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The best way to chart a path forward is to understand the state of the industry and the possible changes that could occur in the near future. In business, that means keeping an eye on all of the trends in your industry, analyzing data collected by yourself or others, and letting the insights be your guide.
One of the most popular places to find insights is through industry reports put together by large organizations that have access to billions of data points, which can be graphed out and analyzed on a deeper level. The Shopping Index is one of those reports. It is put out quarterly by Salesforce and it contains information about consumer behavior, shopping activity across numerous platforms, and a look into how different industries are performing.
In one of the most recent Shopping Index reports, Salesforce collected information from more than one billion global shoppers in order to paint an accurate picture of what the world of ecommerce looks like. On this episode of Up Next in Commerce, we break down some of the key findings in the report with the two people who helped put it together, Caila Schwartz and Ann Marie Aviles. Caila is the Senior Manager of Strategy and Insights, Retail and Consumer Goods at Salesforce and Ann Marie is the Senior Associate of Industry Strategy & Insights at Salesforce. So what’s ahead for the holiday season? How much of the consumer behavior adopted during the pandemic will stick around? And why do people stay loyal to a brand? Find out on this episode.
Main Takeaways:
- Invest in the Basics, Not the New Shiny Object: Even if you have the coolest new technology and a unique website experience, if your customer gets to the point of purchase and sees you don’t have inventory or that delivery will take weeks, that customer is lost. Make sure you have the basics covered before you start bringing anything extra to your site.
- Come In, Stay Awhile: Past data has proven that when consumers adopt new digital behaviors, they tend to stick with that behavior. As every holiday season passes, and more people shop online, those customers are maintaining that online behavior long-term. Each holiday season can be viewed as a stepping stone in digital growth. The holiday season can create a new normal if you have a strategy to meet demand and then retain the consumer.
- Move to Mobile: In recent years, and especially during the pandemic, there has been a significant shift toward mobile and social shopping. As the number one driver of orders, mobile experiences should be a top priority for any business owner in the future.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
Caila: “Mobile is the number one driver of traffic and orders. And we’ve seen over the past several years mobile really accelerate as the number one device for consumers. So as a business owner, if you’re thinking about what device to prioritize, creating a great mobile experience is going to be the top of your priority list.”
Ann Marie: “Since the onset of the pandemic, 63% of US millennials said they had made a purchase over social media. So it’s really turning into what we like to call the mall of the 21st century, because social media platforms are where you can congregate with your friends, you can chat and you can discover new artists and new products.”
Ann Marie: “[Before jumping into new technology like shoppable video] the most important thing is to have a really solid idea about what products you actually have, inventory and fulfillment. If this huge journey is just going to end up in an ‘out of stock’ message, that’s a really bad experience. So before launching into shoppable videos, make sure you have a handle on the basics… Make sure you have a solid order management system, a good handle on where your inventory is, and how you can access it before moving further down the road.”
Caila: “When we think about the holiday season, inventory is a huge topic of conversation because fulfillment is going to be such a challenge and last-mile delivery is going to be such a challenge. There’s such a huge shift to digital, there’s a huge shift in B2C parcel delivery right now and the system is overloaded. So how does a brand or retailer get packages to consumers when they don’t even know if they can rely on traditional parcel delivery? You have to think about moving inventory closest to the source of demand, and that’s really all about utilizing your data, understanding where that demand lies, and getting it there. And in order to facilitate shipping from store or fulfilling from store, it’s about utilizing some of these newer tactics like crowdsourcing, Uber and Lyft, to deliver packages. So it really comes down to having a really great system, forecasting your demand, and not just forecasting your demand or forecasting where your demand is going to be, but making sure you put your inventory there. And making sure that all of your systems are able to communicate with each other so that you can have a really well rounded view of your customer, your organization and what steps you need.”
Caila: “What we know is that when consumers adopt new digital behaviors, they tend to stick around. So every holiday season, we see a huge surge in new digital shoppers. And at the end of every season, we see what we call a new digital baseline. So it’s like a weird set of stairs, where digital spend and digital traffic is pretty flat for most of the year. Then during CyberWeek, it spikes way up. And then it starts to fall toward the end of the season, and then once we hit January 1, it spikes back down. But it never goes back down to the level that it was before CyberWeek. So it’s like a stepping stone or set of stairs. It just keeps creeping up after every CyberWeek. What this tells us is that consumers are adopting behavior that they might not have otherwise adopted if they had not been enticed to shop online.”
Mentions:
Bio:
Caila Schwartz is a Senior Manager, Strategy and Insights, Retail and Consumer Goods at Salesforce. Prior to this role, Caila served as a Senior Strategic Marketing Data Analyst for Demandware. She has a Bachelor’s from Wellesley College and is based in Charleston, South Carolina.
AnnMarie Aviles is a Senior Associate, Industry Strategy & Insights at Salesforce. Prior to her work at Salesforce, she worked at Forrester in a number of different roles. She earned a Bachelor’s from Colgate University and is based in San Francisco, California.
