Unknown Speaker 0:00 Oh Joshua Warren 0:06 Adobe was honestly the most positive predictions I had seen at the time and everyone else was pretty pessimistic. And I didn't agree with those pessimistic forecasts. So I was hoping that Adobe would be accurate. I think they were they're actually pretty accurate weather forecasts Darin Newbold 0:21 really only missed it by too much. Joshua Warren 0:24 Just 2 billion Darin Newbold 0:25 2 billion. Good day and welcome to Commerce today. We're so excited to have you on board. My name is Darren Newbold, and with me as always, as co host, Josh Warren here to walk us through what's happening in Commerce today. Now, this one's a really fun one, Josh, because we're going to maybe use the Wayback Machine, is that what we might use and go go back to our episode number two, where we grabbed and this is where we need that eerie crystal ball sounding theme music if there is such a thing. And we looked at Adobe's crystal ball, and kind of went through their holiday sales forecast for 2022. So with that, Josh, how did they do? Joshua Warren 1:18 Yeah, so I think I even mentioned back then I was super excited for this episode, because I wanted to see how they did. Because Adobe was, honestly the most positive predictions I had seen at the time, and everyone else was pretty pessimistic. And I didn't agree with those pessimistic forecasts. So I was hoping that Adobe will be accurate. I think they were at, they're actually pretty accurate with their forecasts Darin Newbold 1:40 really only missed it by too much. Joshua Warren 1:43 Just 2 billion, 2 billion. Darin Newbold 1:45 So what you're saying is you're okay, if I miss my goals in my budget numbers by $2 billion, that's a capital. Wondering, Joshua Warren 1:54 you see, they exceeded it. Oh, it was actually $2 billion of additional revenue. So yeah, if you want to bring in an extra 2 billion you have that lying around, and I will not complain. Darin Newbold 2:05 All right, folks. You heard it here. First. Two billions. All I need. And we're off to the races. All right, back to our regularly scheduled programming. How did how did it all play out? We have holiday sales, Thanksgiving, Black Friday and Cyber Monday, we kind of they kind of broke it out. So a numbers I know are kind of hard when you're talking. And you don't have numbers to see. So we'll we'll add these or have some of this as part of the show notes for sure. But, Josh, how did they How did it all play out? Joshua Warren 2:30 Yeah, so they had predicted that overall holiday sales for the E commerce world would come in at a 2.5% increase over previous year. So basically, to under $9.7 billion. It's actually a higher increase, it was a 3.5% increase came in at $211.7 billion. And that was obviously a big mess. But the other interesting thing is they had predicted that Thanksgiving and Black Friday would be slower would have the I think probably the first ever the first and many, many years were Thanksgiving sales and Black Friday sales would be lower than the previous year. That was incorrect. They thought it would be a 1% decrease on both of those days. And Thanksgiving, sales for E commerce actually went up 2.9%. And for Black Friday went up 2.3%. So that was a fairly big Miss there as well. Darin Newbold 3:23 That is that's a that's a big miss. Why do you think they thought that? Joshua Warren 3:27 It seems like and looking at this and looking at their numbers and predictions, they really thought that there was such a focus on discounts and people wanting discounts. They were really putting in all their eggs in the Cyber Monday basket and thinking that, proportionally, all the sales are going to come on Cyber Monday, and maybe maybe a few days after Cyber Monday, that type of thing. And not so much on Thanksgiving and Black Friday. Darin Newbold 3:51 So the results then, and we haven't mentioned Cyber Monday. So once your share of Cyber Monday what happened then, Joshua Warren 3:56 yes, the Cyber Monday, they're actually pretty close again, you know, by billions. They predicted 11 point 2 billion and the actual sales were 11 point 3 billion. Darin Newbold 4:08 So hey, it's just a missed by 100 100 million or point 1 billion. I know this is all confusing to think about. It's it's a lot and I figured it up to be about 1000 Corvette so if you if you can think of it that way. That's how far they missed 1000 Corvettes is point 1 billion, give or take a few. But looking at that, and kind of coming back to this if they were predicting that the discounts were the big deal on for Thanksgiving and Black Friday did the retailers outsmart them or outsmart themselves and just pre discount? I do Joshua Warren 4:41 think there's a lot of that but also just looking at the the overall trends so you can actually plot all this data out and they have the data for every single day in the holiday selling season. And sales really didn't slow down until December 12. They actually stayed pretty high. I think a lot of that A lot of that came down to retailers were just running constant discounts and promotions. And so I do think that helped, I think some people in the industry and I think Adobe was part of this in their predictions thought that, you know, the big discounts will be on Cyber Monday, that'll be what drives everybody to shop online. Well, retailers didn't stop, they basically saw the sales they're making on Cyber Monday said, Hey, these discounts are working. Let's keep going. And they found ways I think a big part of it was finding ways to discount and remain profitable. It was kind of interesting. There's some case studies already coming out of companies that they ran promotions, and they appealed to customers that were looking for discounts. But when you actually compare it the way they were either changing their shipping cost or changing the the original