EP055 Unwrapping 2023 E-Commerce Holiday Sales & 2024 Strategy Kickstart === [00:00:00] Darin Newbold: All right, and good day and welcome once again to Commerce Today. My name is Darren and as always my wonderful uh, co host here is Josh and we are excited to have you here for this Commerce Today podcast. And this, this is a fun one because I always like coming back to this, Josh, because this is the, the 2023 e commerce holiday going back to that whole forecast we have and what actually happened. [00:00:30] Behind the scenes in front of the scenes and what's next. So with that, why don't you give us a quick overview of, uh, of what happened in that holiday sales review? [00:00:39] Joshua Warren: Yeah, sneak peek is last year's review was even more fun because I got to say I told you so a lot. [00:00:45] Um, because the predictions about 2022 were not nearly as accurate. [00:00:50] Darin Newbold: They weren't as doom and gloom as [00:00:52] Joshua Warren: Yeah. Yeah. Um, the, the predictions before the year before were very negative this year were a little bit more positive and this year they were a lot more accurate. So, um, overall, really, the predictions were pretty much dead on. [00:01:06] So sales, um, uh, ecommerce holiday sales ended up at $221.1 billion. prediction prediction was $221.8 billion. And you know, what's 700 million among friends? That's close. Um, year over year growth was 5%, kind of as predicted. Cyber Week actually exceeded predictions. Cyber Week is over 38 billion in ecommerce sales. [00:01:29] And really mobile device sales, they did set a new record as expected in that, 51.1 of, transactions in the holiday period were from a mobile device. And that is the first time that has happened. And I got to say, my friends in Europe have corrected me. The first time that has happened in the United States, apparently in Europe, they're much further ahead of us. [00:01:48] Darin Newbold: Everybody's on mobile. [00:01:49] Joshua Warren: Everybody's on mobile. [00:01:50] Darin Newbold: Well, that's interesting. So fundamentally [00:01:53] Joshua Warren: the [00:01:54] Darin Newbold: predictions kind of over predicted and we came in just a hair lower than those predictions, [00:02:00] Joshua Warren: Yeah, we did. We did. And I think some of that was, um, kind of overcompensation, by Adobe and some of these other companies that do these predictions. I think they saw how much they missed last year and felt they were too pessimistic last year. [00:02:13] So they got more optimistic and overall, though, I mean, for this level of data and this amount, it's a pretty darn accurate forecast. [00:02:21] Darin Newbold: good swag. And as a reminder, we'll have all these numbers in the show notes, so if you didn't have your pencils sharpened and everything ready to go, that's okay. [00:02:28] We'll have them there. So all right, let's peel this back now and what were the key trends? What were the real observations, the, what, what was happening behind the scenes of all of these big numbers and stuff? [00:02:40] Joshua Warren: So while Black Friday and other days aren't as significant as they used to be, Cyber Week definitely is very significant. It made up 17. 2 percent of the total sales for the season. So a lot of retailers kind of, their holiday season, they either made it or broke it on Cyber Week. And a lot of that was tied back to discounts. [00:03:00] There was a lot of discounting on Cyber Week. So, [00:03:03] Darin Newbold: how did the role of like Buy Now Pay Later and that kind of stuff, how did that Come into into this cyber week and all of the things during the holidays. [00:03:12] Joshua Warren: as we have mentioned before, that this makes us nervous. Um, we are all really loving that buy now, pay [00:03:19] Darin Newbold: Over leveraged [00:03:20] Joshua Warren: Yeah. A little bit of over leveraging, um, 7.5% of all holiday sales by revenue. Were paid via buy now. Pay later. So that is a new record. That is a lot of money that was financed over the holidays through buy now pay later. [00:03:35] Darin Newbold: All right. And then one of the things that was a big trend with, with COVID and all of that was the, the curbside pickup and, and those kinds of things. [00:03:47] how did that, how was that impacted? During the holidays. Yeah, so [00:03:50] Joshua Warren: curbside pickup, um, continued to be very strong and in demand this year. And from December 22nd and 23rd especially, consumers were all about that curbside pickup. Um, it was a very commonly used method. and then the other thing I wanted to talk about kind of for looking at the data is, um, Years ago, many, many years, um, we talked a lot about a mobile conversion gap and, Creatuity was even involved in an initiative through PayPal that was to close the mobile conversion gap. [00:04:20] well, there is still a mobile conversion gap all these years later. [00:04:24] Darin Newbold: Really? [00:04:25] Joshua Warren: yeah, it was kind of interesting to see. conversion rates on Cyber Monday spiked all the way up to 6.9 on desktop. Um, and before that, Adobe's data showed they were at about 3.8 over mobile. It increased, it went from 1.9 but it only went up to 3. 