Welcome to a special re-release episode of Commerce Famous, where today we revisit a thought-provoking conversation with Jim Lofgren, CEO of Nosto. Host Ben Marks delves into Jim's unexpected journey from aspiring banker to influential figure in the ecommerce world. Jim shares his passion for the industry, recounting his early forays into online selling and his deep interest in customer experience. The discussion turns to the impact of AI on ecommerce, with Jim shedding light on the potential of generative AI for personalized customer interactions and the nuances of maintaining authentic brand experiences. Join us as we explore the evolving landscape of ecommerce and the quest for meaningful, individualized customer engagement. Commerce Famous is proudly presented by Shopware, the leading open commerce platform for all your B2C and B2B needs. Find out more at: www.shopware.com/en/
Welcome to a special re-release episode of Commerce Famous, where today we revisit a thought-provoking conversation with Jim Lofgren, CEO of Nosto. Host Ben Marks delves into Jim's unexpected journey from aspiring banker to influential figure in the ecommerce world. Jim shares his passion for the industry, recounting his early forays into online selling and his deep interest in customer experience. The discussion turns to the impact of AI on ecommerce, with Jim shedding light on the potential of generative AI for personalized customer interactions and the nuances of maintaining authentic brand experiences. Join us as we explore the evolving landscape of ecommerce and the quest for meaningful, individualized customer engagement.
Suggest a Guest for the Commerce Famous Podcast
Commerce Famous is proudly presented by Shopware, the leading open commerce platform for all your B2C and B2B needs.
Ben Marks [00:00:38]:
Hi. Welcome to another episode of Commerce Famous. I am here with Jim Loughgren, who is president and CEO of Nasto. But man, if you look at Jim's background, he has got just a ton of experience leading and being involved with a lot of businesses that have made a lot of movement in the ecommerce space over the many years. So, Jim, welcome to Commerce Famous podcast. Thank you. I would love to just ask you, so how did you end up, it looks like back in the mid 2010s, not two thousand and ten s. In the mid two thousand s, you found your way into the ecommerce world.
Ben Marks [00:01:21]:
And that's been not an uncommon theme with some of the guests that I've had so far. I'm really curious, what led you to ecommerce? Was it happenstance or did you kind of seek it out?
Jim Lofgren [00:01:32]:
No, this was by chance. I was dead set of being. I was going to be a banker. This is my whole vision. I was going to be a banker. My education and most of my background was all geared towards banking life, investment banking. That was my dream. And then I had to do an internship and I couldn't do it in the UK, I couldn't do it in the Nordics, I had to do it elsewhere, preferably in some country where I couldn't speak the language part of my degree, and I ended up doing it in France.
Jim Lofgren [00:02:07]:
I spent probably 2 hours in the only interview I managed to get. I spent 2 hours listening to the most wonderful lady interviewing me. But to be fair, she spoke French in the interview, my French was clearly so and so, but she didn't really ask me that many questions. So she spoke mostly for 2 hours. And I got the job. And I is very fortunate because at the end of it she asked me, do you want the job? But in French. And I said, we. And that was what I recall today, that my only French from there.
Jim Lofgren [00:02:44]:
I love ecommerce and I could do some of my best work there. And I don't look back.
Ben Marks [00:02:52]:
So that's a great place to jump in now. You love ecommerce. I never thought I would end up in an ecommerce career. I mean, it certainly didn't exist really in 2000 when I graduated college. But eventually over time, it just sort of kept coming around. And then I went all in. And I'm curious, when you say you love ecommerce, what are the things that you love about this industry?
Jim Lofgren [00:03:23]:
I guess I was born and raised in the ecommerce industry before the hype, and probably you too, when things were valued normally and when things were way back when, I loved running ecommerce and selling things online. It was wonderful. I did it. My first sort of job, proper job, was selling things online. And I started side hustling with my own company to sell things online. And it was just amazing how you could. At that time, I was dabbling. I remember we were doing huge amount of Google Adwords and advertising, but then on my own little site on the side, I was like experimenting with thumbnail ads in Facebook.
Jim Lofgren [00:04:17]:
And it was like I was buying stuff from Asia, like less common fashion, I would say, and trying to sell it via Facebook ads. And it fascinated me how you could build a business online by finding all these mechanisms. So I fell in love with it. And I guess it's a combination of business and the channel itself where you can connect with consumers digitally without being there. It's just like how you can maneuver that experience. How can you improve it by adding content, changing images and doing all that from the ground up really fascinated me from the beginning. I guess it stayed with me. I spent probably ten years on the retail side before heading into tech, but that sort of customer experience was always very dear to me and I could see it firsthand because I changed something and I got a different engagement from the consumer, and I love that.
