Rugs Direct and Lightopia report significant performance gains following the integration of AI-powered conversational assistant Ask Cleo

The retail landscape is undergoing a profound transformation as e-commerce entities move beyond static search bars toward dynamic, agentic AI interfaces. Elevated Brands Group, the parent company of both Rugs Direct and Lightopia, has emerged as a frontrunner in this transition with the successful deployment of its proprietary AI assistant, Ask Cleo. Since its phased rollout earlier this year, the tool has demonstrated a remarkable capacity to influence consumer behavior, driving add-to-cart rates that significantly outperform traditional search methods.

A Phased Deployment Strategy

The integration of Ask Cleo was executed as a strategic, multi-stage project tailored to the specific product nuances of each retail brand under the Elevated Brands Group umbrella. Lightopia, which specializes in premium lighting fixtures, served as the initial proving ground for the technology, debuting the tool on its platform in May. Building on the insights gained during the Lightopia launch, the company expanded the rollout to Rugs Direct in early June.

This incremental approach allowed the technical team to calibrate the assistant’s natural language processing (NLP) capabilities to match the distinct needs of each customer base. While the technology is unified under the Ask Cleo brand, its functionality is bifurcated to address the technical requirements of lighting design versus the aesthetic and material-focused queries typical of rug shoppers.

Data-Driven Performance Metrics

The results of this deployment have been statistically significant. According to Sharon Gautschi, Chief Merchandising Officer of Elevated Brands Group, consumers who engage with Ask Cleo demonstrate an add-to-cart rate eight to nine times higher than those utilizing traditional keyword search. This disparity highlights a fundamental shift in how shoppers interact with product catalogs when provided with conversational guidance.

However, industry analysts note that while these conversion rates are impressive, they exist within a specific context. As Gautschi acknowledged, the current user base for Ask Cleo remains smaller than the segment of shoppers who rely on conventional search functionality. The ongoing challenge for Elevated Brands Group is to scale the engagement rate, transitioning a larger portion of the existing traffic from passive search habits to active conversational engagement.

The Mechanism of Agentic AI

Ask Cleo is powered by agentic AI, a sophisticated iteration of large language model (LLM) technology that goes beyond simple information retrieval. Unlike standard chatbots that provide static FAQ responses, agentic AI can reason, perform multi-step tasks, and ask clarifying questions to narrow down complex product choices.

For a Rugs Direct customer, the tool functions as a virtual design consultant. A user might inquire about a rug’s durability, fiber composition, or stain resistance, and the agent can provide detailed, context-aware information. Conversely, for Lightopia, the assistant tackles highly technical challenges. Customers looking to install fixtures on vaulted ceilings or requiring specific color temperatures can receive precise, engineering-backed advice regarding dimmability, bulb compatibility, and structural fit. This capability reduces the friction often associated with purchasing technical home goods online, potentially lowering return rates by ensuring the product meets the consumer’s specific environmental constraints.

Training for Brand Voice and Accuracy

The efficacy of Ask Cleo is not merely a result of the underlying LLM but a consequence of rigorous, domain-specific training. Elevated Brands Group dedicated a four-to-six-week period to training the agent on a vast library of proprietary content, including SEO-optimized blog posts, product specifications, and internal design guides.

This process was designed to ensure that the AI maintains a consistent brand voice, characterized as a "well-informed friend with great design, style, and taste." Maintaining data integrity was identified as a critical success factor; the company’s internal organizational structure allowed for the seamless updating of product specifications, which in turn fed the agent with accurate, real-time data. To ensure quality control, the team employs a feedback loop where they manually test the AI’s responses. When the output falls short of the company’s standards, the examples are funneled back to their technology partner, Constructor, to refine the model’s performance.

The Broader AI Ecosystem and External Traffic

Beyond the internal site experience, Elevated Brands Group is closely monitoring the emergence of off-site AI traffic. Referrals from major platforms such as OpenAI’s ChatGPT, Anthropic’s Claude, and Perplexity are becoming an increasingly relevant, albeit currently small, source of acquisition. While these AI platforms currently account for less than 10% of total site traffic, the trend is upward.

Gautschi emphasizes that for a mid-sized retailer, the competition for visibility against industry giants like Wayfair or Walmart necessitates a strategic embrace of these emerging channels. The company anticipates that as AI-powered search becomes more prevalent, the traffic generated through these platforms will be more "qualified"—meaning users will arrive at the site with a more precise understanding of their needs, likely leading to higher Return on Ad Spend (ROAS) compared to traditional digital marketing spend.

Industry Implications and Future Outlook

The success of Ask Cleo serves as a case study for the mid-market e-commerce sector. It demonstrates that retailers do not necessarily need the massive, multi-billion-dollar R&D budgets of the largest e-commerce conglomerates to implement high-impact AI solutions. By focusing on data integrity and clear, domain-specific training, companies can deploy agentic tools that fundamentally improve the customer journey.

As the industry moves toward 2027, the "agent-first" approach to e-commerce is expected to accelerate. The ability for a tool to not only present products but to provide consultative advice is shifting the role of the e-commerce site from a digital catalog to a digital advisor. For Rugs Direct and Lightopia, the focus for the coming quarters will be on increasing the "engagement rate"—the percentage of total visitors who choose to interact with the AI assistant.

The company’s commitment to this technology is reflected in its recent recognition in industry rankings. Rugs Direct holds a position in the Top 1000 Database, a comprehensive index of North America’s largest online retailers. Furthermore, its inclusion in the new AI Rankings, featured within the Top 1000 Pro with AI Database, signals that the company is effectively aligning its operational strategy with the technological shifts reshaping the digital retail sector.

Conclusion: A New Standard for Retail Engagement

The journey of Ask Cleo represents a broader shift in digital commerce toward personalized, high-intent shopping experiences. By bridging the gap between technical product specifications and human-centric design advice, Elevated Brands Group has created a roadmap for other retailers seeking to remain competitive in an increasingly automated environment.

The data suggests that the higher the number of interactions a customer has with the agent, the more likely they are to finalize a purchase. This correlation suggests that as users become more comfortable with conversational commerce, the reliance on traditional, linear search may continue to decline, replaced by fluid, goal-oriented dialogues with AI agents. For the retail sector, the takeaway is clear: the future of digital storefronts lies not just in the volume of traffic, but in the depth and quality of the assistance provided at the point of decision. As the technology matures, the competitive advantage will likely go to those retailers who can most effectively blend data-driven accuracy with a nuanced understanding of consumer intent.