5%. So you're still seeing almost double the, conversion rate on desktop as you do on mobile. So, there's still a lot of work to be done on the mobile experience. [00:04:52] Darin Newbold: Why do you think that is? It's harder [00:04:55] Joshua Warren: shop on a phone than a [00:04:56] Darin Newbold: computer. Interesting. I wonder, well [00:04:59] That's probably for another episode. Um, we do get into some, uh, some good stuff here, but that's some great insights. I mean, really understanding the fact that Cyber Week knocked it out of the park. We still have a mobile conversion gap, because people just, you're still not converting on a mobile. [00:05:14] And then by leveraging is leveraging, we're, we're buying it now and we'll, we'll pay when we can pay. And then curb pickup is still a valid and still a viable, viable option here. So, all right. Now that we have our data, we see where the numbers are and a little bit kind of the trends behind it. what are the things that we need to start focusing now for 2024? [00:05:35] So for our merchants going forward and those that are listening here, what can they start doing and kind of start? Putting their plans together and, and to see how to take advantage of these things that are going on. [00:05:47] Joshua Warren: Yeah, so first I kind of want to look at just the strategy level, and then we'll get, we'll get super actionable. [00:05:52] Um, so on the strategy level, um, mobile. The mobile experience, again, we've been talking about this and working on this for years. There's still work to be done. Um, and definitely, um, looking at, um, The mobile user interface, the mobile user experience, um, you know, hopefully everyone watching and listening to this implemented a responsive design years ago. [00:06:13] If you haven't, I don't know how you're still in business, but you need to do that now. Um, but then also just simplifying the navigation, simplifying the checkout either. Offering something like Apple pay using a drop in checkout replacement, you know, there's a lot of different options there, but look at that checkout experience. [00:06:29] That is still some of the biggest friction, you know, Apple and Google both try to make it easy by auto filling credit card numbers, but it's still not as simple and, uh, easy as a checkout on desktop tends to be. [00:06:41] Darin Newbold: Yeah, I would've to agree that is, uh, that is a key and having that Apple pay there, while sometimes I don't necessarily want that, but it's handy boy when you need it and when it's there. [00:06:49] Joshua Warren: Definitely. Oh, and then also, um, forgot to mention accessibility. We've talked some about that. We have some great episodes you can go back and watch on that. But, um, I find that a lot of like accessibility best practices really translate well to the mobile user experience. Just because even if you don't need accommodations, um, for a disability. [00:07:10] Um, just scaling everything down onto that mobile interface can make it a little bit harder to see, a little bit harder to use. So things like watching your contrast ratios, making sure that your text kind of stands out and pops against the background. Different things like that, that are accessibility best practices are also in a lot of ways mobile best practices. [00:07:29] Darin Newbold: best practices. Absolutely. Definitely makes sense. So, alright, we're still talking mobile, but that was the user interface and those experiences. [00:07:38] From a strategy standpoint, how's the marketing play out to kind of get them there? [00:07:42] Joshua Warren: there. [00:07:43] Darin Newbold: so, as I'm sure a lot of our listeners experienced, SMS marketing is huge. It's sometimes a little annoying, but it's definitely huge. I [00:07:53] Joshua Warren: I mean, there were some brands that were sending out multiple emails, multiple text messages a day during cyber week, and you have to decide what works best for your brand and for your, your audience. But at this point, you know, if you're in one of those very saturated, um, areas, you almost have to do that because all your competitors are doing it, you're going to get lost in the noise. [00:08:12] Um, so definitely. And then what I saw though, beyond just. Text message blast that anybody could do. Um, I saw some interesting innovation around mobile specific deals and promotions. And this is something that again, way back working on the mobile conversion gap. Um, we used to do some experiments where if you were on desktop, we might pop up a 5 percent discount code. [00:08:34] If you're on mobile, we might actually pop up a 10 percent discount code. Something to kind of make the deal a little bit sweeter. Um, try to overcome that resistance to checking out on mobile by giving a bigger discount and a bigger offer. [00:08:46] Darin Newbold: That's interesting. I wonder, wonder how often that's even found. And even noticed. Um, I know I might find something like that and definitely want to jump in. So, all right, that's those marketing strategies and how to do that. [00:09:00] What's some of the the analytics and kind of that performance that you've got to have on mobile? Because that is the one of the big killers. If it's slow or if you can't get to it. They're gone. [00:09:10] Joshua Warren: yeah. So, you know, I think again, most of our listeners, they have some sort of analytics platform installed. They're collecting the data. Um, not all of them are looking at it. You know, sometimes you get overwhelmed. You have a lot of different irons in the fire things you're working on and you just don't check your analytics. [00:09:27] Maybe you don't have a person in your company that's responsible just for