Jim Lofgren [00:05:15]:
So I could continue to iterate on that stuff.
Ben Marks [00:05:17]:
Okay, it sounds like one of the things that was really appealing to you is just that I don't want to pretend that it's a frictionless pursuit. Right. Coming up with an ecommerce concept and then building out a successful business. Right. But that you can conceptualize with a little bit of thought and effort, you actually can relatively easily rather, I mean, much easier than finding brick and mortar location, signing a lease and hoping and then driving foot traffic. You have this whole audience out there, whether they knew that they had the problem that you were going to solve with the things that you were offering or not, but then getting into not just founding and starting up the business, but being able to actually tweak it and see those results in real time was pretty interesting for you. And I think, is that a facet of the many other roles that you've had since then. And just for our listeners, there are a lot of board of director directorships here.
Ben Marks [00:06:28]:
There are extensive work running a lot of businesses, and then probably really notably to the broadest audience, you ended up as CEO of Klarna 2017 2018. Do you find that same attention, that same love of ability to iterate and tweak with the customer feedback, or did that evolve over time in some of your other businesses?
Jim Lofgren [00:07:01]:
Well, I think the experimentation has always lived with me from those days. But the life of a merchant is very different from the life of someone building technology, I think, and it's a hard one to bridge if you haven't done both sides of it. I guess you can add a third, which is like the life of a person in an agency. It's a different life and a different lifestyle. But there are some common trends, I think, that drives them. It's curiosity. Curiosity is a big important thing. It's intrinsic drive.
Jim Lofgren [00:07:41]:
But I think this desire to experiment has always lived with me wherever I'd been. And I think it started early in my career. Probably something more of a personality trait than something that's industry specific, but that's obviously part of it.
Female Narrator [00:08:02]:
Commerce famous is proudly presented by Shopware, the leading open source ecommerce platform for midmarket and lower enterprise merchants. More than 50,000 clients already process over $25 billion in annual GMV through Shopware. Find out more about Shopware and the best value in ecommerce@shopware.com.
Ben Marks [00:08:24]:
Well, you've been around this industry long enough, and you've worn and do wear many different hats. I want to kind of jump back before the current moment of AI hype. Right. Can you pull out any one or two things that you think have in the last five years or so before GPT four, where you say, okay, hey, this is a notable shift in how this industry works. And that could be maybe from the perspective of any of the three personas you just mentioned. Has there been anything out there that just where you said, hey, you know what? I know when we look back in five to ten years, we're going to say that was the innovation or that was the shift in attitude or something else that you knew things were going to be different from then on.
Jim Lofgren [00:09:27]:
Great question. If I look back, 2000 ish was a breaking point for ecommerce to become more mainstream. I find, like, if I look back 2000, ordinary people started buying online. Not a lot of them, but there was this influx of people, mostly the young, trying out this new channel. The prevailing thing that you did before was really buying through a catalog and a phone and you got something in the mail. And now all of a sudden you got exposed to one or two or several websites that sold things so you can actually interact with them online. And I think that happened then. And then five years after that, between 2005 and ten, I think there were different types of platforms popping up so you could enable more and more customers or merchants to do this, but also technologies that were sitting on top of those, which I remember reviews came back then because Amazon led this, largely reviews.
Jim Lofgren [00:10:38]:
I had to deal with this internally where I was. I had to convince our CEO back in the days that reviews was a good thing. We were selling our own proprietary fashion, and no way would we give the customers a chance to give reviews, especially not negative reviews on our own fashion, maybe for like third party electronics. So things like that came during that period. And I think that those technologies that were introduced back then sort of shifted ecommerce dramatically and made it much more mainstream recommendations back then as well. Search technologies started coming up using sort of better language processing and recommendation of basic collaborative filtering, sort of picking up user behavior back then. And first companies were established back then. And I think what we're seeing now with, for example, Gen AI is the augmentation of existing technologies, but also some new interesting applications that will be used.
Jim Lofgren [00:11:49]:
And I think for content creation and content augmentation, Gen AI is extremely interesting. And for workflow automation, I think I see it firsthand, both on the developer side, but also on, on the normal person's productivity. You're in a platform or in a software or something, you're writing some policy, and you can all of a sudden augment the work that you're doing with very little effort. I think it's great and scary at the same time.
