EP315 - 2023 Turkey5 Recap with Salesforces Rob Garf
EP315 - 2023 Turkey5 Recap with Salesforces Rob Garf
Episode 315 is a recap of Turkey5 (The five days from Thanksgiving through Cyber Monday) 2023 with Rob Garf, Vice President and General Manager, Retail at Salesforce. This is Robs' Six time on the show, having previously been on episodes 110, 248, 282, 299, and 313.
Jason and Scot discuss the "Turkey 5" with their guest Rob Garf, VP and GM for retail at Salesforce. They analyze data from various sources to provide insights into the holiday shopping season. According to the U.S. Department of Commerce, e-commerce grew 7.75% in Q3, while total retail only grew 2%. Jason emphasizes the need for e-commerce to grow at least 7.7% in Q4 to stay on track. Adobe's data shows that Black Friday sales were up 7.5% and Cyber Monday sales were up 12.4% from the previous year. The speakers also discuss data from BigCommerce, MasterCard, and Salesforce, highlighting growth in online sales on Cyber Monday and Black Friday.
Rob Garf adds his observations on retail industry trends, noting an increase in demand and robust pricing. He mentions a rebound in demand in Europe, excluding the UK, and highlights retailers' focus on profitability and inventory levels. The discussion then turns to Amazon's innovative advertising approach during a Friday NFL game, where shoppable ads were displayed via QR codes. Jason believes this strategy will benefit Amazon, as it monetizes viewership and reinforces the brand.
Discounting played a significant role in driving demand during Cyber Week, with retailers offering an average of 30% off. Consumers were patient, waiting for attractive deals, while retailers managed their inventory and discounting strategies well. The luxury category, however, did not perform as strongly, with only a slight increase or even a decrease in sales. The hosts touch on the resale market and the growing popularity of Buy Now, Pay Later (BNPL) options and mobile wallets. They discuss the potential impact of mobile wallets on shopping behavior and note that BNPL resonates with new consumers and has replaced layaway.
Finally, the hosts mention the passing of Charlie Munger and the filing of an IPO by Xi'an, encouraging listeners to support the show and announcing more holiday shopping data and reports on Salesforce.com.
0:00:46 Introduction to the Jason and Scot Show
0:05:04 Black Friday: First Sales for Vendors
0:14:06 Softness in Consumer Electronics and Toys Market
0:14:55 Black Friday and Cyber Monday Impact on Holiday Season Shape
0:16:32 Retailers' Inventory Management and Positive Growth Forecast
0:17:47 Retailers analyzing profitability and customer profitability.
0:18:29 Increase in Demand and Robust Pricing
0:22:34 Amazon's Innovative Advertising and Potential Profitability for Holiday
0:26:27 Discount rates over Cyber Week in comparison to previous years
0:29:04 Retailers' management of inventory and transparency in discounting strategy
0:31:52 Consumer behavior and the rise of Buy Now, Pay Later (BNPL)
0:33:32 Mobile wallets and the impact on checkout process and shopping experiences
0:35:26 Buy Now, Pay Later Growing and Replacing Layaway
0:37:22 Charlie Munger's Passing and Xi'an's IPO Announcement
Throughout this episode make liberal use of real-time data from Salesforce Shopping Insights HQ, which tracks how 1.5+ billion consumers are shaping shopping trends. You can see a real-time holiday dashboard, powered by Tableau so you can interact with the data yourself on the Salesforce Holiday Insights page.
Episode 313 of the Jason & Scot show was recorded on Tuesday November 28th, 2023.
Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.
Transcript
Jason:
[0:23] Welcome to the Jason and Scot Show. This is episode 315 being recorded on Tuesday, November 28th.
I'm your host, Jason Retail Geek Goldberg, and as usual, I'm here with your co-host, Scot Wingo.
Scot:
[0:39] Hey, Jason, and welcome back, Jason and Scot Show listeners.
Vigilant listeners will remember that we promised you a delicious turkey five
Introduction to the Jason and Scot Show
[0:47] sandwich starring none other than Rob Garf, VP and GM for retail at Salesforce.
And that's what we're delivering today.
Rob was here way back on episode 313 on November 8th. And he is back here today to tell us what happened during the Turkey 5. Welcome back, Rob.
Rob:
[1:05] Thanks for having me, Jason, Scot. Always a pleasure and look forward to getting into some of this really fun data.
Scot:
[1:12] Yeah, this is your record sixth time. So your old hat here. Before we jump in, we do want to just kind of set the table, keeping with the post-Thanksgiving, theme with some leftovers.
I saw what you did there. Yeah. And we, meaning Jason and his army of interns, have gathered a bunch of data from other sources.
So we just want to give listeners that, and we know you have your own data, and we want to paint a complete picture. So, Jason, give us the quick and dirty rundown of other data that we've seen out there covering the holiday period so far.
Jason:
[1:46] Yeah, yeah, yeah. Let's do it. And side note, Rob, we're going to keep making you come back till you get it right.
Rob:
[1:50] I appreciate it. I'm here.
Jason:
[1:52] I'll do what you need. Awesome. So, super quick reminder, Q3 data from the U.S.
Department of Commerce, e-commerce for the quarter grew 7.75%, over, the previous year. year, total retail only grew 2% from the previous year.