price, it wasn't actually a discount, they still had the same profit per order that they had in previous years. But they were able to get more volume through by appealing to those discount hunters of this year, that Darin Newbold 5:57 whole shipping and handling trick that sometimes it's free, and sometimes it's $20. But at the end of the day, what you paid ends up being about the same, right? Yep. Exactly. Exactly. Interesting. Interesting that, that the sales started decreasing, basically 10 shipping days before Christmas, that that's when people started to recognize, hey, I can no longer get this by Christmas. So so that was a that be a big deal. But yet, places like as we've talked about before, Amazon was still hammering, you know, they had two day shipping, and they had people delivering Saturday, Sunday. If there was an eighth day of the year, they were doing it then too. Joshua Warren 6:42 Oh, yeah. Yeah, I think that some of this, the decrease kind of 10 shipping days before, I think both retailers, but especially consumers were nervous, because I don't know if you remember, but 2020 and 2021. UPS and FedEx had a lot of problems. And there were a lot of late packages. There are a lot of things not arriving when they were promised to arrive. So I think people gave up basically on ecommerce a little bit earlier in the season. But that actually kind of goes into the next thing I want to talk about was, obviously if you you want it fast, you're nervous that you you know, maybe can't get it shipped that fast. That's when you start looking at curbside pickup. Well, Adobe had a prediction there too. And they said that the three days before Christmas, 35% of online orders would be for curbside pickup. This is another one where they actually missed a little bit. It was actually 42% of online orders to three days before Christmas for for curbside. So I do think that retailers were able to capture some of those people that were nervous about shopping online after December 12 by offering curbside pickup, but because so many retailers still don't offer that. That's when I think the brick and mortar stores really started getting a greater share of the sales. Darin Newbold 7:55 Yeah. Is there any breakdown or any information that you have? I'm genuinely curious. I mean, where did all these 42% of the curbside pickup come from? Which stores is that the let's call it the Macy's, the Nordstroms, the Dillards, those kinds of large, large, very large retailers brick and mortar, and they're very much the clothing, a majority clothing type of items and those kinds of things is that Joshua Warren 8:19 that was a lot of it. I know Adobe also pulls data from Target and Target had just crazy numbers from their, their curbside pickup this year. That's awesome. Some smaller retailers that you most likely haven't heard of some regional retailers and I'm thinking specifically of some Farm and Home Stores, some kind of general home supply type stores that have good regional footprints that offer this curbside pickup. Darin Newbold 8:47 Yeah, and they probably at the regional footprints and probably regional loyalty as well. And so that's going to drive that. Interesting. All right, well, moving on here. So things slowed down. around December 12 10 days out 10 day 10 shipping days, I should say not 10 days from Christmas, but 10 days, shipping days. But alright, let's take us all the way up to Christmas. What happened on Christmas day? Joshua Warren 9:14 Yeah, that was super interesting. So mobile set a new record. 61% of online sales on Christmas Day are on mobile. And I really have this picture in my mind and if anyone in my family is listening, I swear I didn't do this. This is hypothetical but it seems to me like after opening gifts, everybody got their smartphones out and went online and ordered what they really wanted for Christmas. Darin Newbold 9:40 Well, okay, let's maybe there's a more positive way to to spin this maybe maybe they got the shirt or blouse and they decided to get the the pants or shorts or whatever that goes with it so that it was complementary to what you'd gotten at Christmas. Joshua Warren 9:58 Well and there's also So many retailers now, especially the bigger retailers make it so easy. If you get a gift card, you can spend that gift card online, you know, without having to necessarily type in all the digits. There's a code you can scan on the back. So I would imagine some of that was getting those gift cards and deciding to put them directly to use. Darin Newbold 10:16 Yeah, that's a good point. Because one of the things that we do is a standard around Christmas is the kind of the white elephant gift exchange that's on Christmas Eve. And it's often because the families have gotten older. And so it's more often that there's less overall true gifts. But there's a lot of gift cards, so I could see that. And maybe, maybe a lot of that. I guess, here's a question for you on that. And he I don't know if you have the data, but how much of those online sales from the mobile how much of that was food and beverage versus product and service or products? Specifically, is there any breakdown on that? Joshua Warren 10:54 Typically, I don't have the numbers in front of me. But typically, with these reports, they are going to exclude certain categories. And so a lot of times that will exclude certain types of food and beverage. But I would have to dig into some of the other data to get those numbers, Darin Newbold 11:09 ya know, everything I'm thinking I mean, how many people got Starbuck cards or those kinds of things, and we're immediately putting my hey, let's get the you know, alright, Christmas Day, we're tired. He had go get the frappuccino, or the Mocha espresso or whatever. Anyway, all right. Very cool. Moving on. So I guess tell us about kind of total, the total sales and how this