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The Jason & Scot Show - E-Commerce And Retail News

Join hosts Jason “Retailgeek” Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Founder and Executive Chairman of Channel Advisor, as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
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Now displaying: December, 2019
Dec 13, 2019

EP203 - Shopper insights from NPD Checkout

NPD Checkout is a product from NPD that scan physical and digital receipts from a panel of more than 100,000 users to get a unique look into consumer purchase patterns in a variety of product categories.

Jeremy Allen, Group President of Checkout, and Patty Altman, SVP Client and Business Development at Checkout join us to discuss what we can learn about the holiday from their dataset.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 203 of the Jason & Scot show was recorded on Tuesday November 16th, 2019.

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show this episodes is in recorded on Tuesday November 26th 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your squad window.

Scot:
[0:38] Hey Jason and welcome back Jason Scott show listeners well we're all here on pins and needles waiting for the first results of holiday 2019 so with that while we're doing that we would warm up your data analysis brain functionality
with some gas that are focused on retaildata we are really excited to Welcome to the Jason Scott show both of these folks come from NPD
we have Jeremy Allen he is the group president of checkout & Patty Altman choose the SVP client and Business Development check out what kind of showed us.

Jeremy & Patty:
[1:12] Thanks for having us it's an honor to be with you guys today thank you.

Jason:
[1:18] We are thrilled to have both of you and I started the tradition on the show we always like to take things off by having the guest share a little bit about their background so I'm Jeremy why don't why don't you get a stardust can you tell us how you came to MP3.

Jeremy & Patty:
[1:30] Absolutely so I've been with MPD for about the past 4 years my anniversary is coming up in December of this year that we don't check out business which will get into a lot more in this show but ended check out his MP start up business we use receipts to measure markets and how consumers shop
we're very very excited about this business it's been a great
investment and opportunity for us and for our clients prior to doing this and joining mpds spent about five years with Nielsen which is also in the measurement space
I led the marketing effect.
Is there helps clients improve their advertising reaching residents and before that I grew up in Consulting so I spent about fifteen long years at McKinsey & Company.

Jason:
[2:14] Route 15 years of Mackenzie is actually like 83 years in in people years.

Jeremy & Patty:
[2:19] Yeah and I have all the gray hairs to prove it.

Jason:
[2:21] Patty can you tell us how you got them pretty.

Jeremy & Patty:
[2:25] Yeah absolutely and thanks as well of her for having me on the show this morning I'm so I did attempt MPG for two years and I work on Jeremy's team I leave the commercial side of our business the mission of our team is to make sure that our clients use check out by rata latex in the most effective way and typically to drive big strategic
decisions and cover opportunities and all within the the omni-channel space.
Apart MPG I was at its cells for 7 years and I had a variety of leadership positions their everything from leading a Global Communication program,
how to custom Resurgens in Brandon Division and renovation.
Back to the keep probably 222 why I'm here at MPG now is my time that I spent at iri I was alright for 12 years and I was in the Consumer Panel division working with longitudinal panel very similar to what we do
and it was there that I learned the ins and outs of how to best leverage by Rihanna lyrics and really the power of that that information so that you know it's funny but it feels like coming to MPD is.
Because a lot of those studies that I did in the CPT space years ago things like Brands switching Milos retains you name it there the core of what we do at checkout and how we drive value at our clients.

Jason:
[3:38] That's awesome so is it fair to say that you guys basically took the best of Nielsen and ri-ri and brought it to make an even better offering a check out.

Jeremy & Patty:
[3:47] That's exactly right so what what's interesting is that panel analytics what that basically means is your tracking the same consumers spending over time it's been a Mainstay in the cpg space so
there's a product of meiosis and I are I collaborate on call the homescan panel and that's where many of those cpg brands
bread and butter analytics come out of that in our space we call a general merchandise in Food Service the industries and MPD tracks there hasn't been a longitudinal panel before check-out so we're bringing those exact same discipline as it existed for decades and cpg marketing to general merchandise and it's it's been a huge opportunity in our clients are thrilled
trouble that innovation.

Scot:
[4:27] Ricola just to make sure so Jason are pretty familiar but just make sure listeners are tracking us there's some kind of two companies in this space there's Nielsen and NPD Nielsen,
they do a lot of data around cpgs and then you guys do the Nazi party stuff with York on General Merchandise is that a is that a fair characterization.

Jeremy & Patty:
[4:46] That's exactly right so we track 24 Industries and it's basically I would check everything that you cannot eat or put on your body so you're getting personal products so it's closing its jewelry its beauty products it's Sporting Goods
it's we also do food service so restaurant operators all of those things that you find in a Target or Walmart that don't fall into the cpg category we track.

Scot:
[5:10] And then again for listeners that aren't familiar with how how this works at General at NPD and then you're working on a sub project within their called check out
in the overall in PD so you're at least 23 kind of non cpg categories,
I'll pick one of my favorites which is Automotive how does that work how are you tracking Automotive data.

Jeremy & Patty:
[5:32] Yeah so if I just back up for a second mpd's been in business for about 50 years and we track these twenty-four Industries and we do it in two primary ways so 1 is what we call a POS which stands for point of sale.
So similar to a Nielsen RI we,
data from retailers to all of their register receipt data we aggregate that data and we classified into a standard hierarchy that we then use the measure products sales
with that we can measure manufacturer brandshare we can measure retailer share and its really we called the data
record set the standard by which companies measure their performance and our Industries so that is what MPD has been doing for 50 years so it's retailer data aggregated organized and then given to the industry to measure performance that's one dataset that ipd uses the other one that would be used for a long time is consumer surveys
so a POS data that we get from retailers tells you what sold for how much it sold and how many units sold the consumer data we really go out and ask consumers,
what they bought and why they bought it right so it's that we called the why behind the buy checkout is a startup that gives us another way to measure what consumers do
the difference with check out that will get into his Patty mention it's a panel so historically with our consumer data we would ask trackers we would ask the same questions,
different people each month with a panel you're asking the same questions are getting the same information from the same people over time and that's where the Innovation comes in for us in these industries.

Jason:
[7:00] That that is awesome and I always like to talk about the soda panel data as observed Behavior what we actually see customers do versus the survey data is more stated.
Behavior is what customer said they do which may or may not perfectly accurately reflect but they actually did.

Jeremy & Patty:
[7:20] A hundred percent correct and that's why we love receipt so if I get in to check out for a minute what's what's interesting or different about checkout is exactly what you said we would ask consumers what they bought where they bought at why they bought it receipts we don't have to ask any questions and it's factual so
we'll check out those as we have an app called receipt palette available and I owe store on an Android.
Consumer download that app and we asked him to take pictures of all of their receipts for all of their purchases
we also ask them to give us access to the rear seats so the core of checkout is getting a consumer to give us information on everything they purchase
in the form of a receipt with an organized that data in the same way we do our point-of-sale data in the same taxonomy is the same hierarchies is class by the exact same way and with that we can measure what people are buying through their receipts.

Jason:
[8:08] Perfect and I don't want to belabor the methodologies so much but it it's super helpful because it lets us understand where there's any potential,
data biases in just like what the what the capabilities of the.
The dataset that's driving the insight into so you're you have a consumer at this enticing people to take pictures of receipts and.
To me part of the cool part is that you just implied as you're not just getting in-store Behavior or just online Behavior as,
as some other panels are doing you are actually seeing the same person across their their shopping habits on Amazon or walmart.com and in a Target store at Costco store.

Jeremy & Patty:
[8:50] That's exactly right and what's Patty use the term omnichannel that's exactly with me by omni-channel we're really interested in trying to understand everything I can supervise.
Where they buy it from a channel perspective and from a retail perspective and from a brand perspective and historically measurement has been Channel Centric right so you have an e-commerce measurement service which we used to provide within checkout
you have a brick-and-mortar measurement service but what was missing there was the interaction across channels and it's exactly what you just said we might getting purchases across all those different channels retailers and Brands we get a full picture of how a consumers making decisions about what the Spanish word I'll spend it.

Jason:
[9:26] Awesome and then you sell to other traditional data collection problems we have,
you don't care how many different devices be customer used to ShopRite because you're not using cookies you're you're getting the receipt so you see the same customer on their their laptop and iPad for example.
And a you don't care what the method of payment is right so they pay with cash or a credit card doesn't doesn't matter because it get a receipt in either case and you see that receipt.

Jeremy & Patty:
[9:54] That's exactly right in for some of the industries that we tried tried that we tried cash is extremely important so if you think about food service and people buying a meal at McDonald's cash is the dominant
method of purchase and if we didn't track the receipts we miss all those cash purchases that's one of the advantages over credit cards for example some sources to use credit card data track spending.

Jason:
[10:14] Perfect sedan is there some unintended bias in your in your pant like because you're its people that are willing to download and use this app.
It seems reasonable that they might skew more digital and therefore shop online more than then Middle America or anything like that at like you guys feel like there is some.
Some specific biases that you try to account for or or do I have that wrong.

Jeremy & Patty:
[10:40] Yeah there's always going to be a bias in any panel depending on the data collection depending on what to be an ass to but what we do with with checkout is we use both waiting and projections just to make sure that we are eliminating as much of that bias is possible.
So when we look at results from our panel it is indeed that's reflective of the average Shopper for that category for that brand for that retailer.

Jason:
[11:04] Perfect and then as I understand it there's about a hundred thousand people in the panel right now it sounds like a huge amount but there is like 240 million households in the US.
I'm guessing that you do some dancing math to somehow.
Make the the hundred thousand represent the all the household or all the consumers.

Jeremy & Patty:
[11:28] Yes fancy math is exactly what we applied the right now that we we have marketing research and Sciences here who are the best in the industry you know well known people who have been doing this for many years and we have,
but the waiting system to make sure who's in our panel is represented appropriately and then projection systems to make sure they could reject out what the total us.
Population would behave so we take that hundred thousand and make a represent the total US population.
If I can just add that hundred thousand by early next year will be a hundred and fifty thousand so we continue to invest
expand the panel because we believe we can accurately represent the population with a hundred thousand but in many of our Industries sample size is critical so the more panelist we have.
The more industry's categories Brands and products we can track US were always trying to invest and expand the panel for that reason.

Scot:
[12:18] Cool that's really helpful in thanks for going to the Jason Gatlin of data questions
I'm sure you guys get this from clients all the time so it's fine. Not foreign to
what time 21 I'm analyzing data I find the real value is in kind of surprises both both positive and negative if you will what are some of the most interesting surprises that you guys have seen from this project over.

Jeremy & Patty:
[12:43] So what was really interesting for me one of the very first things that we did when we got the first.
Long enough term data set to be able to observe consumer behaviors as we broke pick people up
based on how much they spent online so imagine a portion of the population that spends less than 25% of their spend online versus another portion of the population which are heavily engaged in e-commerce it's been more than 75% of their spend online and we really trying to find out it's do retail
preferences change and you would think they obviously would but do they change and how did they change based on how much of a spend
how much spend people do online and how engage they are the e-commerce what was interesting is people that are primarily brick-and-mortar the number one retailer as you might expect
Texas Walmart people that are primarily online Shoppers the number one retailer as you might expect was Amazon what was fascinating though was to look at how the other retail price is changed over time and what we're really trying to understand was where the,
brick-and-mortar retailers able through their.com offerings to maintain their fair share of the market as people moved online.
And for the most part they weren't right and a big question that we're working with our retail clients on its how do I present a multi-channel omni-channel offered it to Consumers so that whether they love coming into my store
or whether they really rather stay home and shop online they're choosing me as their retailer and an interesting example is.

[14:08] Has been a phenomenal job of using their store assets using a.com offering really making a friendly for consumers and actually do better with consumers as the as consumers shift from buying.

[14:21] Predominantly in stores to predominantly online bestbuy.com picks up more than their fair share of that heavy online consumer cohort.
That was fascinating and we use that as an example with our retail clients to say hey don't worry about.
Amazon as the p.m. if you can win you can create a compelling offer for consumers do what you do well use all of your assets.
And you can actually win with consumers as they make that shift online.
Dimension Automotive earlier that said it's a really good example for automotive clients where online penetration is still low.
What is your thinking about consumers moving more online for automotive purchases those retailers were really trying to figure out how did we win from the very beginning with an omni-channel multichannel offering for those consumers.

Scot:
[15:04] Recalls on any other insights from so it's this population that's like using less than 25% so I guess they're doing more Walmart any other interesting would like.
What is that type of a person is it the lower-income cohort or that certain parts of the country or how would you think about that person.

Jeremy & Patty:
[15:27] There's definitely excuse lower-income and more Middle America as you would.
So we're still saying is it in you guys know this way better than we do we still see that internet
Ecommerce shopping go SKU to where the population centers that skews toward the coast that's where you had the Leading Edge Shoppers that are much more comfortable with technology
you have a much higher presence of internet availability although it's becoming ubiquitous now so it's middle of the country and lower-income that desk you toward that lower online engagement cohort.

Jason:
[16:01] So you you mentioned something that was interesting.
You talk about a retailer like Best Buy sort of out I'll come out punching their weight in omni-channel which is fascinating to me I have a premise that.
In our industry a lot we we we work based on these
urban legends and you know we often don't have data and so like by where did math like omni-channel spend Shoppers tend to spend more than in-store Shoppers in that.
That sounded good when some CEO set it to the the shareholders and then it became.
Serve a defective fact in our industry and then the data sets like yours come up and we get to either confirm or debunk some of those urban legends so am I am specific I am curious I'm at specific example.
Is your data showing that omni-channel Spinners to Shoppers that use both online and in-store tend to be more valuable for retailers or or is that an urban legend.

Jeremy & Patty:
[17:03] I think it depends on the category so a lot of times what we do is we'll segments consumers based on spending into a heavy spending group and a category medium or light the heavy your suspenders,
you tend to be people that have,
uptmore multi-channel engagement so I would say in general and it sounds like you were hoping that I would debunk this one I would say in general or data would tend to agree with that premise but it really depends upon the category.

Jason:
[17:31] In fairness I'm probably out of business if you debunk that that so I'm fine.

Jeremy & Patty:
[17:34] Okay I thought you wanted me to be a contrarian and I can't be on that point.

Jason:
[17:40] Yeah yeah yeah if you jumped in and said any money you you spend on digital is a total waste of funds on.

Jeremy & Patty:
[17:46] Fair enough.

Jason:
[17:48] So thank God I dodged that bullet I don't put you on the spot but were there any other sort of.
Surprises to you in terms of omni-channel behavior or are there any retailers that you would have expected that are doing you know really well at capturing their share.
Any categories that tennis humoral new channel.

Jeremy & Patty:
[18:08] So in terms of categories it's cute. You know what I what I will point out is the automotive example that I pointed out earlier I would say there's a couple of categories like Automotive in Home Improvement.

