Joshua Warren  0:06  
Not just for this year, but for the coming years, it's no longer going to be about having a big push around cyber week, I think cyber week is going to be important for life this year, it's falling to around 16% of total holiday sales, and might fall even more next year. So I would say start your holiday messaging now. Start your promotions now and realize that those customers are going to expect that and the big thing is if you're like me, and you like to watch the data roll in throughout the holiday season, you might drive yourself crazy this year. And I would just say be careful. Don't drive yourself to drink looking at all this because your data is probably going to be weird, just because consumer behavior is so different this year.

Darin Newbold  0:49  
Well, Good day and welcome to Commerce today. We're excited to have you on board. My name is Darren one of the CO hosts here. And as always, Josh here to bring us all of his insights into commerce today. And we have a fun one here. So I'm hearing Jingle Bells a little bit and it's holiday season time. And this is the Adobe's annual holiday season forecast. So Josh, you've got your crystal ball there, or maybe I guess I should say, Adobe's crystal ball and going to tell us all about what the predictions are for for this holiday season. So tell us what what do they got up their sleeve?

Joshua Warren  1:24  
Yeah, so it's definitely Adobe's crystal ball, I'm just looking over their shoulder seeing what they're looking at. And I will say, No one knows what's going to happen this year. I think some years, these forecasts can be pretty accurate. But this year, like the past couple of years, there's a few curveballs. So this, I believe, is the best guess. But it's definitely, in a lot of ways. While it is data driven, it's a data driven guests. So we're actually going to come back after New Year's with an episode to see how Adobe did in these predictions. I think it's gonna be a lot of fun, we're gonna see the the hits and the misses. But overall, kind of the story, the projections that Adobe has kind of tells us is that, you know, 2021 was a great year, and maybe 2022 is going to be a good year. And specifically, they're calling for online sales. And the holiday season, which they call November and December the holiday season. They're calling for those online sales to increase probably increased by about 2.5%. That's exciting. They're projecting almost $210 billion in online sales. But what gets everybody down a little bit about these projections is, you know, last year was record breaking year EComm, sales hit almost $205 billion, it was almost a 9% increase year over year. So after setting those big numbers last year, I think there's some some high expectations for this year that aren't being met that kind of have some some retailers and merchants a little flustered.

Darin Newbold  2:52  
Well, is this. Is this a little bit of that? I don't know, what do you want to say, the self perpetuating situation where we're hearing all of these doom and gloom that our economy is going to be in being a huge inflation and, and slowdowns and all of that? And is this just a reflection of that?

Joshua Warren  3:15  
You know, I wonder about that. Because when you look at these numbers, there's two reasons that are a lot of reasons. But there's two big areas that might cause it to decrease one, people are spending less money, or two people are spending just as much or more money, but they're spending more of it in stores. And the two stories that we're seeing a lot in the news lately are people have less money to spend and people love going back to stores. I do think that is kind of starting to become a self fulfilling prophecy where online sales are not increasing as much because people are either holding back or they are more likely to more cases, they're back to shopping in stores, which you know, we all miss the stores, it's, Hey, it's a lot of fun to be back. Now. The other thing that kind of caught my eye just in the overall data is 2.5% growth rate year over year, well, that's actually less than a lot of the inflation numbers. So can we call that growth and it feels like basically, if you assume that it's a total decrease in spending or not just a shift in person spending. That means that people are basically getting less because they're paying a little bit more spending a little bit more, but not enough to offset inflation. So that's, that is a little frustrating to see for sure

Darin Newbold  4:29  
will tell us about. All right, that gives us the overview, but what's going to happen going into you know, the Thanksgiving Black Friday, Cyber Monday, party Tuesday, whatever the days of the week are. Tell us tell us what's happened in there.

