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The Consumer Renaissance: Why AI is Shaking Up Ecommerce and Amazon

If you're an ecommerce or Amazon seller, you know the stakes are always high. But there's a new player in town that's set to rewrite the rules of the game: Artificial Intelligence.

A recent deep dive argues that we're on the cusp of a consumer renaissance, and AI is leading the charge. While "consumer" has become a dirty word in many VC circles, with only 7.1% of Seed capital going to consumer startups last year, some believe this is actually a prime time to build and invest in the consumer space.

Why? Because consumer is a broad category encompassing not just B2C companies, but also the B2B enablers powering ecommerce behind the scenes. Think Shopify for online retail, Faire for offline retail, and Unity for game development. These B2B2C players are all part of the consumer ecosystem.

The potential wins in consumer can be massive - just look at Google, Facebook, Apple and Amazon. And in recent years, some of the best VC returns have come from consumer tech IPOs like Uber, Airbnb and DoorDash. A hypothetical $1M Seed investment in these companies would have yielded returns in the billions.

Despite some mixed economic data and sentiment, U.S. consumer spending remains robust, rising in 2022 and continuing to grow in 2023. Millennials, contrary to the "broke Millennial" narrative, are actually thriving and outearning prior generations. For ecommerce and Amazon sellers, this means the long-term trajectory for consumer spend is still pointed up and to the right.

But the real gamechanger is AI. While most of the AI innovation so far has happened at the infrastructure layer, we're starting to see compelling AI-powered consumer applications emerge. Companies like Amori (AI matchmakers for dating), Can of Soup (AI-generated images social network), Suno (AI music) and Perplexity (AI search) are pushing boundaries.

AI avatars are another exciting area, with language learning app Praktika already at $20M ARR thanks to its smart, low-cost virtual tutors. Every major consumer internet incumbent, from TikTok to WhatsApp to Etsy, should be looking over their shoulder as AI rewrites the playbook.

For ecommerce and Amazon sellers specifically, generative AI is already having an impact. Companies like Midjourney and Captions are enabling brands to produce high-quality images and videos in-house, drastically cutting marketing costs. One major company reportedly saved $10M on marketing this year thanks to AI tools. This is just the beginning.

Going forward, predictions suggest most consumer internet activity will soon happen via AI agents acting on our behalf. For anyone in the ecommerce space, now's the time to start thinking about how AI can supercharge your business, from marketing to logistics to customer service and beyond. Don't get left behind in the coming consumer renaissance.

• The future of AI according to the former CEO of Google.

• Google with optimize Shipping Routes with AI.

• Asana rolled out AI teammates: they are supposed to be able to advise on priorities, power workflows, and even take action on work.

• Instagram is testing two new features for Reels creators to get feedback before posting publicly. These include the ability to send draft Reels to friends for their thoughts and the option to test Reels with a selection of non-followers before official publication.

• Google has launched Accelerate with Google, a new educational resource hub to help advertisers develop expertise in using AI for their campaigns. The hub offers customized skill assessments, tutorials, live streams, and resources on topics like campaign automation and dynamic ad creation, currently available in the U.S., Germany, and India.

• TikTok is quietly rolling out image search capabilities within its e-commerce platform, TikTok Shop, allowing users to find and purchase products by uploading or taking a photo. This feature positions TikTok as a potential competitor to Google's visual search tool, Google Lens, as well as Amazon's image search, while also challenging other companies offering similar shopping tools.

• OpenAI seems to have the ability to create video in Sora, send it to ChatGPT for a script, use Voice Engine for voice over and put it all together.

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