[18:20] Where they've been able to to benefit from watching other categories and other retailers as consumers shifted online and those retailers didn't embrace it.
And really take advantage of all the assets that they had to make sure that they were getting their fair share
they're doing a better job out of the gate with an omni-channel offer so if you think about an advance for example to buy online pickup in-store which is a unique
capability that you have if you have a physical store location of your changing the muffler on your car it's pretty urgent for you to get it quickly right you may not be able to wait till the next day,
but to be able to do the shopping figure out what part you need to be able to look up a model number online.
Select exactly what you need and then go drive over and pick it up to be able to complete the repair or Auto retailers founded that was a very compelling value proposition so figuring out.
What you do well and where you can win,
and where your stores actually are a benefit to you is it something that I've really been impressed with with with some of the other retailers we've observed and Home Improvement similar as much earlier.
Many people thought you don't got you're never going to buy lumber online while you're right but there's a huge assortment of items that are in a Home Depot or Lowe's many of them are very friendly for e-commerce and being able had a
to figure out that buy online pickup in-store the multichannel offer they can really learn from your Best in Class retailers like Target that have done a really good job,
figuring out how to appeal to the consumer with all the different channels and features that they offer.

Jason:
[19:48] That's true that you and I did want to clarify one thing because you have different different companies use categories definition slightly differently when you say Automotive do you mean actual,
vehicle sales or do you mean like automotive aftermarket parts and accessories.

Jeremy & Patty:
[20:05] Thanks for clarifying only automotive aftermarket parts and accessories we do not track vehicle sales.

Jason:
[20:12] Perfect so then the target example which is particularly interesting to me,
because I feel like we've seen this really interesting Behavior we have the Walmarts of the world,
in my mind are really trying to go toe-to-toe with Amazon and and you know Amazon's got 800 million items online
Walmarts in a rapidly expanding their offering and you know trying to match same-day shipping and all of that I feel like when they zig zag Target actually zagged and said hey you know what we're not going to be the everything store.
We're going to carry a curated assortment in that a storm is going to live in our stores and we're going to use our stores,
much more centrally than Walmart does for example so you know their car chipped and they they ship a significant portion of all their e-commerce orders from the back of their stores and they do same-day delivery from the store inventory,
in my mind when I look at those two companies I go what you know Walmart's really playing for assortment price and convenience and Target is really.
Playing for curation and omni-channel does that show up in your data of it like you know.
The omni-channel is more relevant to Target than Walmart.

Jeremy & Patty:
[21:24] So I agree completely with the stories that you just laid out on those two companies and our data does support that at least as of right now.
At target.com is doing better than walmart.com in a fair share sense with people that are heavier online consumers.
That's the facts would support that Emmett and I you know I love about the shift example that you brought up as a very consistent with the Target brand right so
you know what I was growing up and I guess I'm old but people call Target Tarjay right but if you think about the shipt delivery service you have these part-time and in many cases working moms or
work-from-home moms that are coming into your home they're unpacking your groceries they feel like they're part of the family too very personalized,
brand experience of the way they've done it is very consistent with their brand Heritage in my opinion.

Scot:
[22:15] Wrinkle in Time it wouldn't be a Jason Scott show who didn't talk a little bit about Amazon you've already mentioned them a little bit there
what are things are ice and I'm curious about is when you get the macro numbers you see that the Amazons about half of online sales since my first question are related Amazon his
is that track what you guys are saying.

Jeremy & Patty:
[22:38] Yeah that's a really interesting and question I'm arguing shows that about 43% of total online sales moves or Amazon to Summit.
That's the way you just quoted but I think it would really have to know is that there's just a ton of variation across Industries so for example if you look at something like softline industry is like apparel about 20% moved through Amazon as opposed to Choice which,
approach 70% and think about the differences between those two industries toys is often for a specific occasion is often around a holiday it's often for gift giving purchase so that combination of what.
The product is 4 or the gifted of the occasion is for as much as the desire to have a specific online experience tends to drive the Reliance on Amazon vs.
The rest of the online space.

Scot:
[23:26] And you guys so if I kind of think of this giant pie of e-commerce you guys are seeing what what percent do you think you see of the whole pie if you're not doing cpg and apparel.

Jeremy & Patty:
[23:39] We do do apparel we don't do CBG and I I don't know what the shit I honestly don't know the answer to that.

Scot:
[23:46] I thought there's something like if you couldn't put on your body or something.

Jeremy & Patty:
[23:51] Oh yeah no personal products so that they probably the best bad example that I lay that.

Scot:
[23:57] I was thinking sweaters not Nada Massacre.

Jeremy & Patty:
[24:01] Will mascara retract it's more the lotions and deodorant tuxedo.

Scot:
[24:05] Okay why it's complicated.

Jeremy & Patty:
[24:07] It is complicated.

Scot:
[24:08] So so you know you when you read the headlines and and Jason I got there and talked to a lot of retailers and I've spoken it in PT shows about Amazon you do get this feeling that they're on this kind of like
unassailable on and unbeatable
does the data indicate any kind of tips that you would give to retailers are brands of of how to draw a quote-unquote beat Amazon or or two at least kind of slow down there their head weigh.

Jeremy & Patty:
[24:36] So I just got I think it's a lot of what we have been talking about I'd I think and then we have to be careful right because all these retailers are friends of ours and we want everyone to play nicely,
seed to having a physical store where you can engage with consumers on a different level and be there for them and build a relationship and greet them in person
inform an impression of a brand that's a connection with a person is a real Advantage being able to ship from your store being able to let somebody
things up the same day if it's available there's some advantages that a physical brick-and-mortar Network give you as a retailer.
But I think when unexploited right I look at headlines from and you'll remember these from 10 or 20 years ago that talked about the death of the store right and there was probably a credible point of view those before it at some point that people would never go into stores anymore.
There may stores made banners that are doing great because they realize that there are some things that consumers want from a store and we would just encourage all of our.
Retailers that have that physical presence to take advantage of that figure out what they can do uniquely to connect to a consumer when they come into the store to strengthen the connection to the brand,
and it's powerful.

[25:45] Yeah I just to add to a Jeremy was saying it's really only about the it's really all about the consumer not about the channel so the clients are either reach other manufacturers who are seeing really operating at at the highest capacity or those that always keep the consumer Central,
to the story so whether it's an experience of walking into a brick-and-mortar store physical location or if it's purchasing at their direct consumer or a.
A person in a curated site the message the field of communication is all holistic and fits together so it's a shopping at the consumer experience and not a channel experience.

Jason:
[26:18] Yeah that makes total sense I'm always like I'm less interested in which retailers are doing well against Amazon are there any of the categories that you track where.
Where do you feel like Amazon isn't as dominant so there's more online white space.

Jeremy & Patty:
[26:35] So Patty mention just a cystically apparel and it's offline categories especially when you get the fashion is one where
we see a lot of players other than Amazon do well right there a lot of. Com Pure Play e-commerce retailers that have brands that speak to something and see
to Consumers and stand for something and those who really well right I think that's a place where
we would all knowledge that there are a lot of other players in that space and it's not one that Amazon seems to be dominating or moving toward dominance.

Jason:
[27:08] Yeah I know that makes sense I it's funny I get asked all the time like like what categories can we get in.
Where Amazon is nrt winning and and I have to come up with a different answer every year because Amazon.
Conquesting more categories but like I used to say live plants and now they're shipping live Christmas trees.
I feel like I can't win on that.
I meant you regretting I didn't ask you a question earlier when I was in the data gauntlets Y100 the I know for a fact that both retailers and brands are customer of your data,
but I'm guessing how they use it is slightly different like can you share after the brief example of.
You know what the typical use cases for retail and what they might do differently as a result of your data and then what the typical use cases for a product manufacturer.

Jeremy & Patty:
[28:00] Yeah I know absolutely end and we work with a ton of different clients are really using checkout in a multitude of ways whether they're retailer or whether there are brand so you know
in MN across both quite honestly all of them are always interested in the basic or metrics of how consumer shop
we have a product you're called Essentials which in any other company would be things like a purchase summary of purchase Transit a shopping bath
and both from a retailer and a Matic manufacture perspective they need this information and they use this information to understand the core foundation of the health of their brand.
So things like penetration what percent of the population is is buying my product or buying right how much do they purchase over the course of the year do I have a a penetration strategy or do I have a virus strategy and how does it differ from my competition,
that's always critical one thing that I adore one study that we find it actually Bridges the gap between retailers
and manufacturers of something for the leakage tray and basically would have leakage tree does is it looks from a conservative from a retailer lens what trip.
A retailer is missing or or not converting for specific category and from there we can identify that opportunity and how much dollars are being missed because.
Is going to the competitor and who is that competitor in addition what we can do is the next.

[29:22] To help him activate or identify strategies you which to to convert.
Trinity why I say it's also a great manufacturer play as well as you know I mentioned earlier I've been in the cpg world many many years and category management functions or just the bread and butter of how manufacturers work with many retailers,
the Crux of that was always we could read.

[29:43] So that was pretty commonplace in the cpg world the reality is it's less common place here so we're finding manufacturers who are really successful with retailers are using strategies like leakage trees to help them understand how to improve their business,
and that in turn of course also helps create a better relationship and also opportunities for the manufacturer without retailer.

Jason:
[30:07] Awesome very cool Inn in general is check out a tool that like.
Is it a turn key tool that a client would use themselves or is it is it sort of a data set and what the client buys from from you is Insight from a person that's using that data.

Jeremy & Patty:
[30:23] Yeah that's a really great question and we really think that's the value proposition about checkout we right size the offer to wear or what stage a manufacturer and retailer my baby
so for example we have some really sophisticated clients who either came from the cpg world and they use a vuse us before they understand these metrics and and how to use them to a really affect
acid level are we having Seltzer platform for those clients where they can go in and pull those measures that I talked about earlier that really are the essentials of the core of the,
understanding business the other side of the equation where there are usually a pretty complex issues that need to be answered
big dollars are on the line we have a team of experts here who understand the categories that we deal with
from a retailer or manufacturer point of you understand the issues that they're being challenged with and how the best way we could line up what the client is looking to do
versus how checkout can assist
and can drive solutions the other thing that's really unique about us and MPG is because we have those POs and consumer asset
we can tell the complete picture so we can start from up from a step from a sell-side on the POS why cells might be up or down if that's the challenge of client is facing,
we could then look at the consumer data to understand some occasion base or some other information about how people
might have their attitudes towards towards a specific product brand or retailer and then we really bring it home with the check out their data and that check a data completely focused on helping to understand.

[31:53] What strategies you need to employ that are going to motivate be Shopper or the consumer that you want to attract
still get it can be self-serve or it can be a very curated experience where we are handed lock
step with you I'm from start to finish on the solution and what you can do with that solution.

Scot:
[32:09] Cool I like that this is the first time I've heard the term leakage tree.
Feel like I want to go cut down the forest of leakage trees.

Jeremy & Patty:
[32:18] Ocean of of leakage is really important going to be think about what the fundamentally what it means of the retailers been successful.
Bringing someone into their store and yet they're choosing to leave their store to buy somewhere else right so being able to figure out what was I missing from this category from a category perspective or a brand perspective or rice.
What didn't I have that made that consumer we're already did the hard work to get them into my store what am I missing so they had to go to one of my competitors to make that purchase that's powerful and we do that across all the categories to show retail is where they're leaking and why.

Scot:
[32:53] What were the topics on kind of fascinated with is what we call Molly getting right so we're definitely seeing problems at malls obviously this point Macy's just recently announced their reporting and they kind of blames their problems on the fact that a lot of the other anchor tenants at malls like like Sears are closing
the sum of the day that I've seen I can't remember where this comes from but it do showing
not only are Mal visits down but the intramall shock visits are down to so people are going to Great Reigns actually going to the mall and going to the Apple Store and getting some airpods and leaving the mall they're not they're not kind of.
Reading the restaurant six stores that they used to you guys have any kind of multi-level insights that you can talk about.

Jeremy & Patty:
[33:38] It's a great question and probably something we should study but we haven't so I will put that on the list of things that we should look at.
But we would have a solution for it so it's a client did come to us and said they wanted to understand that we have something called the sequencing study which we can understand over a course of a day of someone,
shopping experience if they purchase at Macy's what they did.
My mother was brick-and-mortar or did they then go online and purchase something through them to be purchasing something during the course of the of the day we can help identify where they had to go out from that initial purchase to get other items that could be online it could be in store.

Scot:
[34:16] So kind of a little bit of a pivot here this is something that Jason I have been pondering for literally
I'm 5 years now so here on the show we talk a lot about the data out there at a macro level of Hephaestus e-commerce growing
I'm so generally you have comscore I think it's the Department of Commerce but it's do the Census Bureau they say that online sales are going to 15% and they kind of
put something like a new survey you look at 13 to 15% of sales are online but then you know on the show we always do his new shows and we have Amazon is over 25% Walmart's over 30% this just online sales Target at 50%,
Shopify even like eBay is kind of relatively flat so it feels like.
Either someone is losing tremendous share in there that that we don't see or the 15% number is wrong you guys have any
any insight into which of those things as possible or maybe there's something I haven't even imagined is going on here.

Jeremy & Patty:
[35:18] So I don't know what's driving it but I can say that you're the Department of Commerce number of 15% is consistent with our numbers we see growth from 13 to
1316 %
quarter-on-quarter that's something we publish instead of a new card retail Trends that's very consistent with the numbers that were seeing so when you see outline examples of people with double-digit growth 40 50% growth at you know I guess I would be with you that they must be taking share from somewhere but I also don't know where that is coming from.

Scot:
[35:49] Maybe maybe another way to ask for Smite my senses at Sonny's brick-and-mortar guys that
I just really not continuing to keep their share so I'll pick on like a JCPenney's cuz they've been in the news but not asking you specifically but I guess one counterexample is.
Are there examples of omni-channel going really poorly and is that more the norm than it going really well like like the best by example.

Jeremy & Patty:
[36:15] I think it is I think it is a bit by default right so if you don't pay attention to it and you don't build an omni-channel offering you don't have it. Com presents that appeals to your consumers and you don't invest in it,
you know kind of has to go poorly because you're up against people that are doing it really really well right they
know how to cure a disorder and online in a different way they know how to use the building have an endless shelf online they know how to do targeted marketing to bring people out of their sight so if you're not doing that your. Com presents can feel take off and I think you've raised a great example we probably do have many retail examples
it's not a place where they've invested maybe because they had to focus on other areas and it hasn't taken off and they probably are not capturing their fair share.

Jason:
[36:58] Which is of course always sad and it's I guess it's going to remain a mystery why we have this,
Spirit of numbers my own Theory,
we talked to the very beginning sort of surveys versus observed behavior that the US Department of Commerce data which which mini data providers in Dexter dated to.
Essentially is a survey they send a letter to a retailer and say,
what percentage of the sales were online in a mini cases they've been sending that letter to the same guy for 40 years and that's a store.
You know the answer to that survey doesn't necessarily like tie directly to the Erp system of every retail.
Be that as it may I'm I'm kind of curious you have all this like juicy real data from customers.
I have to imagine that there's.
Some kind of common mistakes that you you see repeated over and over again that you try to evangelize with customers like art are there any reoccurring themes that you tend to talk about that you can share with her audience.

