DTC Holiday Predictions: Real-time Shopping Behaviors & Data

Sep 28, 2021 12:00 PM1:00 PM EST

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Key Discussion Takeaways

With life slowly returning to normal and with the pandemic, many businesses wonder how consumers will shop during the upcoming holiday season. How should your company prepare to meet the trends?

Udayan Bose and his team at NetElixir have been busy studying consumer trends for the last 18 years. The past 18 months have brought on unique challenges as most shoppers turned to online shopping. With the availability of the vaccine and as the pandemic has lagged and physical locations have opened back up, buyers’ priorities are shifting again. Where are consumers spending their money? What’s the best strategy for promoting your product and engaging with customers?

In this virtual event, Aaron Conant is joined by Udayan Bose, Founder and CEO of NetElixir, to discuss how companies can prepare for the upcoming holiday season. Udayan shares statistics surrounding shopper trends, how to plan for key holiday retail days like Black Friday and Green Monday, and why creating a Plan B is essential.

Here’s a glimpse of what you’ll learn:

 

  • Udayan Bose introduces his company, NetElixir
  • How should businesses prepare for holiday success this year?
  • Udayan shares statistics around current online shopping trends
  • How the pandemic impacted shoppers’ buying habits
  • Fluctuating social media and Google Ad prices and the demise of third-party data
  • Using smart strategizing and the four P’s of marketing to win more customers
  • NetElixir predicts a 6% year-on-year growth this holiday season
  • The balance between promotion and inventory
  • Make sure you have a Plan B and frequently engage with customers
  • Promotional strategies for Black Friday and Green Monday
  • Udayan digs into paid media trends
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Event Partners

NetElixir

NetElixir is a fanatically analytical digital marketing agency dedicated to helping eCommerce retailers find and acquire new high-value customers.

Connect with NetElixir

Guest Speaker

Aaron Conant LinkedIn

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

Udayan Bose

Udayan Bose LinkedIn

Founder & CEO of NetElixir, Inc.

Udayan Bose is the Founder and CEO of NetElixir, a leading digital marketing agency that helps eCommerce businesses grow through established high-tech solutions. The company now operates out of Europe, North America, and South Asia and has connected over 600 retail and direct-to-consumer (DTC) clients with their customers. Udayan is also the Co-founder and Leader of NetElixir’s nonprofit foundation, The UDAAN Trust, which helps underprivileged girls in rural India secure permanent employment. 

Udayan is passionate about numbers, analytics, research, and sharing his knowledge on the latest marketing trends. He is also an Innovation Fellow at the Eugene Lang Entrepreneurship Center at Columbia Business School.

Event Moderator

Aaron Conant LinkedIn

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

Udayan Bose

Udayan Bose LinkedIn

Founder & CEO of NetElixir, Inc.

Udayan Bose is the Founder and CEO of NetElixir, a leading digital marketing agency that helps eCommerce businesses grow through established high-tech solutions. The company now operates out of Europe, North America, and South Asia and has connected over 600 retail and direct-to-consumer (DTC) clients with their customers. Udayan is also the Co-founder and Leader of NetElixir’s nonprofit foundation, The UDAAN Trust, which helps underprivileged girls in rural India secure permanent employment. 

Udayan is passionate about numbers, analytics, research, and sharing his knowledge on the latest marketing trends. He is also an Innovation Fellow at the Eugene Lang Entrepreneurship Center at Columbia Business School.

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Aaron Conant

Co-Founder & Managing Director at BWG Connect


BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution.

Co-Founder & Managing Director Aaron Conant runs the group & connects with dozens of brand executives every week, always for free.


