A weekly podcast with the latest e-commerce news and events. Episode 248 is recap of the Cyber Five (Black Friday through Cyber Monday) with Rob Garf, VP of Strategy and Insights, Retail and Consumer goods at Salesforce.
Cyber Week online sales unfolded in the pattern we expected after the first three quarters of the year. Digital sales surged an unprecedented 71% in Q2 globally and significantly grew 55% in Q3 globally. We forecast 30% growth for the entire holiday season, November 1 – December 26. For the largest two digital days of the season, specifically, Black Friday came in right on target with 30% growth and Cyber Monday grew at a lower rate of 18% year-over-year (YoY) globally.
- Salesforce Holiday Portal
- Blog Post for Cyber Five
- LinkedIn Livestream from Rob and Jason discussing Cyber Five.
We cover key trends, including changes to holiday behavior due to Covid-19, winners and losers, mobile trends, promotion trends, and omni-channel tactics.
Episode 248 of the Jason & Scot show was recorded live on Tuesday, December 1st, 2020.
[0:24] Welcome to the Jason and Scott show this is episode 248 being recorded on Tuesday December 20
twenty that’s December 1st I can’t believe it’s already December I’m your host Jason retailgeek Goldberg and as usual I’m here with your clothes Scot Wingo.
[0:42] Hey Jason and welcome back Jason Scott’s show listeners.
It’s the day after Cyber Monday Jason’s on his 10th venti latte so he’s a little jumpy he’s a little excited this is a big day for him this is where he really,
really earns this keep over at big company he works for earns every letter of that title that he has there.
Jason it is after Cyber Monday and we are here to help listeners dig into what happened with the Cyber five turkey five or it seems like the Hipster thing this year is be fcm not sure what that stands for but that’s what everyone is saying.
Join us on the show and walk us through what they saw and their data is Rob Garth he is the VP of strategy and insights of retail and consumer goods at a little software company called salesforce.com.
[1:31] Hey Scott hey Jason such a pleasure to be here happy I guess cyber we khash sorta kinda happy holidays anyways.
[1:38] Happy giving Tuesday.
[1:40] There you go good call.
[1:44] Scot always has to take the high road doesn’t he.
[1:47] I know he’s so good he’s so good.
[1:48] It’s awesome to have you on the show Rob part of me I’m debating whether we should pretend that we haven’t been talking all day all ready or not.
[1:56] Yeah I don’t know how do you want to play that off but it’s good to talk to you as always and I still what we’re going to talk about today I wonder.
[2:04] Yeah I don’t know there’s anything going on in the industry but before we jump into it one of the things we always like to do on the show is give listeners a little bit of background about our guests so can you give us the
the recap about how you got into the digital Commerce Basin and what you do at Salesforce.
[2:21] Yeah sure absolutely it again,
thank you so much such a privilege to be on your show and certainly during this crazy time of the holidays to be able to share some data share some stories and get all of our,
perspective so as you mentioned I head up our strategy and insights team for retail and consumer goods I came to Salesforce by way of the,
demandware acquisition which is coming up on about five years but been in around retail for gosh quite some,
time including practitioner back in the day leading
e-commerce for Lids I then moved to the analyst world where LED retail for am our research which got acquired by Gartner and then prior to joining demandware I led retail strategy yet
IBM so kind of sat on,
all sides of the table and it’s kind of fun in my role now I kind of put all the hats on that I’ve learned throughout the 20 25 years and,
certainly I can get into that when it’s appropriate but I have one of the coolest jobs just behind Jason in the industry.
[3:31] I dispute that last point but I feel like you’ve forgotten your most important qualification you are also holder of a 10 out of 10 score on rate my room.
[3:43] Yeah you know that’s right and I take that with a lot of gratitude and humility because you know what – was struggling as a lot of us have been,
for last eight months to get the perfect rig and,
the perfect background and certainly outdone by the way by my 14 year old but I try to at least keep Pace as best as I can and pretty sight to not only get rated but did pretty darn well as well.
