Q+A: Why Google search is giving way to AI commerce
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What is the main topic discussed in this episode?
Welcome to Fear and Greed Q&A, where we ask and answer questions about business, investing, economics, politics and more. I'm Sean Aylmer. What happens when consumers start outsourcing their decisions to AI? Around the world, retailers, marketers and payment providers are preparing for the rise of agentic commerce, where AI assistants don't just help consumers research products, but actually make purchases on their behalf. My guest today is Talbot Roach, global CEO of Blackhawk Network. It provides branded payment solutions like gift cards, e-gifts and rewards, along with the technology to deliver these products. And it's a great supporter of Fear and Greed. Talbot joins me now from the US, Colorado, I believe.
Talbot Roach, welcome to Fear and Greed Q&A.
Well, thank you so much. Glad to be here.
What is agentic commerce and why is it replacing traditional Google search for discovery?
How fast is the shift? from SEO, Google search, et cetera, or search engine search to AI search and sales?
Oh, it's happening now. We are amidst this transformation to an agentic commerce world. And it's happening in three layers. There's discovery, recommendation by the agent, and then the actual purchasing. Today, most consumers, at least 50%, are using it for discovery and recommendations.
So what does that mean? I mean, a couple of points there. People are shifting for discovery and recommendations. When do we start shifting for purchasing? And I suppose, what's that mean for retailers?
Yeah. Well, it's a great question. And I think first thinking about using agentic sources, most of us have been on Google and done a search and seen the agentic option for search. What that can do is when a consumer is looking to make a purchase, it actually takes you straight to the SKU or the item level detail versus the merchant itself. That's troubling for merchants because it disintermediates them from their direct relationship with the consumer. So rather than going to the front door of the merchant, you're going straight to an item. That item might be listed in stack rank based on how the prompt was given to the consumer by the agentic search engine. And it's going to come back based on very specific quantitative reasoning.
So it could be customer ratings. It could be price points. But it isn't necessarily going to allow the merchant to influence it as much as if you were in that merchant's website. So today, merchants are looking at how to prepare themselves for this world of agentic commerce and investing in the tools and the data orchestration that allows their SKU-level data to appear most effectively in this new world. It doesn't mean that human-based discovery is going away. So we have to today, as merchants, work in both realms at the same time. You also asked an important question. When is the consumer going to be ready to allow that agent to fulfill the purchase, make the purchase autonomously? That's not happening, at least based on the research that we're doing in large forms today.
It's people are experimenting with it, but it comes down to consumer trust. Are you going to trust an agent with your payment credential and allow them to go shopping for you without the human in the loop? Not very many people are doing that today, but it is going to come.
Yeah, I mean, it will get there, won't it?
Absolutely. Well, McKinsey has said in a recent study on Agentic that they're seeing as much as $3 trillion of commerce by 2030 will be operated autonomously by merchants. And today we're already seeing, as I said, 50% of the recommendations and searches powered through AI. So now it's just the next step of building that trust.
Okay, I wanna go back to this SKU idea. So if I'm a retailer and I'm selling a lamp, and if they're not coming through my front door, they're going directly to the lamp itself. And lots of people saying, hey, we can help you make sure that they get to your lamp, right? But really, do we know yet how the large language models work such that we can get that lamp to consumers?
I think today there's a lot of work going into what is called AEO, just like you have the traditional SEO.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:05–0:55
2
What is agentic commerce and why is it replacing traditional Google search for discovery?
0:55–5:14
3
How quickly are consumers and retailers adopting AI for discovery, recommendation and purchasing?
5:14–9:40
4
Why does directing users to SKU-level results threaten merchant relationships?
9:40–10:30
Speakers
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