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Discussion Transcription

Aaron Conant 0:18

Happy Tuesday everybody. My name is Aaron Conant. I'm the Co-founder and Managing Director of BWG Connect. We're networking and knowledge sharing group with 1000s of brands who does do exactly that we network and now share together to stay on top of the newest trends, strategies, pain points, whatever it is that shaping the digital space, I talk with 30 plus brands a week. And when the same topics come up over and over again. That's how we come up with the topics to cover here. So thanks to everybody in the network, who's been sharing what those topics are, and what you're interested in. You know, we'd love to have a conversation after the call with anybody that's joined today, love to pick your brain and what's going on more than happy to kind of, you know, now share across the board from what I'm hearing across the digital landscape. But also, you know, if you need any help with partner selection whatsoever, I do a lot of that right now as well as people are trying to ramp up for next year. We kind of have a shortlist of the top people from across the network. And, you know, housekeeping items as we get started today, we're starting three to four minutes after the hour. And just so you know, we're gonna wrap up with three to four minutes to go as well. We're not going to give you plenty of time to get on to your next meeting without being late. And the last thing is we want to be as educational and informational as possible. So at any point in time, if you have a question drop into the chat, drop it in the q&a section or email me aaron@bwgconnect.com. So let's go ahead and kick this off. A lot of people on multiple levels, both professional and personal are looking for what's going to happen this holiday season. And you know, the professional side, what is it going to look like? There's a lot of I don't know, storytelling is the right word. But storytelling at the end of the day is what it is what's going to happen, especially to executive team and upper management of how we're predicting what's going to happen, what we think is going to happen, how did it play out all that fun stuff. And so we've got some great friends, partners, supporters of the network, play some real key leaders in the digital and analytic space for sure data and analytics space, I should say. And anyway, so great friends, partners, supporters have a network and a ton of different brands in it. So we asked Udayan to jump on today. This is I don't know that maybe the third year we've done the dc dc holiday predictions. You know, event like this. So super interested in curious as what what you have here. But you know, Udayan, a brief intro on yourself and NetElixir would be awesome. And then we can kind of jump into some of the data Sound good?

Udayan Bose 2:49

Sure. Absolutely. Thank you so much. And Happy Tuesday, everyone. I think this is this is the third year. Aaron, you're right. And specifically we spoke right frequently last year with the BWG group. As the as the COVID really sort of hit everyone. I mean, I think 18th of March onwards, I think we were doing almost like these sessions every month. And what we were trying to do is just trying to aggregate all of our actual customer data, anonymize everything. And our customer data is spread about close to about 70 to 75 customers. These are midsize and large direct to consumer companies and retailers. And then really trying to really break it down into different segments or categories, and then really present it. So we got a lot of questions. So one request, again, to just emphasize what Aaron was mentioning, let us keep it as conversational as possible. Because I mean, this is this is a crazy holiday season. And I think we really have to really work collectively to really figure it out and just sort of make progress. So my name is Udayan I'm the Founder and CEO of NetElixir. And it's really a privilege to partner with BWG and sort of bring the real time data insights to you. What I was hoping to cover today during the presentation was a quick introduction to NetElixir for those of you who may not be aware of as to what the company does, I will share with you some of the YTD September data inside these are like pretty fresh, I mean the data is until about September 15. And we have we have come up with our holiday eCommerce forecast which we released last week. And that really has got a lot of lot of buzz and attention from different publications and research media houses on television presenting that as to what what does NetElixir forecast in terms of eCommerce holiday growth. And then I'll sort of wrap up with some strategic growth marketing recommendations and share with you some resources that we have produced which can really help it help you to really navigate this, the other uncertain holiday season that we are predicting. So really quick about NetElixir. We have been around for almost 18 years now and we are one of the largest independent digital marketing agencies in the US. We help eCommerce brands. It's a fairly wide range from Lenovo to Ashley Stewart. Find and engage high value shoppers, or high value online shoppers and acquire game changing insights. We offer a wide range of eCommerce, what we call the growth marketing solutions or growth solutions, starting from working very closely with you to create your digital marketing strategy. This is becoming more and more important these days as with a lot of flux, you really need to have access to data and a lot of strategic models really have to be rethought off. And we are sort of helping our customers with that. And then work with you very closely and execute a wide range of channel marketing initiatives. Whether it be paid search paid social Amazon marketing or process you are we do a fair amount of analytics consulting, where we really try to analyze the shape of the shopping funnel, and tell you as to where you may be encountering a problem, specifically as the overall consumer behavior has changed or shifted, and so on. We do a substantial amount of eCommerce or new website development and do a fair amount of content marketing and Creative Services. We happen to be a premier partner for Google and Ping. We are one of the top 10 independent agency partners for both Google and as Microsoft. We are also a UPS ready partner a part of the program which has just about four service providers. It's called the digital connections that ups and we also are a Niva partner as well work with a wide range of clients, which we are very fortunate to really serve them starting from food to fashion, everything from Ames, Walker Jeffers pet swell, Dover, saddlery, Kansas City steaks, Lenovo, Cole parmer, it's a fairly wide range, we work with a little over 120 retail and direct to consumer eCommerce companies. Some of the differences that we bring to the table we have been around I think longer than most other independent digital marketing agencies. So we really have been able to evolve our technology as well as processes and build our know how over over more than 7 billion hours of actual practical hands on experience.