looked in comparison to 2019 through 21. Yeah, so Joshua Warren 11:34 there's been kind of a story and luckily, these numbers I think, have broken that story or not seeing it as much but late last year, probably starting about the time that Shopify posted there, I think billion dollar loss. There's this story that hey, everyone in the e Commerce Industry thought things were gonna keep going crazy high levels of growth from the the pandemic that the growth in 2020, the growth in 2021, and all that was gonna continue. Well, then all of a sudden Shopify posts that huge losses, oh, no, actually, people are going back to stores, ecommerce isn't going to grow this fast. There's people predicting, pretty much everybody was predicting that ecommerce would not drive as many holiday sales by percentage in 2022, as it had in 2020, or 2021. However, that didn't happen. That was another one of these pessimistic predictions that was actually way off. So back in 2019, way back the before times, about a little under 15% of holiday retail sales were online, while 2020 hits and I'm actually surprised this number isn't higher, but 20.6% of holiday retail sales happened online 20 to 22, or 2021. Everyone says, Hey, I still like this ecommerce thing. It came in at 20.9%. Well, actually, this, this most recent holiday season 2022, ecommerce drove almost 22% of total retail sales. So customers have not gone back to the pre pandemic holiday shopping behavior. They are still shopping online, for sure. Darin Newbold 13:12 And yeah, as you look at this from 2019 to 2022, there's overall there's been a 7% increase in online sales. So however, that breaks out and we had to close years of 2020 and 2021, where the majority of that increase took place between 19 and 20. Very interesting that tells you that the pandemic set a standard that, at least based on these numbers is not going away. Well, out of all of this, Josh, and these interesting numbers and the fact that they missed but they fortunately, everybody missed and they were low, they were a bit pessimistic, I guess, looking forward. What are our takeaways from all of this? Joshua Warren 13:57 So I think first and foremost, if you have any way at all that you can offer a curbside pickup option by this holiday season, you have to like that is just even if you're you're a single store retailer, maybe if you don't even have a store, start looking at creative ways to do that. I think we're gonna see some service offerings from Amazon this year. I know UPS has some things in the works to where smaller businesses can provide kind of a local pickup option and like a locker system. Yeah, exactly. And I think those systems, some type of option like that you're gonna have to have that this holiday season. And that's not the kind of thing that you sign up for service, flip a switch and it's live the next day. That is something you need to be talking to your ecommerce provider about, like yesterday and get that underway. And I think that's where one of the reasons I wanted to kind of highlight the myths and these predictions, I think, again, especially after those disappointing financial results from Shopify, I think a lot of retailers took that as a sign as Okay, 2023 isn't the year to make a huge investment in E commerce. Let's put the money back in our brick and mortar stores. I think some people may have missed in their budgets for this year. And they might want to take a look at these numbers and say, Okay, this is a time to reevaluate, it's still early in the year, we can shift some spending around and make sure that we get that get curbside pickup and some of these other things done before the holidays. And related to that, I would expect that based on what happened this past year, overall, for the year, about 22% of your total online sales are going to happen in the holiday season. That's about the percentage that holiday sales made up of total ecommerce sales last year. And then the only other big changes I noticed as you kind of look at these predictions and try to apply them to the next holiday shopping season is that the online holiday shopping season will be one day longer this year. And I think that kind of your key window for your promotions will be November 24 through December 11. That's when I would kind of cluster my my key promotions based on this. Darin Newbold 16:02 How does it work out that we get one day longer of a shopping? Oh, this Joshua Warren 16:06 is this is where being a longtime e commerce nerd their years I've loved and years I've hated. It's all about the calculation of where Thanksgiving falls because it's the X Thursday of November. And so there's actually a range in November of when Thanksgiving can be and and it's interesting kind of an aside here. This is totally different than the rest of the world. You know, these are all very US centric patterns and numbers. The first time I visited Europe during I want to say it was late October. And and this is before this was common in the US no more stores do this now. But late October all the stores are already doing the Christmas sales. It was the holiday sales season, because there's not a Thanksgiving because that is a US and also Canadian holiday. Rest of the World doesn't have it. So they kind of go full bore into shopping. Before that Darin Newbold 16:59 arrest. Josh, thank you so much for sharing all of that. We hope you guys enjoyed this. And this kind of going back through what happened over the holiday season and really getting that retrospective of this is what was predicted and this is what we were looking at and here's what actually happened, and some great ideas and key takeaways and key points. So with that, again, we appreciate you being here. This is another great episode of Commerce today. We look forward to catching you next time until then Transcribed by https://otter.ai