Ben Marks [00:12:26]:
Yeah, I was just actually recording another podcast just before this, and this was one of the main topics of conversation was how, if you go beyond hype, meaningful AI right now, there's sort of a couple of, couple of different classes for it. One is that it is sort of a force multiplier when it comes to individual effort. Right? So the store operator and whatever role they have, whether they're merchandising or some kind of customer engagement or even on the legal team having to parse through legal agreements. Well, yeah, AI is already having a meaningful impact there. I know my employer, Shopware, has released a suite of tools around this very idea, but then we also have this other class of this generative approach. And the easy part was obvious I think once everyone realized that we are now in an era of sort of natural language interface into big data, but where I see things getting really interesting, and I actually want to test this idea with you because I use this as an AI straw man all the time. So I have this idea. Given what you all are doing, I think I live southeast atlantic coast.
Ben Marks [00:13:46]:
I have a feeling that if I'm looking at products, I'm going to convert better. Let's say I'm looking at fashion, not something I do very often, which anyone who's seen me dress knows. But if I'm actually shopping for clothes, I think we're not that far away from having. When I'm browsing the same site as another person who might be in the midwest, not just the product image itself, but even the background imagery where it's placed, how it's marketed to me, is going to be changed, generated more or less in real time. I'm going to see someone who looks like me walking down a beach in those shorts or in that shirt. I feel like we're on the cusp of that level of informed, real time AI based personalization. Am I right or am I wrong?
Jim Lofgren [00:14:37]:
Well, the good news here is that you're right. The bad news is that you might think that we're stealing your idea because we're already doing it. This is already in, this has already been done. So this is the beauty of geni generative AI will change image creation. It would augment text, online product descriptions and so forth. It will change the customer experience as it will change the merchandising experience for ecommerce. Because even today we do all things that changes the experience on the front end for the consumer. So we power the search, we power the recommendations.
Jim Lofgren [00:15:20]:
So we use predictive AI, we use semantic AI for search. We use visual AI, sort of normalize images and do the things that you were just saying. So all of these AI components with gen AI are also augmented. So for example, you can change out a piece of content in real time. Now, the challenge currently is customers know what's authentic and not authentic. And with some of these AI applications, you can still tell what's authentic and not authentic. And some of the brands are also not willing to fully give up their control over deciding what's authentic and not. So the automation of doing, for example, gen AI generated real time images that are not pre approved is challenging because you lose control over your brand.
Jim Lofgren [00:16:18]:
And as a brand marketer, and as a merchant, as a CEO, having done that for ten years, that's probably the last thing you would like to do. So the thing, how do you automate this in a way, but that stays true to your brand and stays authentic, and that's the balance you need to strike if you're building this.
Ben Marks [00:16:40]:
Yeah, I mean, you can't spell guardrails without AI. It's sort of working from the other direction. How do we ensure that? Because there's so much efficiency to be gained by turning AI loose, but also the whole idea of authenticity and the whole concept of locus of control. I mean, Jim, you know me, I've been working in open source e commerce platforms for a very long time, and our brand control really is always a good chunk of it is external. So I feel this challenge and it brings up an even bigger topic. I mean, it's funny, we didn't set out to make this an AI talk, but it naturally gravitates there in an era where authenticity has been important and having authentic, engaging brand experiences, like having that meaningful personal experience with the brand, has been this thing that we consumers have enjoyed for the last several years, probably decade or so, when everything is trending towards AI and we're letting the machines do more and more work, quote unquote, what does that road look like over time as we go down this path? Would you say that you have a vision of like in five to ten years, is it going to be basically throw all the AI at all the problems, but then let's make sure we have guardrails in place, or are we just going to iterate on AI tech? And we will expect that over time, the vendors or the AI ecosystems that sort of facilitate that kind of guardrailing, will those shake out? What do you see from your position?
Jim Lofgren [00:18:38]:
So we've been doing this AI stuff that now everyone's talking about for some ten years. And generally if you're a brand, you are not giving up control. So there's actually a lot of applications that we've seen across the years where you build something with AI or some predictive technology or an algorithmic output that is a black box that you cannot override, control or change the result score, you cannot filter and move things out of. I'll give you an old example. Like the old world example would be that you create others who view this, also viewed that, or others who bought this, also bought that. If you cannot control that experience, what will happen is the recommended product for people who are looking at this, also are looking at that will give you a product, for example, that might be out of stock or largely out of stock, there might be only one size left. So if you're not controlling the output of the AI well enough, if you're not setting the parameters or the framework for it to operate, then you won't get what you desire. And it's same with Gen AI.