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Transcript:
Stephanie Postles:
Welcome, welcome to our very first roundtable style episode. This is Stephanie Postles, Co-Founder of mission.org and your host of Up Next in Commerce. Today, we are chatting with Caila Schwartz and Ann Marie Aviles. Ladies, welcome to the show.
Caila Schwartz:
Thank you.
Ann Marie:
Thanks for having us.
Stephanie Postles:
Yeah, I’m excited. It should be interesting having a three person call, like I said, it’s the first one. So we’ll see where it goes. It’ll be fun. So, Caila, can you first introduce yourself? Tell me a little bit about you and your role?
Caila Schwartz:
Yeah, so I’m Caila Schwartz. I’ve been with Salesforce for six years now. I am on the Industry Strategy and Insights team focusing on retail and consumer goods. And I am responsible for several initiatives throughout the year that our team puts out into market, which include our quarterly shopping index, as well as all of our holiday reporting. So really utilizing real shopping data to understand the consumer and help put together some insights that can help our customers make some strategic decisions.
Stephanie Postles:
Amazing. And Ann Marie, what about you? Tell me a little bit about your role?
Ann Marie:
Yeah, happy to. So I’m also on Caila’s team, but I have a slightly different focus. So I’ve been at Salesforce for just about a year and a half now by the way of Forrester research. So my background is definitely in research. And so I’d like to think of the shopping index as a fine line and I provide the cheese and the consumer perspective on what their priorities are, how their habits are changing through a lot of in depth research work.
Stephanie Postles:
Amazing. So that’s a good place to start, then I really want to dive deep into the shopping index. So maybe Ann Marie, if you want to start there telling me a little bit about how long is the shopping index been around? What is it? And how can a customer or any shop owner use the shopping index to further their business?
Ann Marie:
Sure. So for this one, I think Caila, since she actually created the shopping index would be the perfect person to describe its origin story.
Stephanie Postles:
Perfect, Caila, take it away.
Caila Schwartz:
Thank you, Ann Marie. Well, I can’t claim the genius behind it because it was actually created by someone much smarter than myself, a several, several years ago. I would say about maybe its seven years ago. So we’ve been publishing, like I said, the shopping index quarterly for the past … I want to say six or seven years. So it’s one of our longest running assets. I inherited it about four years ago. And it came out of a project or initiative to understand the consumer. And back in the day we were from the Demandware. So I worked for Demandware, before I got acquired by Salesforce, and we had access to all of this data from our platform.
Caila Schwartz:
And internally, we started asking questions about how we could potentially use this data to help give insights to our customers on consumer behavior. And the shopping index was born. So it’s really become the bedrock piece of content that helps us start to ask questions that then lead to a lot of these other great pieces of content and research that we do. So like I said, it’s our longest running asset. But as far as how consumers or customers are using it, it really is a benchmarking tool. And it’s meant to be like a sounding board.
Caila Schwartz:
How are you performing against your peers? Is there opportunity for improvement? And using it as a way to uncover some of those questions for customers, about their business, and areas that they can focus on?
Stephanie Postles:
[inaudible 00:04:51]. That’s a good point to go through what are some of the really key metrics that people find the most value in and maybe we can talk through maybe what Q2 look like. What are some of the things that people really rely on?Caila Schwartz:
That’s a great question. I think it really depends on the individual business and what their unique challenges are. I know that right now, everyone’s experiencing some really big searches in digital activity on their websites. So the biggest question that we have right now is, is this normal? Am I doing well, compared to my competitors? Am I not doing as well? So, bringing it back to those core metrics around traffic growth, spend growth, conversion rates. So really bringing it back to the basics almost, of understanding and getting really a basic understanding of performance compared to the market.
Stephanie Postles:
Yes, this report sounds awesome. I’m looking through it right now, it looks like it’s in a really cool Tableau dashboard, which is really fun, and easy to digest. Some of the things that I’m looking at now are when it comes to computer and mobile growth, it seems like … now it seems obvious, but a lot of people have shifted to mobile, but then maybe the cart abandonment piece has not increased as much, maybe if you can talk a little bit about that. I’m trying to think if I’m a shop owner, and right now all my traffic has been on desktop, and now it’s shifted in to mobile, but then I’m not able to convert the customers as well. What are you seeing behind that data to maybe help with that piece?
Caila Schwartz:
Yeah. In an example like that, where we can break it down by device and say, “Hey, we’re seeing a lot of traffic coming from mobile, but it’s not converting as well.” Mobile traffic is up, traffic overall is up. The conversion is far down, or looking at your add To cart rate or your cart abandonment rate to see, are consumers getting to that cart? And are they finishing that checkout process? So, trying to identify those points of friction within the shopping journey, using this data, and so if we see that there’s a high level of cart abandonments, or checkout abandonment, that would lead me to believe that there’s something about that checkout experience that isn’t ideal. And we see that, especially on mobile.