[4:12] Yeah congrats on that that’s that’s awesome the let’s dig into the data maybe we’ll start it kind of the days so this all kicks off with Thanksgiving and culminates and Cyber Monday what,
what did you guys see either absolute value wise or growth wise through the five days and how did that match up to kind of what you were thinking what happened.
[4:30] Yeah absolutely it’s probably worth setting the context about how we get the data because I think that’s an important way to substantiate what I’m going to talk about I’ll still make a lot of stuff up don’t get me wrong no took.
Can blind that’s Jason’s line I’m sorry I stole that from me.
[4:46] He was supposed to ask you that and he dropped the ball so he’s yeah he’s a hot mess over there.
[4:52] There you go but no but seriously so as I mention really cool job in terms of my team’s Charter for staying out in the industry and understanding where,
the market is going and we do that Based on data and much of that data actually comes from the Commerce cloud,
platform because we’re in the cloud.
We are able to aggregate all the data that’s flowing through the Platforms in which we manage across,
the world and we bubble that up.
We obviously strip out all the personally identifiable information but that that aggregate becomes the de facto standard of,
happening in retail it’s the amount of billions and billions of Shoppers every tap every swipe,
every click and we get to report on that based on same site sale so we look at it the same way that any retailer would look at,
their business and so we do this all through the year with our shopping index but of course it gets a lot of attention,
during the holiday so that’s that’s my long Preamble Scott to answer your question around what did we see,
over over side or 5 or actually we look at it slightly different so I’ll give you the growth which will be.
[6:14] Somewhat the same if you will apples-to-apples to the Cyber pie but we look at Cyber week so it’s the Tuesday before Thanksgiving all the way through Cyber Monday and what we saw was a really.
Healthy cyber week despite an earlier and earlier holiday season so globally we saw a 36 percent year-over-year growth in the US we saw,
a 29 percent year-over-year growth that’s actually pretty much in line with what we project for the entire,
holiday which people say gosh that seems or some people anyways my without any contacts say mmm,
you know given that we saw 55 percent year-over-year growth in Q3 and we saw 71 percent year-over-year growth in Q2,
that seems like it’s faded off or soften but that’s not that’s not the case I mean,
we were dealing with a really large Baseline and we’re dealing with growth that certainly we haven’t seen during the holidays since gosh.
You know for a long time let’s put it that way.
[7:28] Yeah I think it’s I don’t track the in the international side Internationals a big category but I’m most familiar with the Amazon data but they’ve shown International growing much less than the US what do you think is causing.
That kind of flipping your data.
[7:43] Yeah well it’s primarily due to two things one is.
We’re dealing with you no more than 40 countries across you know 10 or so different categories the way,
slice it so there are emerging countries in there that are still catching on I mean my conversations when it’s not dealing with how do we move from Scrappy to scale them it’s this pandemic
is around digital transformation and some are still believe it or not around the world questioning whether it is important to
go online and lean into that business so part of it is the emerging countries or at least the countries that,
are at a slower or lower base than the US the second piece is we actually you know.
Around the world have a lot of retailers in categories that haven’t been as aggressive online particularly you know the essential categories like gross.
Change rug that sort of thing and so we’re seeing growth globally in those types of segments as well.
[8:56] Frankel did how to so you kind of think it met your expectations basically that’s kind of in line with what you guys were thinking.
[9:03] Yeah so it did in cyber week we did see a softening in Cyber Monday we saw in the globally 18% year-over-year growth and in the u.s. 10%,
but I guess maybe I shouldn’t be or we shouldn’t be as surprised because.
The broader context of the holiday and I referenced it a little bit ago was we saw a pulling forward of demand that Smooths out sales not just earlier in the week.
But also earlier in the season you know our data shows based on our shopping index that for those retailers not named Amazon they saw a 66%.
Year-over-year growth on Prime day so those are a couple of sleepy die not so sleepy as the summer but certainly days in October that you wouldn’t see that search however there was,
halo effect and you know to accentuate that point.