it. Staying on top of that. So, I mean, step one, go look at your analytics, look at the data and see how your consumers are behaving on mobile. See if you have that conversion gap or not. See how big that gap is. And that's a, a really good, simple starting point. [00:09:45] Darin Newbold: point. Very good. Is there any, is there any specific tools that, that would help as far as around that site speed and performance and any of that, that could impact their conversion rates? There's [00:09:58] Joshua Warren: a lot of paid tools out there. You can try lots of different ones that will monitor your site's performance, that sort of thing. Um, however, at the end of the day, Google has some great free tools and there's some great stuff built into Chrome even that can allow you to run tests against your site. [00:10:12] Google Analytics can capture some of that performance data as well. So sometimes even just starting with those free tools can be a, a solid start. [00:10:20] Darin Newbold: Alright, so now, I kind of led with that, and so that kind of takes us right into our next one, is, is, Hey, the importance of fast loading times and basically that website [00:10:32] Joshua Warren: optimization. [00:10:35] Darin Newbold: and the overall topic we're talking here is enhancing that e commerce website performance. [00:10:41] So, what are some things, Josh, you're seeing there that make sense and that people ought to know about? [00:10:47] Joshua Warren: So, you've got to remember that during the holiday season, that's the slowest your website's going to be. [00:10:51] So, I've worked with a lot of people that, I'll talk to them in January or February, and they'll be like Ah we don't have a performance issue Our website's fast. And in January or February, their website's very fast. You put it under a holiday load, though, and all of a sudden it starts to crawl. And there's so many studies out there that people have heard for years of, you know, for every one second, two second delay, you lose X percent of your revenue, your conversion [00:11:11] rate. [00:11:11] Darin Newbold: Absolutely. [00:11:12] Joshua Warren: it's so true. So that's where, I mean, very basics is Know how your website performs under load and know if you have a problem there. And there's definitely, I mean, depending on your scale, unless you're just getting no traffic at all, you're going to have some level of performance issue. Probably during the holidays, you just need to know how big of an issue is it? [00:11:33] How much revenue is it impacting? And is it then worth digging into and solving before the next holiday season? [00:11:39] Darin Newbold: Where do you find some of those? Those areas is that is one of the biggest areas dealing with images and image loading times, especially in a mobile device. [00:11:48] That's kind of what I've seen. Anyway. [00:11:50] Joshua Warren: it definitely can be. [00:11:51] There's so many people, um, not to blame marketing departments. I know that you're all very overworked and doing the best you can, but I have seen cases where the e commerce team is struggling. It's like, why is, why is, why are these pages so slow? Why are users complaining? They go and look, and with that awesome, um, easy to use content management system you have, somebody in marketing took an image that was maybe five times bigger than it needed to be for mobile, they loaded it into the site, and now every time somebody visits that site, they're trying to download this huge image that probably they can't even see that level of detail on a mobile device. [00:12:24] Darin Newbold: But Josh, we want all 4k pictures here. Come [00:12:27] Joshua Warren: Exactly, you gotta have that retina quality, right? [00:12:30] Darin Newbold: Exactly. Okay. Well, that gets us on the performance side of it, but let's dig a little deeper on the user experience and that the CRO, the conversion rate optimization piece. [00:12:41] Joshua Warren: Yeah, so even if you don't have a major redesign plan for your website this year, you need to be doing some usability testing and thinking about your user experience. [00:12:50] Um, so really just looking at, um, the navigation and really again, kind of going back to that accessibility episode of, How busy is your website? How many distractions are on your website? Like how many things are taking people off that golden path to adding it to the cart and checking out? And I think sometimes we just add, we add this extension, that extension, this widget, that widget, and we don't ever stop and look at the site kind of from a 10,000 foot view and say, okay, what's the experience actually like for our users after we've added all this? [00:13:22] Darin Newbold: Well, yeah, and even, even some simple things like the A B testing of trying a couple of different, different ways to do it. And, you know, you always have, I think I know in an episode we even talked to almost the secret shopper, but having, having some people just go out and. [00:13:38] Do a run at your site, even friends say, Hey, run, take a run at the site and see what you, see what you see. I mean, that can be helpful as well. Right? [00:13:46] Joshua Warren: definitely, very much so. [00:13:48] Darin Newbold: All right. Well, let's, uh, let's kind of move in our last, our last kind of piece here is [00:13:54] Joshua Warren: Now, as [00:13:54] Darin Newbold: this is the. Time to the rubber meets the road, as they might say, of all right, what