Jeremy & Patty:
[38:03] Can it comes back I think too little bit of what we spoke about before really the The Shopper or the or the the
consumer has to be the center of every single
strategy so it's not enough to just say oh we need a direct-to-consumer we need brand. Com website to hell,
pimenta our sales it has to be something meaningful and fit,
what's a consumer expect for the Shopper expects but the experience what they know about the brand I'm so really has to all fit together what we know that some of our clients have moved away from having a Circle D, or separate digital teams we still see,
being a separate function when really it should be just one holistic approach I'm it should not be separated so where we see clients when he more often than not is where the consumer experience is address elastically and it's not Silo different channels where we don't see it happening is where it
it's either an afterthought or it's not a connected experience for the shopper.

Jason:
[39:02] Yeah we certainly will observe the same it's kind of sad that we're still having this conversation in.

Jeremy & Patty:
[39:07] Grid.

Jason:
[39:08] In 2019 but it do my experience recharge I've gotten a lot better at about talking about.
Having the customer at the center in in not having silos but that doesn't necessarily mean that the the organization in the metrics that they pay attention to behind behind the scenes are are perfectly in the.

Scot:
[39:29] What are so this is kind of so we've talked a lot about kind of what I called kind near window of what the date is telling you what was kind of project it forward and I'll kind of leave it to you guys too
to figure that out
the one one way we see a lot of people talk about this as though look at kind of the millennial and gen Z he's got to see that generation and then protect their behavior for work but what's the date of essentially telling you guys about the future.

Jeremy & Patty:
[39:57] That's a broad question future of retail.
And younger Generations are choosing to spend more on,
experiences and I'm sure you guys have done many podcasts on that growth experience spending but experience and services are getting an increasing share of spending our clients that sell Goods
are trying to figure out how to leverage and capitalize on that so it is similar experience brands,
where retailers or experiences that their consumers that have an affinity for their brand or also drawn to so could be Acquisitions it could be Co promotions it could be,
I tried to tie in and Merchandising their products where they wouldn't have before but that's an increasing concern for our clients,
a consumer's younger consumers especially are moving more and more away from buying stuff is the central feature of where they like to spend their money and and getting experiences and memories out of it.

[40:55] Related to that is is the notion of committee consumption which I think we may have coined that term but if you look at any any consumers discretionary spending.
They have an increasing share of that spending every month it's committed before their first paycheck comes in and things like streaming services things like your cable bill things like your cell phone bill.
Things like video game memberships you know they're all the different streaming services that have been the news lately that have launched consumers are spending more and more of their money
before even comes in in this this notion committee consumption so that's crowding-out discretionary spend on goods and that's a real challenge for clients as well so figuring out you know these subscription models are interesting
from any traditional e-commerce retailers are brick-and-mortar retailers and your subscription service is coming up there will my consumers be willing to
dedicate a portion of my spends or their spander of their income every month to me and there are several big retail Brands like Nordstrom.
But have a service where you can spend a certain amount a hundred bucks a month for four outfits they'll send it to your door you can return the ones you don't like but they're trying to figure out how they can get in on this
an ocean of a consumer saying okay every month you're going to get a portion of my spend and if you can't win with that you're going to lose cuz you'll get crowded out and I think that's been fascinating and we're trying to.
Work with our clients to see how they can work through that.

Jason:
[42:15] That that is super fascinating a trend we talked a lot about on the show we call Auto replenishment in so you you can imagine like if your.
You know a general Merchant with a hundred thousand views on the shelf and you're seeing that higher and higher percentage of consumption shift to this committed consumption like can you make.
Paper towels and toilet paper committed us consumption by you know providing some service where those things just show up in the customer doesn't have to shop for them again so.
Yeah it'll be interesting to see if what you said of fighting against that trended we if we seen more more retailers try to embrace that Trend you feel like that could be successful in.
In a broader range of categories in Weston today.

Jeremy & Patty:
[43:00] I think we're seeing a it expand and we're seeing trial I don't know that we've seen proof I mean that the again you guys are the experts in the e-commerce and Amazon space but the statistics that you see on what people are willing to spend.
Or how they're willing to engage when they have Prime memberships the amount of a purchasing that they do in the frequency of that purchasing on Amazon
what is Auto replenishment in the number of boxes that are showing up on their door crowding-out unit trips to,
two other retailers were they may have bought the paper towels or the cleaning products it's astonishing right
the purchase frequency on Amazon dwarfs and its factors 10 to 1 but it's a it's a it's a big multiple so I think Amazon certainly and in that case has gotten it right.
A black Porter other claims that are trying to figure out how they can win with that and some of the apparel manufacturers I think you're a really good examples there.

Jason:
[43:52] Yeah that's awesome along those lines Amazon made a pretty clever announcement this week day they launched a new product called the dash shelf have you guys seen this.

Jeremy & Patty:
[44:05] I have not.

Jason:
[44:06] It's so it's a a smart shelf that's design for their B2B customer so you'd put it in on your your Office Products shell for your pantry in your business and it.
It weighs the products that are on the shelf and automatically reorders when the the Shelf gets below a certain level of inventory so they're essentially.
Pushing automated Inventory management out to all these small businesses for you know ordering you know coffee and cleaning supplies for businesses which if I'm Office Depot or Staples or one of those companies.
I bet that would be pretty scary because they're you know again taking a bunch of that discretionary spending and shifting it to committed Amazon consumption.

Jeremy & Patty:
[44:52] I love that I had not heard of it so thank you for telling me about and I love that idea.

Scot:
[44:56] Ever you just kind of startup question the would look at your data can you tell if someone is a promise or not and can you do guys project and say hey we think there's this many prime users.

Jeremy & Patty:
[45:08] I don't have the projected answer but yes we can tell if someone is a prime user as I mentioned before we have access to e-commerce receipt so in those receipts pill identify
if your Prime member so we can see that was interesting and I mentioned before the purchase frequency that we see him on our users that are Prime members is about 35 purchases,
the average purchase that we see from other retailers is in the new 2 to 5 range so it's just massive the,
engagement and loyalty that Amazon has been able to create with that Prime Membership which by the way you know we've looked at all the things you get with prime that really is a good value for consumers and I think consumers recognize that so it's
I'm certainly not the first person to say it but it's a brilliant thing that they've done in it and we see it hard at in terms of Engagement that consumers cat.

Scot:
[45:55] And that that 35 is over the course of a week here.

Jeremy & Patty:
[46:00] Over the course of a year.

Scot:
[46:01] Yeah Jason does that in the day at Amazon.

Jeremy & Patty:
[46:03] It was really interesting to their spending typically is lower but with that many purchases over 35 different occasions and it's you know close to 2,000 on average per year.

Jason:
[46:17] That's that's crazy that's a huge like endemic advantage and I'm assuming it's a mean because if it was a medium Scott's you know that wasn't Star Wars purchases a year from Amazon would probably have a.
I'm more skewing effect on the data.

Jeremy & Patty:
[46:32] Yes they were that's an average.

Jason:
[46:33] But that's actually going to be a great place to end it because
it's happen again we've used up all our allotted time but if we've whet your appetite and you want to continue this conversation you're welcome to hit us up on Twitter or leave us a question on our Facebook page as always we
we really appreciate it if you jump on iTunes and give us that that five star review,
but Jeremy Patty is a real pleasure to talk to you today and thanks for sharing some of the insights from the checkout.

Jeremy & Patty:
[47:03] Thanks so much for having us thank you.

Jason:
[47:07] Until next time happy commercing.

Dec 6, 2019

Support the Show:

The Jason & Scot Show as been nominated for "Best Retail Media Resource" by the VIP awards.  We'd appreciate your support, if you could take a minute to vote for us.

Adobe Recap

Taylor Schreiner is the Director of Adobe Digital Insights. He uses Adobe's data to give us a recap of the Cyber 5 (the five shopping days from Black Friday through Cyber Monday, this year Nov 29 - Dec 2).

Adobe Holiday Dashboard

  • Thanksgiving  11/28 - $4.2B (up 14.5% YoY) below forecast of $4.4B
  • Black Friday 11/29 - $7.4B (up 19.6% YoY) below forecast of $7.5B
  • Saturday - 11/30 - $3.6B (Up 18% YoY) at forecast
  • Sunday - 12/1 - $3.8B
  • Monday - 12/2 - $9.4B (up 19.7% YoY) at forecast

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 202 of the Jason & Scot show was recorded on Wednesday December 4th, 2019.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott Show. This is Episode 202 being recorded on December 4th 2019. I'm your host, Jason Retail G. Goldberg. And as usual, I'm here with your co host, Scott Wingo.

Scot:
[0:39] Hey, Jason! And welcome back, Jason Scott. Show listeners we are in the thick of holiday 2019 and are really excited tohave back on the show.
Adobe. And I think this is the fourth time. In fact, check me on that. Jason had one of the interns check.

Jason:
[0:54] I I actually had one of the interns in you. That number. So yes, it's right.

Scot:
[0:58] Good. All right. Pre pre fact checked. We're getting pretty. Ah, reliable here of Jason Scott Show.
Um, this year, representing Adobe, we have Taylor Shiner. He is the director of Adobe Digital Insight's Welcome Taylor.

Taylor:
[1:12] Thanks for having me. Guys. Appreciate it.

Jason:
[1:14] We are excited to be a tailor and a sort of tradition on the show. We always like to give listeners a little bit of background. So can you kind of share with us some highlights of your background? And what your role is it it'll be.

Taylor:
[1:25] Sure. So I was the 52nd best chess player in Utah in fifth grade.
Ah, And then from there I went into a career in retail. Uh, I went,
to work on Internet insights about 15 years ago with some of the major Internet players across the industry, and I've been doing that for a decade and 1/2.
And then about three years ago, I found my dream job here. A WNKW Adobe Digital Insight's.
We get to tell these amazing stories about how the digital world works, and we get to tell people about how tech and companies and events are changing their digital lives and companies about how those same trends are affecting how they need to run their businesses.
And we get to talk about retail. We get about time travel. We could talk about a whole host of different things.
It's been fantastic, and I get to work with some amazing data scientists, analysts to develop these insights, and it lets me have conversations like this one with you guys. So it's a perfect gig, and I love it.

Jason:
[2:24] Possum. So, to recap, this is sort of a career highlight for you right now.

Taylor:
[2:28] Yeah, I like to I like to go from Holly Tyler, but this one, I'm loving it.

Jason:
[2:31] Yeah. Yeah. Pinnacle, I like it and I'm.

Scot:
[2:34] Think Jason means being on our podcast. He wants an explicit answer on them.

Jason:
[2:38] All right.

Taylor:
[2:38] Oh, yes, I'll give you a quotable thing. Being on the Jason Scott Show is a career highlight to date.

Scot:
[2:45] Boom.

Jason:
[2:45] That boom. Yeah. You'll see that in the in the preview show. Pretty soon here, Uh, and I'm sure all this insight stuff is gonna be super fascinating. But I have to know first, if you've kept up your chest up chess, it all.

Taylor:
[2:57] Uh, only recently in my eight year old has started to learn to play chess, and he's creeping up on being able to beat me. And that is not acceptable. So.

Jason:
[3:05] Yeah, that's a losing battle. You could probably keep ahead of him for a little while, but I think, uh, there's, ah, natural progression there. That's working against you.

Taylor:
[3:13] I'm afraid so.

Jason:
[3:15] Awesome. Well, let's jump into the data. So we talk about your date a lot on the show.
We already did. Ah, an episode this week. In fact, what we talked about some of your data, and it always falls on me to describe your data set.
And I'm sure I'd butcher it. So, um, here's a chance toe kind of refresh our audience from the horse's mouth. Can you tell us a little bit about, um, what the data set is and how you use it.

Taylor:
[3:38] Sure. So we build a model of US online retail sales based on trillions of Web site visits based on,
tens and back to think over hundreds of millions of skews based on data from thousands of different companies all across the US across.
Ah, you know, a variety of device types.
OS is on other information, and we use that to to plan out, especially on a day by day and occasionally hour by hour basis.
Uh, how we think that that season's gonna go So he predicted all.
And then we go back and we track on a daily in again, sometimes hourly basis.
How US online retail sales go s Oh, it's a big data lift, and we spend all year getting to this point to be able to talk Ah, in almost real time about how how the sales were going.

Jason:
[4:33] I got it. And so just make sure my understands. Correct. So, um, there are a ton of major e commerce sites that use an analytics product called the Dhobi Analytics, which is, if you go back far enough, formally. Ahm nature.
And so it. The core of your data set is in aggregated view of all of those customers that are using that analytics tool for for their e commerce sites. Do I have that right?

Taylor:
[5:00] Yes, sir. The majority of the data that we've got and this is not including some data from the recent magenta acquisition so that there's a whole other set of data sources as well as some other things.
We talk about it on the periphery, but the core of the data that we work with our data from opted in. So companies that have chosen to share data with us, um, and for value that we give them.
And so that shared data Anonima ized before we even touch it and aggregated at a very high level so we can talk about these macro trends, but yes, that's where the data comes from and to be analytics.

Jason:
[5:34] Perfect. And then, um Ah, and that was you already answered.
My fob question in the court date is that you have not integrated any of the new data that you might have access to from Magenta. And if I have it right, you're also, at this point not really using data from the rest of the adobe marketing cloud.

Taylor:
[5:53] E. I wouldn't necessarily say that. So we do. Uh, we do a lot of so we haven't agreed.
A lot of the magenta data allowed us to look at things like shipping and returns that, uh, we're new renews angles for us, and it certainly gives us these amazing to you into that tail.
Set aside some of the bigger players in terms of e commerce, but we also you used the mark enter data for your candidate to look at so are marking channel Information Ad Cloud, which used to be two mogul, which I worked for.
Uh, we used them for some advertising data around Thanksgiving. So we bring it all the pieces.
Um, but, you know, not all of it necessary goes to the top line number. As you as you say.

Jason:
[6:33] Sure. And then, um, you kind of alluded to this, but you're not just trying to report on trends from adobe customers.
You're you're using some advanced math and you do the customers represent a big chunk of the market. But then you and interpret what the total market is based on the subset that you see. Do I have that? Correct.

Taylor:
[6:56] You do. I could spend a whole other podcast on how we do that, but it sze not do that. Yes, it's cool math. We do cool math.

