EP283 - Year End Review
It’s our final show of 2021!
We recap the US Dept of Commerce November Advanced Retail Sales Data.
We do a deep dive into the retail industries growth from 2019 through November 2021. In those 23 months, the retail industry grew 22%, historically fast growth. There were clear winners and losers. If you want to follow along on with all the data, here is a visual recap of retail growth 2020-2021. (PDF Download).
We also highlight the six most important trends of 2021.
We’re so very grateful to our audience, both for the time you have shared with us, and for generous opinions, feedback, and knowledge that many of you have shared. We wish you all the very best holidays and New Years, and look forward to seeing you in 2022!
Episode 283 of the Jason & Scot show was recorded on Tuesday, December 21st, 2021
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.
[0:23] Welcome to the Jason and Scot show
this is episode 283 being recorded on Tuesday sept December twenty first twenty Twenty-One I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scot Wingo.
[0:39] Hey Jason and welcome back Jason Scott show listeners Jason how are the holidays treating you so far.
[0:46] They are treating me really well it’s been super interesting what’s going on in our industry and getting ready to take the family to California to see my mom and brother.
[0:59] Very fun California versus Chicago seems like a smart smart choice this time.
[1:04] Yes early and my relationship with my wife we agreed that we would visit her Michigan in-laws and Thanksgiving and my California relatives in December seems weather prudent if nothing else.
[1:16] Yeah smart I like your
like you’re negotiating strategies so we are recording this here live on December 21st so we are in the very last tail end of holiday 21
and Jason you had some some interesting data that you had parse through that I thought we could start with it’s going to be largely kind of the November data but it’s kind of the best data we have,
until we get into January and see how the holiday played out and then we’ll do a quick
checkpoint on what you’re hearing from clients and then I think both of us wanted to kind of share our big stories for retail and e-commerce for 2021
so why don’t you kick us off with some data.
[1:57] That sounds amazing so yeah so the data we are talking about is the US Department of Commerce data we get a an update every month so you know last week we got the,
the update that includes November and in general November sales were up
sixteen percent from November of twenty twenty so I always coach people that we should look at year-over-year not month over month so pretty healthy growth in 2021 from 2020
if you look at year-to-date so January through November
we are up about 18% from 2020 and if you look at e-commerce we were up about 12 percent from November of 2020 so I you know I always
put this data out on social media and I got a ton of,
interesting responses this year on that data everyone’s like
hey Jason why are you comparing to November of 2020 like we’re in the middle of the pandemic everything was all topsy-turvy like it’s like comparing,
pandemic 2021 numbers to pain demick 2020 numbers isn’t very helpful to me because everything is so confusing.
[3:13] And so I kind of took that to heart like you know it is the best kind of comparison we have about how we’re doing but I said oh you know the more interesting comparison is maybe we take.
One step back and we compare the.
The the last two years of data to two years ago so we kind of compare how much growth we’ve had during the pandemic with what girls look like before the pandemic
and I hadn’t hadn’t really done that in a while and what I found was interesting and in a few cases it surprise me.
[3:46] I feel like we should create a new word for this I’ll work on it in the vein of a ship again yeah that’s just boring I don’t know.
[3:54] Yeah yeah de or.
Yeah every CEO in America has learned to say you’re over two years ago by the way and for it’s super funny for non-gaap metrics in the and in the 10-qs they.
Like it’s they kept they completely cherry-pick like if the number is good they take versus last year and if it’s bad they take versus two years ago.
[4:18] Yeah yeah that’s the nice thing you need everything every number needs to be up into the right.
[4:23] My takeaway there is you CEOs are oily.
[4:25] We know we’re strategic.
[4:29] Got it potato potahto.
[4:31] Cool what did this year over your year over year over last year review.
[4:37] Yeah so if we say hey from how much has retailgeek grown in 2020 and 2021 as a two-year stack it has grown 22 percent,
so you know people talk about like all the struggles and challenges we had during the pandemic but if I see
if I got in a time machine and no pandemic just told every retail CEO how would you feel about growing 22% over the next two years,
the vast majority of CEOs would have jumped at that and then if you said and our life is going to be totally disrupted by this pandemic.
[5:14] I think every retail CEO in America would have said I’d be thrilled to get through the next two years with 22 percent growth so that was
interesting and then I said I wonder how that compares historically so I got in the hot tub time machine and I pulled all the data from 1990 through today and I restated
every year as its growth versus the previous two years to kind of come up with this standard metric to compare against the 22 percent
and 22% is unprecedentedly high it’s by far the biggest two-year growth we’ve had since 1990 there’s only a few years that
that just tickled 15% so I can 2000 we hit 15 percent and in 1994 we hit 15% but like,
most of the.
The this last decade we were kind of tickling in the kind of six to eight percent growth so 22 percent growth.
On average for the whole retail industry is a huge win and unprecedentedly more growth than we would traditionally get does that surprise you at all.
[6:26] It doesn’t sort of make sure I understand it’s all retail so it’s offline and online in Aggregate and then you can’t just divide it by 2 right because there’s compounding in there so it’s not really two years of 11 it’s probably like I don’t know 12 in an 8 or something.
[6:41] Yes so you are correct now and.
That 20 yes and all of this data it does include compounding the the compounding is an interesting point which will come up in a another piece of data in
in just a minute but yeah so this is all like literally looking at the.
Aggregate sales for 2019 and the aggregate sales for 2021 and saying how much bigger was 2021 than 2019.
[7:08] Yeah did you run a kegger so in MBA school they would say well you can actually unpack the compounding by look at the compounded annual growth rate.
[7:17] Yes yes I am familiar with the math I did not.
[7:21] Okay it was two years it’s not going to be that substantial yeah repeat.
[7:24] No that’s the yeah it’s right typically like with like a five-year Horizon it makes a lot more sense but yeah it would have been interesting but it just I had to your data so I was just trying to come up with an Apples to Apples.
[7:36] Not feels feels like a wind.
[7:38] Yeah so then I said alright well that’s interesting on average retail is a huge win.
[7:44] Very obviously there are winners and losers so I said alright well let’s look at all the categories that the US Department of Commerce gives us.
Based on that 2-year stack and there were you know and who was at the industry average who wildly outperformed the industry average and who underperformed the industry average and
there are some things that made total sense to me and we’re not surprising and then there were some pretty big surprises in there so,
the the category that out of the US Department of Commerce data that grew the fastest was,
non store sales which is kind of our e-commerce proxy right and it grew 39 percent so almost twice as fast its total retail that’s pretty intuitive you know again you’re hearing a lot of.
E-commerce growth is slowing.
Wagon November as more people went back to stores you know compared to this like you know pandemic impacted 20/20 but when you look at onto your stack,
e-commerce is still the fastest growing part of retail at group 39% from 2019
and that certainly didn’t surprise me the next two categories sporting goods and building materials,
also really didn’t surprise me because we kind of talked about them being,
the big pandemic winners that like you know people then go to the gym so they bought stuff from Dick’s Sporting Goods people didn’t go on vacation so they built a new patio with materials from Home Depot and so kind of all the that Services Revenue.
[9:14] Shifted into retail and that gave sporting goods and building materials a big a big kiss.
Motor Vehicles which at one point people were saying like oh my God that’s going to be a horrible category in the pandemic Motor Vehicles actually outperformed the industry average so they grew at 24 percent versus 22 percent for total retail.
And then here’s where we start getting surprises.
Slightly below the industry average was furniture and Home Furnishing so that grew at 21 percent versus the industry average of 22 and if you just asked me to bet I would have said in the same way that building materials and Home Improvement stores.
Got extra spending from the pandemic I would have expected furniture stores to get extra spending from the pandemic as well and so it surprised me that they were only at the industry average and the only my only hypothesis is.
Did they have more disruptions from supply chain like why.
Was it just harder for them to scale up to make more sofas to meet the increased demand and so they,
they grew healthy but they didn’t grow as healthy as they might have because they they couldn’t double their us Workforce to build more couches.
[10:23] The feels right the furniture industry has been here in North Carolina that’s our primary one and they’re just destroyed by the supply chain they can’t there was a series of events that couldn’t get phone because of the fire and awesome remember that that seems like a year ago but it actually wasn’t
go to the summer and then
with this quote-unquote Supply pain they haven’t been able to get the other inputs like anything fabric while that stuff made in China and shipped over here and sitting on a boat somewhere.
[10:50] Yeah and I feel like it’s a double whammy for them because it’s harder than ever to make stuff but there’s actually they could sell more than ever before if they could make it so it’s like,
it almost feels worse than knowing there’s demand that you can’t meet.
[11:01] Yeah it’s painful.
[11:03] Yeah so then general merchandise grew at 16 percent versus of retail 22 percent
and then the one that surprised me most that I talk about a lot is grocery grew at 16 percent versus the industry average of 22 percent and I would have said man a ton of spending shifted from restaurants to grocery stores they were another pandemic winner
and so I’ll be honest I don’t have a perfect hypothesis for why.
