Liftoff with Jeanniey Walden · POSSIBLE
Christine Russo of What Just Happened on AI, Marketplaces, and Commerce Media
Who’s on this episode
Hosted by Jeanniey Walden, founder and host of Liftoff with Jeanniey Walden, recorded at POSSIBLE.
What you’ll learn
- Why rolling your eyes at AI is a mistake, and why adoption is becoming a leadership mandate.
- Why marketplaces are the non-endemic revenue play, and who’s chasing the pie.
- How commerce media and retail media became new revenue streams.
- What makes PayPal a rare horizontal commerce network.
- Why the funnel now behaves like a pinball machine, or a tornado.
Episode highlights
- 00:09The tornado stage of retail
- 00:44Why eye-rolling at AI is a mistake
- 00:55Non-endemic and the marketplace play
- 01:30Amazon, Walmart, and everyone wanting a piece
- 02:16Commerce media and retail media as revenue streams
- 02:30PayPal, the horizontal network built on transactions
- 03:24Influencers vs traditional brand campaigns
- 03:40The funnel is a pinball machine, then a tornado
- 04:12Storm chasers, and experience as a driver
Episode summary
Christine Russo hosts What Just Happened, so Jeanniey hands her the microphone to do what she does best: cut through the noise on retail technology. Her first target is the reflex eye-roll at AI, which she calls a mistake. AI is driving real change across retail and beyond, she says, and keeping up, sitting through the sessions, learning from those ahead of you, doing the research, is quickly becoming a mandate from leadership rather than a choice.
From there the conversation moves through the new revenue map of retail. What the industry calls non-endemic, Russo files under marketplaces: selling other companies’ products as a fresh source of revenue. Amazon is the proof of concept, Walmart looked at it and built its own to great effect, and plenty of others now want a slice, because the core retail business is hard and the margins are thin. Layered on top are commerce media and retail media, two more revenue streams. She singles out PayPal as one of the few, maybe the only, horizontal commerce networks, with ads built on actual transactions, and credits Mark Grether with building it out. Retail media, by contrast, is a heavy lift: expensive to stand up, slow to return, and currently stumbling, though she expects it to keep growing and thinks AI can help build it.
The closing stretch is where her language really lands. Asked about influencers versus traditional brand campaigns, she offers the metaphor she’s become known for: the funnel is less a funnel than a pinball machine, and better yet a tornado, the same shape but whipping around, wrecking things and flinging them everywhere. That, she says, is the stage the industry is in now, and everyone at POSSIBLE is a storm chaser hoping AI can wrangle the beast and bring back the ability to plan. Her last note is a hopeful one: in-person experience, which COVID took away, is back with a vengeance, and that’s another thing to thank AI for helping organize.
Key takeaways
- 00:44 Rolling your eyes at AI is a mistake; it’s driving change across retail, and adoption is becoming a leadership mandate.
- 00:55 Non-endemic commerce is what the industry calls marketplaces: a new revenue source built on selling other companies’ products.
- 01:30 Amazon proved the marketplace model, Walmart built its own and grew it fast, and others want a piece because retail margins are thin.
- 02:16 Commerce media and retail media are additional revenue streams stacked on top of the core business.
- 02:30 PayPal is a rare horizontal commerce network with ads built on actual transactions; Russo credits Mark Grether with building it out.
- 02:45 Retail media is a heavy lift: expensive to build and slow on ROI, so it has stumbled, but Russo expects it to keep growing and thinks AI can help.
- 03:40 The funnel now behaves like a pinball machine, or a tornado: customers find brands from anywhere, and marketers are all storm chasers.
- 04:12 In-person experience is back with a vengeance after COVID, and it’s another driver of how customers connect with brands.
Questions people ask
Who is Christine Russo?
Christine Russo is the Founder and Principal of Retail Creative & Consulting Agency and the creator and host of the retail podcast What Just Happened. She is a widely cited voice on retail technology, AI, and commerce media.
What is a marketplace or non-endemic play in retail?
Russo says non-endemic commerce is what the industry calls marketplaces: selling other companies’ products as a new revenue source. Amazon is the model of a successful marketplace, Walmart built its own and grew it fast, and many others now want a piece because core retail margins are thin.
How big will commerce media get?
Russo expects commerce media and retail media to keep growing as additional revenue streams. She points to PayPal as a rare horizontal commerce network, with ads built on actual transactions, and notes that retail media has stumbled because it is expensive to build and slow to show ROI, but she does not expect companies to walk away from it.
What makes PayPal’s commerce media different?
Russo describes PayPal as one of the few, if not the only, horizontal commerce media networks, meaning its ads are built on real transaction data rather than a single retailer’s shelf. She credits Mark Grether with building it out and says it was a major topic at POSSIBLE.
Why is retail media a heavy lift?
Because it is expensive and slow to pay off. Russo says building a retail media business takes a lot of upfront spend, so the ROI is challenging early on and the category has hit a stumble, even as leaders like Amazon and Walmart continue and others try to follow. She believes AI can help build out that business.