Jason:
[6:59] Yeah, let's not do that. But just call it a cool math.
Yeah, And then the other thing that comes up a lot. And I think you guys are really good in this as well.
Like very often. We talk last year versus this year, and when a lot of vendors report their data, the customers they have this year are different than the customers they have last year.
So when they're when they're talking year over year growth and things like that, it's usually not perfect. Apples to apples.
Um, but because your your, um trying to normalize the data for the whole market before you do it. When?
When you say there is a 20% growth this year versus last year, that's a pretty accurate number. Drab.

Taylor:
[7:39] Uh, yeah, I think you should. It's yet. You said that. Really? Well, that's absolutely That's.

Jason:
[7:43] Perfect. You can use that in your highlights. Now we've reciprocated. Awesome.

Scot:
[7:49] Go. So, uh, now that Jason's extracted his pound of flesh, let's Ah, let's jump in at a high level. How? How would you view Holiday 2019 shaping up?

Taylor:
[7:52] Okay.

[7:59] I think it's been quite strong. And it has been strong all through today.
In fact, if you let me, I'll give you, uh, it as, ah, this morning.
So yesterday's numbers Through the third of December, we saw $84.7 billion in online retail sales, and that's up 14.8% on last year for the same period.
So that's a little faster than our aggregate prediction.
But the way that the bottle is trending that out puts us on target to be about 14.1% roughly on our predicted Taff for the season. So and the 14.1%.
I mean, some listeners and people who visit our website will see that last year was particularly strong of the 16% growth year.
But if you look back a few years just 2016 twice 17 this is sort of on par with those growth rates, but on a much larger base now, as we head into almost $150 billion in sales. So it's it's pretty huge.
Um, the the other tidbit of information I can give listeners about yesterday.
Giving Tuesday is that it was a $3.3 billion day, which is amazing research and account $3 billion days, the way that when I started in this gig, we counted $1 billion days.
So they're coming fast and furious. Now, that's only up about 11% on last year.

[9:23] So, uh, it leaves us open to the question of our consumers.
Have consumers, you know, taking all these early deals on and won't be spent later, or are they just taking a break on Tuesday and ready to get back out today?

Scot:
[9:38] Yeah, let's Ah, so it sounds like we're growing kind of 14% year over year.
Um, if you if you kind of look at the shape of the holiday so far, I know you can't predict. Well, you don't know what it's gonna happen here towards the end. It's kind of gotten this what I would call a U shape where it's being more front and loaded and back and loaded.
So the front end is people that have their act together and jump on the deals.
The back end is like Jason I where we're like, Holy cow. Uh, holiday is here. We should do some shopping on the 23rd.
Um, the, uh does that does that kind of what you've seen and is getting more pronounced. Can you tell if you've seen the front part of the curve?
I saw some data that said, like, Veterans Day was unusually large and like the early November days were larger. You guess? You know.

Taylor:
[10:24] Absolutely so we saw just points on these numbers from this conversation.
If you look from the beginning, what we call the beginning seasons of the person November roughly right to, um, Wednesday, that hole to the Wednesday before Thanksgiving, that whole period Groot. About 15%.
So that's what that was about a point 1/4 faster than we would have predicted.
So angry it. We saw a big lift we saw lift above.
We would have expected in that early season it that seems to be attributable to a bunch of, uh, earlier deals.
We had something similar happen last year, but it's even stronger now where discounts came earlier in electron ICS and computers and televisions.
We also saw that, you know, last year, Thanksgiving itself was a breakout day where you had, despite it can. Suddenly Thanksgiving was growing faster than any other day.
That spike seems to have moved back now to Wednesday, where the Wednesday before Thanksgiving was growing at about 22%.
And I think again, that's attributable to ah, lot of deals moving forward in time. So and to your point, that really changes the shape of the season.
You know, we used to basically tell a story of like, look, everything is sort of lifting around that Cyber Five said. The days of the 757 days is getting a disproportionate share.

[11:41] That's still true, but we're seeing sort of, ah, shift back to earlier sales this year, and that might have to do with the calendar.
But I think it is actually a broader trend of thinking about these pre holiday sales and reality promotions as being think that happened earlier, both for retailers and consumers.

Jason:
[12:02] Yeah, it's interesting to me. It's like, um, it feels like in the beginning of the season, you know, there's there's a lot of retailers under stress and have to have a good holiday. And there's this kind of winner take element mentality.
And so we both see Maura aggressive promotions and discounting at the beginning of the season. And I feel like we also see more digital marketing like more investment in ads and things like that, huh?
That really goosed the front half of that. You, um and then I have a hypothesis.
We'll see if it plays out. But, uh, you know, of course, Amazon has gone toe faster and faster shipping, right? And so that, you know, this would be the first big holiday with with sort of standard one day delivery in various forms.
Walmart, target and some extent, even best Buy have all been forced to sort of match that fast shipping.
So, you know, not that long ago we would have had this this very gentle ramp down of sales as we'd hit shipping cut offs and people would stop buying goods and then they'd just be doing oh, piss or gift cards.
Or things like that because they'd run out of time to get the gifts before the end of, you know, in time for holiday.
But now everyone can be a procrastinator like Scott and I, because so many of the vendors will ship so fast. So it feels like like all of those things conspire together to make the very beginning and the very in these these ah, anomalous bikes or that you shape.

Taylor:
[13:25] I think that's that's gonna be absolutely true. And this this year, in particular with this shift, two more by online pickup in store ah, or clicking collect behavior.
And to these accelerated shipping, it's gonna it's gonna make people think they can wait longer in the season where they can't really wait longer to your point.
You know, it's it's three weeks away before even those things are gonna be, uh, almost too close to Christmas to shop for Thio to purchase with.
And so you know, I think we'll see that ramp up at the end of people. Start to panic a little bit.
And that's also why, by the way, you see jewelry discounts be really strong on, like 20th.
Everybody who's panicked and realize they haven't gotten anything starts. Uh, just looking for something nice and blinking. Tow. Give us a gift.

Jason:
[14:09] Interesting. I was always assuming that people just misbehaved right before the holidays. And therefore it was a Yeah, I have no personal experience or data to support that.

Taylor:
[14:13] You may have a better high pop resistant I do on my own. I would draw my contention.

Jason:
[14:20] Just to be clear, honey, if you're listening, um uh, do you want to jump in to the cyber five, though?
Um, so we just got through those, Uh, can you kind of give us a recap for specifically? How have Thursday through Monday played out?

Taylor:
[14:37] Sure, So overall it's about $28 billion uh, online purchases over that same time frame, and that's 10 almost $11 billion of purchases through smartphones.
So overall it was quite strong. Almost 18% if you like those five days over last year, five days with peaks, you been on Black Friday and Cyber Monday, which always kind of blows my mind because I get the question every year.
Are these days too big to really grow outgrow the rest of the season?
And I convictable Maybe next year they will be.
And it's not not the case, people. Another not only are moving more online, but they're really focusing a lot of those purchases and increasing amounts on those big days.
S o. You know, several money, for instance, this year was $9.4 billion.
So we're almost gonna guarantee there is a $10 billion day, uh, barring anything serious happening next year on Cyber Monday, which is,
incredible, and over 1/3 of that, those purchases are really coming on phones.
Eso you're seeing people not only window shopping actually make purchases on those big days on their phones, especially that's what cyber Monday when people go sit in front of computers at work.
But you know, people under the table on Thanksgiving.
Uh, people on Black Friday we'll pretend to hang out with their family, but but by where? Two things. Anyway, Uh, that's really been a mobile story.

[16:06] And then the other story of the weekend, which I always, you know, you're talking about how, by a and pick up in store, uh is ah, you know, it is a capability that my drive people to wait a little longer for their purchases.
But nonetheless, we saw a big bump in bogus activity.
Even on that, that major weekend without 40% more purchases.
Then we had when we saw last year over the same timeframe, so outstripping overall gross and really pushing both share up.

Jason:
[16:38] Interesting. And so And if I think of it from a historical perspective, you know, 10 years ago a few people had reliable Internet and so, you know, cyber Monday or we'll call 20 years ago.
Several Monday became a big thing, like we'd all enjoy Thanksgiving. We'd go to work on Monday, steal our bosses Internet and go shopping.
And so that was like the one day spike.
And then, as as, uh, you know, we all became ubiquitously online.
The traditional big shopping day Black Friday also became a big online day.
And in fact, I feel like they're often are these forecasts that that Friday is eventually going to surpass Monday online, which seems like, hasn't happened yet. Read joy. I have that, right?

Taylor:
[17:23] But it hasn't quick hasn't gotten there yet. Uh oh, no. Didn't you thought?

Jason:
[17:25] Yep. And then I'll go ahead,
I was gonna say, And then increasingly, those other days in the weekend have grown to be extraordinarily meaningful.
So, you know, frankly, 10 years ago, we talk a lot about cyber Monday.
I actually don't care as much specifically about the results on Cyber Monday, because if it feels like the the aggregate results of the Cyber five is much more important and indicative of how holidays going than any one day in the,
in that block nowadays, is that a good way to look at it, or am I being shortsighted?

Taylor:
[17:59] No, I would agree with that. And I think what's always fascinating to me and is, uh, topic of a longer conversation. Is that to your point?
There's no need necessarily now for Cyber Monday. Everybody's not only got good Internet access at home, they've got good Internet Internet access in their hands.
But we have become so habituated to that day being a major sales day, and both on the consumer and the retailer side that it continues to grow on.
The psychology of this often drives a lot of the behavior even beyond the pricing or the deal's or anything that our model might pick up.
So to your point, you know, I think if you just looked at the data, you might think, Hey, look, this is all going to smooth out a little bit.
But people continue to think about those days as the big days to go shopping, Uh, online and offline.

Jason:
[18:47] Interesting. So you're saying people might be willing to go shopping even when it's slightly irrational? Interesting. No.
Thank God for that, by the way. Yeah, and along those lines, it feels like folks have been trying thio kind of make hay in some of those other days.

Taylor:
[18:54] It's a new fighting I came up with. Yeah.

Jason:
[19:04] Like for a while now, that that Saturday has been small business Saturday.

Taylor:
[19:09] You okay?

Jason:
[19:10] Andi, I think there's a couple of people trying to grab Sunday now, too, right? It is. I'm trying to, uh.

Taylor:
[19:15] Yeah. Super Sunday has a bunch of different cuts at it.
Exactly. And there are big days. Now we're talking about, uh, you know, there, there.
Three and 1/2. Almost $4 billion each.
This is It's massive any other day of the year and we would be having a conversation about a particular $3 billion day.
But they just come fast and furious between November and Christmas.

Scot:
[19:42] Do you do? You have? Ah, At the end of the season, everyone has a different word. Just be like free shipping day. And then I think it's called Green Dares. But you guys, what is what is last year like? Was there a bump? And is it? How does that compare to, like, Cyber Monday?

Taylor:
[19:51] And.

[19:58] So we said we would see ramps toward the end of last year, and I don't have the last little couple days to hand. But they were more closer to sort of Super Saturday and or even smaller than that in the $2 billion range.
Um, as you had in there. They're not the ones bigger ripped last year, but two earlier point.
I'm really curious to see if we don't see a big bump. Uh, come to the 20th 19.

Scot:
[20:24] Yeah. Hey, this is just kind of came to me. So it's if you don't have an answer. I understand. So last year we grew 16%. This year we're growing 14.
Where do you think that 2% Delta is coming from? Is it just kind of across the board, or is it a certain category underperforming? You have any Any thoughts on the.

Taylor:
[20:44] I have some thoughts, and I think it'll be really interesting conversation to have in a few weeks.
But the the, um, the couple things, first of all the models telling us 14 ish, Um, my gut says there might be more upside risk there than downside.
So somebody get my clothes.
What seems to be the case so far in the data is that there wasn't proportionately even bigger push into the early season.
Um, because of, uh, a CZ people moved into Thanksgiving on on that Wednesday, some of his deals move forward.
But honestly, if you just if you just look at the math, which is, uh, what we particularly good at,
the just pushing the season shorter between Thanksgiving and Christmas is about a $1,000,000,000 which is, you know, 50 bases, 50 of those basis points, uh, arm or sorry on its own.
So between a little bit of merging of error and that some of those basis points and ah, uh, and not the shock of all these earlier deals that got everybody accelerated between those three things you kind of get to, uh, the delta.

Scot:
[21:53] So the jury's still out. Kind of depends on how the models perform and how people react to those missing days.

Taylor:
[21:59] Yeah, exactly. If we get a big surge and everybody. Service comes off of the off several Monday and thinks, Gosh, I got a sprint toward, uh, toward River Last shipping days game. I'll be very different than everybody feel like.
Gosh, I blew my budget on all those early deals.

Scot:
[22:16] Yeah, cool. It wouldn't be a Jason and Scott show if we didn't talk a little bit about Amazon.
And I understand if you can't talk specifically about anyone, retailer or whatnot.
But any insights into how Amazons holidays going big, they put out their annual release that said something like Vague like We sold hundreds of millions of dollars.
You know, third parties did great. So so it always befuddles Wall Street when they kind of without these puzzle boxes for them to figure, figure out.

Taylor:
[22:45] Yeah. J. J. Abrams doing the press releases? No, I, uh you said you wouldn't be your podcast if you didn't ask about Amazon.
It wouldn't be a doubIe response. I didn't say we don't talk about particular retailers, but what I can say eyes we do track the biggest and the smallest against each other Really looking at.
Especially as you see two big trends that big.
A lot of discussion about big, big retailers pushing, couldn't collect, pushing one day shipping, having great deals.
Ah, and a lot of democratization of, uh, e commerce. As you know, a lot of art form.
We have five farm, those others that makes that much easier for people to bring businesses to the market.
So those two forces air going on, um, in the on the average, uh, you see big companies outperforming smaller ones in terms of growth.
So if you compare November an average day in November to an average day in October for the big companies they're up about, these are $1,000,000,000 plus companies.

[23:42] They're up about 87% in sales, whereas the smaller companies in the 50 million lower range.
So these are the small ones are up only about 43% and some of it is.
It's coming from the East from the data, at least, is coming from two things. One is the larger companies are much better at mobile conversions, that 80% better at taking a customer and bringing them to purchase on a phone than the smaller companies.
And consequently, they get about 10% more of their share.
Their revenue from those phones and the way that I reviewed the data is that if you're a consumer and you are going to a big retailer, that big retailer has a number of advantages, including a wide set of products wide set of,
promotions generally really good, aye, aye at connecting you with those promotions,
and a really the slick, speedy checkout process that they worked on really hard.
And for the smaller companies, they obviously have quite a selection.
Some of them haven't figured out how to turn customers, uh, into buyers swiftly.
But the last thing I would say this is the most important part about this is I am talking about the averages.
So, you know, in the smaller companies, there's a lot of entry, a lot of people trying things out on a lot of exit, and there are within that average a huge number of small companies who are just blowing the doors off.
It's just that on average, they're not doing as well as the very big ones.