Again sixteen percent is Healthy Growth and by historical standards it’s better than any two-year period since 1990 so I don’t want to say oh
you know they had a rough time they had a good time but surprising that they were below the industry average to me a little bit.
You have any great Insight that I didn’t think of on why that would be.
[11:52] I don’t maybe it’s like a mix thing underneath the hood like the e-commerce grew so much doesn’t it like well I’ll be in this category are rules so if.
[12:02] Imperfect yes so you are right like one of the wrinkles in all of this is.
The way the US Department of Commerce treats e-commerce as another category which is unfortunate right because
you know when someone shifts from buying a exercise bike in a Dick Sporting Good to buying a dick exercise bike from Dick’s Sporting Goods.com.
The sale leaves the sporting good category in enters the non-store category and so that’s.
That’s not really Apples to Apples and then of course this is all done with surveys that are in perfectly filled out by human beings and so how different retailers respond to that survey is also inconsistent so you got it.
This data is super helpful directionally but you definitely don’t want to get too wrapped around the axle of the minutiae of the data because it’s just an imperfect methodology.
[12:52] And so then the the categories they did the worst,
do make sense with one outlier for a couple hours for me so gasoline only grew at 14%,
you know again make sense to me that they you know underperformed when people aren’t commuting to work surprising 14%
sales are still pretty good growth clothing is near the bottom at 12% growth so again clothing over the last two years did not shrink they still grew at 12% which might have been their average rate of growth I should do that waiters pulled just
the category growth over the last 30 years.
But compared all these other categories obviously closing was was poor and the Very lowest category is restaurants and bars which still grew six percent so that all makes sense but then there were two
two categories in the cellar that I would have expected to do better health and personal care grew at 11%
and Electronics and Appliances grew at seven percent so those are both pretty far under the industry average and you know those are two categories.
They had some complication they had pros and cons you know within that category but by and large I guess I was surprised to see them so well.
[14:06] Yet Health and Beauty one because Aaron was zooming like the makeup sales shot way up so it’s got to be a you know it was e-commerce.
[14:15] Lipstick sales actually went way down because of the Mask but mascara and skincare went way up it’s so funny bye.
then I just did one other sanity check so you know people like a couple people a couple of Industry analysts even like responded to my data and said yeah just don’t believe the numbers and I’m like
just some understanding you you’re saying you don’t believe the US Department of Commerce numbers not like I didn’t make any of these numbers upright bike.
[14:45] And and the US Department of Commerce data is imperfect I would argue it’s.
The best we have access to and it’s it’s a bunch of you know PhD in statistics that have you know the force of law to you know to enforce compliance with their survey so I
it’s better than any other survey out there for whatever that’s worth but so I thought how can I do a chance sanity check on this data and I’m like oh
all the public retailers are required to report their growth every quarter
so we could try to create a year over two year growth
for all of these public retailers and compare it to the industry data and some of these public retailers are in a particular category so you can you know pretty safely assume all their sales are in that category so you could kind of use that as a sanity check
so I pulled I don’t know I guess it’s about 25
companies and I converted their quarterly growth into a two-year stack
and here I will confess I took a shortcut and if there’s any mathematicians that want to help me solve this problem I will toy do it these.
Draws numbers are not compounded growth so the problem is we don’t have annual growth rates from the Retailer’s we have quarterly growth rate so basically you have to.
Aggregate for quarters of growth and then.
[16:11] Calculate it over two years and so I took a lazy shortcut and I just added their.
20 growth to their 2021 growth so we have basically seven quarters of growth for most of these retailers and it’s it’s
what they call a two-year stack which means growth from 2019 plus 2020 and while the math is not right there by the way right because of.
Like the compounding problem of your 2020 growth include your you know growth over 2019.
This is how most retailers reported in their earnings so when they talk about to your growth
for these non-gaap measures where they try to put themselves in the best light and they report their two year growth they’re almost never talking about a compounded number like if you read the footnote.
They’re they’re adding the growth from those two years so this is how they’re doing the math in most cases
for whatever that’s worth but so that’s way more precursor than we need the retailer that grew the public retailer the grew the most over the last two years total shocker to me I would not have expected in a million years is Burlington Coat Factory.
That Drew 85% and to put that in perspective,
they sell apparel which did not do very well in the pandemic and they turned off their website their e-commerce site the month before the pandemic.
So they didn’t sell any a long line.
[17:34] They’re not really opening a lot of stores either.
[17:36] No I mean they may have opened a couple stores over the whole two years but like this is mostly comp sales growth so it actually kind of,
factors out new store.
[17:46] Okay so it’s cops okay.
[17:47] Yeah this is these numbers that ye are based on currency adjusted comp
sales just in the u.s. wherever possible
so so Burlington’s a total outliner congratulations to them surprising to me Amazon is was the second fastest grower and all public retail at 61 percent over two years which.
Doesn’t surprise me that super impressive but you’d expect to see them near the top of this list then you see Dick’s Sporting Goods at 57 percent and again,
like from from the industry data Sporting Goods was the second fastest growing category behind e-commerce so Amazon as a proxy for e-commerce and dicks is approximately for sporting goods
makes total sense but then things start getting interesting the next fastest grower was Ulta
which is personal care at 36 percent so they grew much better than did the.
The personal care category now they’re less than half the personal care category the slightly bigger version of them would be Sephora but Sephora is actually owned.
Buy a house of Brands and so it’s harder to get their data.
[19:01] Bed Bath & Beyond group 35% which is impressive Target group 34 percent,
Home Depot which again was in one of these these outperforming categories grew 33% was group 28% by comparison Best Buy grew 29% in this it doesn’t surprise me the best bike route 29 percent but this is.
Makes that the fact that Electronics was one of the slowest growing categories at 7% make even less percent make even less sense I guess it’s it’s hard to imagine how.
Electronics only grew seven percent over the last two years when you know everyone bought all this extra equipment for homeschooling and home entertainment and then with Best Buy growing 29 percent it’s even harder to imagine.
[19:53] Yeah maybe in a perfect world you could then split like something like that into store non-store store / e-commerce and maybe that would tell the story.
[20:00] Yeah yeah again that’s like one of the few the,
my few answers to to a number of these anomalies and then I know this is like all these numbers in a podcast sock but like then you start getting into like Abercrombie & Fitch 28% Costco 26 percent,
Cole’s Nordstrom’s Walmart grew at 21% which again for you know a huge company,
the fortune one company to grow at the industry average is pretty good Nike grew at 20%.
T.j. Maxx at 15% and the the bottom three.
A surprise into not surprises so the second worse and third two words were Dollar Tree in Dollar General at 10% growth which is kind of surprising.
You know consumers were kind of flush with cash with all the extra economic stimulus they weren’t really slowing down their spending and so like
you know maybe it wasn’t a great season for the value shoppers but a lot of the news was about how these dollar stores were opening tons of stores and we’re really thriving so interesting that they both only Drew.
10% and then the the worst performing public company on this was Macy’s which grew six percent over the two years not totally surprising.
[21:18] Isn’t that the one that Prophet G said was going to crush.
[21:24] Be there be there the future of retailers Macy’s not Amazon yeah this chart unfortunately yeah contradicts that prediction so we’ll have to wait and see are you Scott Galloway fans you just hang on hang on to your stick to your guns.
[21:38] Good luck with that.
[21:41] Yeah so that’s my the rabbit hole that the stupid November numbers took me down so as you can imagine none of my clients got any deliverables in November.
[21:52] When people tell you they don’t believe the data what are they reacting to.
[21:57] I think there’s a couple categories there are people that are like hey it’s the the month-over-month is interesting but like.
Who cares right because these are all anomalous months and that’s why I went for this two-year stack and and so.
My point was I think like when people are saying hey I don’t I don’t believe the data I actually don’t think they meant they don’t believe that this is the data that the US Department of Commerce reported I think they’re both saying in some cases,
I don’t think the US Department of Commerce can count very well and what they mostly hang their hat on is is the non store sales not being right and that’s fair right like when someone at Best Buy fills out a survey
the US Department of Commerce would like them to put their e-commerce sales in one box and their store sales in another box.
[22:47] And do they do that I don’t know right and does every retailer do that.
Properly and consistently I can tell you that the person assigned to fill out the surveys is generally not the most senior accountant at the it’s usually not the CFO.
Um so so that is imperfect and then what I think they’re saying more is.
Maybe don’t make all your future plans based on like this snapshot of the world because you know we are looking at a
unique set of circumstances that resulted in this data right so if you mistakenly thought my takeaway was
retail is better than ever and you know everybody should double down because you know retailers is the most thriving industry in the world 22 percent growth is amazing and it’s going to continue forever.