Udayan Bose 7:03

We're very fortunate to have an opportunity to work with over 500 eCommerce companies since we started in 2004 2005. Our key differentiator is our AI powered customer intelligence platform whereby we are able to identify from a live customer feed, who may be the high value shoppers and really sort of through one click really focused through Google retargeting as well as Facebook retargeting. And when more of the high value shoppers call NetElixir Insights, we have a wide amount of experience in search marketing. In the international markets, we have actually a wholly owned subsidiary in Sweden in Stockholm, over 12 plus years of experience. Currently, we have, we are managing campaigns in 110 countries, search marketing campaigns, specifically mostly on Google. And it's, it's really our passion and focus to democratize digital marketing. We host various events, knowledge sharing events, to our NetElixir or university initiatives, workshops, webinars, we actually have our big event, the x equals experience, we bring in the Ivy League professors and industry leaders for a day and a half of just some interesting conversations around rethinking innovation in the post pandemic world that is coming up actually day after tomorrow and this Friday. And we last but not the least have a have a free SEO and SEM tool marketplace called NetElixir Marketplace, our free SEO and SEM tools, which are housed all at NetElixir Marketplace.com or be used by more than 1 million small businesses who come from over 140 countries. So that's a little bit about NetElixir as to what we do. The questions that I will try to address in this presentation. And when I say try to address because I don't think anyone can really address it at this point in time just given the the overall level of uncertainty that we are all experiencing. But the first question is How will the first post pandemic holiday season be. And I am probably using a little bit of tongue in cheek application of this post pandemic holiday season because it's a very humbling admission that we are still within the pandemic and still we are losing too many lives. And it's still a tremendous concern for the entire humanity. So I really hope it's more of an aspiration driven word usage of post pandemic but everyone wants to know as to how this holiday season will pan out to be. How should businesses prepare for holiday success this year? What are some of the strategies which they can be using to navigate really an uncertain and unpredictable here like this one. And last but not the least share some of the growth marketing resources which we believe can really help you plan your digital marketing plans, whether it be in paid search, or paid social or Amazon etc. Again, a request any questions we want to really make it very interactive. I don't really want to just keep on dumping a lot have data on you. It's it's extremely heavy on the content and the data side, please feel free to kind of put any of your questions that that you may have on your chat box as Aaron requested. I'll start with some YTD insights overall, just to give you a lay of the land as to where exactly we are on the e-commerce side. And the first graph that I wanted to share with you, is taken from the monthly retail trade report, which is released by the government around the beta of every month. And this is Jan 2022, August 2021. So as we as we all know that during the fantomex, starting from the second half of March, online sales really experienced a dramatic increase, you can see those blue bars are the blue lines really nearly become very tall. That continue till about q1, but then q2, suddenly, the blue line started becoming a lot shorter. That was primarily because one we were comparing with a very high pace of last year. But at the same time, besides certain categories, like for example, food and grocery, where a lot of folks with, with progressing progress in terms of the coverage of vaccination, go back to stores to make their purchases. So we saw some some diminishing of the overall depth here on here online growth, which continued until July, August. Again, we are very clearly experiencing in the US this part, this is for the retail trade report. Overall, the number seems to be again, slowly going up. So the question in everyone's mind is with these ups and downs that we have seen, what is the prediction? And how exactly can we really use this data to predict how the holiday season will be? We, we have been tracking real-time data trends. And basically, this is aggregated over four different categories, which includes home furnishings, home improvement, pet supplies, and gifting. And the the chart on the left, effectively is number of actual absolute number of websites sessions in 1000s. And on the right is the number of website orders in 1000s. Again,

Udayan Bose 12:00

the orange line is the number of actual website sessions. These are all unique websites sessions in 2021. And the blue line essentially is number of unique website sessions in 2020. So as you can see in the graph, somewhere around the second of May, the sessions last year, really started exceeding the number of sessions this year. And that really has continued and the same, the same trend from about 22nd and 23rd of April, was very visible when it came to number of website audits as well. So obviously there was a shift. So again, we had a very strong q1, q2 somewhere around the month of April, again, things started slowing down a little bit for the categories. And that's what we what we really are able to track. Though, if you really notice, almost all the way till the end, the numbers are slowly starting to creep back up. specifically around the last week of August and beginning of September, we are continuing to see that for most categories, the numbers are still trending a little lower compared to where it was in September, with the exception of passion with the exception of beauty cosmetics. And with the exception of other couple of handful of categories including pet supplies, and also DIY tools. other categories are more or less trending a little lower. I have a category level prediction as we