Caila Schwartz:
The mobile shopping experience, at least the checkout experience it’s come a long way in recent years, but the whole tapping in all of your little form fields on your mobile device is really cumbersome. And so, thinking about ways to flatten that funnel through mobile wallets, whether it’s through Pay Pal, or Apple Pay, or Google pay. So those are some of the ways that a shop owner could utilize that data to see, okay, where are the points of friction within that shopping journey? And mobile is the number one driver of traffic and orders. And we’ve seen over the past several years mobile really accelerate as the number one device for consumers.
Caila Schwartz:
So as a business owner, if you’re thinking about what device to prioritize, creating a great mobile experience is going to be the top of your priority list. But what’s interesting about 2020 is that even though we’re still seeing this massive shift to mobile, which we still are, computers have actually had a resurgence. And it really highlights the need to have a great experience across all of your touchpoints. So even if you’re focusing on mobile, you have to think about providing a great experience, no matter where the consumer chooses to engage with you. And I think that’s something that is really easy to forget, because sometimes you can get so hyper focused on one particular device or channel or tactic, and it really is about the big picture.
Stephanie Postles:
Yeah, I completely agree. I can also see some of these … like you said, these are things that you can benchmark your business against, and it would give me peace of mind anyways, if I could say, “What is the average?” And it’s nice that on your [inaudible] report, you have it, or you can select it by vertical. So I was just looking at a footwear vertical because we’ve had Puma and Little Burgundy shoes on and being able to see what is the average order value and the discount rate that other people are offering and the cart abandonment like, “Oh, okay, maybe 80 something percent is actually has always been normal, so what can I do to become better than that?” Or if I’m worse than that, at least I know what the average is. So it seems like you could not only give peace of mind, but then also see areas where a shop owner could improve, which is great.
Caila Schwartz:
Exactly. Remember, these are just averages so and there’s people that are doing better, there’s people that are doing worse. So where do you stand amongst that? And then where are those opportunities for improvement?
Stephanie Postles:
Yeah. Tell me a little bit about the social traffic data you guys collect? Because I’m looking at that now, and it shows the social traffic share increasing by mobile. And I think I know what that means, but maybe detail that a bit so I can see what the opportunity is, by that share increasing?
Caila Schwartz:
Yeah. So our social data that we collect is coming from the social referral data. So data from a social platform, whether it’s Instagram, or Facebook, or Pinterest, any channel that’s directing traffic to an ecommerce website, as a referral. It’s also paid in organic. So we’re collecting that visit data and we’re looking at it through the lens of, okay, is this social referral from a mobile device, is it from a computer? And then we look at it overall. And then the percentages within that chart are looking at the share of traffic, against all other sources of traffic. So if it says, 10% of mobile traffic, or 10% social share for mobile devices, that means that 10% of all mobile traffic came from a social referral channel.
Stephanie Postles:
Yeah, that makes sense. We’ve actually heard that theme, quite a bit from many previous guests, where they’re talking about the social shopping experience and how they’re relying on influencers, and how, of course, there’s a lot of platforms Instagram, TikTok that people are looking at right now. But that seems like if a shop is not playing there or a brand is not there, you should probably be there, because it’s rising.
Caila Schwartz:
Oh, totally. And Ann Marie can really go into more detail on this, but in our snapshot series, research, we did some research on just the different types of pieces of content that consumers are engaged with, and I know social was right up there. Ann Marie, can you elaborate on what you guys found from that?
Ann Marie:
Totally. Yeah, happy to. So you’re totally right. Social is the talk of the town right now. Typically, we see social referred traffic hit around 9-10% around the holidays, which is when you see all of those peak online numbers. But now that’s just the usual during quarantine times when everybody’s IRL lives have been pushed online. And through the snapshot research series that we did, where we surveyed thousands of consumers every two weeks to see how their shopping habits were changing, how their emotional states were changing over time. And we found that since the onset of the pandemic, 63% of US millennials, said they had made a purchase over social media.
Ann Marie:
So it’s really turning into … we like to call it the mall of the 21st century because social media platforms are where you can congregate with your friends, you can chat and you can discover new artists and new products. So as you called out before, we’re seeing Instagram, Facebook, TikTok, all definitely cash in with awesome new features, which just continues fueling the fire. The easier it is to sign up for a product drop, or learn about a new makeup line, the more consumers flock to it, and then the more innovation these companies provide on the back end. So it really is exciting.
Stephanie Postles:
That’s great. Are there any new channels that you guys saw popping up that maybe others wouldn’t be aware of right now?
Ann Marie:
So one big trend that we’re seeing, explode over in Asia was shoppable videos. So during the pandemic, I love this example because it was so wild to me. Rural farmers started live streaming their different produce because they no longer had access to things like farmers markets. And I believe the stat now is on … In Taobao, we have over 50,000 rural farmers that will sell their different fruits and vegetables and produce to an online audience that will just see the video and immediately click tap and make the purchase. We even saw that Shanghai did their fashion week, all online where you could stream models coming down the runway, and immediately say, I definitely want that dress or those shoes and make the purchase in real time.