[23:36] Yeah no that’s not what I’m saying I’m just saying that like it’s interesting there were positive and negative impacts on all these businesses as a result of the pandemic but on the aggregate.
The impact was disproportionately positive and I don’t think that that is sustainable right like I you know I think we will hope to drop down to the regular the sort of pre-pandemic growth levels and potentially.
We pulled some growth forward and we might even see some more lean years because we you know absorb so much growth this time.
[24:10] This a long way of you saying you now agree with the the Goldman Sachs chart that showed five years of acceleration.
[24:15] No no I think that still is pretty clear and they were primarily talking about e-commerce which definitely didn’t happen.
[24:25] So that’s my my deep dive into data and if there’s
there can’t be anything more fun than listening to a podcast about a bunch of dudes being a bunch of numbers so I will I’ll do two things I’ll try to put some of this data in the show notes but what I’ll do is I’ll put a link in the show notes to download some charts with this data in it.
[24:46] Very cool I actually like you spewing data so maybe I’m just an audience of one.
[24:53] You may be in a liar.
[24:56] So what are you seeing so that kind of gets us through November what are you seeing here in December I poked around on the usual spots for the Adobe and the sales force and a couple others
and it’s really weird they’ve been kind of quiet since since kind of the Cyber week what what are you hearing from your clients.
[25:17] Yeah so I don’t know like there’s not good data that’s already reporting December sales for holiday but so anecdotally talking to a bunch of clients and talking to some of these companies that do have internal data.
December is looking like a good month right and so the.
My kind of aggregate estimate is holiday for 2021 is going to end up being about.
Nine percent bigger than holiday 2020 and again you say well as nine percent good or bad by historical standards it’s pretty darn good
most most years we get about a holiday grows less than the rest of the year because there’s so much extra volume in it so most years we get about five percent growth in holiday in 2019 we got four percent
growth 9% is a big number and last year was a pretty big growth year and so.
Um you know also around nine percent so nine percent on top of 9% is a.
Pretty big deal I have seen some estimates that think it’ll grow even more than nine percent this year to put that in perspective the last time before last year there grew nine percent would have been like 1999
so so not only do we have great growth over two years we do have great holiday growth one huge caveat.
[26:43] The trend up until about a week ago was,
that more people were returning to the store store traffic was going up we were seeing kind of pre-pandemic shopping behaviors and e-commerce was still a big deal bigger than ever before but the rate of growth was swelling because,
there was so much pent-up demand and go to stores lots of people were planning on getting together with their family like there was a funny Walmart stat about you know how much bigger the turkeys were that got sold this year than last year because people were,
we’re entertaining a lot more so,
unfortunately in kind of real-time chats with most of my clients in the last week
we have seen foot traffic to stores dramatically curtail and it feels like.
We’re very quickly getting a lot of negative Media news around and I say media but I guess it’s based on the data about
Omicron and the hypothesis is there either,
Omicron has people scared and so they’re not going to stores or a second hypothesis is everyone desperately wants to have their family gathering so they’re being extra cautious leading up to Christmas but in either case,
we’re seeing this last-minute pivot to e-commerce and that has some impacts like the shipping companies that actually been doing.
[28:04] Much better job this year than last year on keeping up with ship again in but if suddenly everyone you know runs towards e-commerce these last two weeks that could really put.
[28:15] Shipping in Jeopardy in a in a really vulnerable time when they have a lot of Labor challenges so yeah I don’t know it’s kind of a Debbie Downer bit of news in this whole thing.
[28:26] Yeah yeah I’m a crime that has a it’s going to put next year kind of up into a question mark of what happens is and then.
The thing that’s really frustrating trying to operate a business during this time frame is the bookmarks of good and bad are so wide that.
Dirty you have no idea but you drive a truck through and right there 180 degrees so you read one new source it’s like oh it’s super mild and it’s almost going to act like its own vaccine then you see another source and it’s like we’re all gonna die.
Somewhere hopefully we’re somewhere in the middle there.
[28:58] Amen Ya Know It’s Tricky yeah and kind of evaluating all these data sources that’s like the new the new societal challenge right.
[29:09] It really is.
[29:12] So I’m wondering so that’s that’s kind of my holiday snapshot some good news and some bad news in there I wanted to take a couple minutes
on this podcast because I think this is going to be our last show of the year to kind of zoom out from the minutiae and just kind of think about the year in totality and kind of,
don’t know you know highlight what we think are the big things that happened in our industry this year that might impact us going forward how do you feel about that.
[29:39] Let’s do it you want to go first.
[29:41] I mostly wanted you to go first because I thought I would surprise you and make you get bet answers while I thought about it.
[29:48] Okay I’ll go first so so I’m going to try to limit it to three because we.
Yeah we could go on for for a long time here so I think the highlights of this year for me,
it would be a Jason and Scot show if we didn’t think a little bit about Amazon the.
Build out of Amazon’s shipping infrastructure and I feel like we say this every year but it’s accelerating and there’s some really good data we want to have a guest on that’s publishing some data on this just Amazon has built more capacity in the last
two years than they had in the last 10 so they’ve used the pandemic as a you know
the response to it and they’ve gotten kind of cover I guess you could say is to really.
10x down on fulfillment infrastructure where where you get the most feeling of that is that the last mile which is this DS p– program that they’ve just really scaled up massively.
This touches my my day job because it’s Biffy we’d service a lot of these folks and they’re just they’re everywhere and,
you know it used to be they would kind of work out a fulfillment systems then they built these fulfillment centers now they’ve got these see the last word of station what are they call them.
[31:02] Delivery stations that have a whole new nomenclature where they now are have these forward-deployed areas where the dsps are almost housed and Aggregates you’ll go to these places and it’s pretty well that I’ve seen several of them now
and they’ll be like 20 dsps operating out of there these little micro businesses and you know just.
[31:22] Prime Vans as far as I can see.
Where is the stat that I think is kind of the most interesting is the Amazon did disclose that they plan to ship more than
then FedEx this year and then I think they said in the next couple of years they’ll exceed the USPS as far as package delivery it doesn’t surprise me just given the scale that they are throwing at this thing.
For example you can’t buy a van today because the Amazon is just pretty ordered all the vans so it’s pretty fascinating the scale they’ve done there.
The thing that in our will do our annual predictions but I’ve been annually predicting that they would compete more directly with FedEx and UPS by offering just package delivery to anybody I just feels like we’re a lot closer to that but I say that every year so we’ll see,
the other surprise for me
is the explosion of this 15-minute grocery delivery world the most people have probably their first experience this or the first company heard was go puff and it wasn’t really a 15-minute thing it was just kind of faster it was almost
hours then you had instacart really scale up and then what’s happened is the service level on these things it’s got lower to the point where they’re all trying to get you something in 15 minutes.
It’s a smaller number of skus than you would get with like Amazon’s 300 million skus available so it’s typically going to be.
[32:43] You know you probably have a cool word for it but it’s like snacks and
oh my gosh I’m out of a soda I need or ice cream things that you kind of have an urgent hankering for and are willing to pay to scratch that itch a little bit more.
On the shipping and handling fees and those kinds of things these are kinds of things when I talk to people they’re like yeah that little
the economics will never work in the be no one will ever use it and then everyone’s always surprised because you can never underestimate the convenience or any consumer that when you give them the choice to do something with convenience they will,
they will do it and they will order things you would never have thought about.
I remember when Amazon rolled out Prime now they were shocked that the toilet paper and personal products were such a high considered item and it’s just you know.
People people don’t plan ahead and they run out of stuff and they want it right then and there willing to pay extra for it so that one’s pretty interesting and you track this probably even better I do Amazon’s going after this one and then there’s like,
10 startups in there that are have all raised,
billions of dollars go puff just announcer one and a half billion dollar extension of their last round by layering on some debt so there’s one called like gorillas or gorillas and.
[33:55] Tons of these things out there but Amazon scaling it up too so it’s gonna be interesting to see if any of these guys can make Headway against Amazon or Famas on will just crush them.
[34:05] And then the last one is live-streaming this one sputtering in the US,
every data point outside the US indicates it’s a thing and I do think this one’s going to translate from I’ve seen it
I’ve seen data that shows that as a has expanded out of China and that’s kind of where maybe a year ago we were talking about it largely on Alibaba platform.
But now I think it’s there’s European startups I’m starting to see some categories in the US where this is interesting
I followed the collectible category and there’s a couple of the hot companies are they do these live streams where they will do.
Unboxings so they will they will buy a pack of cards from like the 80s and then they will open them live and and see what’s in there and and you know,
it’s kind of riveting if you’re if you’re into that and you’re like I wonder you know there’s a one in 100 chance that this has a Michael Jordan rookie card or something and they pull that the column poles that can be fascinating so there’s a lot of.