Aaron Conant 13:19

know, this is really interesting just from the brands, you know, that I was talking that I talked to, they saw pretty much the same thing it was this switch in you know, as by the time summer started to hit from, you know, they're sitting there, a lot of people were at home. And they've now bought all the toasters, they need all the TVs they needed Oh, that's this, this consumption of products mindset. And then it was a shift almost to an experiential, right with a lot is what I was hearing from a lot of brands is that sales were down. But then you talk to you know, other companies on the hospitality side where things started go up as people moved from, hey, I bought all the toasters I need, I'm going to move on to you know, summers here, it's nicer weather, I'm gonna do something experiential. I'm going to rent an RV, I'm going to, you know, take a plane flight, I'm gonna go to Disney World. It's just interesting to see how that overlaps. We use start to see a turnaround, as we get into September. You think that's is that back to school? Or is that a trend

Udayan Bose 14:24

has had an impact? And that's a good question. For me. I'm just to give a little bit of a context. I mean, we, we believe that there were three factors which were in place, specifically around the end of March beginning of a particular pay period. So the first one was the progressive vaccination, people felt a lot more confidence stepping out of their homes. And they really wanted to because they had been stuck at their homes for more than a year at that time. Right. So I think with that we saw also something interesting happening last year, the entire travel industry was extremely surprised in terms of the overall demand. And that started again, going back slowly getting back to normal. We believe it There is some time in the month of May, I think the overall flight bookings were very comparable to 2019 numbers. So overall, I think this is something almost like a balancing part, Aaron, which is bound to happen, because when you really look from the consumers perspective, she doesn't really look at things in a very compartmentalized format. She probably does, but not really in that sense, because she has that same let us say, $100. And she decides as to where do I really invest these $100? Where should I spend this, just buying more products? As you mentioned, we already have an adequate number of toasters at home and we have had about enough products. So why don't we really now since we feel safe, we are vaccinated? Why don't we really go ahead and maybe sort of take that trip that we have been meaning to take for the last 18 months now? So it I think it's a good thing. And we saw also, I think travel retail sort of go up quite substantially along with that as well. Now, that phase continued around made of April and went all the way till I mean, it still continues effectively, but it sort of went all the way till about mid of September, everything. And now is the interesting phase now that there has been that leveling, and everything seems to be at least at a at a more center level or more leveled approach. What would the consumers really spend their, their $100 in? And that's the fundamental question, which I think everyone is trying to really answer that question effectively, but you and I absolutely right, I think people really decided to pursue their experience that Disney trip that was pending for a long time, they are taking that which I think is a great thing. So that's the trend but it just sort of makes a prediction for the future a little more difficult because now things are being leveled out. Travel is again almost back to the the the pre pandemic levels and so on. So now Where do I invest the next dollar or this is the entire question is as to where do I invest the next dollar section?

Aaron Conant 16:53

One quick question comes in remind us again, what is the source for this data in the online sales trend and the slide you have,

Udayan Bose 17:00

so this data effectively, we have really clubbed? So we have we worked with multiple clients in each one of these categories, we really sort of clumped all of this data and really tried to normalize it as well, because there are certain customers that we work with which are very large in the home furnishing side, the others may not be as large so we are normalize the data. And this is essentially we track the data on an hourly basis, effectively across so this is essentially our customer base. The number of customers included in these four categories would be roughly about 35 to 40. But overall, our data set based on which we are making this this presentation is about 75 customers with what we have considered including categories which includes food and gourmet includes things like DIY tool and store.

Aaron Conant 17:44

Awesome mystery mining. For others, you have questions drop in the question section or the chat or email them to me, Aaron@bwgconnect. Awesome. All right, cool. Thank you, Dave, for the assist to a little sidetrack there,