Jason:
[25:09] Sure that makes sense. Um, you talked a little bit about Omni Channel. I wanted to jump into that for just a second.
That seems like an area where, in particular, a lot of the big companies have made major visible investments in their infrastructure.
So of course you know, Target, but shipped. And then now that's heavily integrated. And they have rich like same day delivery and curbside pickup options available across all their mobile platforms.
Wal Mart, you know, has has done a bunch for general merchandise Omni Channel. But even more for grocery, um, and curbside pick up and and all of those things even, um ah, the Amazon.
You know, although much more footprints are starting to get a little better at Omni Channel with their with their small footprint of retail stores, um is any indication of that's paying off?
Like Are you guys ableto to see an Omni Channel transaction versus a pure digital transaction? And is there any like is the rate of growth of those Omni Channel transactions faster than overall?

Taylor:
[26:15] Oh, yeah. So we're we're seeing a Z, said rumor, roughly in the 14 to 16% range growth for the overall market place, but for by online picker in starker POTUS.
Another word that's up but, like 40% for the season. So it's way outstripping overall sales.
And what's also really interesting is we see that this has a little bit to do with larger, so small.
But we see that companies that offer, uh oh, this, uh, 20% better at converting, then companies that don't offer both us.
So people are coming there specifically for that capability, or at least finding that capability incredibly valuable to them.
At my my thought on this is Look, we got a phone in her hand that has moved the display window experience into your hand. It's moved the checkout experience into your hands, and everybody just wants to move that fulfillment.
That one thing in between the human experience, closer and closer and you know, one day shipping is great, but, uh, sometimes it's just easier if you drive down in about 10 minutes and go pick up the thing you just saw and knew you wanted.

[27:25] And plus these guys are. You know what we see in the survey data to is it?
This is good for the brick and mortar stores that not only are they know is you guys know that not only are they making people making purchases online and sitting in the car and getting that that pickup, they're also going to the store and buying another thing, could they thought of it.
I'm driving that That makes it different. Step for brick and mortar stores as well.

Scot:
[27:47] Wrinkle. Um, you've hit on this a little bit, but let's talk about mobile. So, um, do you guys, when I talk about mobile, I tend to take tablet out, and it seems like you do to you. You seem to be explicitly calling out smartphone.
Um, so you mentioned. I think I can't remember. Was it black Friday? You said it was. 1/3 of the sales came from a bull. Ah, talk us through any other kind of insights on the mobile side.

Taylor:
[28:12] Sure s o your point. We tried. We tried crier years to be really disciplined about mobile version smartphone.
We've been a little acts this year because tablets are decreasing share. So smartphone really had started crossed That that 1/3 threshold on major days in terms of dollars spent, it was always has been for the past several years.
The majority visits were coming from phone, so people were doing initiating their shopping.
We had this challenge empire years and still have some do now that they weren't closing the deal.
Uh, from that we'll visit either not at all or going to the desktop to purchase.
That gap continues to close. In fact, on Christmas this year, we expect to have the first day in us where the majority of online purchases actually come through a phone.
As people aren't going to their computers and their families are around, they're actually using boats.
That purchase and the things that are driving this, at least in the data that we see are two really interesting and related points.
One is that time per visit is going down rapidly.
So, consumer, they're coming. They're not messing around.

[29:20] They're looking for and expecting the product that they that they came for at least a product to buy.
And some of that is going to be in part because your connection speed have gotten faster. Screens gotten bigger processes were faster, but also retailers have gotten much better at streamlining that process.
I'm the mobile phone, and consequently, the amount of money that people are spending per minute per second on a mobile phone continues to skyrocket month after month, year after year.
As people just get faster making those purchases, especially with a lot of them. You check out options that make make it easier than, say, trying to type in the numbers on your credit card.

Jason:
[30:03] Fascinating. The, um that would be cool if, uh, Christmas did end up being the first, like, majority mobile day.
Um, I was also truce. You mentioned something earlier.
Um, that sounds like that. I call it a mobile gap when traffic side, but conversions lower.
And it sounds like that mobile gap is getting lower for big companies. And you said it a couple reasons why that might be, um, in general. Do you feel like that?
Like, Is that mobile gap? Um, getting narrower across the border. Is it only for large companies that they're they're being successful closing that gap?

Taylor:
[30:39] Well, I think large companies again, it has to do it so that the broad, um uh, you know, there's a much broader array of outcomes and smaller companies than larger ones, so it's harder to paint them with the same brush.
The large companies obviously have focused on this. Figure it out.
They can track per second per user per region per item, how much time consumers are willing to tolerate and they can achieve those things down.
If nothing else, would I just bring more machines online?
Smaller businesses don't always have that ability, but the platforms,
one of which Toby has but the Platform three Commerce are making that whole process from visit to fulfillment and even marking channel much, much more streamlined, especially for small businesses.
Who, uh, we think about that a little bit and focus on what their consumers experience needs to be.

Jason:
[31:34] Got it. So one A transition briefly to profitability. So last year I feel like the narrative would have been, ah, you know, a big growth year, a jump from the previous year.
But a lot of people felt like it was Ah, that was partly attributed thio heavier than usual promotions, which meant it actually ended up being, you know, not a phenomenal profitability year.
Um, and so this year, we're seeing the rate of growth slow a little bit from last year.
Is there any reason to believe that people are being more conservative on promotions or are you have any insights about how we're gonna come out from promotions and profitability perspective?

Taylor:
[32:18] So, you know, I'll be honest with you were really good about figure out the revenue. We're really good about throwing out prices. We are generally missing that third piece of costs that allows you to talk about profitability.
But I'll tell you what. I was thinking about this this morning and last night and looking at, but began for a bunch of different angles in our data and frankly, that the short answer is the results are mixed.
So we did. If you asked me a week or so ago, uh or even to I would have said, Look, the discount seem to be moving forward, especially in electronics.
Um, and so, you know, maybe the maybe the profit margins are slimming, but then we started. Look at toys and toys. Bottom out, quickly.
Um, uh, you know, maybe once the Toys R Us process was was through the toy discounts didn't go is deep.
This year's they did last year, and we're seeing something we saw. For instance, we elected appliances, appliances discounts for a little later last year.
So exactly how the profit margins are gonna go. Hard to say.
But the, um, you're in the revenue looks really strong.
So, you know, I think the jury is ah, bit out where possibilities go in.
But I don't for consumers see, a year where we're like have massively deeper discounts than the last year. We just have them earlier and on particular product.

Jason:
[33:38] Got that? Uh, that makes sense, and I agree. It's It's really hard to get a clear picture until well after the fact on the promotions, because there's like there's promotions and pricing effects and all these other things.
But one thing that seems like it might be coming to play a little bit more on profitability this year is profitability like there's a couple Evers one.
Is that pricing a promotion? Another is the cost of acquisition.
Um, and I do feel like folks. There's a lot of folks that used the Adobe marketing cloud, um, for further cost of acquisition.
Like, Are you guys seeing any trends around higher advertising rates or spend rates than previous years, or is that not something you guys are looking at you?

Taylor:
[34:18] So we don't. We have looked at overall investment in advertising.
That could be a fairly complicated thing to grab to look into. But we have looked at performance and individual, Um, your ad level pricing and what's interesting is we definitely see if you're if you're advertising, especially in video, but also on display or search.
You're gonna see costs go up, um, a bit as everybody sort of pores online and wants to wants to acquire customers in the video room. That's about 23% higher CBN's.
But when we look at performance, metrics does go up by an even greater amount.
So, uh, you know, again in video that we're pressed about 20% performance in terms of, uh, viewable completions of videos are going up 30%.
Or we see, for instance, your email efficacy goes up quite a bit over that that same time frame.
So we should We haven't reached a point of diminishing return earns uh, in those areas yet where prices start outstripped performance growth, and I think there's a lot of opportunity for customer acquisition there on dhe.
Advertisers and marketers have figured that out and are pouring the money, and now when it's, uh, it's most productive.

Jason:
[35:32] That that makes sense, and that's gonna be a great place to leave it, because we have, ah, slightly exceeded are a lot of time for this show.
But as always, if we didn't get to something that folks want to talk about, your welcome and I hit us up on Twitter or leaves the question on our Facebook page, as always, have you enjoyed the show?
We'd really appreciate it if you, um, jump on Thio iTunes and give us that five star review were also nominated for this vendor of the year award in our category, So I'll put a link in the show notes.
If you could take a couple minutes and vote for us, we'd really appreciate that. But Taylor really appreciate you being on the show and sharing the data. I know it's a busy week for you.

Taylor:
[36:10] Thank you guys so much. Really appreciate the opportunity.

Scot:
[36:13] Thanks, Taylor.

Jason:
[36:13] Until next time. Happy commercing.

Dec 4, 2019

Support the Show:

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Adobe Recap

Taylor Schreiner is the Director of Adobe Digital Insights. He uses Adobe's data to give us a recap of the Cyber 5 (the five shopping days from Black Friday through Cyber Monday, this year Nov 29 - Dec 2).

Adobe Holiday Dashboard

  • Thanksgiving  11/28 - $4.2B (up 14.5% YoY) below forecast of $4.4B
  • Black Friday 11/29 - $7.4B (up 19.6% YoY) below forecast of $7.5B
  • Saturday - 11/30 - $3.6B (Up 18% YoY) at forecast
  • Sunday - 12/1 - $3.8B
  • Monday - 12/2 - $9.4B (up 19.7% YoY) at forecast

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 202 of the Jason & Scot show was recorded on Wednesday December 4th, 2019.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott Show. This is Episode 202 being recorded on December 4th 2019. I'm your host, Jason Retail G. Goldberg. And as usual, I'm here with your co host, Scott Wingo.

Scot:
[0:39] Hey, Jason! And welcome back, Jason Scott. Show listeners we are in the thick of holiday 2019 and are really excited tohave back on the show.
Adobe. And I think this is the fourth time. In fact, check me on that. Jason had one of the interns check.

Jason:
[0:54] I I actually had one of the interns in you. That number. So yes, it's right.

Scot:
[0:58] Good. All right. Pre pre fact checked. We're getting pretty. Ah, reliable here of Jason Scott Show.
Um, this year, representing Adobe, we have Taylor Shiner. He is the director of Adobe Digital Insight's Welcome Taylor.

Taylor:
[1:12] Thanks for having me. Guys. Appreciate it.

Jason:
[1:14] We are excited to be a tailor and a sort of tradition on the show. We always like to give listeners a little bit of background. So can you kind of share with us some highlights of your background? And what your role is it it'll be.

Taylor:
[1:25] Sure. So I was the 52nd best chess player in Utah in fifth grade.
Ah, And then from there I went into a career in retail. Uh, I went,
to work on Internet insights about 15 years ago with some of the major Internet players across the industry, and I've been doing that for a decade and 1/2.
And then about three years ago, I found my dream job here. A WNKW Adobe Digital Insight's.
We get to tell these amazing stories about how the digital world works, and we get to tell people about how tech and companies and events are changing their digital lives and companies about how those same trends are affecting how they need to run their businesses.
And we get to talk about retail. We get about time travel. We could talk about a whole host of different things.
It's been fantastic, and I get to work with some amazing data scientists, analysts to develop these insights, and it lets me have conversations like this one with you guys. So it's a perfect gig, and I love it.

Jason:
[2:24] Possum. So, to recap, this is sort of a career highlight for you right now.

Taylor:
[2:28] Yeah, I like to I like to go from Holly Tyler, but this one, I'm loving it.

Jason:
[2:31] Yeah. Yeah. Pinnacle, I like it and I'm.

Scot:
[2:34] Think Jason means being on our podcast. He wants an explicit answer on them.

Jason:
[2:38] All right.

Taylor:
[2:38] Oh, yes, I'll give you a quotable thing. Being on the Jason Scott Show is a career highlight to date.

Scot:
[2:45] Boom.

Jason:
[2:45] That boom. Yeah. You'll see that in the in the preview show. Pretty soon here, Uh, and I'm sure all this insight stuff is gonna be super fascinating. But I have to know first, if you've kept up your chest up chess, it all.

Taylor:
[2:57] Uh, only recently in my eight year old has started to learn to play chess, and he's creeping up on being able to beat me. And that is not acceptable. So.

Jason:
[3:05] Yeah, that's a losing battle. You could probably keep ahead of him for a little while, but I think, uh, there's, ah, natural progression there. That's working against you.

Taylor:
[3:13] I'm afraid so.

Jason:
[3:15] Awesome. Well, let's jump into the data. So we talk about your date a lot on the show.
We already did. Ah, an episode this week. In fact, what we talked about some of your data, and it always falls on me to describe your data set.
And I'm sure I'd butcher it. So, um, here's a chance toe kind of refresh our audience from the horse's mouth. Can you tell us a little bit about, um, what the data set is and how you use it.

Taylor:
[3:38] Sure. So we build a model of US online retail sales based on trillions of Web site visits based on,
tens and back to think over hundreds of millions of skews based on data from thousands of different companies all across the US across.
Ah, you know, a variety of device types.
OS is on other information, and we use that to to plan out, especially on a day by day and occasionally hour by hour basis.
Uh, how we think that that season's gonna go So he predicted all.
And then we go back and we track on a daily in again, sometimes hourly basis.
How US online retail sales go s Oh, it's a big data lift, and we spend all year getting to this point to be able to talk Ah, in almost real time about how how the sales were going.

Jason:
[4:33] I got it. And so just make sure my understands. Correct. So, um, there are a ton of major e commerce sites that use an analytics product called the Dhobi Analytics, which is, if you go back far enough, formally. Ahm nature.
And so it. The core of your data set is in aggregated view of all of those customers that are using that analytics tool for for their e commerce sites. Do I have that right?

Taylor:
[5:00] Yes, sir. The majority of the data that we've got and this is not including some data from the recent magenta acquisition so that there's a whole other set of data sources as well as some other things.
We talk about it on the periphery, but the core of the data that we work with our data from opted in. So companies that have chosen to share data with us, um, and for value that we give them.
And so that shared data Anonima ized before we even touch it and aggregated at a very high level so we can talk about these macro trends, but yes, that's where the data comes from and to be analytics.

Jason:
[5:34] Perfect. And then, um Ah, and that was you already answered.
My fob question in the court date is that you have not integrated any of the new data that you might have access to from Magenta. And if I have it right, you're also, at this point not really using data from the rest of the adobe marketing cloud.

Taylor:
[5:53] E. I wouldn't necessarily say that. So we do. Uh, we do a lot of so we haven't agreed.
A lot of the magenta data allowed us to look at things like shipping and returns that, uh, we're new renews angles for us, and it certainly gives us these amazing to you into that tail.
Set aside some of the bigger players in terms of e commerce, but we also you used the mark enter data for your candidate to look at so are marking channel Information Ad Cloud, which used to be two mogul, which I worked for.
Uh, we used them for some advertising data around Thanksgiving. So we bring it all the pieces.
Um, but, you know, not all of it necessary goes to the top line number. As you as you say.