[10:08] The week before cyber weeks or not last week but the week prior as a total we saw in Eighty percent year-over-year growth.
Highlighted by that Friday which saw a 95%.
Year of your growth so retailers have been trying to drum up Demand right since the beginning of October for various reasons.
And it’s working so we saw that manifest itself don’t get me wrong I mean Black Friday Cyber Monday are still.
[10:44] Along with Thanksgiving so let’s say those three are the three biggest.
Days for online but there’s certainly been a smoothing out which impacted Cyber Monday.
[10:56] Interesting and if I kind of parsing the tweets between you and your team I think if I look at it if I look at Black Friday in the US you guys are calling it as being bigger than Cyber Monday and that that’s going to be a first time that’s happened I would imagine right.
[11:10] That is a first-time good can look at you awesome I’m psyched that you’re tracking it that closely you’re exactly right so it’s the first time in the US but the fourth year in a row,
globally so there’s definitely a leveling off and you know we for this year in particular chalked it up to,
the slowing down the ratcheting back of traffic what did you say Jason earlier today around 50%.
Off of physical store traffic this year.
[11:44] Yeah yeah both Shopper track that tracks in you know foot falls in retail stores.
In Verizon that secretly spies on all the Verizon customers including Scott I.
With geolocation Services reported that they saw like about fifty percent of the traffic they saw last year in retail stores.
[12:05] Yeah so that’s certainly.
Contributed to the growth in the u.s. right I mean people aren’t lining up around the door for necessarily doorbusters,
this year and so people turned,
digital and that certainly played out over Black Friday just so you have the numbers globally we saw a 30% increase in the US we saw 23% this is Black Friday
and that equated to for Global twelve point eight billion of online sales and for the I’m sorry.
For Global it was 62.8 excuse me and for us it was 12.8.
[12:50] Wow one of the things that always surprises me is the Black Friday and Cyber Monday are a thing,
internationally you I given that they’re they’re sort of originally tied to a u.s. Centric holiday I feel like Amazon and others have done a really good job of exporting that.
[13:08] They have,
they have it’s starting to really condition the consumers you know it’s something we look at really closely I’ve been calling it discount chicken for quite some time even going back to my
analyst days the idea that retailers have a steady drumbeat try to lure the consumers to buy earlier in the season but,
you know we all have patience and we’re all conditioned to waiting for those deeper discounts on Black Friday,
or Cyber Monday,
and that has really conditioned particularly European consumers to wait and retailers have played into that so the dynamic.
Has been translating certainly internationally for quite some time.
[13:57] Yeah I fear that the promotion chicken is evolving into the boy who cried wolf because.
Uniquely this year we had some very systemic reasons that we would generally did want customers to buy early like most years we say we want customers to buy early because we’re trying to steal the sales from each other,
but / your point the discounts are going to keep getting deeper and deeper until we get to Cyber Monday.
This year we were desperately trying to avoid a spike on Cyber Monday because we’re worried about shipping capacity and inventory levels and things like that so we would generally are telling all the customers
hey this year you really should start your shopping early and put your point there was no reason consumers should believe us because we say that every year.
[14:44] Right right right you know you got to think well first of all you know Prime day because that to be marked the official start of.
The Holiday Inn created a buzz created this halo effect,
but also you know the pandemic right there are three key reasons why consumers were actually compelled unlike any time ever before to actually complete the purchase many would browse right like we see traffic,
increased significantly as we March through the first second and third week of November but the buy button really took hold.
During cyber week but what happened as I mentioned really three things converging right first of all.
[15:25] Consumers were feeling the strain of shipping issues in the spring and so they sensed there.
Will be an issue,
second they were worried about product availability I know about you but I was really psyched to get I guess Scott you’re not as worried about a North Carolina but Jason for you some patio heaters,
just at the end of the summer because none of them are available now and the third you know people are looking out for their health and safety so it took a pen down attic for consumers to actually.