Stephanie Postles:
That’s great. What platform was that, where you can actually click and make [inaudible 00:15:25]? Because I still feel like there’s a bit of friction on some of the social platforms that I use anyways, that it’s not always very easy to buy, I’m even thinking about Instagram, I follow a bunch of influencers, and they talked about the outfits but then you have to go to a different app to maybe find it, and then it opens up again in a different browser. And it’s like, oh, my gosh, I don’t even remember what I was looking for. So is there a different app? Maybe [inaudible] they’re using it makes it more frictionless.
Ann Marie:
Totally. Yeah. So in China, it’s all about Taobao. But in the US, we’re starting to see tech companies make investments there. So Snapchat is now launching a bunch of shoppable like video series, where they will announce new product drops, and you can buy it in app. I know, Google has something in the works called Shoploop. And a couple other tech companies are starting to release new programs so that in the US or in Canada, we’ll be able to have a more seamless experience. Because you’re totally right. It feels like a webpage hopscotch where you just want to learn more about one product, and then you get rerouted, four different times, definitely not optimal.
Stephanie Postles:
And it’s out of stock. Lop off.
Ann Marie:
Yeah. Don’t get me started.
Stephanie Postles:
So with all these new tech investments that are being made, and a lot the larger players are investing in this area, is there anything that a brand can do to start preparing for this, either with their tech stack, or just making sure that they’re ready when Google comes out with their new technology that can maybe be implemented? What should a brand be doing right now to prepare for this?
Ann Marie:
Totally. So I think one getting a sense of your audience and what they want. It’s a very basic statement, but maybe you don’t need to be the earliest adopter on this technology if your consumers aren’t streaming as much videos. But I would say the most important thing is just one, you alluded to it earlier, but making sure you have a really solid set of ideas about what products you actually have, inventory and fulfillment, if this huge journey is just going to end up in an out of stock. That’s a really bad experience. So I would say that before launching into shoppable videos, make sure you have a handle on the basics. And that’s a huge issue we’re seeing with fulfillment period, where stores are having a hard time getting a sense of where their inventory even is. Is it locked in a warehouse? Is that in a store, do they have it available? So I would say, step one, just make sure you have a solid order management system, a good handle on where your inventory is, and how you can access it before moving further down the road.
Stephanie Postles:
So if your inventory is a mess right now, and you’re still like, this company is like, “Oh, man, I don’t even know what to do, my retail store closed down.” And like you mentioned, it’s probably in a warehouse somewhere, but how much do I have? Our team hasn’t been able to go there in a while. How would you recommend them starting from scratch right now to start building a good inventory system where they can tap into that, know what they have and not have out of stock issues that I have actually been seeing a ton recently?
Caila Schwartz:
That is a great question. I think it really first starts with a great order management system. And being able to share information across multiple systems. So thinking about data integration, and not having any data siloed of any one system and then implementing processes and procedures to make sure that you have the stock available in your stores, and then you have your emergency stock set up so that you’re not servicing inventory visibility on the website that isn’t truly there. When we think about the holiday season, inventory is a huge player because … and a huge topic of conversation because fulfillment is going to be such a challenge, last mile delivery is going to be such a challenge. There’s such a huge shift to digital. There’s a huge shift in B2C parcel delivery right now.
Caila Schwartz:
The system is overloaded. So how does a brand or retailer get packages to consumers when they don’t even know if they can rely on traditional parcel delivery? So thinking about moving inventory closest to the source of demand. And that’s really all about utilizing your data, understanding where that demand lies, and getting it there and in order to facilitate shipping from store or fulfilling from store, and all of those things, or utilizing some of these newer tactics like crowdsourcing, Uber and Lyft, to deliver packages. So it really comes down to having a really great system, forecasting your demand, and not just forecasting your demand or forecasting where your demand is going to be, and making sure you put your inventory there. And making sure that all of your systems are able to communicate with each other so that you can have a really well rounded view of your customer, your organization and what steps you need.
Caila Schwartz:
You can then use that information to understand what necessary steps you need to do to get your business to where it needs to be in terms of inventory management.
Stephanie Postles:
Yeah, I love that. It seems like there’s definitely a lot of room for companies to look at their back end processes. I know we were we had a previous guest on the show that was talking about every order that comes in it has the rules behind the scene that say, “Okay, you’re calling or you’re buying from California, so pull from the warehouse in San Francisco. Or you’re in Maryland pull from the D.C. one.” And I had all that setup in the back end, but they had just recently implemented that. And it hadn’t been something they had before. I’m like, “Wow, that’s really smart. Why doesn’t every company have that?” Because why would you ship something across the country if you could pull from a store or a warehouses that’s right near that customer?
Caila Schwartz:
Exactly.
Stephanie Postles:
The other thing I was looking at right now was the average order value. And I was surprised to see on average that it had decreased in Q2 2020. And I guess I was a little bit surprised by that. Because I hear everyone’s moving online, and people were buying a lot of new things that maybe they hadn’t bought before, whether it’s around toys and home improvement. There’s a lot of new needs have sprung up when everyone’s at home right now. So can you walk me through a bit about why the average order value went down in Q2?