Udayan Bose 17:56

no problem at all with pressures on the eCommerce trends. The first one I have already shared, I think the strong q one followed by a slower than expected q2 but it was on a pretty high base of last year as well. And then back to school season, we had expected that it will be stronger. We had expected it to be closer to about 10%. Finally it ended at about 7% we believe it's like a still a fair amount of uncertainty will we have in person classes will we have hybrid classes and so on, which almost like lingered on till about fairly recently as well, which may have really impacted that online sales growth. Also, our mobile devices now account for almost 50% of all the all the actual orders, and we believe during the holiday season, this should go up to about 52% or more. Our inventory issue. I think, as we were discussing this earlier, I mean, that has been the biggest challenge. The inventory issues really have been have continued to create massive challenges for retailers and businesses. fashion and beauty categories have done well in q2 and q3. other categories have been pretty moderate on no year-on-year growth. And last but not least the YTD online sales accounted for 19% of total retail sales. So let me explain this one. So I'll just go back probably really quick. So in the month of FEHB, as you can see, online sales accounted for about 14% of total retail sales, and this is the government data, right, and that percentage has now increased to almost 19 18.5 or 19%. And that shift we believe normally had it not been for the pandemic may have taken another about 18 to 24 months. So again, this is a very classical database proof that the pandemic actually accelerated everything by a span of about 18 to 24 months, not 10 years, as I think has been written in a lot of publications and media houses but I think we have seen an acceleration of two years, almost effectively. That's what I think the data very clearly proves as well. The key channel trends Amazon continues to increase his dominance on the product searches I mean we we estimate about 60 percent of product searches now are actually happening on Amazon. In terms of the overall eCommerce channel advertising instacart was really the the massive pandemic pandemic success story. If that word can be even used in a troubling time and a difficult time like this, but that was definitely I mean their their share per market and increase from 10% to 21%. of the of the online grocery space, that was a massive explosion. And Instagram advertising is expected to cost more than a billion dollars in ad revenue by the end of next year, which is huge that didn't exist. Just about two or three years back. Primary channels have really been applying a lot more AI to help marketers target and engage customers more efficiently and at scale. And we are expecting about 550 percent plus of all the Google Ad budgets currently are already being influenced by what we call the modern search or AI. And every business and channel is trying to figure out as to how will the digital advertising world change with the demise of the third party. And we have already seen the Facebook ads attributable revenue has experienced a big hit since April 26. And I think there is a lot of discussions, a lot of conversation around that as well. Moving on to my next slide I this is Amazon share. So essentially, again, we have been tracking our customer base and effectively what is the what is Amazon's contribution to the overall sales increase from 22%, about 49%. And it's being driven very clearly by their Prime members who are really helping to drive this exceptional growth. So some questions as we're getting into the forecast. And when we are creating the forecast and we sort of work with a wide range of clients in diverse segments in the overall retail and DTC categories, the question that we are getting asked by our customers, will amazon prime a second Prime Day in October? that's a that's a very difficult question, I must say, will inventory challenges lead to customers shopping early creating the shopping list a little earlier this year? And which retail categories will really do? Well, this holiday season? These questions, some of these, I think we are at least the third one, we will try to try to address as much as possible. The first and second, I think it's probably beyond the scope of this presentation of the data research that we are doing. I mean, last year, Amazon did its Prime Day on the 13th and 14th of October. And who knows, I mean, if it is ready enough to given all the logistics and supply chain challenges we are going on to do the second Prime Day. It's a little unlikely at this stage, because we are on the 28th if we were to do that, if they would have probably announced it earlier. So we would think the answer is no that they would not be doing a second Prime Day in October. Because we would have known by this time, it's already the end of September now. Yeah, I

Aaron Conant 22:46

don't think I've been on it. You know, either. I mean, that's the other side is if you're asking for another discount. You know, I have a lot of brands even the first time around with the with Prime Day, early this year. And I've done they have been I talked to 30 plus brands a week. And a lot of them, you know, over 50% are saying, Hey, we can't even offer a discount because we don't have inventory. We don't want to go out of stock. Especially. So yeah, yeah, I agree is it's too late. I can't imagine them doing especially with, you know, cyber five around the corner. And you know, brands as a whole not wanting to be silly not wanting to purchase but they can't you. You don't want to run an incentive when you're going to run out of stock and why you're going to sell. Yeah, exactly. That leads into bullet point to write it.

Udayan Bose 23:35

Exactly. So that's the second part as well. Yeah. Because I mean, the question is whether whether consumers are doing it in mass, right. So we will probably break it down into category and within categories of new product line specifically. But there may be a possibility that there may be a possibility that some holiday shopping trends are actually starting to happen now. So we have been tracking this data since 2008. And one of the interesting things that we observe and we we have been tracking the overall search query data related to holiday shopping as well. So one interesting thing that we have been observing, I mean, in 2019, it was pretty, pretty regular, almost specifically 2012 to 2019. It was almost like happening definitely. That we saw that first search query spike so people searching for holiday specific items for their gifting. The holiday gifting. roughly around the third Monday of October was the first price spike day so they started the holiday searches started going up around the third Sunday or Monday of October. We are seeing that start or we believe that that may that spike may start to happen now. And we are actually are starting to see it in certain industries. So we believe this time I think there may be maybe a three week advancement of the entire holiday shopping process. And again, we are just tracking only The overall search queries to, to come to this physical inference almost.