Purchase early because you’re right Jason consumers are smart consumers are patient consumers recognize it is a bit of the boy who cried wolf and.
Retailers were kind of playing into that fear as well we saw for the month of November of the top retailers in the state 61 percent.
[16:21] I sent an email out that use the word shipping and had some sort of verbiage around delays or Byerly
and over cyber week we saw Justin that week 25% of the top retailers made it a key message in their email.
[16:40] Wow so my hypothesis is the Retailer’s talking about it alone would not have been enough to pull sales in but I my hypothesis is the reason sales got partly pulled in is because,
the media talked about it so much and I don’t know if this is well-known or not but you know Scott coin this phrase,
ship again and and the Today Show turns out to be huge Scot Wingo Fanboys so they were talking about it every morning on the show and I wonder if if that.
Those media messages reinforcing the retailer messages landed a little bit with consumers but.
A question I’d be curious about if you have an opinion.
So we have this unusual shape to the holiday this year right Prime day happens in October retailers are promoting earlier the media’s warning customer consumers that they should be shopping early,
and so all that seems to have worked,
we sold more digitally earlier in the holiday than we normally do and while we grew on the on the big Marquee days like the the rate of increase,
slow down so what happens next year right.
Does the shape go back to the traditional shape is that like permanent change a semi-permanent change do you have any if you had any bandwidth to think about what next year looks like.
[18:03] Yeah it’s a great question and it’s a question we’re getting a lot from our,
retail customers it’s like how do you predict the unpredictable you know,
what we’re going to see as we’re looking for it and we’re still crunching numbers and seeing how the holiday plays out you know the first thing to keep in mind is the pandemic,
didn’t really take hold and there wasn’t the Declaration of a pandemic by The Who until the second week of March so you know we’re going to anticipate January and February 1 year anniversary ring.
Online sales to still see that that’s like right it’s just math it’s going to work that way but you know what we see.
Every holiday and I know you can’t equate the pandemic to the holiday is.
[18:56] Q4 particularly November December huge spike in traffic huge spike in sales and it creates a whole new Baseline for digital shopping and it doesn’t.
when you get into January February and March to pre-holiday levels and so we don’t anticipate that when we get into March April and May,
of this year even with you know stores presumably fully being back.
Online and so are they going to grow at the 71% we saw in Q2 and the 55% we saw in Q3 likely know,
actually no but let me be declaring about that but we are going to continue to see
Healthy Growth and you know I see it coming from at least two different areas and Scott and Jason I’d be interested in your perspective on this one is.
Net new digital Shoppers right because that helped the growth over cyber week over cyber week we saw,
a 22 percent growth in unique Shoppers that came off of,
a growth of forty percent in q1 and Q2 so for the first half of the year
we saw a 40% increase in unique Shopper so these are people like my mother-in-law who would never buy groceries online because she’d want to go into the store touch the produce make sure it’s fresh.
[20:22] But because of her pre-existing long can it she’s not going back into the store just going to do it from the health and safety.
Or at least comfort and safety of her of her home right and so that’s not snapping back and that’s going to contribute,
to growth going into next year the second,
area is there’s a whole new set of categories that people wouldn’t have ordinarily bottom line and candidly retailers in those categories weren’t investing heavily in selling online grocery is a great example,
and you know this Jason we’ve talked about this a lot you know we saw it was.
Black Friday just to throw one day in one data point we saw a hundred and twelve percent increase year-over-year
of online sales for food and beverage I mean it didn’t even show up on the chart last year right and so it’s growing and that’s not going to go back and that’s not just gifting you know that’s not just
chocolates or fruit baskets these are,
you know the Staples that we ordinarily would go into the store but are not so I know that doesn’t give you a number and I know I’ve been asked for that a lot and we’re looking through it but overall from a macro perspective,
set a new Baseline knock and a snapback it’s still going to be aggressive throughout the next year.
[21:45] It’s great to hear that data on the unique Shoppers I think that definitely bodes well for the future of digital sets exciting.