Kind of very specific category activity going there that I think I think a lot of us thought okay Amazon’s and do this Amazon is tried and it’s been
pretty terrible but I think it’s going to come from these really niche of Articles at first and they’re going to figure it out and then you’ll see it get more more momentum up into the broader retailers so those are those are my three.
[35:27] Wow those are three good ones I feel like you stole my three I’m just kidding
um no but I totally agree with all those I do think like we’ve actually seen Amazon launch some.
Selling of shipping services and I’ve seen Stan said they’re going to deliver 90% of their own packages this holiday so like I think that definitely is a thing even Walmart is now,
selling shipping services to other people including Home Depot so that’s totally interesting Trend hundred percent agree on the live streaming
like I kind of call it the D bundling of shopping and you know we have all these e-commerce sites that are good at buying things but we’re not very good at product Discovery and it seems like social and video or where a lot of the,
the new product discoveries coming from and then that that ultra-fast delivery for filling orders to give you all the words you are asking about the that that’s a huge thing and if you think about you know how much retailers are struggling with with
grocery profitability like it’s a double whammy that wow they’re trying to figure out how to solve for profitability the consumers moving to this even
you know inherently less profitable order so it’s going to be that that’s going to be an interesting disruption of the industry so if I were to add 3 to that.
I do think just the whole pandemic.
[36:41] Acceleration of great digital grocery like is when I talk about a lot and I still think that that is a huge thing like all those predictions about how much the pandemic was accelerating e-commerce for probably wrong but grocery delivery
Ecommerce probably did get accelerated five years and to me
maybe you know what will ultimately end up being one of the most important things that happened during the pandemic is Amazon invented a new grocery store right this Amazon Fresh concept
and it’s starting to scale there’s more than 30 of them now they have just walk out technology in them which
I would have bet against them having this quickly and there are there are lots of investigative journalists that have found.
Some interesting real estate footprints that would imply that it’s going to scale their that there’s a business plan footing out here that had like 300 of these in the UK which is a small island
um I think we could look back five years from now and see Amazon is a very meaningful brick-and-mortar grocer and and I think
20:21 is the year it it happened without us totally
acknowledging it so I think Jay W groceries an interesting Evolution one that I end up talking about a lot with my clients also driven by Amazon is retail media networks right so you know Amazon,
is that a run right now of about 30 billion dollars in ads it’s probably the most profitable business Amazon has I think this this.
[38:08] Battle for eyeballs between retailers and traditional digital platforms is super interesting and I think you know you set the layer who is.
One of the the.
The key guys at Amazon media like we had him on the show when he moved to Fresh Direct and he’s now running Walmart Connect Four
for Walmart so you’re seeing the Retailer’s hire these like credible media sales people and I think that’s a.
[38:37] A going forward a significant part of every retailers plan is how to be their own media Network how to get eyeballs and how to monetize those eyeballs and that’s a new new skill for a retailer so I think that’s a big deal and then
the last one I’m gonna throw out,
is one that I am surprised doesn’t get talked about more but it’s the apparel retailer she in and I think they are super interesting they’ve had phenomenal success they’re probably globally the largest apparel
reseller on the planet right now and their their annual revenues are more than than H&M and Zara combined so so remarkable.
[39:18] Story of fast acceleration but the bigger story here is,
to me Sheehan is very representative of the democratization of apparel that like for the longest time
we expected Mickey Drexler or Versace or
Yeezy to tell us like what was cool to wear and then we waited until we can buy those clothes and we bought them
and I just I think that model is totally dead now I think the apparel that sells best the stuff that she and sells the stuff that target cells the stuff that
Stitch fix cells is frankly based on customer data it’s watching customers finding out what they like and then making it really fast and so
Sheehan isn’t isn’t fashion driven by a stylist It’s Fashion driven by Tick-Tock right and an Instagram and I think that’s a,
a lot of apparel companies haven’t gotten the memo yet that the consumer is now squarely in charge of these fashion trends.
[40:18] Yeah saw an article about these guys were this this one lady she did this Argyle Sweater outfit and.
It was on Instagram it got some viral love they took that and it created a hole
the outfit they had copied it or I guess fast fashion and I don’t know how the how the IP Works in this world but they had replicated it and they I think they even used her picture which I think was with articles about that she didn’t really you know,
realize that that effectively shows open sourcing this thing to the world and then it became a top seller for them like in 60 days it was insane how fast that they identified the trend and get the.
The product out there it was like you know NASCAR fashion or something.
[41:03] Yeah it’s crazy if you think about like the fashion traditionally worked like.
Dudes would show up in Paris at the Fashion Show and show these cool Styles and then everyone would steal those Styles and send them an effector he’s and two years later those fact those Fashions would be available at Neiman Marcus.
Two years later and in so the genius of Gap was that they got those Fashions to the mall,
18 months later instead of two years later and the the disruption of H&M and Zara was that they got them to the mall six months later instead of 18 months later right.
She and sees that woman in the crop-top Argyle Sweater
and they have they have that fashion available in a week and here’s what super interesting they don’t make a million of them and hope they sell which is what all those other retailers had to do,
they make 12 of them and if those 12 sell in 8 seconds versus 20 seconds then they make thousands of them.
Right and so it’s really data-driven real-time a/b testing on apparel trans at a speed that that these kind of traditional apparel Brands can’t even imagine.
[42:13] That’s because they have the factory right there that they’re able to do that or like to have some.
[42:17] Yeah and they.
In Shane’s case they don’t own the factories they have a net like that it’s a gig worker economy for factories right like so in the same way that boober recruits a bunch of Uber drivers she and recruits a bunch of factories that they then go to and say hey we’ve got some
some ideas for some new models and find one of those factories that accepts the order and makes the
the stuff and so in sometimes there’s our Factory driven ideas sometimes there she and driven ideas but but yeah that’s that’s the model and you know there is a
Dark Side to this I got you know a lot of its there’s a lot of questions about the labor standards and practices at a bunch of these factories and of course there’s.
You know a lot of the stuff that gets bought on Shion is super cheap and gets worn once and so it’s a ecological disaster I would argue the industry it’s disrupting is also.
Kind of a you know it has a lot of dark sides and and is not very sustainable so I like I’m not sure she and improves on on any of those problems but from a pure consumer demand standpoint,
I don’t think we’re ever going back to you know these like anointed tastemakers that like decide what we’re all going to wear for the next year.
[43:32] Yet clearly clearly that model is sailed having.
[43:36] Indeed well listen Scott I know we both have to run but that is probably a great place to wrap up our final show of
20:21 I need to take some downtime not to see my family or anything like that but
in early January we always like to record the forecasts show and hit
traditionally you crush me and so I feel like I need to spend a lot more time thinking about my forecast before the forecast show comes up.
[44:07] Yeah challenge accepted I will also be thinking about this in a background processes I’m enjoying the holiday I think this is a good time to thank our listeners you know we’ve
you know we’ve seen our listenership grow pretty steadily over the years and we really appreciate everyone giving us time to
your day to talk about the topics we talk about and we get a lot of great feedback and really engaged set of listeners and we really appreciate you listening
and if you want to share your appreciation one of the ways you can do that is through a five star rating so fire up your favorite
podcast listening technology and if you would leave us a five starters we that would be the perfect holiday gift for us.
[44:47] Yeah that’s exact five stars is exactly my size to Scott.
[44:50] How about that.
[44:53] Awesome well most of can’t appreciate enough the listeners for spending this time with us every week this is a lot of fun for us to do and I learned so much from
the the chats I have with folks after they listen to the podcast so I’m that is one of the things I’m super grateful for.
[45:10] Everyone have a great holiday Jason you how enjoy your trip to California.
[45:14] Thank you you have a wonderful holiday as well and until next time happy commercing!
EP282 - Cyberweek Recap with Salesforce's Rob Garf
The Salesforce shopping index combines data and holiday insights on the activity of more than a billion global shoppers across more than 54 countries powered by Commerce Cloud, billions of consumer engagements and millions of public social media conversations through Marketing Cloud, and customer service data powered by Service Cloud.
We cover e-commerce sales in November 2021 vs 2020 and 2019. First mile issues, last mile issues, inflation, winning and losing categories, predictions for December.
Episode 282 of the Jason & Scot show was recorded on Tuesday, November 30th, 2021
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.
[0:24] Welcome to the Jason and Scot show this is episode 282 being recorded on Tuesday November 30th
20:21 I’m your host Jason retailgeek Goldberg and as usual I’m here with your co-host Scott Wingo.
[0:39] Hey Jason and welcome back Jason Scott showed listeners well Jason we’re in the thick of it we are recording this the day after Cyber Monday
this is our favorite time of the year and who better to help us recap the turkey five than longtime friend of the show Rob Garf he is the VP and GM retailgeek
at Salesforce and he is here to sling some hot data and some fresh takes welcome Rob.
[1:06] Hey Scott Jason it’s great to be here as always happy holidays.