Caila Schwartz:
Yeah, I think that what we saw in Q2, we saw massive growth in digital spend. So 71% year over year growth in actual spend. So people were buying more, or buying more online. What’s interesting about AOV, its average order value per order. What we saw, at least in terms of consumer behavior in Q2 was a shift to … Yes, there was the essential purchasing, which happened in March. But in Q2, we saw a shift towards non essential purchasing. And so there was this cup for purchases.
Stephanie Postles:
That was on me.
Caila Schwartz:
Yeah.
Stephanie Postles:
I want a new make up, I don’t know why. I don’t go anywhere, but I want it now.
Caila Schwartz:
Exactly. So, I probably have a package coming every day from Amazon, like “Oh, look at this cool new contraption. Let’s try it out.”
Stephanie Postles:
[inaudible] the dopamine now, we can’t go in and see people and have fun conversations. So we just want a new package every day.Caila Schwartz:
Exactly. So I think that what we saw this decrease in average order value is really a function of people just placing a quick hit order, a satisfying psychological needs to … just seeing like, your Amazon guy or your UPS deliverer show up was like, “So exciting.”
Stephanie Postles:
Yeah. Hi, friends, how you doing?
Caila Schwartz:
Exactly. So I think there is a component of that. And so I think when people are ordering more frequently, or average order value tends to be lower. Also, what we do know is that average order value on phones tends to be lower. And so we saw significant increase in mobile orders, like I said before, makes up the majority of orders by device, when we look at it compared to computers and tablets. So consumers are likely not doing a big shopping list on their phones, they’re watching TV and scrolling their social feeds and buying. So I think that was a function of that type of behavior. And that’s why [inaudible] probably dipped a little bit in Q2.
Stephanie Postles:
Got it.
Ann Marie:
But I will say that we might expect this to change too because the reality is very similar to you both where I’ll have a different package coming in every day. But that’s incredibly expensive for retailers, if you think about all those shipping costs, and then layer on the fact that a lot of logistics companies are ramping up their prices for the holiday season. So I think increasingly we’re going to see retailers implement more bundling, or just higher minimums, to make it worth all of those shipping fees. So we’re watching their numbers closely to see, of course for the holiday season next quarter and the quarter after that, how the average order value does evolve over time.
Stephanie Postles:
Yeah, that’s really interesting thinking about a lot of people right now do want things, even if they’re smaller and are starting to get used to that two day shipping and free shipping, I know at least myself want to go somewhere. And it’s like, pretty high order value to get free shipping, and like, sometimes I’ll just like give up and go look somewhere else. So it seems like there’s an interesting balancing act between making sure that you’re running a business in a profitable way, and that you’re figuring out how to ship things and not just shipping these little one off things here and there, but then also not scaring away your customer to where they come in and they’re like, “Whoa, $75 minimum before free shipping.” I don’t know, that’s too much.
Stephanie Postles:
Another thing I wanted to, anyway, maybe you can touch on a bit more is the snapshot series you were mentioning. You talked about how you were getting a read on consumers every two weeks, but I didn’t hear too many details around what you were actually seeing now versus maybe even a couple months ago or last year, like what are the biggest changes that you’ve seen among consumer buying behavior and sentiment?
Ann Marie:
Sure, yeah. I think some of the biggest jumps were, So a couple of things we were tracking was adoption of new shopping habits. And so it’s no surprise to hear that curbside pickup or buy online pick up in store rocketed up in popularity alongside contact, plus payments. But it was really great to see numbers to those statements. So in the initial weeks of the pandemic, we saw curbside pickup grow, I think it was close to 38% in popularity as entirely new categories of shoppers, I’m thinking my older parents were trying these new means of getting the essentials home. But another really cool thing that we tracked and we saw evolve over the course of the pandemic itself too, which is priorities. So one of the questions we were asking and tracking was when it comes to loyalty or how you choose which brands and retailers to purchase from, what are some of the most important factors?
Ann Marie:
And early on when we’re hearing a lot about core years and unrest with certain brands and their shipping practices, and health concerns, one of the top priorities and be more loyal to a brand was how they were treating their employees. And over time, we saw that shift to a more, I would call it inventory focus and also accessibility focus, meaning that the number one reason to shop with a certain brand at the end of the day was, do they have everything I need in one place? Because those out of stock notifications were definitely driving everyone crazy.
Stephanie Postles:
So when you said how they were treating employees, what do you mean by that? Because when I walk into the store, I probably wouldn’t know or when I’m looking at a e commerce shop, I don’t think I would really know how they’re treating their employees. Like I wouldn’t have the nitty gritty. So what do you think people are looking for when they’re looking for that metric to stay loyal to a brand?
Ann Marie:
Sure, yeah. So for that, it was employee health and wellness. So are they ensuring that people are wearing masks? Are the hours reasonable? It’s not something that you would necessarily see [inaudible] aside from the mask when walking into a store, but there are a ton of news reports and of course, I won’t name names here, but there are a lot of news reports about disgruntled employees having to work overtime or not having the same health benefits during the crisis and yet having extremely public facing roles if you think about in-store associates at a grocery store or a pharmacy. And so that was something that rubbed consumers the wrong way and did impact some purchasing habits. But over time really, that number one reason to be loyal to a new brand or website was about of course price, but really number one was availability and in stock.