Jim Lofgren [00:20:02]:
The gen AI that you see now with OpenAI or other solutions are only as good as the prompts that you put in. Now, what really scares me, I have to give you that I'm, of course, a LinkedIn addict. I browse through LinkedIn way too much, and I end up seeing this guide dog robot in an office. And it was sort of the robotics of a dog, quite big, half the size of a human, but fairly big with jaws and everything. And then it was largely built on the llms for the language so it could speak, and it was a guide dog. When you came into the office, it guided you around. Now, you let that loose, or somehow that behavior is not controlled, it's going to chew you up. You have no chance against that dog.
Jim Lofgren [00:21:02]:
That's kind of what scares me.
Ben Marks [00:21:05]:
Yeah, we are kind of crossing over into our AI machine overlord territory. That is the scary outcome. That's probably a different discussion for a different day. One other thing, as we wrap up, one last question. One of the things I've noticed over time is that as certain sort of technology vendor channels and companies have really matured and defined their own space, I see sort of not necessarily an increase in scope, but a filling of the scope where you see, like, okay, hey, the mission matters. And it's interesting, because when I look at how Nosto describe themselves, you're talking about an experience platform, right? And this is also interesting to me, because this is how, and I know you all are partners with several ecommerce platforms, but this is also how e commerce platforms like to talk about themselves. How do you see, and this is a fun conversation, because I know we've just announced a partnership with Shopware and Nasto, but how do you see that relationship playing out between the two as both systems sort of become more and more better at the things that they do? But there is some sort of functional overlap. I'll give a caveat that you all have been in the big data and helping make sense of big data and using big data like a sword for a long time.
Ben Marks [00:22:51]:
And that's a very different skill set than what ecommerce platforms have traditionally done. But given that we're all in the business of delivering great experiences, how do you see that playing out?
Jim Lofgren [00:23:04]:
We talk a lot about making every impression relevant at Nosto. What that means for us is that every single interaction by every single user or consumer visitor should be meaningful to them. In all my years working with partners and platforms and so forth, that's not really been their mission. Their mission is wider than that. Ours is really this experience. When you land on a website and you pass through that website, and it frustrates me. Today I go to these large brands that mostly my wife love, and she browses on them, and it's a wonderful brand in the Nordics called H M. They're global now.
Jim Lofgren [00:23:50]:
And you still have this experience where you click, and there's so much information that I shed when I click on things. I browse around, I click on men's and I click on pants and I hover over mostly brown pants because that's what I'm looking for. All this information I shed over the journey that I'm doing. And I don't have to spend a long time at the site to shed that data. Why not immediately capture that data and change the entire experience, change out the content, make sure I'm segmented, pick up that I'm most likely shopping for men's. I'm most likely interested in pants. And why don't you change the entire experience from there? Once you have some certainty, you change the experience. Once you have more certainty, you change it again.
Jim Lofgren [00:24:39]:
And what I find frustrating is that not the largest brands but the medium brands are driving this new era of shopping where they are actually doing this. They're creating content for the different segments. They're doing one to one personalization. They're changing out the experience midway through the journey or one third through the journey. They're changing out the checkout experience based on the interaction they've had on the site and changing every single impression. A world where every retailer does that is where I want to go. I want to go to a site that sort of doesn't have to recognize me by name or my Pii, my data, my personal stuff. It needs to be very specific about.
Jim Lofgren [00:25:26]:
Yeah, you probably like this.
Ben Marks [00:25:28]:
You should look here.
Jim Lofgren [00:25:30]:
This is the right part of the website for you based on just what you've done in the last 1 second or 5 seconds. And none of the big guys does that. And I'm on this quest to make sure that everyone gets there. That's where I want to go.
Ben Marks [00:25:45]:
Well, I don't think there's a better place to leave it than that, because that is the mission I 100% am behind. Let's make this business as efficient as possible for everyone involved. Jim, I can't thank you enough for the gift of your time today. It's been a really informative, insightful chat and I look forward to thinking about some of this as I head out.
Jim Lofgren [00:26:08]:
To watch out for the dog. Yeah, I wouldn't go there.
Ben Marks [00:26:14]:
I'll going to have personal emps, I think, before we know it, to shut these things down. All right, Jim. Take care. I'm sure I will see you out and about in the world, my friend.
Jim Lofgren [00:26:24]:
Thank you, Ben. Have a great one.