it more useful.

get them to identify themselves, right? To give them reasons, incentives, enough, about the brand. we're biased here, but if we can make it fun and, gamify that experience in which I've achieved something, but in order to get to the next level or to get the tokens, I've got to, give you my email.

It's a natural transaction. I'm aware that I'm doing it. I've now invested in a brand that makes sense. And now I've identified myself in a way that I wanted to do I'm sure you had this shopping experience where you go on a site, they fingerprint and sniff you. then you get a message or an email, an hour later and you're like, I never did this.

you're left with a bad taste in your mouth about that brand, even though their intentions are good, I think the more that we can be up front, the more that we can tap into who [00:12:00] people are so that it's a win win, right? Rather than trying to go behind the scenes and sneak some information.

I don't think that's a lasting strategy and brands that do it, often. Face bad press and backlash online, with the power of social media. the number one thing you can do with Ananas visitors, is get them to reveal themselves and, share an experience with you.

Kajal: Anything else that you want to add to let our listeners know about AI and personalization? 

John: I just want Rans to realize that AI, while exciting and new is not a replacement for a great product, great service.

as founders and operators of businesses, the authentic desire to serve your customer base in the right way. is essential. as we embark on this new chapter of AI, the key thing to do is invest in understanding your customer base by [00:13:00] collecting the right data.

But thinking through, and I don't think AI will replace this in the near future, is your understanding of your customer base, right? You've been in the business, you know who's buying from you. Think about how they want to be served, how these different buckets of customers, might delineate themselves, and then use AI.

To do some of that automation, to do some of that personalization, at the end of the day, it's a tool to empower you to serve people better. It's not a replacement, for you and how you run your business, it's really an exciting way to leverage what you do best rather than, replacing human operators, which, I don't think is a future I see nor a dystopian future that I'm super excited about.

Kajal: Thank you, John. we will catch you next time on the Playably podcast.