[1:12] Happy holidays to you Rob I feel like it wouldn’t be holidays if I if we weren’t recording a podcast with you it’s kind of an annual tradition.
[1:20] Absolutely look forward to it every year.
[1:22] So before we jump into it remind our listeners who you are and what you do for Salesforce.
[1:30] Yeah absolutely some VP and GM for retail so what that means is I oversee
the industry product solution and insights and the insights portion is really what brings me here today we have a team whose Charter is really to stay out in the industry understand where.
The retail space is going and that helps us really think about our products and solution but also have really interesting.
And informative conversations with our customers as well and most of that data and Analysis is based on our shopping index are shopping index looks at all the data that flows through the Commerce Cloud platform we obviously bubble that up.
We strip out all the pii data and it really becomes the de facto standard of what’s happening in retail and this is our
holiday it’s our Super Bowl where we really allow the data to come to life and not only project where.
The industry is going over the critical holiday time but report on it so it’s been a couple of sleepless nights over the last week and really excited to be here today to crawl through the data and just have really good conversations with two good friends.
[2:38] We are excited to do it and I’m extra excited because if I’m not mistaken it seems like you have a bigger scope than you did last time you were on the show did you get a promotion because of what a good job you did on the show.
[2:52] I think it was exactly that and I appreciate it by the way your check is in the mail yeah you know certainly.
It’s important to Salesforce to look at Industries and industries as a practice within Salesforce has really
then one of the focus one of the priority areas over the last couple years and so for retail taking a real close look at what products what Solutions we have to bring to Market
across the entire supply chain obviously in Salesforce we grew up in the sales and service space grew to marketing Commerce now and analytics and data and
collaboration but we want to look at it always through the industry lens and in this case
that’s retail so it’s my Charter along with the insights that I talked about a minute ago to oversee our product and solution strategy so thanks for that help by the way.
[3:43] It was well-earned and well-deserved so good props test Salesforce erect for recognizing talent and I want to call out I feel like you’re famous for three things first for being on the Jason and Scot show.
Second for all the great work you do foreign with your co-workers at Salesforce and then third you are the.
Kind of egotistical center of the whole garfi movement.
[4:11] Haha you know I miss that’s one of the many things I miss about
the pandemic is not being able to do live gar fees that I’ve been out on the road.
Over the last I don’t know how to say four to six weeks or so and it’s been a highlight to get back at that a little bit so can you promise me gentlemen in a couple weeks hopefully knock on wood will be back in New York for NRF and we can get another garfi of us
we can try it virtually here it’s just not always the same so we can see how that plays out.
[4:42] Yeah yeah we’re always up for garfi and that’s got several in my library.
[4:46] So before we move on from that explain to our listeners what a garfi is.
[4:51] Yeah of course so garfi obviously a play on selfie and you know I struggled for a long time trying to find my persona.
Via social you know first was LinkedIn and you know what I realized is I spent a lot of time on the road
and when I’m on the road I need a lot of awesome people and when I meet those people I get really inspired
and so I just you know for no plan in particular started taking pictures with them and me whether it’s one-on-one one you know a few of us or me up on stage and just turning around and doing
I selfie with a bunch of people in the crowd and a much more creative person than I am.
Salesforce’s social media team
all of a sudden one day said that’s a garfi and then you know really where it came to life is over and our F that same person had a great idea to say hey why don’t we make some money for a charity by.
[5:53] Donating a certain amount of money.
For every time somebody takes a selfie or a garfi with me and that I guess I don’t know two or three years running we’ve connected and collaborated with the retail orphan initiative
great music in friends and really raise money for kids in need
and so it has a nice altruistic angle to it which of course is part of Salesforce and ar111 model and giving back really please really closely to our values so I’m able to do a couple of things,
really share with those in the social sphere what I’m up to hopefully helping.
Inspire them like it’s expired inspired me and then finally raise some money in and around NRL so that’s kind of I don’t know if I’ve ever shared and not much detail the Genesis of it but it was fun doing it so thanks for asking.
[6:49] Yeah and I also admire I feel like it’s an underappreciated talent to take a good selfie I feel like I really struggled
frame the photo well with my arm fully extended and hit the shutter and you I don’t know if you started out doing it this easily but I feel like in more recent years it seems like you do it effortlessly so just hats off to you on your
quality of your selfies.
[7:12] I mean that’s the best compliment I’ll get all day or holiday I can tell you that right now I started I was really bad
like really bad and now my family like I’m the go-to during holidays to be able to do it so yeah it’s you know chin up
don’t go you know don’t angle to I don’t go to Le I mean I could write probably a social posts are a blogger I don’t know there might be something in there.
[7:36] Art of the the art of the garfi.
[7:37] The art of the confit.
[7:39] Yeah I strongly I strongly encourage that and then getting slightly closer to like topics that that our listeners came for
I do want to caveat one thing we’re going to be talking a lot about how holiday has played out and what the interesting Trends are
and just I want to underscore the mainland’s you’re looking at this through is a online lens so I’m sure I’m sure the bulk of your
clients are omni-channel and you get some some good insight into what’s happening in stores but the actual data set is measuring how much consumers shop and buy on websites is that
do I have that right.
[8:16] Totally you got that right I mean if you think about it as I mentioned the shopping and X which we have throughout the year and we release it
quarterly is really the backbone of it it’s billions and billions of Shoppers digitally it’s across thousands of sites across dozens and dozens
of countries yeah like you said we do do primary research and we do have some instrumentation understand some of the things that
show the intersection between online and digital but the short answer to your point Jason it is really primarily the digital shopping that we’ve seen.
[8:53] We’ll call let’s that’s really good backdrop and we should definitely dig into the garfi thing on another episode but the enough foreshadowing how are things going for the holiday season give us kind of the the big picture.
[9:08] Yeah well you know coming into this sky
the way we’re looking at it even going back till June was you know if last year’s headline with ship a gettin was all around
a smile how
and if products are going to get to the doorstep of the consumer this has been all about the first mile we’ve all heard about it I think you’re going Supply pain right so it’s more of the
inbound Logistics the container stuck
off the port of LA and trouble getting the containers off the vessels in through the domestic supply chain and that’s really,
kind of cast the context for the holiday and you know the headline in addition to the first Mile and the issues that
retailers have been seeing is a pulling forward of
holiday demand you know it’s something that retailers have wished for four decades upon decades
and this year it actually came to life I have a lot more to share on that you know I can keep on going but I can also pause as well to see if you have any.
Follow up questions are just you know you can just fly me up I can tell you a little bit more of what we’re seeing broadly in the holiday so far.
[10:22] Yeah one of the theories was that
you know the Press wasn’t shy about the supply pain and consumers you know when my aunt ji is asking me about this stuff I was I know it’s reached the zeitgeist.
How do you say it pull it Forward are you talking like right even like before Halloween you saw unusual activity or like give us an idea of like how how much of the the oxygen move to the front of the balloon there.
[10:47] Yeah yeah yeah well like that oxygen moved to the front of blue and I like that might have to borrow that Scott yeah so so what we saw is that.
Real demand got pulled forward you know if you look at the first two weeks of November we saw an 18% year-over-year increase and that is significant last year we saw a bit,
in October because Prime day if you remember got pulled into October and we had that halo effect so if you were named Amazon you were still you know getting some of that Halo of the demand and the buzz and the conditioning that happened
but it really simmer down late October through.
November until the week before cyberweek this year really you know again as I mentioned 18% year-over-year increase for the first two weeks of November
you pull that out to the first three weeks in November we saw a 10% your of your increase so there actually was a pull forward and you know I want to.
[11:48] Put this in context I mentioned
retailers have been hoping and dreaming for this forever I call this discount chicken you might remember I reference this
last year probably last couple years I’ve been on the show and this is this phenomena where retailers go into the holiday season with this amazing
promotional calendar all the expertise all the data all the analysis and after the first week.
They usually rip it up call an audible and they chased the discount and you know consumers have been conditioned to wait it out.
Consumers typically win the game a discount chicken they wait until Black Friday they wait until Cyber Monday,
for that last big deal and this year I have to say given what we’ve seen so far consumers aren’t winning at that game.
Retailers have really held their own on discounts and you combine that with like you mentioned the headlines that consumers were seeing around the supply chain and you know inflationary concerns as well and they were actually
buying early and that did have an impact by the way spoil alert on cyberweek all you know all in.
[13:06] Awesome will you open the door so let’s dive in there so first of all you you call it cyberweek and so what what is that weak to you does that start Thursday Friday when does it.
[13:17] Yeah good call so yeah we look at cyberweek from the Tuesday before American Thanksgiving through Cyber Monday it’s the way we’ve been,
reporting on it for the last bunch of years than just for like for like now analysis we’ve kept that I know there’s the turkey five and the Cyber five
that certainly are looked at for benchmarks and you know partly why we do that is we started to see
early on a smoothing out of demand not just through the course of November as I just referenced before but over the course of
the week and we wanted to represent that in a more holistic way so you know the short answer to your question we look at it from the Tuesday before Thanksgiving all the way through Cyber Monday.
