Jason & Scot Show Episode 201 – Cyber5 2019 Hot Take

A weekly podcast with the latest e-commerce news and events. Episode 201 is a hot-take on the Cyber 5 holiday period.

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

Adobe Recap

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

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

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

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

Automated Transcription of the show

Transcript

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

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

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

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

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

Scot:
[1:10] Very nice.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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