How will AI-led e-commerce affect small businesses?

"All of this is possible, because the underlying Large Language Model algorithms absorb massive amount of human generated content, from reviews to Reddit posts, to figure out the world and how to answer queries. The way LLMs work poses a challenge for small businesses, which are going to have to figure out how to get noticed by these algorithms, when the online chatter about them is far less than for big brands and retailers."

"Some companies are beginning to think about this challenge now, and starting to pivot in response, even as the AI future - and even the present - remains largely uncertain. "There has been, historically, this area of marketing spend called Search Engine Optimization, also known as SEO. And now I hear that more companies are investing in something called AEO, which is answer engine optimization," Kodali said."

AI chatbot adoption is moving rapidly and will enable tasks like finding restaurants and purchasing products through chat interfaces. Large language models learn from massive amounts of human-generated content, such as reviews and Reddit posts, to answer queries. That learning process favors entities with abundant online chatter, creating discoverability challenges for small businesses with less online presence. Some companies and retailers are beginning to pivot and explore new marketing approaches aimed at optimizing for answer engines. A new focus on 'answer engine optimization' (AEO) is emerging alongside traditional search engine optimization. Traditional search traffic sources like web search, email, influencers, and marketplaces still drive current online traffic for many retailers.

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