Rugs Direct has rolled out its on-site AI-powered conversational assistant, Ask Cleo, and it’s driving increases in key performance indicators.

The retailer falls under Elevated Brands Group, also the parent company Lightopia. Elevated Brands Group launched Ask Cleo as separate rollouts for each retailer. Lightopia debuted Ask Cleo on its site in May, with Rugs Direct following weeks later, in early June.

Sharon Gautschi, chief merchandising officer of Elevated Brands Group, shared that since then, add-to-cart rates for consumers using Ask Cleo have been 8x to 9x more than other users across both Rugs Direct and Lightopia.

“But you do have to temper that with engagement,” Gautschi told Digital Commerce 360. “Certainly, the majority of customers are still using classic search. So that is a higher add-to-cart rate, but on a smaller base. We’re still ramping up engagement.”

Using agentic AI to power its search, Ask Cleo allows shoppers to describe what they are looking for conversationally. It can ask clarifying questions and help solve practical design challenges such as selecting an appropriate fixture for a vaulted ceiling, according to Elevated Brands Group.

Ask Cleo, the AI shopping agent, suggests products to a shopper. | Image credit: Rugs Direct website

Rugs Direct is No. 622 in the Top 1000 Database. The market research tool tracks North America’s largest online retailers, ranking them by annual ecommerce sales and more.

Rugs Direct is also No. 492 in Digital Commerce 360’s new AI Rankings. That set of rankings is available in the Top 1000 Pro with AI Database.

How Rugs Direct and Lightopia are using AI agents for search

Consumer shopping both Rugs Direct and Lightopia are “really showing us that they are looking for quality,” Gautschi said. But there’s another set of customers chasing fashion, she added.

“They are clearly interested in using conversational or natural language search,” Gautschi explained. “And that’s becoming more and more prevalent across our industry, which is exciting and fun. They really want more answers, they want it fast and they want to understand the results.”

She shared that Elevated Brands Group tapped Constructor to develop Ask Cleo. Lightopia and Rugs Direct both use Ask Cleo in two different ways:

• AI Shopping Assistant (ASA). Gautschi described this as a site-level or higher-funnel search tool.
• Product Insights Agent (PIA). She described this tool as living on a product’s page to answer specific questions about it.

“Overall, we’ve seen some interesting trends where the more questions they ask, then the higher the KPIs are,” Gautschi said. “The signals are stronger. We’re seeing higher add-to-cart, higher purchase rates.”

Consumers on Rugs Direct might use Ask Cleo to learn about a rug’s materials, thickness and dimensions, she noted. On Lightopia’s site, they might use Ask Cleo more spec-focused questions, she said, as lighting is “much more technical” than rugs. That could mean asking about dimmability, ceiling height, bulb compatibility or color temperature.

How Elevated Brands Group trained its AI agent

Gautschi said Elevated Brands Group plays “a big part” in feeding information to train its AI agent. Elevated Brands Group has articles and blog posts that it has written for public relations and search engine optimization (SEO). It also has specifications for all its products.

Elevated Brands Group has taken that library of content and given it to Ask Cleo, according to Gautschi. The training process took about four to six weeks, she estimated. Ultimately, though, it comes down to bandwidth.

She also praised the company’s emphasis on data integrity.

“Even some of the larger companies I’ve worked with, getting one spec updated across my assortment is really hard, but here, we’re pretty nimble with data integrity,” Gautschi said. “And that’s able to feed the agents quite well, where the agents can really respond nicely.”

Using all that data, Rugs Direct and Lightopia have trained Ask Cleo on brand voice and how they want it to respond to consumers. Gautschi said the company intends for the Ask Cleo tool to function like a “well-informed friend with great design, style and taste.”

“It doesn’t just say, here’s what you want,” according to Gautschi. “It really should give you some advice and some additional things to think about for what you’re looking for. We feed it and then we test it, so we’ll ask it questions to see how it responds. And if it doesn’t respond in a way that we think is right — or the answer can be optimized — then we are giving those examples back to our third party.”

Off-site AI traffic to Lightopia, Rugs Direct

Gautschi noted that Rugs Direct and Lightopia are increasingly generating traffic from AI platforms such as OpenAI’s ChatGPT, Anthropic’s Claude, or Perplexity. She estimated that AI traffic referrals generate less than 10% of consumers’ visits to the two retailers’ sites.

“We are definitely getting more traffic from AI platforms, but not enough,” Gautschi said. “I want more. And as a smaller company — we’re not Wayfair, we’re not Walmart — we’re competing with those big guys. We’re definitely seeing the traffic come our way, and we have nowhere to go but up, fortunately, in terms of increasing that traffic.”

That growth in traffic could also help bring visibility to the online retailers’ Ask Cleo tool. If agentic AI-powered search platforms’ traffic becomes “more qualified,” she said, then Elevated Brands Group will expect return on investment (ROI) and return on ad spend (ROAS) to be higher than traditional digital paid marketing programs.

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