Stephanie Postles:
Earlier you mentioned these new customers that are coming online and had been coming online the past couple months. How are you guys thinking about retaining those customers? Are they going to be here after the pandemic is over? Will these new shoppers still be wanting contactless delivery and being able to pick up curbside? Is this going to stay or do you think quite a few of them are going to revert back to their old habits?
Caila Schwartz:
Yeah, I can take this one on. We know from our research and looking at our data that whenever we see big spikes in digital adoption, which is historically typically seen in the holiday shopping season, but more specifically CyberWeek, we see huge rates of digital adoption during this weeks. And what we know is that when consumers adopt new digital behaviors, they tend to stick around. So every holiday season, we see a huge surge in that new digital shoppers. And at the end of every season, we see what we call a new digital baseline. So it’s like a weird set of stairs, where digital spend, digital traffic is pretty flat for most of the year. And then during CyberWeek, it spikes way up. And then it starts to fall towards the end of the season. And then once we hit January 1, it spikes back down. But it never goes back down to the level that it was before CyberWeek.
Caila Schwartz:
So we see it’s like a stepping stone or set of stairs. It just keeps creeping up after every CyberWeek. So what this tells us is that consumers are adopting behavior that they might not have otherwise adopted, if they had not been enticed to shop online. And they’re shopping online because there’s a lot of great deals online, there’s a lot of incentives online, there’s a reason to know no longer … not say no longer, but people aren’t lining up outside of their local stores at 5 am on Black Friday anymore. It’s becoming less and less of a thing, because people can shop from anywhere all throughout CyberWeek and get great deals from the comfort of their homes.
Caila Schwartz:
And so what we know from that is that when consumers adopt new digital habits, they don’t typically just go away. And yes, people will want to go back to the store, but the conveniences of curbside, especially for buying groceries and other types of goods are really going to … I don’t think we’re going backwards, we saw buy online pick up in store search to really take hold last year and that was a non pandemic year. So I think that what’s happening in 2020, none of this is going away and it’s going to continue to … it’s not going to accelerate at the same pace, but people are still going to retain these behaviors that they’ve learned.
Stephanie Postles:
I think that’s a really interesting point too when it comes to thinking about if a brand is starting to see that there may be having higher profitability when it comes to maybe mobile orders, or they’re just seeing higher conversions or something, maybe giving the consumer an even bigger reason to shop a certain way so that they can retain them in the long term. Because it seems like once you get them there, then you’ve captured them on that platform. And if you have a platform that you prefer them to order on or a certain way to order, it seems like they might want to incentivize them to do that, even if it is having a slightly higher sale price or something to bring them there, so then they can have that customer longer term where they want them, if that makes sense.
Caila Schwartz:
Exactly. It’s all about the entire customer journey too. It’s not even just about that purchase, it’s about thinking, how do you engage that consumer and provide them with great content? And that was something that we really saw come out of the pandemic through those Instagram Live sessions. You could take a class of the loo lemon superstar, like athlete, and do that live on your phone. How cool is that?
Caila Schwartz:
We saw these really great pieces of engagement that came out of it. And then not only that, but thinking about how you service that customer after the sale, and making sure that you’re offering many different types of ways to resolve problems, whether it’s through a self service type of a knowledge base, or live chat or bots to really like … bots might seem impersonal but sometimes people just want to know like, where’s my order? How do I return? And it’s things that you can really offload easily so that you can focus on giving a really great personalized experience to some of your more challenging cases and so really thinking about retaining the customer after the sales, just thinking about the entire journey, recognizing that it’s not linear, there’s a lot of different paths and twists and turns that that shopper is taking, and continuing to be there for that customer and embedding yourself where they are.
Stephanie Postles:
Love that. Ann Marie, what were you going to hop in and say?
Ann Marie:
Just to wrap up the last statement in terms of, are people going back to normal? The reality is that, at least in the United States, plenty of states are re-opening. And we’re seeing in the shopping index that instead of, there’s this huge climb of hockey stick growth in terms of digital orders, but it’s not going back to normal. It’s not bell shaped at all. It’s exactly as Caila described that leveling off in that step shape. And one question that we had asked earlier on in the pandemic is, do you think you’ll go back to buying in person after all of this is over? And we found that at 60% of consumers said that they were likely to continue buying essential goods online [inaudible] subsided. So there’s definitely a significant amount of stickiness there.
Stephanie Postles:
That’s great. Were there any surprises in the data or anything maybe? I don’t know if you guys ask long form questions or get answers in that format, but anything surprising, or funny or interesting, that you weren’t expecting?
Caila Schwartz:
Ah, that’s a good one. Ann Marie, do you have anything that surprised you?
Ann Marie:
It’s funny how none of these trends are brand new, right? Like Caila mentioned, buy online pick up in store has been around, so has contactless purchases and buying online. It’s really just the sheer acceleration of all of these habits that was mind blowing to actually see in the numbers. So our data set contains the clicks and taps of over a billion shoppers. And we saw that data set increased by 40%. So we saw 40% net new online shoppers since the pandemic. And so well, yes. We know that people obviously are doing more shopping online as their quarantine, it was really wild to quantify it in that way.