What does Christine Russo mean when she says the funnel is a tornado?
Russo says the old marketing funnel now behaves more like a pinball machine, or better yet a tornado: the same funnel shape, but whipping around, wrecking things, and flinging them everywhere. Customers can discover a brand from anywhere, an influencer or otherwise, and marketers are all storm chasers hoping AI can wrangle the beast and bring back the ability to plan.
Full transcript
Jeanniey Walden: I’m Jeanniey Walden, and this is another episode of Liftoff, with Christine Russo, host of What Just Happened. I’m so excited to have you on Liftoff. I’m expecting to get all the inside scoop from POSSIBLE about the retail industry, technology, and everything else that’s going on. You’re the source, so scoop away. Tell us, what is the latest in retail technology that we need to know about?
Christine Russo: Gosh, everybody rolls their eyes when they hear AI, and that is such a mistake. It’s really leading many, many changes throughout the retail industry and many others. So, unfortunately, kids, you’ve got to sit through the sessions, you’ve got to learn from others who are ahead of you. You have to do a lot of research on what’s happening, and it’s really going to be a mandate coming from leadership anyway.
Jeanniey Walden: Absolutely. So there’s a lot of conversation around endemic and non-endemic media, non-endemic commerce. Do you think it’s inevitable that every business is going to have to move into non-endemic spaces, looking at making revenue from selling other people’s products?
Christine Russo: Okay, so we refer to that in the biz, in my biz, as marketplaces. There’s a lot of success out there, and a lot of big companies are saying, well, I want some of that pie too. Perfect example, and these are the biggest, so what does it mean for other people? Not sure yet, but let’s first talk about the leaders, because there will then be followers. Amazon is the perfect example of a successful marketplace. Walmart looked at it and said, well, we want that too, and they ended up building it out, and it’s grown tremendously. There will be others, and it’s another source of revenue, because the retail business is really hard. Amazon’s margins are like two percent.
Jeanniey Walden: Yeah, it all comes down to the margins.
Christine Russo: Yeah. So then you have commerce media and retail media, and that’s another revenue stream.
Jeanniey Walden: And how big do you think commerce media will be?
Christine Russo: Well, commerce media, so for example, like PayPal, they’re one of the few, if not the only one, that’s a horizontal network. So the ads are built on actual transactions. Very powerful. They’re the leader. Mark Grether is the one that built that out, and we’re hearing a lot from him during POSSIBLE. And retail media, you know, it’s a heavy lift. It’s not something you just jump into. So again, you have Amazon, Walmart, and then lots and lots of others saying, I want a piece of that pie. So it’s hit a bit of a stumble because it’s hard to do and the ROI becomes challenging, because you’re building it out. So a lot of expenses, and then it’s got to sort of take off. So I think it will continue to grow. I don’t think people will run away from it. And coming full circle back to the original comment, AI can help build out that business.
Jeanniey Walden: Absolutely. And do you feel that influencers and social are going to be the driver of some of the branding of the new brands? Or do you think it’s still going to be traditionally driven brand campaigns supported by influential social media pockets and traditional digital with some AI personalization?
Christine Russo: One of the things I’ve learned is that the funnel is more like a pinball machine than a funnel.
Jeanniey Walden: I’ve not heard it described that way, but a pinball machine, yes.
Christine Russo: Someone in the industry coined it, I like it, and I’ve had them on the show to get into the depths of what that means. I think it’s very representative of how customers find brands. Is it the influencer? Yes, and it’s like improv. Yes, and many, many other yeses. The funnel is wide, it can come from anywhere, an influencer or wherever. So maybe at the top it’s like a pinball-machine-esque type of element. But I like to say it’s more like a tornado. It’s the same shape as a funnel, but it’s whipping around, kind of wrecking things and flinging things all around. That’s the stage I think we’re in now. And I think at POSSIBLE we’re trying to say, how can we contain this? We’re all storm chasers, everyone here is a storm chaser chasing that funnel and saying, well, is it AI? Is AI going to wrangle the beast and help us be more organized? Because being organized means we can have solutions, we can plan. We’re in a non-planning stage of business right now. It’s very hard to plan, and even AI has costs. We’re very much in a throw-spaghetti-at-the-wall, allocate this much money and let’s see what happens, stage.
Jeanniey Walden: When you think about brands capturing that customer or influencer, whatever it is, add experiences as a driver as well.
Christine Russo: Absolutely, and I love that, because for people like you and I who love in-person experiences, and the rest of the world has missed them. COVID took them away from us, and now they’re back with a vengeance. So I’m here for it. And we’ve got to thank AI for that as well.
Jeanniey Walden: This was such a fascinating conversation. Thank you so much for taking some time to be on Liftoff.
Christine Russo: My pleasure. Thank you so much.
This conversation was recorded at POSSIBLE and lightly edited for readability.
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