Joshua Warren  4:44  
Yeah, so I am an ecommerce nerd. I know Darren, you you're a big Formula One guy. Well, I gotta admit that like on Thanksgiving and Black Friday, lots of years. I'm in Google Analytics, watching the real time analytics of some of the clients that I I work with, and I'm watching those numbers, almost like you would watch an f1 race. Oh my goodness. And so one of the things I find kind of interesting is the distribution of sales, like what's going to be on Thanksgiving, what's going to be on Black Friday. And it's an interesting pattern that Adobe is forecasting, they think that for online sales, Thanksgiving Day is actually going to fall, there's gonna be a 1% decrease in spending and online sales, they think Black Friday is going to be flat at just a 1% increase. So really, between Black Friday and Thanksgiving almost comes together as no change. And then Cyber Monday is going to be the one day in that kind of span that has a big increase, it'll be about a 5% increase in sales. So you're gonna see a very different pattern in your online sales this year, where you're really not going to see that that big, early spike on Thanksgiving, like we saw last year and the year before. The other thing with this pattern is cyber week as a whole is expected to make up less of total holiday sales, they think that people are going to be shopping throughout the season. The other thing, and Adobe kind of even calls this out in their research that one challenge with their report is they're projecting for November and December. Well, October actually isn't making up more of holiday sales this year than it ever has before, just because there's more and more retailers offering discounts in October. So a lot of those sales that would have happened during cyber week are happening now. So people are now shopping much earlier. Well, yeah,

Darin Newbold  6:33  
you're seeing sales everywhere you've got what is it? Amazon's Prime Day happens in in October and early access and all those things. So that's going to drive drive a lot of that earlier and earlier. It's, it's it's like, gosh, we skip Halloween and we go straight to Christmas because the decorations are already out kind of crazy. So all right, what else do you have in your Adobe crystal ball there?

Joshua Warren  6:57  
Yeah. So while you know most of this data calls for either flat or increases in online sales, I do have bad news for all the apparel businesses out there, especially the pure play ecommerce, apparel, businesses, apparel shoppers have gone back to the malls, they're back in the stores, Adobe's actually predicted and almost 7% Decrease in online apparel sales this holiday season. So everybody is back to wanting to try it on and get that great in the store experience. The good news, and again, this is more good news for those store based retailers and omni channel retailers is that you're gonna see a lot more curbside pickup specifically. So last year, the average was 25% of orders were curbside pickup orders of online orders. They think that's going to continue this year, except for the three days before Christmas, when Adobe thinks that up to 35% of orders might be curbside pickup orders. So if you have that solid omni channel experience in place, I think you can potentially make up for some of those losses and apparel sales by just having that that customer service opportunity I

Darin Newbold  8:07  
was gonna say so if you are a full apparel type of story, ecommerce store, then offering, offering that curbside pickup make that a big deal and make that really stand out for your customers so that they can experience that now. How does that work for apparel stores that don't have a brick and mortar where you can really go to do a pickup? I think we think we there's one at least I'm thinking of that might run into this. Is there any thoughts on what they might do? Yeah,

Joshua Warren  8:37  
I mean, that's, that's challenging. For this year, I think there's going to be, especially for kind of a small to midsize retailer, I think there's going to be some interesting options going forward for being able to leverage some of the pickup points and things like that to almost basically provide a curbside pickup experience. The bigger retailers, were seeing partnerships where basically you can go and pick up your order in another retailer store, but I haven't seen that no one. Well, there's probably someone out there disrupting that right now as I speak, but no one's really brought that down to make it accessible to small to midsize retailer yet.

Darin Newbold  9:15  
Now. I'm gonna I'm gonna put you a little bit on the spot here. Josh, just because we had a previous episode that I know we talked about some of the disruption that's going on in the shipping side of the world and you'd mentioned pickup points and so the first thing I thought of was like the Amazon drop box or lockers that they have is Is that does that start to become an option for for those apparel, and I'm throwing out the apparel just because hey, it's gonna be a tough looks like is gonna be a tough year for them. So is that an option? Maybe

Joshua Warren  9:46  
it's not something that Amazon has made available to retailers yet, but I definitely could see especially if you're, if you're already leveraging Amazon for your sales, if you're leveraging Amazon for your fulfillment could definitely see The Amazon providing kind of access to those pickup points. Be a smart move for them. But I'm also wondering, this is where I'm tempted to Google on the fly here because I just whether they're in stealth mode, or they've announced it, I feel like there's got to be a company out there that is partnering with others pickup points at a lot of seven elevens. Places like that. Got to be a company that is doing something on the filament side to get these kind of mid sized retailers into Yeah, good points.

Darin Newbold  10:28  
Yeah, I would think so. Well, all right. So curbside pickup, that's a biggie. So what does this mean overall, for your average ecommerce merchant?