Stephanie Postles:
Yeah, that’s great. Yeah, very interesting to see. So, I want you guys to predict the future now. So what are you thinking Q3 results are going to look like?
Caila Schwartz:
Well, we’re digging into Q3 right now as we speak. So we just ended Q3 yesterday. So I don’t have any updates to share yet. But looking at the data, initially, a few weeks ago, and seeing where we were, we’re still we still see a massive acceleration to digital. And we saw huge, huge growth in Q2, we’re seeing a little bit of a leveling off in Q3. I think it’s a function of people just not shopping as much for back to school this year, because a lot of kids are home, and also waiting on a heavy promotion filled fall and winter.
Caila Schwartz:
The growth is still very significant, much greater than we typically see in Q3. And so while I don’t know final numbers, I think we’re going to see a lot of the trends that we saw in Q2 continue to shift into Q3.
Stephanie Postles:
That would be good to see. Ann Marie, anything to add?
Ann Marie:
One trend that I’m excited to continue tracking frankly for next quarter is just this embrace of social. So, not only are consumers really flocking to buy new products, signing up for product drops, but the flat platform forums themselves. And brands themselves are doing such cool things on different social media platforms. The other day, I saw Marc Jacobs was launching a new product, and they had this huge Zoom party and you could walk into different Zoom Rooms.
Ann Marie:
And one of them, you could get your portrait done over Zoom video. Yeah. And so they had a lot of great user generated content, because people were tweeting about their portraits and Charlotte Tilbury, which is a makeup brand, they’re doing these free 10 minute makeup tutorials that you can have either over FaceTime, or they can just stream it as well to learn how to bedazzle your eye just because eye makeup is where it’s at now that half of our faces are covered with masks. So, the creativity is something that I’m just amped to see especially as we gear up for the holiday.
Stephanie Postles:
Yeah, that’s a really good reminder to figure out how to stand out like that, because there are a lot of creative things you can do, you just have to think differently about the platforms that you can utilize. So, that’s really fun thinking about the Zoom Rooms. I also think it’s interesting thing about how you can maybe leverage influencers and incentivize them to sell for you through these platforms. So like you’re mentioning with the makeup videos, how can you have maybe people that you can tap into to do maybe one on one quick tutorials to people so they walk away with an experience that they’re like, “wow, that was memorable. And I’m going to talk about it right afterwards,” to get that UPC content.
Ann Marie:
Absolutely, yep. Influencers are a huge plan. We’re seeing a lot of video views coming in from influencers more so than brands themselves. So it’s definitely a powerful tool to rely on. A trusted advocate for your brand to draw people to your content.
Stephanie Postles:
Yeah, completely agree.
Stephanie Postles:
All right. Cool. I will jump into the lightning round brought to you by our friends at Salesforce commerce cloud. This is where I’m going to ask you both a question, and you have a minute or less to answer. But I should probably just give you 30 seconds or less to answer since there’s two of you. Are you ready?
Caila Schwartz:
Yes. I hope so.
Stephanie Postles:
All right. Caila, I’ll start with you. What one thing will have the biggest impact on ecommerce in the next year?
Caila Schwartz:
Oh, I’m going to say that fulfillment. Fulfillment, last mile will have the biggest impact on ecommerce.
Stephanie Postles:
All right, Ann Marie.
Ann Marie:
You know what? I was going to have the same answer. So definitely fulfillment and also continually improving that checkout flow make it as easy as possible to get shoppers from their daydream product to having it at home.
Stephanie Postles:
Yep, completely agree. All right, what’s up next on your reading list? Ann Marie first.
Ann Marie:
Oh man, for commerce or in general?
Stephanie Postles:
In general.
Ann Marie:
Oh my goodness. So, I just started a new book called On Earth We’re Briefly Gorgeous by Ocean Vuong, which is the story of an immigrant moving to the US. And it’s like a journey of self discovery. And it’s really beautiful. So highly recommend.
Stephanie Postles:
I like that. That sounds good. I have to check it out. Caila, how about you?
Caila Schwartz:
I have two children. So my reading list these days consists of children’s books.
Stephanie Postles:
[inaudible] there.Caila Schwartz:
Pete The Cat is up next tonight.
Stephanie Postles:
I like it.
Caila Schwartz:
Oh, yeah. We’re all booked with the cat.
Stephanie Postles:
I’ll have to check that out. [inaudible] all about Max and Ruby over here. So I’m trying something new to get away from that.
Caila Schwartz:
Kitty Cat, it’s like straight out of the 1970s. They use a lot of like, it’s groovy.
Stephanie Postles:
Oh my God.
Caila Schwartz:
So, my four year old is running around saying, “It’s groovy.”
Stephanie Postles:
I like that. Bring it back.
Caila Schwartz:
Yeah.