And so if you take e-commerce out of total retail, brick and mortar in Q3 2023 only grew 1.08%, so lower than traditional. So when you come into the beginning of Q4 and holiday in particular, in my mind, e-commerce has to grow at 7.7% just to stay at par.
And brick-and-mortar has to grow more than that one percent.
[2:37] So, and I like to start with the lesser data and work our way up to the gold standard, very best data we have, which is, of course, the Rob Garth.
So our friends at adobe which have a different data set but similar methodology and slightly different definition so you can't perfectly compare apples to apples, they said black friday sales were nine point eight billion in the us which is up seven point five percent from the year before so that would basically be right at that par i was just talking about, they said cyber monday was up to twelve point four percent and that was hot off the press so i wasn't able to do the math on what growth rate that was.
They said for the whole month of November year to date, that they see November up 4.6% from last year.
So kind of below that par. These are all numbers Adobe is giving for e-commerce.
[3:26] And of particular note, and I know we'll talk about this more, they've seen a significant uptick in use of Buy Now, Pay Later services, and they've seen deeper discounting than we saw last year.
Now, Shopify is really out there with a big news cycle.
And I don't want to say they won up Salesforce, but they bought the sphere in Las Vegas and broadcast their data on the outside of the sphere, which visually is, is super cool.
But their data isn't so useful because they don't report same store sales.
They had a, you know, some unknown basket of merchants that sold a bunch of stuff last year, and they had some unknown basket of merchants that sold more stuff this year, and we don't know if the same merchants were here this year and last year or if they added a bunch of merchants or, or if this is true growth.
So, so while the Shopify numbers are interesting, if you're investing in Shopify, they don't tell us a lot about what's happening in the e-commerce world.
I did see a super interesting quote from Harley Finkelstein, who's the president of Shopify, and it's possibly, possibly that he just misworded this, but he was excited after Black Friday and he said 17.5, thousand. So $17,500.
[4:41] Vendors made their first sale this Black Friday weekend.
So I took that to mean, not that they launched on Friday just in time for Black Friday, but that this was their first Black Friday where they sold anything.
So that's 17.5 thousand new merchants.
[4:58] And then he said, in total, 55 thousand merchants set their all-time daily record on Black Friday.
Black Friday: First Sales for Vendors
[5:05] And while those two numbers sound impressive, if you kind of think about it for a second, you go, wait, the vast majority of merchants on Shopify that are B2C are going to sell their record.
Cyber Monday hasn't happened yet, so take that out of the equation, are going to set their all-time record on Black Friday.
So not surprised, you would expect the vast majority of all merchants to set their Black Friday record.
And 17.5 thousand of them are new. So what that says is there's only 37 thousand merchants that are a year old on Shopify that sold more this Friday than last year on Black Friday.
And that's, I guess, less than I would expect based on the usual reports we get from Shopify.
So that, I'll just record that as a moment and our stock analysts that cover Shopify listening on the call can weigh in on that one.
[5:58] BigCommerce, a slightly weirder data set. They saw an outlier, they saw 14% growth, but again, random, they're not trying to report at the industry, they're just reporting their clients.
And then a particularly interesting one to me is MasterCard.
I have a love-hate relationship with MasterCard.
Unlike all the rest of you, MasterCard gets a set of data for stores and retailers, so they try to forecast what happened in retail, which is super valuable.
Historically, I've seen some weird deviations from MasterCard that make me cautious about their numbers.
But this year, they reported Black Friday, they did not report Cyber Monday.
Their Black Friday number was up 8.5% year over year for eCommerce.
[6:39] Which is at the high side of the mean for all these other datasets.
And they reported that on Friday, total retail sales were up 2.5%.
But if you back eCommerce out of that number, brick and mortar was only up 1.1%.
So basically, I would call all those numbers par with our Q3 numbers.
So, that kind of sets the table.
Scot, take us through what we learned from Salesforce.
Scot:
[7:11] Yeah. So, a million questions, Rob. Let's start with, it seems like one of the biggest interesting battle royales is, A, why was Rob's face not on the sphere?
And then B, it seems like one of the data sets is saying Cyber Monday is much bigger than Black Friday. And then in your pre-show, you had said you guys are seeing Black Friday exceed Cyber Monday. So let's start there. Which was bigger?
Rob:
[7:37] Yeah. Well, first of all, I lost the coin flip and Astro or Cody, which are critters in Salesforce world, won.
So they got their faces along with Einstein on the sphere a couple of weeks ago during F1.
So I'm still going for it next year, but we'll see what happens.
But I digress. Let's get into the numbers.
So yeah, we are seeing, you called it a battle royal. I appreciate any reference to 1980s wrestling, by the way.
So thank you very much, but let's not go down that path. That could be a whole other podcast.
But what we are seeing is, as you mentioned, a battle between Cyber Monday and Black Friday for supremacy.
[8:19] And they are going back and forth. What we found in our data in 2019, Black Friday eclipsed Cyber Monday and has remained there, especially outside of the United States.
And so we're seeing big growth and, you know, partly what's contributing to that is not only Alibaba, which has been in place for some time, but Timu and Xi'an, which I know you gentlemen like to talk about.
So regardless what I think, two things based on all the data that you provide, and I appreciate the broad perspective that you share here, is people are actually buying.
They might not be buying as much as they were in the past and throughout the pandemic, but But there is demand.
And you know, I think that's important because when we look at our numbers and just to put it out there for Cyber