Fanatics teams up with OpenAI for new AI-powered shopping suggestion feature

Source: Fanatics

At any given moment, Fanatics offers more than 1.5 million unique SKUs for sports fans to buy — from jerseys and hats to team-branded streetwear and socks. The search for those items is getting easier with a new feature called "Shop the Look," created with the help of OpenAI's Codex.

Fanatics' product assortment reflects its rise into a massive sports-industry platform, with deals with nearly every major sports league and team worldwide. Each year, Fanatics Commerce manufactures more than 45 million items and sells them to customers in more than 180 countries.

But Justin Tsai, chief product officer for Fanatics Commerce, said that growth has also created a challenge for the company.

"One problem we just kept seeing was that our customers come to our sites, and we operate hundreds of these sites … their challenges are that they're always trying to look through our very large catalog to figure out what they can buy," he said.

Tsai said customers' shopping sessions routinely ran over 30 minutes on average, and that time kept compounding as Fanatics released upwards of a thousand new products each week.

"Shop the Look" suggests coordinated outfits on each product page, matching those items with other in-stock items based on team and intended style.

Traditional shopping curation strategies, like photo shoots and stylized outfits, have lead times that don't always work with Fanatics' rapidly increasing product pool, or for quickly-released items like championship shirts and hats, Tsai said.

Random suggestions don't work for sports fans either. "Nobody who is a Los Angeles Dodgers fan wants to be matched with a San Francisco Giants item … team and player alignment is extremely important in our world," he said.

Even as Fanatics has grown into a multibillion-dollar business, team merchandise remains its biggest revenue source. Fanatics founder and CEO Michael Rubin told CNBC's "Squawk Box" earlier this month that the company's commerce business will exceed $7 billion in revenue this year, compared with roughly $5.5 billion for its collectibles business, which includes Topps trading cards.

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OpenAI has been experimenting with shopping tools for ChatGPT since the chatbot's launch, including a feature last fall that let users buy merchants' products directly within ChatGPT. However, it is ending the Instant Checkout effort and now is working directly with retailers to create dedicated apps within ChatGPT, according to CNBC reporting.

The new Fanatics feature is another way OpenAI is leveraging its technology across shopping. Rosemary DeAragon, head of industry GTM at OpenAI, said this personalization issue in retail "is an age-old problem." While the rise of e-commerce gave retailers new ways to "figure out the fingerprint of the customer" — whether that's past purchase history, where they are viewing the website from, or a logged-in account — those efforts still sometimes miss the mark.

"In the past we were trying to stitch together something that would be good to show a customer," DeAragon said. "With AI, you can do more deterministic matching to do personalization in this next-level way."

The Shop The Look feature on Fanatics.com

Fanatics

"Shop the Look" uses OpenAI's Codex to create a tool that parses product and catalog data to find compatible items and reevaluate recommendations, ultimately creating those looks that might suggest a hat, socks and other accessories to go with a jersey a fan is considering purchasing.

Tsai said that after rolling out the new feature, there was a 10% increase in views of recommended items. He also said the suggested items help shoppers have "more conviction" about the items they're thinking of buying, seeing how it may fit with other team gear.

DeAragon said that while there will always be room in the shopping experience for more curated looks and trying items on in person, the integration of AI into efforts like this — where it can help narrow down massive product selections and show what might work with a valuable purchase like an authentic team jersey — shows that there is a "really big opportunity to enhance the existing experience."