[14:01] Perfect and fun fact for our listeners Thanksgiving is obviously a North American holiday but Black Friday and cyber week our Global phenomenon which is interesting
the holiday is not Global but the shopping is so how did cyberweek play out we’re recording this a day after cyberweek so we’re we up from.
20/20 and I’d also love to know how he did versus 2019.
[14:24] Yeah absolutely so we wore up so for the course of cyberweek we were up four percent year-over-year and that represents about sixty two billion dollars with the be
of digital revenue and you know you look at that number and you say wow that’s kind of you know muted it’s kind of leveling off and
I can’t lie it is because we saw such
a significant Spike to your point from 2019 to 2020 so there’s a whole new Baseline that’s been set but to really replicate that seismic growth that we saw last year with
non-essential retail closed people really focused on their health and their safety also looking at dealing with retailers that provided convenience and Trust.
I see four percent year-over-year
as as good as you know a retailer should hope right again because retailers should have seen brand should have seen that pulling forward of demand earlier in the season.
[15:28] Yeah and then can you and part of it is last year was a monster year for digital so like do you do you have your like do you do it
a two-year year-over-year or do you remember what the growth was last year for cyberweek just for frame for comparison.
[15:44] You know I don’t have that exact number in front of you what I can say for the holiday so November December was 50% year-over-year growth so you know you got to imagine suck cyberweek was way up there I could tell you that Force four.
Black Friday in the u.s. because those are u.s. numbers just to remind you to sixty two billion at the four percent year-over-year we saw 20 percent growth.
On Black Friday so that gives you a sense of what you saw throughout the year a lot of the growth last year actually came the week before.
Cyberweek and in large part because the two of you everybody saw a ship again in like everybody right it made the Today Show.
Large part really in the growth the for cyberweek last year we saw something like eighty percent year-over-year growth for the week before.
Cyberweek because consumer saw the headline you know I was asked by a customer just recently in the specialty apparel space.
Who worked for the wholesale division asking will this year.
Consumers understand the issues that are happening in the inbound supply chain
unlike last year where ship again was front and center I mean we all felt the Bermuda Triangle of packages being you know delayed significantly so as a consumer.
[17:07] That kind of triggered you to think hey maybe I should buy early to make sure I get the product and also by the way maybe I should buy online and pick up in store so I know I can actually.
Pick it up because it’s more black a smile under my control.
[17:22] That’s my long way saying once again we saw growth last year in large part 3 cyberweek Black Friday we saw twenty percent so this 4% bringing it back today.
Around cyberweek was
you know leveling off from prior years but was on such a significant or based on such a significant New Normal that we really hit last year and by the way we don’t see the snapping back to what we saw before the pandemic.
[17:51] Yeah and I think that’s a mistake people make and in their head when they’re looking at growth rates they see this year’s 4% is smaller than last year’s twenty to thirty percent and they say oh gosh digital shrinking
and no it’s growing off a huge number from last year it just growing in a smaller slower rate than it than it did last year.
[18:13] Exactly and by the way people are getting back into the store right especially for those not essential retail we’re experiencing something and they want to
go talk to a knowledgeable store associate and want to touch and feel the product you know they actually want to see friends out in a mall believe it or not and so there’s you know.
A rising tide here that’s really lifting both digital and physical so you can’t
kind of look at one without the other I don’t think there’s a cannibalization happening per se because you’re still seeing growth but you can’t forget what’s happening
in-store this holiday.
[18:48] Yeah it’s super interesting and inside just to highlight like
macro Trend that you’re sort of underscoring here so this year cyberweek grew around 4% but holiday digital is growing in like ten percent so I’m gonna I’m gonna do risky public math
that sounds like the holiday spike is kind of flattening out and holidays becoming more about that hole.
Um cyber November if you will instead of instead of cyberweek is that do I have that right.
[19:21] You got it spot-on Jason you know just throwing some more numbers at you because I know you love them
but I know there’s a lot is that for November and you hit it by the way you said 10%
we saw based on a nine percent year-over-year growth across,
the month of November and so in the US that represents 136 billion dollars of online sales
so there is this smoothing out there is this flattening I’m not ready to put the nail in the coffin for Cyber Monday and Black Friday just you know consumers are just so
condition to shop on those days but retailers can’t ignore
the fact that you know these spikes are still relevant but there is this smoothing out that started even before this year and we saw even more pronounced this year.
[20:16] Yeah I was talking to a very big client and they were talking about how early in his career they used to celebrate this anomaly where the wear like during cyberweek they would have their.
There billion dollar day in total retail sales and this year every day in November is a billion dollars for them.
So I am still curious even though it does seem like it’s slightly less relevant it still is a super interesting novel to me novelty to me can you break down.
The key days within cyberweek like I’m always interested in.
E-commerce sales on Black Friday versus Cyber Monday and whether you know with the Advent of the smartphone are we selling more stuff at the Thanksgiving table on Thursday what sort of Trends did you see across the week.
[21:11] Yeah I love it that’s awesome yeah so let’s dive into that you know a couple of things here
you know Cyber Monday we saw a three percent year-over-year growth representing eleven point three billion and digital sales on Black Friday we saw five percent year-over-year growth which represented
thirteen point four million and online sales and so we saw.
[21:38] And this isn’t the first year on this it’s happening over the course of the last three or four maybe even five years.
That Black Friday is a bigger digital sales day
van Cyber Monday let me say that again Black Friday according to our data is a bigger digital sales day and Cyber Monday a lot of that you hinted at it Jason is that Cyber Monday you all know this was really.
Coming to bear from our friends at the national retail Federation.
To coin a term to signify people getting back into their office when the internet was not so great at home so they can get high-speed connectivity and Shop but now.
We’re all connected right we’re all connected all the time and so in fact over the course of cyberweek 61%.
Of borders and close to eighty percent of traffic was on a mobile device by the way that’s phone.
To be specific that doesn’t include your tablets.
And so there is this moving out partly because of connectivity what we saw in Thanksgiving for the last couple of years is a growing.
[22:56] Disproportionately growth I’ll say over Thanksgiving because you kind of.
Finish your meal you’re done with your crazy uncle Lou and you want to sit on the couch a little bit you can press and you pull out your phone and
you know shopping generally and especially over the holiday is you know totally embedded and fragmented now you often get inspired by what you see on your phone.
When you start shopping what we saw this Thanksgiving actually was.
There was a little bit of leveling off we feel like people were more present
last year I know I didn’t have Thanksgiving and the one or two times over the holiday we did get together last year was underneath our patio heater we
probably one of the last people in the country to get one and our fire pit and people want to be present this year and so.
It wasn’t as strong what I thought was interesting is two more points I’ll make is.
[23:55] Saturday Sunday we’re pretty strong and those are generally pretty light days but this year people are online and people were buying so.
You know I’ll pause there probably a lot more to talk about but certainly
again you see these Peaks happening with Cyber Monday with Black Friday in particular Black Friday where I should say one more thanks I’m just thinking about it is you know obviously Black Friday digitally was really large because
more stores were closed and even if they were open people still felt more comfortable buying online.
[24:29] Yeah just just to sort of echo that point Walmart told me that in 2019 they sold a billion dollars worth of turkeys on Thanksgiving and this year they sold 10 billion dollars worth of turkeys.
So like a twenty percent jump in in American turkey consumption so that.
[24:50] That’s crazy that’s amazing.
[24:51] Yeah so sir clearly indicating that people were excited and did get back together so I almost wondered if that was gonna put a damper on the online shopping but it seems like it really didn’t.
[25:03] Not across the entire cyberweek it was still again I I’ll risk even say healthy but probably closer to moderate growth is what I’ve been talking to our customers about but again that growth.
I’m really or moderate growth is because of the earlier demand which retailers that’s what they wanted that’s what they got they should be smiling and be happy.
[25:27] Very cool so just for the record Black Friday bigger than Cyber Monday for the first time that’s pretty I think it’s worth saying again.
[25:36] Yeah it is it’s kind of interesting because you know Black Friday think about is such a physical store holiday right and.
It’s really smooth it out and I know I’ve used that word before but it’s really the theme for this holiday,
and I think we’ll see how I think it is a sign of things to come by the way I don’t think this is now an anomaly but rather.
How we’re going to view the holiday season moving forward finally it didn’t really by the way pull as forward as I would have suspected into October we saw some blips here and they’re based on.
The promotional calendar but it really started in Earnest on November first.
as a pure play e-commerce guy I’m glad we kind of overtook Black Friday and so yeah the so now that now that we’re through these key days does it change your forecast up down or you feel like it’s kind of
right in line with what you guys were expecting.
