ChatGPT's Instant Checkout is HERE (and What It Means to Retailers)

So, OpenAI just announced instant checkout for ChatGpt. That means people can now buy products directly from inside ChatGpt. So, does this spell the dawn of a new era of e-commerce or is it just another overhyped AI thing that nobody really asked for? Let's take a look. So, here's how it works. Currently, this is available for any ChatGBT user, but only in the US. So, I've put a query in here, and it's got a bit of commercial intent. ChatGBT gives me a familiar looking answer, and it will recommend some products. So far so good, right? This is like a typical chat GPT answer with product recommendations. But if you click on these, you will see that some of them have this little button here, a buy button. And if you click on that, this happens. So you can check out using Apple Pay, Google Pay, Link via Stripe, or with a credit or debit card. Now, at the moment, people can only buy through Etsy stores, but Shopify is coming soon, and that will mean more than a million more stores added to this platform, including monsters like Gym Shark, Glossier, Bashion Nova, and Ski, and for the customer, it's free to use. The store pays what OpenAI call a small fee. Now, this is a little bit like Perplexity's shop with pro feature, which we made a video on about a year ago, but obviously because chat GBT has so many more users than Perplexity, this is getting people quite excited. So, if you're an e-commerce brand or store thinking, "Oh, we can sell a lot of products through this." There are some things that you need to know first. Firstly, Open AAI says that just because you've got instant checkout enabled, that doesn't necessarily mean your products are going to show first. Products are ordered by relevance and context. Although, check this out. Instant checkout items are not preferred in product results. When ranking multiple merchants that sell the same product, ChatGBT considers factors like availability, price, quality, whether a merchant is the primary seller, and whether instant checkout is enabled. Okay, so instant checkout items are preferred in search results. Then when you buy a product through chat GBT, the merchant still processes the order, sends all the confirmation, does all the fulfillment. Chat GBT is just essentially passing that information through to the merchant. Another thing to consider if you are a merchant is that when your customers buy from you like this, you will not be able to sign them up for marketing emails. And that could be a big deal. We've consistently found that back-end email marketing campaigns for e-commerce stores can be one of the most profitable sources of more purchases because it doesn't cost you anything to market again to your existing customers. If you've got customers coming through via chat GPT and you can't add that additional revenue source, that's going to sting a little bit. And by the way, if you want to get set up with this, then I've got two pieces of advice. Firstly, talk to our web development team at Exposure Ninja because we're working on how to integrate the Agentic Commerce protocol that allows stores to have their products appear in ChatGpt. The other thing that you can do is have a look at this fantastic guide from our friends over at Peekaboo, which is all about how to get your e-commerce brand prepared for Chat GBT. Gives you lots of recommendations about how to upload your feed and optimize your feed for Chat GBT. Well worth a look. Okay, so what does all of this mean? Well, quite understandably, a lot of people are getting really excited about ChatGpt's instant checkout, and it's easy to see why. ChatGBT now has 700 million weekly active users and usage is only increasing. We know that people are using chat GBT for product related queries as well. And we also know that one of the top reasons people don't buy from AI tools when they are ready to make a purchase is because there is no checkout functionality. Our friends over at Profound released this data that showed that 14.5% of people that were ready to make a purchase didn't do so via an AI tool because the checkout didn't exist. Well, now ChatGptd has that checkout. So that blocker is unlocked and that is a lot of purchases. There is existing demand for this. Furthermore, whilst the implementation of instant checkout might feel a little bit basic, there is that saying in the world of AI that this is the worst it's ever going to be. Right? If this proves to be popular, there's going to be more budget, time, and resource piling in to making this even better. And of course, all of the AI companies are looking for sources of revenue like this. So, you can bet that they're going to continue experimenting. So, if this is so potentially huge for e-commerce, why don't I feel more excited about this? And I think it's this. We've been working with e-commerce stores for about 13 years now. And we've learned that if you want to increase the number of people that make a purchase via e-commerce, there are basically only two things that you can do. You can either make it easier to buy or you can give people more information. In the early days of e-commerce, a lot of our recommendations to e-commerce store owners would be, "Hey, it's really difficult to find the checkout button or your process is really broken or confusing." We would move the buttons. we'd make the checkout process less confusing and we would see the e-commerce conversion rate go up. Happy days. And of course, whilst there is still room to do things like that, these days, most e-commerce stores are pretty welllaid out because there are established standards to e-commerce and people like us have spent a decade figuring out the position of things and where they need to be in order to improve conversion rate. Which leads us on to the second way that you can make people buy more, which is to give them more information. And this can be more information about the product itself. This can be more information about how it is made or the merchant or the delivery terms. A lot of what we find ourselves recommending to clients nowadays is arm the consumer with more information so that they can answer all of the questions they might have in order to make a purchase. And by the way, if you want to improve your brand's visibility in AI search like chat GBT, then the team here at Exposure Ninja can help. We have a service called the free digital marketing review where we have a look to see what your current visibility in various AI tools is and what the sentiment attached to your brand is as well. We'll then map you out a prioritized action plan over the next 6 to 12 months to increase the volume of leads and sales that you're generating, not just from AI search, but of course from regular web search and paid search as well. This service is completely free of charge and it is fantastic, but not everybody is eligible. So you do need to apply for this over at exposurinja.com/re. So whilst chatgbt instant checkout is cool and it's a nice trick, it's really solving the first problem, i.e. shortening the e-commerce purchase sequence, but it's doing so at the expense of the second