There’s a there’s something I call zero friction addiction that until you have one of these zero friction experiences you don’t realize how addictive it is and then,
that going back just feels like you went back you know way way further than you actually really went forward if that makes sense.
[22:05] Yeah wait was that zero addiction friction.
[22:09] Zero friction zero friction addiction.
[22:11] Perfect okay I’m stealing that you better.
[22:14] It’s a ZF a rub if you need to reinforce it it’ll be all over the Today show tomorrow.
[22:19] Apparently yes Hoda already texted it I see it coming through right now.
[22:24] Oh hold on,
she was over for Thanksgiving anyway the it’s like Jason the first time he had the Starbucks mobile experience it was such a game changer for it now if it’s ever down a just
which is a total fit and starts throwing then tea mugs against the wall and he’s like I need my mobile app.
[22:40] Yeah well we should look at his Pantry I have you know I’m not a betting person but I’m guessing he has a stockpile.
[22:47] Let’s dig into some of the categories you saw were there any categories that stuck out is
winners we wouldn’t expect obviously you know we’re the pandemics kind of creeping up on us again and you probably seen some Essentials there but any interesting categories that were either
leaders are laggards.
[23:06] Yeah absolutely and by the way I’ll put a pitch for my colleague who’s the Mastermind behind much of this data Kayla Schwartz you can look up on Twitter she just posted a really cool.
Depiction of this so you can see what it looks like but as I mentioned food and beverage certainly.
And then you know outdoor I would say anything that dealt with health and fun is really the themes that we saw right so outdoor fared really well.
And health and beauty did pretty well also and you know that’s a little counterintuitive people are thinking oh people aren’t going out.
To business occasions or dinner or whatever else but you know where.
The blending of personal and professional lives come together at home and we’re working digitally people want to look half decent,
on their resumes and certainly are making purchases for themselves and Gifts in that category as well.
[24:13] Awesome Rob another.
Segment I guess that’s super interesting to me is mobile so I as you know talk a lot about the mobile Gap and you know Jen this General premise that,
[24:25] increasingly Shoppers are using mobile devices but the conversion rate on mobile devices is lower,
I’m curious if you guys looked at the mobile Gap around holiday and like did we continue to see mobile growing as a share of total traffic and his conversion getting any better.
[24:43] Yeah great question and it was interesting by the way for Thanksgiving.
First of all traffic was down overall quite a bit sales were,
reasonable for sure a little softer than we would have expected but,
actually desktop was quite a winner for traffic and for sales because,
people were looking to that form factor and likely not you know at their on some calls or parents house so they had the access
to their own computer but that was a little bit
of anomaly as we looked at across cyber week so what we found is that over cyber week again the way we look at as Tuesday through Cyber Monday
mobile comprised 71 percent of traffic and 55.
Percent of orders and when you look at desktop we saw 26 percent of traffic and 41,
percent of orders so mobile is holding certainly steady even increasing as a relates to traffic but you know the Stallworth of,
desktop is you know still still healthy again at 41 percent so it’s.
[26:09] Pretty interesting to see certainly as an industry we’ve gotten much better at here we go Scott ready
breaking down that friction so we get the zero friction Addiction on the mobile device I mean really,
we’re it was or has been a really clunky experience right to order stuff online for quite some time but it’s getting easier it’s getting easier because of artificial intelligence and retailers serving up,
the right products above the fall and it’s getting easier certainly because of the Advanced Mobile payment options,
for sure as well so that’s that’s contributing to it as well but what I will say on the conversion side I mean we’re still seeing essentially double,
the effectiveness of conversion meeting on desktop meeting desktop is converting at a two times higher rate than mobile so we still have a way to go.
[27:11] Wrinkle excellent use of zero friction addiction I appreciate that.
Um the the next one is going to be returned again so we’ll talk about that December 26th.
The you guys have any insights into how promotional things were our retailers having to give away the farm to get this growth or they keeping pretty good on on the margins.