[26:34] Yeah we were expecting 10 percent growth over the course of the holiday in the u.s. and 7% growth.
Globally we’re sticking to that right now we’re about just shy of 50 percent of All Digital sales in the books for this holiday.
But we still have a way to go and in fact fun fact I guess that wasn’t the exact questions got you ask but I’ll grow it out there is about one-third of All Digital sales happen in November and December.
So yeah we expect
there are still a lot of sales to be had out there and we are anticipating similar results and so we’re staying Pat on our
our ten percent growth year over year across the entire holiday season for digital.
[27:22] Wrinkle any indications of the data so far if you mentioned kind of that first mile any indications of other than it pulling forward that it’s you know
that it’s causing any kind of problems like increased stock outs or we’ve had this first wave and you’re worried there won’t be anything on the shelves at the back end or what do you see in there.
[27:43] We do see some concern with that you know I’ve been cautioning anybody I’ve talked to so I’ll say here now is if you see something you like
buy it don’t wait for that last big discount we can talk about discounts in a little bit if you like but you’re not going to necessarily get it in the product
might not even be there what retailers have done based on our data is pull back on their assortment and so what we saw is.
First cyberweek in the u.s. we saw a shrinkage of 6% of product catalogs so retailers are being conservative.
They’re selling what they know or hope is available but there is a concern as we go into these last couple of.
Weeks of the holiday as The Last Mile and shipping cut off window starts to creep up
what it will look like for those replenishable items if they actually will be replenishable but we thought was super interesting as I just mentioned is retailers were really being conservative
and trying to do you know going deeper in there.
[28:55] Inventory rather than going broader in their assortment and that’s evident by what we saw in cyberweek with a six percent
decrease in the product catalog where is generally speaking for cyberweek you’re seeing you know anywhere from a five to ten and some cases of fifteen percent increase in that product catalog.
[29:14] Nursing and then let’s flip to the other side last year we had ship again in the indications there that that the shipping infrastructure was having problems keeping up.
[29:26] You know we’re feeling a lot Rosier than we did last year certainly you hit it on the head with chip again and we.
[29:35] We anticipate in Saab 700 million packages at risk and those in most cases were delayed that was pulled back
tremendously this year
retailers really moved over the course of the last 20 months from Scrappy standing up some pretty Innovative but Scrappy nonetheless solutions for Last Mile and they’ve really worked to scale that
and to not only do it effectively but efficiently efficiently meaning don’t crush their margins by trying to get the product to the consumer buy online pick up in store still seems to be the winner,
this holiday so those that put it in place over the course of the pandemic are actually seeing.
Some really nice benefits from it one interesting fact that the team was able to gather was for those,
retailers on Black Friday that offered buy online pick up in store so orders placed with the confidence at home and being able to picked up in and around the store grew at a 50% higher rate than those
that didn’t so consumers think about it over the course of the pandemic really showed loyalty retailers who are able to provide health safety
convenience and Trust to the denominator there is removing the friction from the shopping process and those that offer that service were really.
[31:04] Able to leverage and benefit from that in the new consumer Baseline of removing the friction.
[31:12] Yeah you know it’s an interesting thing on the last mile.
Last year Amazon passed FedEx in terms of the number amount of packages they delivered themselves right in there.
Depending how you count something like 30 to 40 percent of all e-commerce
the middle news this week one of the supply chain guys that he expects by the end of this year or the first quarter of next year that they’ll not only will they ship more packages than FedEx they’ll ship more packages than UPS so
Amazon could be the large the largest non-governmental last Last Mile in the in the country by next year.
[31:50] Yeah you mean it’s quite amazing
how large Amazon has gotten with Last Mile and I give credit to anybody who isn’t last excuse me who isn’t Amazon.
And who is in a big box retailer who has you know some capital of fro at The Last Mile Challenge and you know those that partnered with these you know collaborative networks to be able to.
[32:16] Outsource if you will the the last mile or even
provide buy online pick up in store to you know Outsource The Last Mile to the consumers have really benefited and you know where we saw unfortunate gap between
the large players and the neighborhood and local players they somewhat of leveling the playing field.
[32:39] Will be leveraging the stores not only for a filament Center
but an experiential Center as well and I know I’m shifting a little bit but it’s something that comes to mind Jason Scott is you know our research showed coming into this holiday.
Those retailers that leverage their store for more than just scanning and bagging will benefit in fact 60% of.
Online orders will be influenced
by the physical store let me say it again 60% of digital will be influenced by the store which is somewhat the opposite that for store really came at us with five ten years ago about digital orders.
store orders and you know that could be whether the store is generating demand or fulfilling demand and that could be from
fulfillment or store associates being social media managers or
you know even Service agents whether they’re in the store or they’re picking up micro shifts at home and then certainly obviously pick packing and shipping and getting the products ready to either be picked up or Filled from there so I know that was a little bit of a tangent to say you know most
don’t have the scale of an Amazon and so you got to get really crafty and Innovative of how you’re going to
kind of level the playing field particularly around Last Mile.
[34:07] Yeah no totally agree and it’s actually if you have too much free time on your hands it’s really fun to read all these retailer
Q3 earnings reports because like they
often embedded in the back of that they do talk about like the percentage of their sales that are fulfilled by store influence from store and that that’s a standout stat for almost every retailer now is how important that store is
for the digital supply chain so that’s that exactly mirrors your data I want to
like there’s so much going on this holiday I feel like we could we could do a two-hour show which we won’t do to our listeners but another interesting one is
pricing promotion and inflation and how all that pays out like it was a lot of the growth from this year in your guys estimation was it.
Inflation and consumers just paying more for less or or was it.
[35:00] Yeah yeah we got the data and it’s
it’s fascinating it is really it’s you know it’s fascinating on one hand but it’s like pretty basic on the other which is a lot of the growth was driven by
increase prices and so what we saw for instance over cyberweek the average selling price was up 11%.
In the US and 5% globally what we also saw at the same time is that order volume was lower,
and average order value was higher so the math says,
that people are buying fewer items at fewer retailers because they have
kind of a zero-sum game you know they have a specific budget and so if you’re buying things at higher prices you’re buying less of those things and you could equate the 11%.
[36:00] Increase of average selling price to inflation and we’re seeing that across the board meeting across the different product categories so you know.
That’s happening we predicted that for the second half of the Year retailers and brands.
We’re going to have an incremental 223 billion dollars of cost of goods sold and that’s from manufacturing supply chain labor they absorbed a good amount of it but.
They had to pass some on to the consumers consumers they’re happy they’re positive.
They want to focus on buying things that they want versus just needs.
[36:40] So they bought now what retailers did to the discount piece of this and why consumers are likely to lose out on discount chicken this year is discounts were the lowest levels and we’ve seen.
Andres when I say that discount rates where some of the lowest we’ve seen in recent history and so the discount and the rates being lower I think it’s something like eight percent.
Down your view here in the u.s. is because you know retailers.
Just had to hold their own right and really protect some of the margin and you know even on Cyber Monday where you see some of the biggest discounts it just wasn’t happening this year.
[37:28] Yeah interesting you know you talked about consumers picking fewer retailers and buying being a few items for more money I wonder to me that sounds like it’s a recipe for sort of retail,
I hate using this word because Steve Dennis will get all excited bifurcation
that you know if consumers are buying less items than their first choice retailer is likely to win and they’re you know kind of longer tail retailers are likely to lose those that are using that at all or do you think that’s how it’s going to play out this year.
[38:02] Yeah I do just plainly you know loyalty has been redefined we don’t mention it before in terms of health safety,
convenience and Trust now that’s the Baseline and retailers really need to focus you know what we’re hearing from consumers they want to be treated special they want to
E M I don’t know what personalization means but when you ask them the attributes of it they want that right they want to feel like they’re unique two-thirds say they want to,
have a unique experience and feel like they’re being treated uniquely the challenge based on Research that we just conducted is
only one-third of retailers can actually harness and democratize that data and turn it into personalized promotions and prices and offers and so.
Yeah there’s this will give a shout out to Steve face Steve happy holidays there is this bifurcation taking place and it’s you know
so important especially as we go into this cooking this world for retailers to really harness their data more than they ever have it’s not,
a new story right we’ve been talking about for a while but this first part is
zero party data so important because that same research showed three strikes and you’re out after three bad experiences
retail with a retailer or brand consumer is going to abandon and go somewhere else and not come back so yeah just I think you’re onto something this
and I need to really not just a choir but think about the consumers that you have those loyal shoppers.
[39:31] Yeah if only there was some kind of tool set that merged I Commerce and data and it all lived like I don’t know in the cloud that would be amazing.
[39:39] It would be kind of amazing woman that I know I think we’re in a pretty good spot.
[39:43] Someone should do that.
Another thing that’s been interesting to me regarding the inflation is it seems like some retailers are.