Stephanie Postles:
[inaudible] turns back. That’s good. What about commerce news? What kind of things do you all pay attention to stay on top of the trends other than internal research?Caila Schwartz:
I’ll go first. Say definitely there’s a lot of commerce experts on Twitter. I love just scrolling through Twitter and seeing what the sentiment is and what people are talking about. It really gets a good pulse check on that to see what other industry leaders are thinking about. And I’m a data nerd, so I love reading through like e-marketer and statistics and seeing what the latest results are.
Stephanie Postles:
Great, Ann Marie.
Ann Marie:
Yeah, I would say, Twitter is a great curated view of what’s hot. I love following Michelle Grant, Jason Goldberg, Brendon Witcher. But in addition to that, I do stay on top of a lot of the data, but I have a definite favorite newsletter and that’s Retail Brew. It comes out a couple times a week, it’s incredibly well written, really thought out, and it’s not necessarily about being the first to report on a trend but they go really deep. So, it’s a really great explanation to what’s going on and why.
Stephanie Postles:
I like that. Yeah, a lot of people are ready to do newsjocky type of newsletters, and I like the ones that actually go deep on topic where I walk away and learn something from it.
Ann Marie:
Same. Absolutely.
Stephanie Postles:
What’s Up next on your Netflix queue? Ann Marie first.
Ann Marie:
I would say I haven’t been Netflixing. I’ve been trying to get away from the screens as much as possible.
Stephanie Postles:
That’s good. That can be an answer. That’s good. Caila, what about you?
Caila Schwartz:
Great question. So I recently heard of this on the radio this morning, actually, after dropping my kids off at daycare. There’s this true crime series. I think it’s called The Family Next Door.
Stephanie Postles:
Yeah.
Caila Schwartz:
Yeah, I heard it was really interesting and creepy. I’m going to try and convince my husband to watch that later.
Stephanie Postles:
What is your favorite ecommerce tool that you see people using or that you may be tested out a bit that you think is really impactful?
Caila Schwartz:
You want to go first Ann Marie?
Ann Marie:
Sure. Yeah, I would say I have a lot of fun with the AR like makeup try ons. I think they’ve come a long way. So big fan of L’Oreal’s ModiFace. And also just Apple Pay. It sounds really nice. It could be able to just scan my finger and then just have everything be checked out and done with instead of filling out 100 different fields and messing up my zip code has made my life as a shopper much better.
Stephanie Postles:
That frictionless experience, just like you said, super important.
Ann Marie:
You have it.
Stephanie Postles:
What about you, Caila?
Caila Schwartz:
Yeah, I’m a big Apple Pay lover, because I do most of my shopping on my phone. So I love just being able to double tap and be on my merry way. And I have to go find my credit card hidden somewhere under the couches. But for me, I love them. So I am a terrible decorator. And so I get all my ideas from Instagram. So I love being able to use the searchable images. So you can search the image and they’ll make recommendations. Wayfair has an app that does this. It’ll pick out recommendations from your catalog based on the image that you put into the search box, and so I think that’s so cool, because I’ve been able to find a lot of things that like, oh, where do you source this? How do you find this? Who carries this? So I think that’s a really cool feature that I am totally loving these days.
Stephanie Postles:
I love that. Alright, and the last one, if we were to have a Caila and Anne Marie podcast, what would you both want to talk about? What would the show be about and who was your first guest be? This is where you have to collaborate a bit.
Ann Marie:
Oh, wow. Oh, boy, Caila should it be the highs and the lows of social media or what are you thinking? We have a lot of conversations about this.
Stephanie Postles:
Oh, it sounds like there’s already one brewing behind then.
Ann Marie:
Always up to something.
Caila Schwartz:
I know, right? Yeah. We’ve definitely had a few rounds of the impact of social, positive and negative.
Stephanie Postles:
That would be a good one. And who would your guest be for that?
Caila Schwartz:
If we could have anybody?
Stephanie Postles:
Anyone.
Caila Schwartz:
Oh, man. Well, you could just go right to the top and get Mark Zuckerberg and …
Stephanie Postles:
There you go. Yeah, why not? We’ll get him on.
Ann Marie:
Let’s do it.
Caila Schwartz:
Yeah c’mon.
Stephanie Postles:
I’m on the new show. I like it. That’s a good one. Okay. But Ann Marie, this has been a very fun roundtable. Thank you for being my first guest to try this out with me. Where can people find out more about the shopping index and your work and the two of you?
Caila Schwartz:
Yeah, well, we are both on Twitter, where we publish all of our content. My handle is Caila Schwartz. I also launched an Instagram page. We’re publishing all of this content as well. It’s called Data_Candy, Data underscore Candy so you can follow along with me there. Ann Marie, what about you?
Ann Marie:
Sure. Twitter’s a great place to find me @AviAnnMarie. So, A-V-I-A-N-N-M-A-R-I-E. And also check out Salesforce’s blog, Caila and I are always writing up the what it means behind all of the data on the shopping index. So you could do a quick Google search for Caila Schwartz or Ann Marie Aviles at Salesforce blog to see the latest in commerce trends.
Stephanie Postles:
Love that. Thanks so much for joining.