Joshua Warren  10:36  
Yeah, for the average merchant, I think the biggest thing you have to be aware of is that your customers are shopping earlier. And they're expecting discounts. I've seen data of up to 36%, kind of being an average for some retailers, how much they're discounting over last year's prices. And that's one of those things that as news of that gets out, it only builds even further, where customers expect more and more and more discounts. The other when he put all this together really though, it's just super critical to have holiday messaging and promotions throughout October, November and December. I think that not just for this year, but for the for the coming years, it's no longer going to be about having a big push around cyber week, I think cyber week is going to be important. But like this year, it's falling to around 16% of total holiday sales, they might fall even more next year. So I would say start your holiday messaging now. Start your promotions now and realize that those customers are gonna expect that. And the big thing is, if you're like me, and you like to watch the data roll in throughout the holiday season, you might drive yourself crazy this year. And I would just say be careful, don't drive yourself to drink looking at all this because your data is probably going to be weird, just because consumer behavior is so different this year. So do you start seeing sales on Thanksgiving or Black Friday that aren't trending like they were last year? Don't give up? Hope? It seems like you're gonna see more people shopping before that. And after that, then on that actual weekend. Interesting. Well,

Darin Newbold  12:08  
looking back real quick, kind of on the you had mentioned the critical holiday messaging. And it just got me to thinking for the E commerce merchants, they typically are going to have at least some level of a range of in pricing of of products that they're that they're providing. Would you think or is there a strategy? And I'm sure there is a strategy for everything. But I guess what what do you have any thoughts on what that strategy might be on? You know, going after promoting and either discounting a maybe a high ticket item, versus maybe a lower ticket or a mid ticket type of item? Is there some strategies? And is that is that a strategy that maybe you you look at a an October and then it changes slightly in November, and then it changes again in December?

Joshua Warren  12:54  
Yeah, there's definitely, definitely room for strategies like that. I've been developing a theory and I'm seeing more and more data backing this up where different price points are being impacted differently by inflation, and by cuts and consumer spending. And literally today at age had an interesting report out about premium price points, and Gen Z and kind of the intersection of those two things and how, basically, Gen Z, especially Gen Z they can afford it, they are very much interested in premium products and shopping at a premium price. But kind of their definition of that premium experience is different. And so I think that the data is not fully out there yet to know for sure exactly how to do this, especially for kind of a small to mid size ecommerce merchant. But I would say experiment, start experimenting with looking at, you know, maybe you run your and again, this also depends on your objectives. Because you might not want to run a lot of discounts on your lowest price point items, because you may already make money on them. Yeah, be losing money. But if you have the profit margins to do so maybe try experimenting with do some big markdowns early on on your lower price point items, but don't mark down your higher price point items that may be midway through the season, flip it if that's not working out and just see how your particular audience reacts.

Darin Newbold  14:18  
Interesting. Yeah, there's always ways to always ways to do that. And what I'm what I'm hearing from you and for merchants, and what they really need to do and this is goes for every company on the planet, whether you're ecommerce or not, but know who your customer is, and really know them and know their buying habits because knowing having that information is going to gonna really help direct how you want to come about putting this together. So Well, Josh, any last thoughts as you wave your hand over the Adobe crystal ball,

Joshua Warren  14:51  
glad Adobe's letting me borrow their crystal ball? Hopefully they don't notice that it's missing. We better get it back pretty soon and I will do To say stay tuned. I'm really excited. I know there's a lot of numbers and figures and guessing in this episode. I think we're gonna have a lot of fun next year in our retrospective of looking back at how accurate Adobe was and, and even how maybe some of the suggestions we made today see if that ends up in the industry press and if anybody tries those

Darin Newbold  15:18  
well yeah, and maybe we can even get somebody from Adobe to join us to really, to really talk through it. That would be fun as well

Joshua Warren  15:24  
put them in the hot seat. Absolutely. Absolutely. Well,

Darin Newbold  15:27  
as always, folks, thank you again for tuning in to Commerce today. We really appreciate you being a part of this show. As always, if you like it definitely hit us up for a like add comments, as well. We would love to hear from you and hear your thoughts on each and every episode with that. You have a great rest of your day. Take care