problem. I.e. the buyer has to sacrifice information in order to be able to use this. But chat GBT instant checkout solves the speed problem at the expense of the information problem. you can check out in a couple of clicks. But in order to do this, you have to sacrifice information about what you're buying and where you're buying it from. And this sacrifice isn't insignificant. Let me ask you a question. Would you actually buy this bowl based on this amount of information? We have one, two, three pictures there. We've got a bit of product information and then we've got these customer reviews with an AI generated summary. Now, maybe you would buy this bowl, but also maybe you wouldn't because you don't know how big it is, whether it comes in other colors, what it's made of, who's selling it, what their reputation is, what the average review says about this product. Are there other products that you might like more from other ranges? In fact, let's compare this experience with the underlying Etsy page to see just how much information is presented there, which doesn't exist in Chat GBT. Here, we've got a lot more product images, and they're larger. But we can see what they look like. We can see that this is Etsy's pick. It's been hand selected by the Etsy team. We can see the bowl size comparison related to some utensils. We've got a bit more information here. We got some social proof telling us that this product is popular. We can also split the payments via Cler. We can get gift wrapping. We've got all of the dimensions. We've got sets. We've got loads more detailed information, including whether it's dishwasher, microwave, and oven safe. And we know exactly where it's being made. We can see delivery times. We can see the terms of the return and exchange policy. We can see where it's being sent from. We can see information about the store, including the person behind it, how many reviews they've got, the number of sales they've made, how long they're on Etsy. We can see all of the detailed reviews and pictures from those reviews of the products in the customer's homes. Everything I know about digital marketing, every website I've reviewed over the last 15 years tells me this is a high-erforming e-commerce product page. It has all of the information that you would want. Yes, they could potentially add a video showing you the product in action, but other than that, this is pretty damn good. And it's pretty damn good because marketers like us have spent years tracking people's eyes as they go through a page like this, looking at heat maps to work out where they fall off, optimizing every pixel of this page layout to make sure it works really well. Okay, so let's go back to chat GPT for the contrast. Here's what we've got. we're being asked to purchase based on this amount of information. Would you honestly do that? There are some even more fundamental limitations right now. For example, at the moment, you can only buy one product at a time. Yeah, if you wanted to buy loads of these, you'd have to check out individually. If you then wanted to buy the matching plates, you'd have to check out individually for those as well. Apparently, multi-product checkout is coming, but Open AI haven't given a date. Then there's also the wider question about purchasing through AI chat. Perplexity has had its shop with pro functionality for over a year now, but we haven't heard any stats from Perplexity or anybody else about how popular it is, and we've not seen it becoming a significant source of custom for any of our e-commerce clients. Now, usually when something really new works in AI, we get loads of data all over the place. Perplexity is shouting from the rooftops about how awesome it is. So, the fact that we've heard nothing about this makes me think maybe it's not that popular. And whilst this is a new frontier in e-commerce, it's not like there haven't been other new frontiers in e-commerce, not least from the Godzilla of e-commerce, Amazon. Remember Amazon Dash? The little buttons that we were going to press which were going to immediately order us a new pack of Tide. Well, these were a great idea and again focused on shortening that customer buyer process. We could just press a button and it would immediately turn up at our door. Genius, right? But they killed it 4 years later. Now, of course, the reason that they killed it was that it was going to be overtaken by people ordering via voice from their Alexexas, but only a small fraction of people ever do that. Some people are even questioning how many people actually currently shop via chat GBT. And I think one of the suspicions that I have is that today e-commerce is actually pretty good. Yes, there is a big product discovery piece and AI could really help with that. But when it comes to actually making a purchase and learning about individual products, the e-commerce experience has been refined and honed over quite a long time now. And I'm just not sure that instant checkout via textbased AI tool is really the next generation. So am I saying that instant checkout and shopping via generative AI is a giant nothing burger? Absolutely not. After all, what we do know for sure is that more people are using chat GBT than ever. We also see in our clients that they're generating more and more traffic from chat GBT and they're generating more leads and sales as a result of chat GBT. That is absolutely real. In fact, we're seeing so much interest in AI search optimization, i.e. getting your business products and services recommended by AI, that we've had to start a waiting list for our own AI search optimization projects. That's because brands want to get featured where people are spending their time and increasingly that is in chat GBT. For me personally, it seems much more likely that chat GBT is going to disrupt traditional search. Now, undoubtedly there is a nonzero chance that not only does chat GBT disrupt traditional search, but it also fundamentally alters e-commerce. Now, I'm not saying that instant checkout is the ultimate implementation of this. In fact, I think I'm saying that I don't personally believe it's quite there yet. But our approach with this would always be spend time doing what works today. And for many people, that will be Google shopping. That will be focusing on their product visibility on Amazon and other e-commerce stores. But don't ignore this. You want to set a portion of your time, energy, and budget for experimental things that may blow up. Fundamentally, this is a new form of shopping, and as such, we cannot ignore it. We must spend time figuring it out. Of course, ultimately the development of this will depend on you and I. It'll depend on how much we adopt this and how much we buy products through chat GBT. If we do, some of the world's smartest brains and biggest budgets will focus all of their energy on improving this product right now. And it's a fairly safe bet that this isn't going to be the last time that Open AAI tries to monetize all those 700 million weekly active users. We are expecting ads and of course when they arrive we're going to be breaking them down, figuring them out and sharing what we learn on this channel.