Passing more of the the costs on to Consumers than others and it’s been funny I don’t know if you followed all these all these Q3 earnings but there’s retailers that are like.
We pulled a lot of levers we got a lot of extra inventory in but it came in way more expensive we didn’t raise our prices a lot and so our sales have been great but our profitability is down and then there have been other retailers that are like,
consumers have been willing to pay more for a good so our sales are up in our profitability is up.
Side note I don’t I don’t follow this is much but the investors like the retailers that took the prophet a lot more than the retailers that acted as a shock absorber.
[40:31] Shocker yeah I think generally that equation that you just talked about not only sales but profit come back into play here retailers and of what I’ve seen
I’ve gotten somewhat of a hall pass over the course of the pandemic because you know the focus on.
Associate safety getting the product through the supply chain and so the Retailer’s took a hit there I think we’re taking you know a.
Refocus you know back on to profitability
and you know that’s why it’s interesting I was hosting a Roundtable virtually just recently and one of the participants one of the executives reminded all of us is of the
profitability of the box right we kind of lost sight up that’ll is what I mean by that obviously the physical store.
And I think we lost sight of that purposely over the course of last 20 months but.
And I think we’re going to have to really hunker down and really look at what that looks like especially as you know consumers have gotten used to having a lot of flexibility and choice around how they get in where they get the product.
[41:44] Cool and interesting data from the categories apparel has been under a lot of pressure since the pandemic
Electronics have been surging Home Improvement seems to be running non-stop it anything any changes to those kind of Trends we’ve seen for the last 18 months.
[42:02] Yeah you know I’ll look I’ll give you some information and across cyberweek.
Because it’s most recent but I think it speaks to what’s happening Scott or what has happened over the last 20 months.
Um what we saw in the hottest categories across cyberweek are luxury handbags with a sixty percent year-over-year growth.
Furniture at a 56 percent year over year growth.
In general Footwear at a 22 percent year-over-year growth now luxury handbags in general apparel I get it.
That’s going off of a base that shrunk last year nobody saw my feet on any zooms right so my slippers were just fine legs are handbags.
I know we weren’t really going out to many restaurants in SLE need to refresh that so the growth on Lower base or.
Shrinking base from last year makes sense for getting back out in the world you know we’re focusing on exponential categories as consumers like entertainment and travel and being outdoors.
[43:11] What really is super interesting is furniture.
Furniture has been on a tear because we’ve all been home and whether we’re redoing our outdoor patio set because that’s where we’re spending time outdoors I did for the holiday as I mentioned or it’s my home office.
You know what I can think about as my team look through the data is it’s a shifting slightly of
what people are buying for their home they’re buying more entertainment type of products whether it’s home appliances or its couches.
Or the like where people are coming back into your home after a long respite and we want to spruce up our home as well so you know like I said the handbags
from where I get it which is great to see Furniture you know ears.
Really didn’t know walls over the course of the pandemic and as we come through this holiday.
[44:07] Nursing how about any interesting toys you want to highlight like I think Jason mentioned the mixy as one that was kind of called out as being a hot toy.
[44:16] Jason what’s the Mixie tell me more.
[44:20] You are I don’t I actually haven’t seen any data on whether it came to fruition but the toy it was the toy the toy industry was leaning into and it’s like
it’s like a combination of a chemistry toy with a plushie so like like it create smoke and then a plushie comes out of the smoke I think is the
the gist of it the the big toy I’ve seen in terms of sales velocity is that the gaming platforms are selling like hotcakes.
[44:51] Yeah yeah yeah that’s what I was saying it’s really just a sample size of one where it’s like
for my boys 15 and 12 they’re all about whatever’s digital whether that’s devices or Dean’s on those devices so you know shopping is gotten a little easier on one hand but we have to also be really creative as well.
[45:12] Yeah I wonder we’ll see how it plays out but it doesn’t feel like Last Mile has had a big impact on on shopping up till now but like even if
give last-mile holds up in there’s no capacity problems we still have these holiday cut-offs right you know we still get to this date where we can no longer cost-effectively ship something to your home in time for the holidays
and I feel like there’s more digital gifts out there than ever before so you think of all the streaming services you can gift a subscription to all the content for these these gaming Platforms in these Computing platforms and I’m not
super Bush for this holiday but like I think we’re going to see more retailers offering enough teas and things this year so it I’m kind of curious if the back half of.
December becomes the sort of digital holiday season.
[46:01] Yeah we certainly saw that didn’t we Jason last year in terms of the shipping cut off.
Come in really early on the heels of Cyber Monday because the last mile issues and a lot of retailers really honed in on gift cards as another source of.
A gift and I think you’re right I think you’re right in terms of you know whether it’s and FTS maybe we’re a little early for that but we’ll see.
My colleague Michelle Grant has been tracking that really closely and she’s pretty bullish about the whole category as relates not only gifts but
the intersection between that and loyalty programs but yeah I mean I think it’s you know whether it’s gift cards to restaurants or travel
or the like gaming as you mentioned just I think there’s something that I really think there’s something to that.
[46:50] Yeah well listen this has been a super exciting conversation and I always like to end it on a total Debbie Downer note so the.
I’m curious if you have seen or have you guys are trying to figure out how you’re going to model like any impact from the new covid variant like in my world it feels like people were definitely planning to get together and more in person events but
it does seem like people are starting to second-guess those there’s all the news articles are talking about what what’s the correct pronunciation is it Omicron.
[47:27] Sounds good to me I’ll let you stick to that one I will try to because I know all.
[47:31] Got you I think a Peyton Manning screaming Omaha is my.
[47:34] Hahaha I like that reference nicely done yeah.
That’s a good question I as I mentioned earlier I only hope we can see each other in person at an arrest in January you know where.
We’re at Salesforce tracking just.
[47:53] Now this new digital world really closely because we’re not going back to the same.
You know mindset as we had before as our newly
assigned co-ceo put it is work isn’t where you go but it’s what you do and you know we’re living in this digital headquarters and it’s going to be hybrid I’ve.
Attended plenty of hybrid types of executive meetings over the course of the last month or two as people start,
get back on the road as it relates to retail you know I can’t really speak to what’s to come.
But what I can say is we tracked digital sales across the last 20 months as it relates to cases and maybe it shouldn’t be a surprise you know as.
Stores closed and I hope that doesn’t happen again but people want to hunker down and be home and order products online there was a direct correlation between cases and
order and sales growth in fact over the course of 2020 we saw a 50% year-over-year growth.
And by the way that was I’m sorry 57% to be precise and that was driven in large part by 40%
growth in net new digital Shoppers so these are people would hang on a line right they go to social media they be able to browse and.
[49:22] Do some research but they ultimately go in the store and buy they’re also buying new categories as well and so you know as things.
As we look forward we can certainly based on history see a correlation between digital which is set a whole new Baseline as I mentioned before and what that looks like as it relates to traffic orders and sales.
[49:47] Yeah it is certain there is no short – of variables to impact this holiday as it feels like we’ve gone from playing checkers to playing 3D 3D chess a little bit with all this stuff.
[50:02] Yes you’re right I need to bring in my 15-year old to help me play that game because yeah I’m a couple moves behind but you know we can look at data and that’s the fun part about our part of the fun part about my job as looking at the data and seeing what people have done.
[50:17] I I do other and that’s why we love having you on the show so much is because you bring the data in Rob that is going to be a perfect place to wrap for tonight because we have used up all our a lot of time on this
special cyberweek / Hanukkah edition of the show
so if you if listeners enjoyed this show we sure would appreciate it as our holiday gift if you would jump onto iTunes and give us that five-star review.
[50:45] Rob we really appreciate you taking the time out of your busy schedule to join us here on the day after Cyber Monday you guys have a fancy cool new portal or I don’t know what you want to HUB how do folks find that.
[50:59] We do have the insights hub for the holiday and so perhaps we can in the show notes or however you do it
these days share it with the crew but if you also searched Salesforce holiday insights Hub you’ll get right to it so you’ll see
all the data that I talked about and even more across marketing as we get further into the holiday season you’ll see it for service as well
and so I encourage your listeners
to engage through that portal and you know Scott Jason thank you so much sincerely I mean it’s been a long week not a lot of sleep for the team and me but.
It’s been a highlight to share this with you and make this an annual tradition so happy healthy and safe holiday season.
[51:46] Thanks Rob will have Jason put a link to the hub on his friend stir page.
[51:55] I will do it I will put it in all the socials and if folks want to keep track of the gar fees that’s its retail Rod right is it retail Rob Garf is that your Twitter handle.
[52:07] You got it retail Rob Garth and then I’m on LinkedIn as well.
[52:10] Awesome I will put links to all of the above Rob really appreciate it one of the conversations I look forward to every year and absolutely look forward to seeing you in person at the interrupt Big Show next month and until then