[27:34] Yeah you know it’s interesting this was something we track and we have tracked year after year and this year we just saw a steady.
Drum beat it progressively increase the route cyber week but nothing nothing material.
You know and I credit that to and Jason you and I have talked about this before
we typically see an over reaction on Cyber Monday where that has the deepest discounts of not only the weak but of the season,
but we didn’t see that this or not at least dramatically this holiday and part of it was,
retailers were trying to preserve some margin as you reference Scott part of it was retailers saw a really healthy demand and.
Therefore were regulating product availability and didn’t feel as much pressure,
as they have in the past so you don’t get me wrong we’re seeing discount rates at the high 20s on average.
Throughout the year you know holiday season by it wasn’t as dramatic as we’ve seen in the run-up to Cyber Monday as we’ve seen in past years.
[28:57] What I will say though actually if I could add one thing quickly is the vehicle people are using.
For promotions is Shifting right so we saw a healthy.
Increase of email throughout cyber week but we saw Triple digit growth.
In SMS and push notifications which of course is a combination of promotion and then hopefully providing some transparency around,
product availability and shipping status and the other point I’ll make and then I’ll be quiet I promise is that.
Retailers are leaning into what we’re calling the edge or where consumers are shopping on the edge in these third party platforms like social messaging live-streaming even gaming.
And so seeing deals pushed through that means and.
In some cases even exclusive deals trying to create this exclusivity this scarcity trying to drum up demand where consumers are getting inspiration and hanging out with their friends and family.
[30:13] Ya Rabbi like are you guys seeing an actual uptick in the data in terms of like traffic coming from those those activities this year.
[30:23] We are we are seeing an uptick it’s not dramatic or at least dramatic as I would have expected or we’ve seen other parts but traffic and.
Orders around 10% are coming from social and it’s you know material but not.
Significant growth year over year but it’s something that you know I’m talking to retailers about a lot and really advising them not to sleep on it.
And again it’s really two angles here one is thinking about how to use these what I consider to be the next shopping malls where.
Inspiration happens and therefore monetization happens to really push people to their websites but also think about how they can push their brands to these properties so we’re not next year talking as much,
or at least next year talking equally as much about the traffic that’s being generated as.
The orders that are happening actually embedded on these third-party you know what essentially are emerging Commerce platforms.
[31:41] Yeah that’s super interesting because I would remind people like traditional Commerce experiences and you know e-commerce sites.
Really excel at that zero friction addiction right like making it easy to get stuff but where we’ve been struggling is in the whole product Discovery experiences and so.
You know that if live streaming and these you know newest generation of social commerce experiences,
you know if they really catch on there they’re sort of the the digital version of this product Discovery and,
you wouldn’t necessarily expect that to be dominant over holiday right like holiday people tend to know what they’re looking for and and they’re focused on the acquisition so it really the other times of the year when you might expect to see more heavy use of those Discovery tools.
[32:32] That’s a really good point right in the holiday time frame where a bit more surgical in terms of the gift-giving given a list we have in the people we have two by four so that certainly can contribute to that because we have seen sizable growth other times of the year.
[32:47] Yeah well wasn’t robbed that’s fascinating and that’s actually going to be a great place to leave it because we have once again slightly exceeded our allotted time for this special friction-free addiction.
Episode of the show.
[33:02] We appreciate you taking time out of your busy schedule if folks want to track your you and your team’s pontification zon on these topics where should they go.
[33:13] Yeah certainly so we spun out a holiday insights Hub so I encourage the listeners to search for that it is a real-time tracking of
holiday insights and it’s built by the way on Tableau so it’s,
very visual very intuitive during the other times a year I encourage you to check out our shopping index on,
salesforce.com and then of course feel free to follow me always
tweeting the latest at retail Rob Garf sharing our insights our data and for what it’s worth my perspective.
[33:55] Awesome Rob I will put a link to the the holiday Hub in the show notes because it’s obviously the home screen for both Scott and I and until next time happy commencing!