Aaron Conant 25:04

But yeah, I mean, it's a it's a key point for brands of the line today and the direct consumer side, I would have a hyper-vigilant state, monitoring the web traffic on your on your direct consumer site earlier than normal in the potential to if you have different promotions, right, today, this is what I'm thinking is if you start to see that ramp up, they're looking around right now if you start to see that, you know, the uptick, which I'm not surprised by, right, because it's, you know, everybody's talking about everybody on the line today realizes the inventory position that they're in, and that it might they might run out of stock or be short stock later in the season. They're thinking, well, if every if I'm like this, a lot of other brands are and they're ramping up. You know, they're how they shopping, be hyper-vigilant and be ready to pull the trigger on potentially launching earlier than normal discounts and promos to bring them in.

Udayan Bose 25:58

Yes, absolutely. Absolutely. I think that's a great point doesn't actually have to be a bottom with most of our holiday clients on this thing. What we call is, I mean, rethinking the entire four P's of marketing or the marketing mix, right. So the product is basically the is defined by the inventory that you really have available. But the other piece, you probably have some amount of control in terms of the promotional plans that campaigns that you really want to run the promotional mix, or do you want to brand, the pricing strategy that you really want to follow and of course, the place the channels you really want to. And we believe that through a smart, smart strategizing around this four piece of marketing mix up, not only can you really win more new customers, but you really have a substantial chance of really having a very strong holiday season, just by playing around and being smart about your four piece of marketing mix. So that's something that we are we are working and we are seeing some effect almost. And this will not only limited though to just the marketing piece. This impacts their merchandising, this impacts your promotional strategies and impacts everything. But I believe there is a better way to really do the entire four piece system. Let me let me let me move on in this one. So this is the holiday forecast that I really wanted to share with all of you that we have come up with. Now the holiday forecast just a little bit of a basis of this. This is an ongoing analysis of eCommerce and search marketing metrics. And the search marketing we are taking primarily because we have seen that still, for most cases, the search queries really precede actually eCommerce purchases or eCommerce sales, right. And we are focusing only on the midsize and large customer base that we have, we are anonymizing the data. But just to give you an understanding of the size of the customer base or the quantum of data, these customers we expect them to do about 700 million plus in terms of online holiday revenue between November 1 and December 25. This year, just to give you an understanding as to it's a it's a fairly let us a sizable data set that we are talking about. We are talking about 500 plus million unique visits forecasted during the upcoming holidays as well. And the sectors that we have considered adding for this one the first one is gourmet food. Second is apparel and shoes. The third is home and decor gifting and consumer electronics. And as I mentioned, we have been aggregating this information since 2008. This is our 13th holiday forecast. So based on whatever we have seen so far. But before I get into it, this was I think a little bit about the methodology if someone really wants to go into a little more detail as well. We are using the week wise website visit website sales, journey wise investments, etc. Breaking it down to mobile and desktops, it's pretty extensive. This year was more difficult or has been more difficult because obviously of how challenging the fluctuations has been. So we really have to retrain our the entire forecasting model. For example, back to school normally has an award of 15% weightage. But this year, we really have had to tweak those specific variables as we really build this forecasting method. So we are actually projecting about a 6% year-on-year growth this holiday season. This may seem to be slower than usual in terms of eCommerce sales growth, but we have to keep in mind that this comes on top of a very, very strong and a very big holiday season of 2020. The pandemic holiday season was I think I think about 37% direct or 34 to 37% higher compared to the 2019 overall eCommerce sales so yes, it's still substantial amount but in terms of absolute numbers probably it may not not look as impressive or percentage number may not look as impressive when you compare it with the growth that you may have experienced last holiday season versus versus 2019. But still it's a substantial quantum Silvia talking about the believe these are some of the factors which will help drive 6% year on year eCommerce revenue growth The first one is an interesting motto law Last year, for a marketer, there were about 7.4 million Americans who shopped online for the first time ever. We estimate that 25% of all these first time new to online shoppers, essentially last year, will shop online again this year. So if you really do simple math, it's about 1.8 to 2 million new pandemic shoppers who did not shop in 2019. They'll shop this holiday season.