Jason:
[6:33] Sure. And then, um, you kind of alluded to this, but you're not just trying to report on trends from adobe customers.
You're you're using some advanced math and you do the customers represent a big chunk of the market. But then you and interpret what the total market is based on the subset that you see. Do I have that? Correct.

Taylor:
[6:56] You do. I could spend a whole other podcast on how we do that, but it sze not do that. Yes, it's cool math. We do cool math.

Jason:
[6:59] Yeah, let's not do that. But just call it a cool math.
Yeah, And then the other thing that comes up a lot. And I think you guys are really good in this as well.
Like very often. We talk last year versus this year, and when a lot of vendors report their data, the customers they have this year are different than the customers they have last year.
So when they're when they're talking year over year growth and things like that, it's usually not perfect. Apples to apples.
Um, but because your your, um trying to normalize the data for the whole market before you do it. When?
When you say there is a 20% growth this year versus last year, that's a pretty accurate number. Drab.

Taylor:
[7:39] Uh, yeah, I think you should. It's yet. You said that. Really? Well, that's absolutely That's.

Jason:
[7:43] Perfect. You can use that in your highlights. Now we've reciprocated. Awesome.

Scot:
[7:49] Go. So, uh, now that Jason's extracted his pound of flesh, let's Ah, let's jump in at a high level. How? How would you view Holiday 2019 shaping up?

Taylor:
[7:52] Okay.

[7:59] I think it's been quite strong. And it has been strong all through today.
In fact, if you let me, I'll give you, uh, it as, ah, this morning.
So yesterday's numbers Through the third of December, we saw $84.7 billion in online retail sales, and that's up 14.8% on last year for the same period.
So that's a little faster than our aggregate prediction.
But the way that the bottle is trending that out puts us on target to be about 14.1% roughly on our predicted Taff for the season. So and the 14.1%.
I mean, some listeners and people who visit our website will see that last year was particularly strong of the 16% growth year.
But if you look back a few years just 2016 twice 17 this is sort of on par with those growth rates, but on a much larger base now, as we head into almost $150 billion in sales. So it's it's pretty huge.
Um, the the other tidbit of information I can give listeners about yesterday.
Giving Tuesday is that it was a $3.3 billion day, which is amazing research and account $3 billion days, the way that when I started in this gig, we counted $1 billion days.
So they're coming fast and furious. Now, that's only up about 11% on last year.

[9:23] So, uh, it leaves us open to the question of our consumers.
Have consumers, you know, taking all these early deals on and won't be spent later, or are they just taking a break on Tuesday and ready to get back out today?

Scot:
[9:38] Yeah, let's Ah, so it sounds like we're growing kind of 14% year over year.
Um, if you if you kind of look at the shape of the holiday so far, I know you can't predict. Well, you don't know what it's gonna happen here towards the end. It's kind of gotten this what I would call a U shape where it's being more front and loaded and back and loaded.
So the front end is people that have their act together and jump on the deals.
The back end is like Jason I where we're like, Holy cow. Uh, holiday is here. We should do some shopping on the 23rd.
Um, the, uh does that does that kind of what you've seen and is getting more pronounced. Can you tell if you've seen the front part of the curve?
I saw some data that said, like, Veterans Day was unusually large and like the early November days were larger. You guess? You know.

Taylor:
[10:24] Absolutely so we saw just points on these numbers from this conversation.
If you look from the beginning, what we call the beginning seasons of the person November roughly right to, um, Wednesday, that hole to the Wednesday before Thanksgiving, that whole period Groot. About 15%.
So that's what that was about a point 1/4 faster than we would have predicted.
So angry it. We saw a big lift we saw lift above.
We would have expected in that early season it that seems to be attributable to a bunch of, uh, earlier deals.
We had something similar happen last year, but it's even stronger now where discounts came earlier in electron ICS and computers and televisions.
We also saw that, you know, last year, Thanksgiving itself was a breakout day where you had, despite it can. Suddenly Thanksgiving was growing faster than any other day.
That spike seems to have moved back now to Wednesday, where the Wednesday before Thanksgiving was growing at about 22%.
And I think again, that's attributable to ah, lot of deals moving forward in time. So and to your point, that really changes the shape of the season.
You know, we used to basically tell a story of like, look, everything is sort of lifting around that Cyber Five said. The days of the 757 days is getting a disproportionate share.

[11:41] That's still true, but we're seeing sort of, ah, shift back to earlier sales this year, and that might have to do with the calendar.
But I think it is actually a broader trend of thinking about these pre holiday sales and reality promotions as being think that happened earlier, both for retailers and consumers.

Jason:
[12:02] Yeah, it's interesting to me. It's like, um, it feels like in the beginning of the season, you know, there's there's a lot of retailers under stress and have to have a good holiday. And there's this kind of winner take element mentality.
And so we both see Maura aggressive promotions and discounting at the beginning of the season. And I feel like we also see more digital marketing like more investment in ads and things like that, huh?
That really goosed the front half of that. You, um and then I have a hypothesis.
We'll see if it plays out. But, uh, you know, of course, Amazon has gone toe faster and faster shipping, right? And so that, you know, this would be the first big holiday with with sort of standard one day delivery in various forms.
Walmart, target and some extent, even best Buy have all been forced to sort of match that fast shipping.
So, you know, not that long ago we would have had this this very gentle ramp down of sales as we'd hit shipping cut offs and people would stop buying goods and then they'd just be doing oh, piss or gift cards.
Or things like that because they'd run out of time to get the gifts before the end of, you know, in time for holiday.
But now everyone can be a procrastinator like Scott and I, because so many of the vendors will ship so fast. So it feels like like all of those things conspire together to make the very beginning and the very in these these ah, anomalous bikes or that you shape.

Taylor:
[13:25] I think that's that's gonna be absolutely true. And this this year, in particular with this shift, two more by online pickup in store ah, or clicking collect behavior.
And to these accelerated shipping, it's gonna it's gonna make people think they can wait longer in the season where they can't really wait longer to your point.
You know, it's it's three weeks away before even those things are gonna be, uh, almost too close to Christmas to shop for Thio to purchase with.
And so you know, I think we'll see that ramp up at the end of people. Start to panic a little bit.
And that's also why, by the way, you see jewelry discounts be really strong on, like 20th.
Everybody who's panicked and realize they haven't gotten anything starts. Uh, just looking for something nice and blinking. Tow. Give us a gift.

Jason:
[14:09] Interesting. I was always assuming that people just misbehaved right before the holidays. And therefore it was a Yeah, I have no personal experience or data to support that.

Taylor:
[14:13] You may have a better high pop resistant I do on my own. I would draw my contention.

Jason:
[14:20] Just to be clear, honey, if you're listening, um uh, do you want to jump in to the cyber five, though?
Um, so we just got through those, Uh, can you kind of give us a recap for specifically? How have Thursday through Monday played out?

Taylor:
[14:37] Sure, So overall it's about $28 billion uh, online purchases over that same time frame, and that's 10 almost $11 billion of purchases through smartphones.
So overall it was quite strong. Almost 18% if you like those five days over last year, five days with peaks, you been on Black Friday and Cyber Monday, which always kind of blows my mind because I get the question every year.
Are these days too big to really grow outgrow the rest of the season?
And I convictable Maybe next year they will be.
And it's not not the case, people. Another not only are moving more online, but they're really focusing a lot of those purchases and increasing amounts on those big days.
S o. You know, several money, for instance, this year was $9.4 billion.
So we're almost gonna guarantee there is a $10 billion day, uh, barring anything serious happening next year on Cyber Monday, which is,
incredible, and over 1/3 of that, those purchases are really coming on phones.
Eso you're seeing people not only window shopping actually make purchases on those big days on their phones, especially that's what cyber Monday when people go sit in front of computers at work.
But you know, people under the table on Thanksgiving.
Uh, people on Black Friday we'll pretend to hang out with their family, but but by where? Two things. Anyway, Uh, that's really been a mobile story.

[16:06] And then the other story of the weekend, which I always, you know, you're talking about how, by a and pick up in store, uh is ah, you know, it is a capability that my drive people to wait a little longer for their purchases.
But nonetheless, we saw a big bump in bogus activity.
Even on that, that major weekend without 40% more purchases.
Then we had when we saw last year over the same timeframe, so outstripping overall gross and really pushing both share up.

Jason:
[16:38] Interesting. And so And if I think of it from a historical perspective, you know, 10 years ago a few people had reliable Internet and so, you know, cyber Monday or we'll call 20 years ago.
Several Monday became a big thing, like we'd all enjoy Thanksgiving. We'd go to work on Monday, steal our bosses Internet and go shopping.
And so that was like the one day spike.
And then, as as, uh, you know, we all became ubiquitously online.
The traditional big shopping day Black Friday also became a big online day.
And in fact, I feel like they're often are these forecasts that that Friday is eventually going to surpass Monday online, which seems like, hasn't happened yet. Read joy. I have that, right?

Taylor:
[17:23] But it hasn't quick hasn't gotten there yet. Uh oh, no. Didn't you thought?

Jason:
[17:25] Yep. And then I'll go ahead,
I was gonna say, And then increasingly, those other days in the weekend have grown to be extraordinarily meaningful.
So, you know, frankly, 10 years ago, we talk a lot about cyber Monday.
I actually don't care as much specifically about the results on Cyber Monday, because if it feels like the the aggregate results of the Cyber five is much more important and indicative of how holidays going than any one day in the,
in that block nowadays, is that a good way to look at it, or am I being shortsighted?

Taylor:
[17:59] No, I would agree with that. And I think what's always fascinating to me and is, uh, topic of a longer conversation. Is that to your point?
There's no need necessarily now for Cyber Monday. Everybody's not only got good Internet access at home, they've got good Internet Internet access in their hands.
But we have become so habituated to that day being a major sales day, and both on the consumer and the retailer side that it continues to grow on.
The psychology of this often drives a lot of the behavior even beyond the pricing or the deal's or anything that our model might pick up.
So to your point, you know, I think if you just looked at the data, you might think, Hey, look, this is all going to smooth out a little bit.
But people continue to think about those days as the big days to go shopping, Uh, online and offline.

Jason:
[18:47] Interesting. So you're saying people might be willing to go shopping even when it's slightly irrational? Interesting. No.
Thank God for that, by the way. Yeah, and along those lines, it feels like folks have been trying thio kind of make hay in some of those other days.

Taylor:
[18:54] It's a new fighting I came up with. Yeah.

Jason:
[19:04] Like for a while now, that that Saturday has been small business Saturday.

Taylor:
[19:09] You okay?

Jason:
[19:10] Andi, I think there's a couple of people trying to grab Sunday now, too, right? It is. I'm trying to, uh.

Taylor:
[19:15] Yeah. Super Sunday has a bunch of different cuts at it.
Exactly. And there are big days. Now we're talking about, uh, you know, there, there.
Three and 1/2. Almost $4 billion each.
This is It's massive any other day of the year and we would be having a conversation about a particular $3 billion day.
But they just come fast and furious between November and Christmas.

Scot:
[19:42] Do you do? You have? Ah, At the end of the season, everyone has a different word. Just be like free shipping day. And then I think it's called Green Dares. But you guys, what is what is last year like? Was there a bump? And is it? How does that compare to, like, Cyber Monday?

Taylor:
[19:51] And.

[19:58] So we said we would see ramps toward the end of last year, and I don't have the last little couple days to hand. But they were more closer to sort of Super Saturday and or even smaller than that in the $2 billion range.
Um, as you had in there. They're not the ones bigger ripped last year, but two earlier point.
I'm really curious to see if we don't see a big bump. Uh, come to the 20th 19.

Scot:
[20:24] Yeah. Hey, this is just kind of came to me. So it's if you don't have an answer. I understand. So last year we grew 16%. This year we're growing 14.
Where do you think that 2% Delta is coming from? Is it just kind of across the board, or is it a certain category underperforming? You have any Any thoughts on the.

Taylor:
[20:44] I have some thoughts, and I think it'll be really interesting conversation to have in a few weeks.
But the the, um, the couple things, first of all the models telling us 14 ish, Um, my gut says there might be more upside risk there than downside.
So somebody get my clothes.
What seems to be the case so far in the data is that there wasn't proportionately even bigger push into the early season.
Um, because of, uh, a CZ people moved into Thanksgiving on on that Wednesday, some of his deals move forward.
But honestly, if you just if you just look at the math, which is, uh, what we particularly good at,
the just pushing the season shorter between Thanksgiving and Christmas is about a $1,000,000,000 which is, you know, 50 bases, 50 of those basis points, uh, arm or sorry on its own.
So between a little bit of merging of error and that some of those basis points and ah, uh, and not the shock of all these earlier deals that got everybody accelerated between those three things you kind of get to, uh, the delta.

Scot:
[21:53] So the jury's still out. Kind of depends on how the models perform and how people react to those missing days.

Taylor:
[21:59] Yeah, exactly. If we get a big surge and everybody. Service comes off of the off several Monday and thinks, Gosh, I got a sprint toward, uh, toward River Last shipping days game. I'll be very different than everybody feel like.
Gosh, I blew my budget on all those early deals.

Scot:
[22:16] Yeah, cool. It wouldn't be a Jason and Scott show if we didn't talk a little bit about Amazon.
And I understand if you can't talk specifically about anyone, retailer or whatnot.
But any insights into how Amazons holidays going big, they put out their annual release that said something like Vague like We sold hundreds of millions of dollars.
You know, third parties did great. So so it always befuddles Wall Street when they kind of without these puzzle boxes for them to figure, figure out.

Taylor:
[22:45] Yeah. J. J. Abrams doing the press releases? No, I, uh you said you wouldn't be your podcast if you didn't ask about Amazon.
It wouldn't be a doubIe response. I didn't say we don't talk about particular retailers, but what I can say eyes we do track the biggest and the smallest against each other Really looking at.
Especially as you see two big trends that big.
A lot of discussion about big, big retailers pushing, couldn't collect, pushing one day shipping, having great deals.
Ah, and a lot of democratization of, uh, e commerce. As you know, a lot of art form.
We have five farm, those others that makes that much easier for people to bring businesses to the market.
So those two forces air going on, um, in the on the average, uh, you see big companies outperforming smaller ones in terms of growth.
So if you compare November an average day in November to an average day in October for the big companies they're up about, these are $1,000,000,000 plus companies.

[23:42] They're up about 87% in sales, whereas the smaller companies in the 50 million lower range.
So these are the small ones are up only about 43% and some of it is.
It's coming from the East from the data, at least, is coming from two things. One is the larger companies are much better at mobile conversions, that 80% better at taking a customer and bringing them to purchase on a phone than the smaller companies.
And consequently, they get about 10% more of their share.
Their revenue from those phones and the way that I reviewed the data is that if you're a consumer and you are going to a big retailer, that big retailer has a number of advantages, including a wide set of products wide set of,
promotions generally really good, aye, aye at connecting you with those promotions,
and a really the slick, speedy checkout process that they worked on really hard.
And for the smaller companies, they obviously have quite a selection.
Some of them haven't figured out how to turn customers, uh, into buyers swiftly.
But the last thing I would say this is the most important part about this is I am talking about the averages.
So, you know, in the smaller companies, there's a lot of entry, a lot of people trying things out on a lot of exit, and there are within that average a huge number of small companies who are just blowing the doors off.
It's just that on average, they're not doing as well as the very big ones.