are the projects that we really need to start that we really need to have in the hopper or be looking at and be planning for 2024 based on, hey, here's what we see. [00:14:09] Here's what we've seen. Here's the results. Now, what do we do? [00:14:12] Joshua Warren: do? Yeah. So the first one is to have a robust customer data platform, and I would actually expand that. Forget the customer part, call it a data platform. Just know, where is your data? How much data are you able to collect about your customers, about your products, about your traffic, about your sales? [00:14:31] Where is all that being stored? How can you analyze it? And then that ties into My, my second recommendation, my favorite thing. You just thought you were going to get away with an episode where we didn't talk about artificial intelligence. so investing in AI and it's interesting. The National Retail Federation's big conference just ended and. [00:14:50] The, uh, CEO of tractor supply was there talking about how artificial intelligence and his view in 2024 is a lot like e commerce in the early 2000s. And that no one knows quite where it's going to go quite what it's going to do, but if you get it right now, you are going to make a lot of money. [00:15:06] Darin Newbold: Wow, that is awesome. That is awesome. And what else? I know there's one more that we're dying to tell everybody. Well, [00:15:12] Joshua Warren: and on the, on the AI front, and the way that ties in back to that data platform is there's some, some interesting reports coming out about how there's a lot of cool things you can do with AI if you own your data. [00:15:24] If you have all your data in one place, and if you can easily feed it into that AI. And that is what is, I think, tripping up a lot of retailers right now, is especially kind of the small to midsize retailers. Your data might be owned by and stored by seven different companies, different extension providers. [00:15:39] It's all over the place. So one thing you can do, you know, I think a lot of people hear AI and they go, it's going to be a million dollar project. Just start consolidating your data, start getting it all into one place, and then in a way that you can feed it into Some type of generative AI to start to help you, whether that's with your product descriptions, your inventory. [00:15:59] I mean, there's so much it can do if you have all the data in one place. [00:16:03] Darin Newbold: That is key. Data is king, as they say. [00:16:05] So what about, we got to close it out with, what's our last strategy here, Josh? [00:16:10] Joshua Warren: So having a comprehensive mobile strategy. So look at your mobile marketing. Look at even what I mentioned earlier about different offers on mobile devices versus desktop. [00:16:20] Realize that the user experience is different on mobile. Your customers, when they're on mobile probably have different things they're even trying to do. So account for that. Don't try to have a one size fits all kind of marketing and advertising approach for both desktop and mobile, but really make this the year that you focus in. [00:16:37] And try to kind of close that mobile conversion gap. I know that apple with the vision pro they're pushing hard on augmented reality this year. I think this may finally be the year where augmented reality can make sense for a lot more brands than it did before. And that can be another good tool to start closing that mobile conversion gap. [00:16:55] Darin Newbold: will very much look forward to our episode where Josh is in his [00:16:59] Joshua Warren: uh, [00:17:01] Darin Newbold: augmented reality mode and we get to do that. [00:17:04] So that will be fantastic. I look forward to that. Well, kind of wrapping this all together with a big shiny bow if at all possible. We really went through our holiday sales review basically predictions were in alignment with everything that people were saying the trends and observations, hey cyber week kick butt and People are leveraging things. [00:17:28] We still we still have a mobile conversion challenge a gap if you will and curbside pickup still still valid the strategies we want to be be aware of is, hey, the mobile, mobile, mobile, mobile. That's I mean, it's kind of like location, location, location. It's now mobile, mobile, mobile, the user interface and that experience, even the marketing strategies you use. [00:17:50] And then by gosh, we got to know the data. We got to have the analytics so that we can do some performance things. Um, we want to be able to stay on top of that. And then the projects to really kick into is having that robust. Customer data platform that you talked about. AI is here to stay. And then let's have that mobile marketing strategy. [00:18:10] Any last things to wrap this up or we'll land this plane. [00:18:13] Joshua Warren: Now I got to go get ready to pre order my uh, Vision Pro. [00:18:16] Darin Newbold: my gosh. Yes, he's on his way. All right. Well, hey, we appreciate you as always as listening. for listening. We definitely welcome you, uh, an opportunity to hear from you. Please comment, subscribe, like our posts. [00:18:27] And as always, if you have comments specifically around the content that we have, we love to have those questions and bring those, those all obviously give us ideas for our next [00:18:36] Joshua Warren: episode. [00:18:37] Darin Newbold: And as always, thank you and welcome to 2024. We look forward to seeing you soon.