Udayan Bose 30:27

And their patterns or their overall shopping patterns of their path to purchases still are very different and very unique compared to someone who has been habituated are used to the online shopping process. The second one is we we also believe that there will be an earlier than normal start is the holiday season, we are already seeing the search queries trend up, primarily because ongoing stock shortfalls is leading people to stock up a little early. And the last one is which is the more concerning and the unfortunate part, which is a Delta variant is in certain geographies have been hit pretty hard. And we are seeing in that we have built a live tracker, which correlates sexual CDC active case data with the actual eCommerce sales which we are aggregating from our this data set of customers. And we see a pretty direct correlation that wherever the Delta cases are higher, the online shopping incidences are higher as well. So we believe that may have an impact as well I we are I'm pretty sure all of us are praying, Aaron that the Delta variant really just goes away. And I think the holidays are a lot better. But that that still remains a factor which cannot really be ignored at this time. Right. In terms of two factors that may negatively impact holiday sales this year, I think there are. One is the supply chain challenges we have discussed enough about this. The second one is a little concerning. It's more of the prevailing uncertainty and a sharp drop in the consumer confidence. The University of Michigan has been tracking this a consumer sentiment for a long time. In August, there was a massive fall. So it can sort of work both ways. One, the optimists in me feels that a lot of people really want to celebrate this holiday season, just be happy because they have been through this almost like a grueling time for the last about 19 months now. And I think they really want to be happy. So that's when really lead to a lot of the pent up demand which still exists Currently, the it was sort of ripped to daily just or just that that really exploding, which will be a good situation. But also it we cannot really completely ignore the fact that the consumer sentiment index sort of fell quite sharply in August. And and this trend cannot really continue that there has to be a bounce back to ensure that the holiday season is a strong so that's I think those are the two factors which we believe will really have a bit of a play or an impact this year. I mean, but that's a pretty significant drop there. That is actually the largest that the University of Michigan has tracked since 10 years. The last time this happened was in 2008 I believe an image of NATO Yeah. Category level forecasts and this is something which we have been tracking and this is the basis effectively of our research as well. So in the first half, I think food and gifting were in bread, I mean, they would they continue to be in red in July and August, November December. We believe food will still because last holiday season was massive for the entire food category. We believe it will still be trending down though it can sort of slowly claw back up the other categories we believe like apparel would be plus 26% gifting 10% home furnishings 4% so more or less a little above last year with the exception of gifting which we believe we just I mean we are optimistic to believe that we will see people really spending more on gifts and that's the reason I think I tried shopping early spending more on gifts and that's the reason we say up to 10% their consumer electronics also we believe will be a plus 10% so that just a forecast of the category level are happy to address any questions regarding any of these that you may have as well.

Aaron Conant 34:14

Yeah Just a quick reminders for just past the halfway mark here. The seven minutes pass so you have any questions? No dropping the q&a drop them into the chat or email them to me aaron@bwgconnect.com And we will get as many of those answered as possible. No, it is interesting. I think the gifting part is right. Our gift cards captured in that.

Udayan Bose 34:38

Yes, yeah. Yep. Awesome. Yeah. So moving on. Some recommendations have been really quick. for everyone. I think the first one is this year, this particular matrix is going to assume a very different level of importance. I mean, what we would recommend as you sort of planning for the marketing, whether it is search, social, whatever you want Applying for marketing, it will be helpful for you to map all of your products and categories based on this matrix, whereby on y axis, we have the profit margin. So how much profit margin Do you have per unit sold. And the second on the X category, our x axis, it's basically the velocity of the number of units that you're selling units in a month, or week, etc, and really focus on the green quadrant more. But the, the the boundary condition that would be applied this year, which didn't exist in most of the previous years was, it would be also defined by your inventory status as well. If you don't really have stock in certain of those green category on green quadrant categories, then obviously, you wouldn't really want to advertise or go heavy on that, and so on. So that's this, this matrix can be really helpful this year, as you really plan for your brother for peace I mentioned to marketing mix. The second is knowing these high value customers is extremely important. I mean, we use our customer intelligence platform, I mean to identify the high value customers, and we are able to really identify as to which of these customers are likely to purchase again, and so on. So that's how the AI algorithm that we have developed really helps us. But knowing these high value customers is critical, and especially the new customers that you have acquired, or one in 2020, I think can be a very, very important target segment, which can, which can really make a difference for your overall holiday season this year. So please, please do track and try to really understand the behavior and just try to engage them a little more responsibly during the holiday season. And most important, I believe, is having a plan B ready. I mean, this is absolutely absolutely critical. I mean, this is as I mentioned, I'm there is a lot of uncertainty still there. And effectively, if you don't really have a plan B really, it's, it's difficult, it's difficult, because you can really create a plan and go down one path and then suddenly find out that things really gain sort of turned out differently. So having a plan B ready, I can't really emphasize the importance of this. I mean, we at NetElixir, I mean, we work with a volleyball close towards 8085 holiday specific retail clients for these clients. Just in November, December, about 1/4 of their annual sales happened just in these two months. So just because there's just so much momentum, so much fast pace. So much activity, we have really had to build what we call this holiday operating model, which ensures a failsafe performance includes our experts working around the clock, we have built custom processes, we are providing technical support around the clock, and so on. And obviously us our customers, so I think just be ready for the holiday season. I mean, we have very clear proof that I mean, since 2005, we have been able to beat the industry during holidays by about 3x or 300%. That's the proof that if you are really really unprepared and are able to act quickly, I think you can really beat the market by a substantial substantial percentage. This is a holiday calendar, I really wanted to spend about five minutes Aaron because this is we have been we have been publishing this since 2008. And this has been, I think, correct, widely recognized and utilized by a lot of businesses in the US to really plan their digital marketing initiatives. So let me explain as to what we are trying to do here. So we have tried to classify, based on our experience base, the trends that we have really analyzed all the data starting from 14th of November until the end of the year, into three different segments and these three segments are, we believe that on that particular day, if you compare to a comparable day, the reason I mentioned comparable days because Thanksgiving was in the 25th or sorry, I think 26th last year this year is in 25th. So we're just using Thanksgiving as a benchmark and really comparing those like days of the year-on-year increase in online sales volume. If it is less than 5%. We are marking it or highlighting an ad cream. And we are calling it moderate. So that's the expected increase that you can expect across the various categories that we are really been tracking I've discussed the categories.