Jason:
[25:09] Sure that makes sense. Um, you talked a little bit about Omni Channel. I wanted to jump into that for just a second.
That seems like an area where, in particular, a lot of the big companies have made major visible investments in their infrastructure.
So of course you know, Target, but shipped. And then now that's heavily integrated. And they have rich like same day delivery and curbside pickup options available across all their mobile platforms.
Wal Mart, you know, has has done a bunch for general merchandise Omni Channel. But even more for grocery, um, and curbside pick up and and all of those things even, um ah, the Amazon.
You know, although much more footprints are starting to get a little better at Omni Channel with their with their small footprint of retail stores, um is any indication of that's paying off?
Like Are you guys ableto to see an Omni Channel transaction versus a pure digital transaction? And is there any like is the rate of growth of those Omni Channel transactions faster than overall?

Taylor:
[26:15] Oh, yeah. So we're we're seeing a Z, said rumor, roughly in the 14 to 16% range growth for the overall market place, but for by online picker in starker POTUS.
Another word that's up but, like 40% for the season. So it's way outstripping overall sales.
And what's also really interesting is we see that this has a little bit to do with larger, so small.
But we see that companies that offer, uh oh, this, uh, 20% better at converting, then companies that don't offer both us.
So people are coming there specifically for that capability, or at least finding that capability incredibly valuable to them.
At my my thought on this is Look, we got a phone in her hand that has moved the display window experience into your hand. It's moved the checkout experience into your hands, and everybody just wants to move that fulfillment.
That one thing in between the human experience, closer and closer and you know, one day shipping is great, but, uh, sometimes it's just easier if you drive down in about 10 minutes and go pick up the thing you just saw and knew you wanted.

[27:25] And plus these guys are. You know what we see in the survey data to is it?
This is good for the brick and mortar stores that not only are they know is you guys know that not only are they making people making purchases online and sitting in the car and getting that that pickup, they're also going to the store and buying another thing, could they thought of it.
I'm driving that That makes it different. Step for brick and mortar stores as well.

Scot:
[27:47] Wrinkle. Um, you've hit on this a little bit, but let's talk about mobile. So, um, do you guys, when I talk about mobile, I tend to take tablet out, and it seems like you do to you. You seem to be explicitly calling out smartphone.
Um, so you mentioned. I think I can't remember. Was it black Friday? You said it was. 1/3 of the sales came from a bull. Ah, talk us through any other kind of insights on the mobile side.

Taylor:
[28:12] Sure s o your point. We tried. We tried crier years to be really disciplined about mobile version smartphone.
We've been a little acts this year because tablets are decreasing share. So smartphone really had started crossed That that 1/3 threshold on major days in terms of dollars spent, it was always has been for the past several years.
The majority visits were coming from phone, so people were doing initiating their shopping.
We had this challenge empire years and still have some do now that they weren't closing the deal.
Uh, from that we'll visit either not at all or going to the desktop to purchase.
That gap continues to close. In fact, on Christmas this year, we expect to have the first day in us where the majority of online purchases actually come through a phone.
As people aren't going to their computers and their families are around, they're actually using boats.
That purchase and the things that are driving this, at least in the data that we see are two really interesting and related points.
One is that time per visit is going down rapidly.
So, consumer, they're coming. They're not messing around.

[29:20] They're looking for and expecting the product that they that they came for at least a product to buy.
And some of that is going to be in part because your connection speed have gotten faster. Screens gotten bigger processes were faster, but also retailers have gotten much better at streamlining that process.
I'm the mobile phone, and consequently, the amount of money that people are spending per minute per second on a mobile phone continues to skyrocket month after month, year after year.
As people just get faster making those purchases, especially with a lot of them. You check out options that make make it easier than, say, trying to type in the numbers on your credit card.

Jason:
[30:03] Fascinating. The, um that would be cool if, uh, Christmas did end up being the first, like, majority mobile day.
Um, I was also truce. You mentioned something earlier.
Um, that sounds like that. I call it a mobile gap when traffic side, but conversions lower.
And it sounds like that mobile gap is getting lower for big companies. And you said it a couple reasons why that might be, um, in general. Do you feel like that?
Like, Is that mobile gap? Um, getting narrower across the border. Is it only for large companies that they're they're being successful closing that gap?

Taylor:
[30:39] Well, I think large companies again, it has to do it so that the broad, um uh, you know, there's a much broader array of outcomes and smaller companies than larger ones, so it's harder to paint them with the same brush.
The large companies obviously have focused on this. Figure it out.
They can track per second per user per region per item, how much time consumers are willing to tolerate and they can achieve those things down.
If nothing else, would I just bring more machines online?
Smaller businesses don't always have that ability, but the platforms,
one of which Toby has but the Platform three Commerce are making that whole process from visit to fulfillment and even marking channel much, much more streamlined, especially for small businesses.
Who, uh, we think about that a little bit and focus on what their consumers experience needs to be.

Jason:
[31:34] Got it. So one A transition briefly to profitability. So last year I feel like the narrative would have been, ah, you know, a big growth year, a jump from the previous year.
But a lot of people felt like it was Ah, that was partly attributed thio heavier than usual promotions, which meant it actually ended up being, you know, not a phenomenal profitability year.
Um, and so this year, we're seeing the rate of growth slow a little bit from last year.
Is there any reason to believe that people are being more conservative on promotions or are you have any insights about how we're gonna come out from promotions and profitability perspective?

Taylor:
[32:18] So, you know, I'll be honest with you were really good about figure out the revenue. We're really good about throwing out prices. We are generally missing that third piece of costs that allows you to talk about profitability.
But I'll tell you what. I was thinking about this this morning and last night and looking at, but began for a bunch of different angles in our data and frankly, that the short answer is the results are mixed.
So we did. If you asked me a week or so ago, uh or even to I would have said, Look, the discount seem to be moving forward, especially in electronics.
Um, and so, you know, maybe the maybe the profit margins are slimming, but then we started. Look at toys and toys. Bottom out, quickly.
Um, uh, you know, maybe once the Toys R Us process was was through the toy discounts didn't go is deep.
This year's they did last year, and we're seeing something we saw. For instance, we elected appliances, appliances discounts for a little later last year.
So exactly how the profit margins are gonna go. Hard to say.
But the, um, you're in the revenue looks really strong.
So, you know, I think the jury is ah, bit out where possibilities go in.
But I don't for consumers see, a year where we're like have massively deeper discounts than the last year. We just have them earlier and on particular product.

Jason:
[33:38] Got that? Uh, that makes sense, and I agree. It's It's really hard to get a clear picture until well after the fact on the promotions, because there's like there's promotions and pricing effects and all these other things.
But one thing that seems like it might be coming to play a little bit more on profitability this year is profitability like there's a couple Evers one.
Is that pricing a promotion? Another is the cost of acquisition.
Um, and I do feel like folks. There's a lot of folks that used the Adobe marketing cloud, um, for further cost of acquisition.
Like, Are you guys seeing any trends around higher advertising rates or spend rates than previous years, or is that not something you guys are looking at you?

Taylor:
[34:18] So we don't. We have looked at overall investment in advertising.
That could be a fairly complicated thing to grab to look into. But we have looked at performance and individual, Um, your ad level pricing and what's interesting is we definitely see if you're if you're advertising, especially in video, but also on display or search.
You're gonna see costs go up, um, a bit as everybody sort of pores online and wants to wants to acquire customers in the video room. That's about 23% higher CBN's.
But when we look at performance, metrics does go up by an even greater amount.
So, uh, you know, again in video that we're pressed about 20% performance in terms of, uh, viewable completions of videos are going up 30%.
Or we see, for instance, your email efficacy goes up quite a bit over that that same time frame.
So we should We haven't reached a point of diminishing return earns uh, in those areas yet where prices start outstripped performance growth, and I think there's a lot of opportunity for customer acquisition there on dhe.
Advertisers and marketers have figured that out and are pouring the money, and now when it's, uh, it's most productive.

Jason:
[35:32] That that makes sense, and that's gonna be a great place to leave it, because we have, ah, slightly exceeded are a lot of time for this show.
But as always, if we didn't get to something that folks want to talk about, your welcome and I hit us up on Twitter or leaves the question on our Facebook page, as always, have you enjoyed the show?
We'd really appreciate it if you, um, jump on Thio iTunes and give us that five star review were also nominated for this vendor of the year award in our category, So I'll put a link in the show notes.
If you could take a couple minutes and vote for us, we'd really appreciate that. But Taylor really appreciate you being on the show and sharing the data. I know it's a busy week for you.

Taylor:
[36:10] Thank you guys so much. Really appreciate the opportunity.

Scot:
[36:13] Thanks, Taylor.

Jason:
[36:13] Until next time. Happy commercing.

Dec 3, 2019

EP201 - Cyber5 2019 Hot Take

Cyber 5 is the five shopping days from Black Friday through Cyber Monday (this year Nov 29 - Dec 2).  

Adobe Recap

Adobe Holiday Dashboard
(note: numbers updated after show was recorded)

  • Thanksgiving  11/28 - $4.2B (up 14.5% YoY) below forecast of $4.4B
  • Black Friday 11/29 - $7.4B (up 19.6% YoY) below forecast of $7.5B
  • Saturday - 11/30 - $3.6B (Up 18% YoY) at forecast
  • Sunday - 12/1 - Not reported
  • Monday - 12/2 - $9.4B (up 19.7% YoY) at forecast

We'll have an Adobe analyst on next week to break down results.

Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes.

Episode 201 of the Jason & Scot show was recorded on Monday December 2nd, 2019.

http://jasonandscot.com

Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.

Automated Transcription of the show

Transcript

Jason:
[0:24] Welcome to the Jason and Scott show
this is episode 201 being recorded on Cyber Monday December 2nd 2019 I'm your host Jason retailgeek Goldberg and as usual I'm here with your Scot Wingo.

Scot:
[0:41] Jason and welcome back Jason Scott show listeners hope everyone is having a successful sales and up time Cyber Monday Jason how's your cyber monday going.

Jason:
[0:52] Mine is awesome I've been up all all day I haven't had any outages.

Scot:
[0:56] Very good nice to know I have you what's been hot on your must-buy list.

Jason:
[1:01] You know I'm falling the consumer Trends so I'm buying a lot of Frozen and PAW Patrol toys.

Scot:
[1:10] Very nice.

Jason:
[1:11] Yeah those are big sellers this year and my son is in one both.

Scot:
[1:16] Rachel have you seen Frozen to you.

Jason:
[1:19] We did we took baby geek to his very first movie was frozen to eat totally mean you did great and enjoyed it.

Scot:
[1:26] Awesome we did adults attitude is good.

Jason:
[1:31] There's a few good movies out right now and of course December going to be a big month for you and me.

Scot:
[1:38] It is so this is our Star Wars side Sidekicks the first.
Star Wars fan I strongly recommend a really good Star Wars content and then yeah December 20th.
We'll see it's kind of a Bittersweet classic but have to report on spoiler-free report on the shows that we do after that.

Jason:
[2:04] I will mark my calendar to listen to that one.

Scot:
[2:07] Well folks we are in the meat holiday 19 as mentioned coming to you live on Cyber Monday and wanted to give you a cyber five holiday 2019.
As we mentioned on the show there 60 or days between Thanksgiving and Christmas this year so in a way everyone these days is really Amplified and much more important than usual
so first want to set the table we did a new show that I'm sure you all listen to but just to refresh your memory
when you kind of boiled all the different forecast online offline what not.
The one I cared most about showed e-commerce coming out in the mid-teens for Holiday 19th that was kind of the pontification around the Halloween time frame for 4 we're going to see the shirt,
we have been busy here at Jason Scott podcast headquarters Gathering all the data and are going to summarize it in this hot take,
Jason you've been studying the Adobe data and we are going to have Adobe on the show later to go into this more detail but they walk us through what they reported so far.

Jason:
[3:13] Yep. So I would say it's but good news bad news from the Adobe data all the days are up pretty significantly but they're all
down slightly from adobe's forecast so there it is supreme their forecast was slightly over Rosie and the the rate of growth is probably swelling so for Thanksgiving but that man was sales were up 22% which came in at 4.2 billion up sales in the US
against the forecast at 4.4 billion so off the forecast a little bit but up a healthy number of Pap you know more than the
traditional amount of e-commerce growth and of course Thanksgiving has been a particularly rapidly growing.
Day in the old days people didn't shop on Thanksgiving Salina shop online on Thanksgiving and increasingly as shopping is gone the mobile
you know where we're all shopping on the dinner table and Thanksgiving so that that day is growing faster is now pretty big black Friday.

[4:18] You know it continues to be the biggest day for offline shopping online growth according to Dobie was only 14.5% so.
You know not not.
Super impressive growth I mean, in line with the the typical average growth we see for the whole year and again slightly under adobe's forecast of 7.4 billion and sales on Black Friday against a 7.5 billion forecast.
The year we are seeing a significant shift to mobile.
And that the rate of mobile growth is much bigger so I cracked Black Friday 4.
Adobe I mean there's going to be some other data that can put you this a little bit later but Prado be on Black Friday 39% of all sales 61% of all traffic.
I was on mobile and I would say those numbers are in line with the individual data I've seen from clients the majority of traffic is on mobile but.
But still mobile underperforms as a conversion in the aov form factor.
And then Saturday was up 19.6% Sunday was up 18% and we don't have the final numbers from Monday because it's still going on in a lot of us every Monday shopping happens.

[5:41] At night as we're recording this but they're you know what the forecast is for 9.4 billion and it sounds like people you know still think it's going to be in that.
9.2 to 9.4 billion which is a pretty healthy bump over last year which was actually 7.8 billion so where.
We are simply not going until we're jumping over a billion dollars in sales just on on Cyber Monday so for Adobe that's going to put you just under Thirty billion dollars for the cyber5 29 billion for the.
For the whole deal.
And that was pretty much how Adobe saw anything you saw in the Adobe data Scott.

Scot:
[6:26] Yeah. I saw a lot of wall streeters kind of summarize the data and I saw some people kind of.
I would call a sounding alarm Bells but they're starting to say there's some concern that it was a little squishy I would say so especially this slowing so last year.

