Daydream's don't-call-it-a-pivot enterprise play in fashion AI

Good afternoon. This is coming to you a little later than normal thanks to a sick kid disrupting the regular schedule. Please address all complaints to my son Sebastian. (If his text responses only contain 3 letters or fewer, that’s normal.)

On Monday, I stopped by Mike McNerney's fun (no, really) marketing and media event in New York City called MARCC that focuses on the affiliate and creator spaces.

Every attendee was asked to complete a bit of "homework" in advance—I was a bad student and didn’t, but more than a third of the audience did—which included naming the other attendee they most wanted to meet, plus sharing details on a cool innovation or idea you were working on. McNerney then invited some attendees up to talk about their ideas, but also to humorously ambush them with a corporate-themed version of "Would You Rather?" It was a great icebreaker for the whole room, and one I may use as "inspiration" in a future The Aisle event. Thanks, Mike!

Amid all the hype about the creator economy, a fair amount of it deserved, I was glad to hear some real talk from some of the speakers. One of them was Sheel Shah, a publishing industry veteran who now leads partnerships at the creator platform Circle.

Shah talked up some upstart media operations using AI well for behind-the-scenes tasks, like the team behind YouTubers/podcasters Colin and Samir. But he's found that kind of discipline is more the exception than the rule, especially for the middle class of creators with somewhere around 10,000 to 50,000 followers. Many are struggling to grow amid everyone's-an-influencer saturation, he said, and the pressure to take the money before it evaporates is leading to less creativity from large swaths of them.

"There's just so much money flooding into the creator/influencer space that I think creators even know it doesn't really matter [what they create]," he said. "You look at their first draft and it's just Claude, right? Or just ChatGPT outputs. AI...is supposed to allow for us to have more business, to be creative, and I think it's actually allowing for a lot of laziness in the influencer and creator space."

I’m sure his comments will stick with me next time someone tries to convince me that AI is often unlocking more creativity in content creation, not less.

Another potential trend from the event came up in conversations off-stage. Everyone talks about Google Zero, the idea that Google's AI search provides more answers right there on Google while giving users less reason to click through to the websites of publishers or retailers. But now there's a growing fear Amazon Zero is coming.

Many online publishers depend on Amazon as their chief source of affiliate revenue, earning a cut every time their content sends a reader to buy something on the Everything Store. But the company has slashed affiliate rates for some publisher partners. And other brewing internal Amazon initiatives, including some AI-powered ones, are worrying partners too, according to cocktail-party chatter. Not the best news for the affiliate space alongside the Phia scandal I reported on recently, which saw the AI shopping startup accused of siphoning off affiliate commissions from other publishers through “cookie stuffing,” without shoppers ever knowing.

Now on to the good stuff...

A little more than a year ago, the AI shopping startup Daydream launched a website and app meant to give online fashion shoppers more nuanced, personalized help through an AI-powered conversational search interface, rather than the usual keyword search or navigation bar browsing. Someone might not want to search for simply a floral dress; they might instead want dress ideas for a cliffside beach wedding in the fall, or trendy but not try-too-hard looks for moderating a tech conference panel in New York. (Hmm.)

In my article in Fortune at the time, I wrote that founder and CEO Julie Bornstein had dreamed of building such a shopping experience since her days running Nordstrom's e-commerce operation in the early 2000s.

“I just remember thinking someday I would like to build a search and discovery platform that just helps you find the right stuff,” she told me then.

This week, just 13 months later, the venture-backed startup that has raised $50 million announced that it has already branched out into trying to build the same experience for shoppers on other shopping sites. Namely, the e-commerce sites of fashion brands and retailers that Daydream already partners with. The enterprise technology is called Powered by Daydream, with fashion brands like Alice + Olivia and STAUD testing it out.

I admit my first reaction was not necessarily “smart move,” though I am fully aware that it may turn out to be. Instead, I assumed that the move into the enterprise space must have been a result of Daydream’s consumer shopping experience not catching on. And so this must have essentially been a pivot, just without that label.