[6:44] Thanksgiving and Black Friday rough by 29% year-over-year and to kind of go to almost half of that at 14 and a half people felt like
you got it feels like we're really slow down your ear specialist pure days now the Counterpoint to that is baby people did start shopping earlier and Sibley was the first things that I want to talk to the folks about cuz I think they also reported Veterans Day was up something like 40% so
and that goes what is that that's double singles Day this year right Stars 11:11 so you know
so one scenario is it song these days are so important that you know that the problem is that the shape of the holiday just refused to change it
go forward more and more I have anecdotally see more people talking about I should cut my holiday shopping done it's only the 2nd of December lot of that going on.
These guys have started rolling out their head like a November month of black Friday's or something like that it's everyone's definitely
going earlier so I got to get this kind of changing the shape of the holiday but we'll have to see what the data bears.

[8:00] The,
the taking it to the brick-and-mortar world there's a couple folks that track traffic Jason I know you feel strongly about this exceeded these things maybe not being,
the best fits it is kind of
probably directional I would say and so shoppertrak is one of those and they said by their calculations store foot traffic was down 3%.
Over the whole holiday. So far that's kind of the Thanksgiving through Cyber Monday but on Thanksgiving it was up 2.3% so this kind of Mia Black Friday movie did Thanksgiving Trend continues
I did notice that this was the first time Best Buy has been open for.

[8:44] Thanksgiving so they kind of jumped into The Fray but then Black Friday ring shoppertrak the foot traffic was down 6.3%,
that sounds most cataclysmic to me as a.
Oh my guy because I count on that foot traffic for Black Friday so it's kind of,
the piece that together with Adobe data it starts to feel like maybe the physical stores are not really going to come out of this very well lefse
one more data point is from retail next and they had Black Friday Also down there wasn't theirs wasn't as severe
they said the traffic was down 2.1% people bought a little bit more of the sales were only down 1.6%
banana same time they said the transaction value was down 6.7% that didn't make any sense I had to read it like six times I don't know how the
Ultra Works in that particular statement but I'll let our listeners try to pursue that if they can they can make more sense than I could.

Jason:
[9:42] Yeah I think what it amounts to is sales as in sales conversion you bought or didn't buy and Transit.

Scot:
[9:49] Okay so it's like unit unit sales.

Jason:
[9:50] The dollar value yeah yes I think it is conversion in aov.
Yeah I think those are both totally valid data sources those are both companies that sell Hardware that measure traffic in stores and so that the only grain of salt to take with their data is it skewed towards the particular,
set of retailers that each of them has sold two and you know they disproportionately he happened to both sell two big boxes and Mall retailers right and so,
you know it's,
that that's a a significant portion of of the retail space but obviously you know we know we know malls are down in general and
you know as I think it was traded in both their datasets more stores are open on Thanksgiving so there was more overall traffic on Thanksgiving and that took a bite out of Black Friday but I do agree with you.
Like the bigger Trend that's more concerning as overall for the for the turkey 5,
days you know trap traffic's down in that that is a big concern for ticket when there's a bunch of retailers that are already in a distress situation.

Scot:
[11:01] Yeah nfm United State assets bisacky
the neuro datapoint can really screw things like an online a lot of them don't have Amazon data and that's like half right so that's going to be don't have that day to 30% that's going to cost you everything
south of where I came in so I'm left thinking you know between these these guys
when I go to the mall the store that's the busiest Apple Store I doubt apples using these things maybe they are I don't know
he didn't have Apple Store that seems to be like the number one destination in every Mall I've been in the last 2 years so I'll meet you at you'll get this really die of you the world that may not be true.

Jason:
[11:45] Yep yeah in retail that you know that the mall winds tend to be more specialty apparel and anchor store in so you know we know those are.
Two unhealthy parts of the the return echo system.

[11:58] But I did also see that the sales force has a bunch of their data out.
In that that also was interesting.

[12:11] The date their numbers did not completely jive with the Adobe numbers you want again same same conversation we just had.
Salesforce data comes from all the people using Salesforce Commerce Cloud which was formerly demandware demandware was originally really targeted and apparel retailers so it's it's Broad and since then but you know I think if we look at the bulk of their.
Their user base it's going to be I'll call him upper mid-tier retailers so it's not going to be the very biggest retailers cuz it's a.
Clouds a solution with a rev-share component.
I'm sold your shoes you probably wouldn't use them but they tend to be kind of enterprise-class customers and they tend to skewed towards retail and so that
apparel so you know that's going to buy stared at a little bit but they had Black Friday up 13% which again is another bad number and kind of matches the.
The Adobe one in general they had that was 7.2 billion I think which is up 14%,
a interesting thing that they only gave us by Friday data but they also had some interesting discounting data and they said that they saw their customers.

[13:30] On average of sales were discounted 28% this year versus 27% last year last year we talked about it being a pretty heavy promotional year and it actually,
had a pretty significant negative impact on margins and you don't gets feeling like that.
True again this year what jumped out at me though is they also said that 56% of all the sales on Black Friday were happened on mobile phones which is.
Considerably higher percentage than what a w said and.
You know I'd be surprised if overall for all of retail that the numbers really that high but but interesting to see that that's that's what's happening in their segment.
What did you think about that Scott.

Scot:
[14:18] Yeah it feels like mobile the mobile results are kind of all over the place so so,
that point was from the shop Friday then we can have a discussion about it
Absol Shopify is done something fun to have a visualization like this and then it didn't seem to be that cool.
What's the horoscope I don't have a handy or I will put it in the show notes but you know it's just a spinning globe you can see line shooting all over and then occasionally it'll say
a customer just bought an order you know that's going to go 50 miles or something like that and then it says.
Check out or something like that just feels like.
Just not enough information to really be useful but then so that that was kind of a little bit of a disappointment but they did announce that for Holiday they're seeing sales up 40% year-over-year,
cross 6.1 million Shoppers and then they said Black Friday was up 49% year-over-year.
Whether they said 69% of their sales were mobile that felt like super high because for the longest time you know traffic has been north of 50 for a while but sales ad in south of 50 on mobile but we're saying mobile.

[15:44] Tablet covers around the desktop category or even separate or is it really just one product detail page
we've ever been on Facebook and seen an ad where you can kind of see an ugly sweater that's interesting to you or a cat.
Bug or something like that.
A lot of those are just Shopify one product page stores I could lyrics you mind into a check out so I could see that mobile number being there saying that I thought was true about their data,
having a. Of 10 years reproduce this kind of data at child eyes or nose bleed kind of stop doing that but you have to be careful because you can give this.

[16:33] You have this discussion of not clean view of the data because they don't report same-store sales that's really important because he's growing.
Merchants so they say they're hot is up 40% over this really closely and I think I'm saying their entire holiday is up 40% with that doesn't really tell you is what are the Saints for sale
so they added 50% more Merchants then actually there's things for sale would have to be down because they're adding always merchants and yet
your bratty more Merchants than their stomachs true that it's kind of not very helpful to have that number without the seeds for sale on it so hopefully this is our first year doing this will put them through some of this give us a little bit more data that this kind of
meteor.

Jason:
[17:20] Yeah I had the same impression and I equally I was excited when they announced this holiday Port the real-time holiday dashboard
and yeah it ended up just being an order for me a minute speedometer really which isn't isn't that interesting a bunch of these companies in the past have had these really interesting real-time dashboards but
for the most part Benders and moved away from those so
I'd say we have fewer datasets and for sure of the days since we have one that gets quoted the most is Adobe and that's probably with good reason not only do they have a a good chunk of e-commerce
but they also do the rigorous math to state same-store sales so the one downside of that is
you actually can't come when they talk about this year vs last year if you actually go to last year and see what their last year was it's not the same as what they're talking about.
Now because they're comparing their current customer sales this year vs last year not their customers last year at that.
Could be more confusing to make any more sense but they they do the math right to make sure it's true apples-to-apples.
Set of retailers with their data this year in their data last year.

Scot:
[18:35] How about did you see in any interesting out of this.

Jason:
[18:39] Yep so this is always the sad part to report but usually there are some stumbles over this holiday as you know these sites get hit with.
You know dramatically higher traffic than they're used to and that tends to.
Put some stress on things and we usually have one or two notable outages and unfortunately this year was no exception the one that I saw to get the most buzzed was Costco.
So they even really had them put a lot of focus on digital until very recently the kind of almost.
Begrudgingly did digital and you know they're their Executives used to talk about why would we ever encourage people not to come to the store and stuff like that so they they really only have done serious about digital last year so like you don't frankly
they're less digital immature or then some other retailers and not shocking that an outage I haven't seen any.
Any sort of recap as to why they had the outage sometimes we get it sometimes we don't Nordstrom Rack also has an outage which,
tell me a little more surprising cuz this has been a big day for Nordstrom for a long time
and I did see something funny that I just had to add add to the list brick-and-mortar retailers are not immune to outages either so one of the very biggest shopping malls on the west coast is South Coast Plaza in Orange County and they actually had a power outage at 2 p.m. and all the stores have to close for several hours
cuz they they couldn't use their point of sale systems.

Scot:
[20:05] Does that do to those rolling around house to have enough there cuz it's kind of random.

Jason:
[20:10] Yeah I don't I kind of doubt it so if they are having rolling power outages but if they did that to her to like this huge shopping mall on Cyber on Black Friday that would probably be.
Some,
Sirius Revolt so I suspect this was an unplanned thing and it sounds like it was just localized to South Coast Plaza so so probably some some issue with their infrastructure I was actually
at the on Thanksgiving day I was at the Lions Bears football game in Detroit and we had a power outage during the halftime show so the the music got interrupted.
Yes it happens Super Bowl went black one year.
Yeah so what is that investors think of all this.

Scot:
[20:57] Yes it was a Wall Street is largely kind of going through a lot of the day that we have one of the more interesting reports is out of Goldman Sachs or they have a retail analyst
and what they do is they come up with the basket of holiday items and they do it in two categories take the track consumer electronics and toys
and then they did really come up with this round Halloween the track it through Tyler holiday and it was interesting there is on the electronic side
they also look at selection and
Amazon is kind of dominated there where they have the most of this basket of goods that are in stock I'm so a lot of people sell out very quickly and see see this with the.
Targets in the Walmart especially and I think that maybe cuz he's in that store kind of inventory as a backstop more than the hook on it.

[21:44] But you know what else I noticed is Amazon's prices crept up and
the Amazon was the cheapest at
so the index is at 1 so it's so if you add up this basket of goods that's one on average below the average about that
you're working so Amazon was a full 1% lower than everyone else in Best Buy was the most expensive then the week that kind of ended with Cyber Monday Amazon was up 1.6% so.

[22:24] Walmart with the most expensive at 2% off the decks at Best Buy a discounted about 3% that's kind of simple average but then when you wait it by
the more expensive items having more weight in the whole thing kind of price-weighted approached Amazon was the most expensive are around Cyber Monday at 3.1%
that's on consumer electronics and then if you go and look at toys then,
your Amazon was by far the most toys by a factor of about 3%
so you're kind of the read that I got from this pricing data was that the Amazon was really,
Cushing to win the Toy War this year in a consumer electronics maybe they're right kind of margin preservation that was my take on some of that interesting
ice basket of goods kind of price now it's.

Jason:
[23:21] Yep and that is going to be interesting because it is that's the price that all the stuff gets sold at is in many ways more important than the,
total revenue number in the in the final analysis and how successful holiday was so that's going to be an important thing to track it is tricky because there's so many.
Different different ways to sort of track pricing data and it's just not possible to to perfectly know what every retailers doing on price.

Scot:
[23:50] That's better so you know just kind of land the plane in c e that's a 5% Delta Amazon margin was effectively 5% higher the Best Buy's which is really material into termite.

Jason:
[24:03] Another interesting data set is this company called
Edison Edison Trends is the name of the company and they are another one of these companies that get a large panel of consumers to give them access to their emails and then they scan for
e-receipts and they report you know various e-commerce Trends based on the e-receipts that they see in so they
actually publishing data specifically for Thursday and Friday that showed up from there their View,
have individual retailers did and so they had like the big Winners that grew a lot as Nordstrom Walmart and Amazon they showed Nordstrom is the.
Fastest griller with 60% higher sales and last year Walmart at 53% irr in Amazon at 49% higher and they show Target JCPenney and eBay is the big losers with
Target down 12% JCPenney down 14% in eBay down 17%.

[25:17] So that it that's an interesting data set I hate to say it but like you need to take all these receipt data sets with a slight grain of salt number one the big,
retailers are constantly trying to obfuscate the receipt so that these companies can't scan their sales so it's a constant arms race and
you know I do Tennessee some like crazy anomalies in this data and Yuna frankly
it just can't be true that Walmart and Amazon are both up over 50% and the.
Average for the day is only up up 17% like that would have sent you mean every other retailer on the planet is way down because Amazon and Walmart are such a big.

[26:02] Chunk of all all e-commerce sales
but directionally if those are the retailers that are winning and there's a retailers that are losing that is believable
and particularly of you if you look at it through the lens of discounting you know you think about a retailer like Nordstrom traditionally they didn't like to Discount a lot and they had one big sale a year
then maybe you know did a little activity around Cyber Monday but it wasn't a huge promotional holiday
and this year Nordstrom is super promotional that a lot of deals on merchandise and then there
they're literally giving you money to shop so you can spend $400 on discounted merchandise on Nordstrom and I'll give you $100 back so.
So they're really aggressively trying to buy customers per your day that we saw that Walmart and Amazon a really aggressive on price.
And like it so I haven't seen a conclusive data but to me it's at least viable,
the target is intentionally being less promotional than some of those other retailers this year in particular you think.

[27:02] A pretty big chunk of Target sales are exclusive merchandise.
There there's less reason to be promotional on that so you might see you know Target for going a little bit of.
Top line revenue by not being so promotional but maybe they'll end up being a little more profitable than some of these other retailer.
So you don't I'm going to tell him that but but as I sit here on Cyber Monday I'd say rate of growth slowing.
Aggressive discounting continuing there's going to be a lot of stress on profitability and.
And that you know the big strong retailers are disproportionately winning which means the distress retailers.
You know are going to be really distressed coming out of this holiday. Which is you know none for an unfortunate reality.

Scot:
[27:51] Seems like the other big trend is mobile heading to 60% of sales not to strap.

Jason:
[27:56] Yeah yeah and I do I mean I think the mobile Gap we talked about a lot it's still a real thing but I do I do believe it's narrowing and it Narrows more on these big event holidays than a minute it's likely to for the.
Traditional shopping throughout the year as well so not shocking to see mobile index higher on these big sale days then then it would ordinarily.
So that is pretty much are.
Quick take recap as we're still waiting for final data to come in on Cyber Monday but we hope you enjoy this sort of real-time look,
I am you do have any questions or comments we would certainly enjoy hearing about them on our Twitter feed or on our Facebook page
and of course if this hot takes been valuable to you we sure would appreciate it if you'd go to iTunes and give us that five star review.

Scot:
[28:49] Big Sur when we hope your holiday sales are up over 100%.

Jason:
[28:54] And until next time happy commercing.

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