Udayan Bose 39:02

If it is in the five to 12% range, so 5% to 12%. Higher on that particular day in terms of online sales revenue, compared to last year, then we are calling it Hi and that's been that's been marked as an orange orange sale, and then the very highest greater than 12%. So last year, whatever the sales was, on that day sales revenue, this is more than 12% on that particular day. And this is our prediction. This is our prediction on a day-by-day basis. So as you can see on 14th 15th we believe that some retailers will be running attractive teaser holiday promotions, just to sort of get that early shoppers or early basically Black Friday shoppers in with some earlybird promotions during that it's definitely a possibility. Because for them this is a great way to really break free from the clutter and really attract to the customers and then really sort of keep on continuing to engage them through the holiday season. So we believe that that's a definite possibility this year. During the next week, which is the Black Friday week, I mean, this is a train that started last year. I mean, we saw a lot of businesses start with, rather than a Black Friday, or a tank giving offer, they started with a black friday week offer a Thanksgiving week offer. And that offer remain more or less consistent through the entire week. Now, last year, I think we expected a little bit more creativity from businesses because not many of them really changed the offer throughout the entire week. And as a result of which we believe they lost some amount of Black Friday sales because the Black Friday offer was the same, which was introduced on the on a Sunday of that week. We believe that that would in this time, though, businesses would still have the entire Black Friday week offer. But specifically around the midnight of Thanksgiving, we expect some businesses to start being creative with offers, when I say creative, they may come up with product category specific, almost like a six hour sort of a deal situation. Right? So and then you got to keep moving things around, etc. So that is something which we feel almost confident that that will sort of happen this year. Moving on to the next interesting, let us say we effectively is the week of the 12th. Now 13th is what is called the Green Monday. But 14th we believe is most likely going to be the ground shipping cutoff day for Christmas. Now, which makes make this 13th a very, very big day for eCommerce. So 13 1412 1314, we expect a lot of businesses to run very aggressive promotion on specifically items that they have still in stock. So it's a very important point. And I will just try to explain as to what I'm trying to sort of share here. So this is what I've talked about when I talk about the strategy component, when it comes to really heard of mixing and planning your overall promotional mix horribles business, which is creative enough, understanding the inventory status, projecting as to when customers will sort of buy what and what products may add as almost like a doorway product, which sort of leads to maybe future purchases. And then what are the products that they really want to introduce in the last week, before the ground shipping cutoff day, all of these is something which is each one of these offers an opportunity for you to be creative and strategic about. And that's what I really wanted to emphasize, please do meet with your teams to come up with a promotional strategy. One thing I can assure absolutely, I'm pretty sure all of you I mean, we have a lot of brands joining now and I think you would I'm I'm pretty sure all of you would agree with you that given that the cost of operation has increased very substantially, whether it is the supply chain, whether it is the inventory, carrying costs, etc, etc, or the delay cost on the container costs have gone up. So all of these things, the overall absolute discount that you would be able to offer this year is actually going to be lower compared to last year, which is which was actually lower compared to the previous year because last year people were banking on the demand. So the question is are the letter say if you redefine or reframe the problem that we are talking about in terms of reading our promotional plan, the thing is, for a lesser discount, overall aggregated as a percentage, how creative Can you be? So that one, you are able to drive higher sales, of course, the second is you can really engage more new customers and get more new customers in your overall in-house file. And the third component is you can induce repeat purchases as well. So keep in mind, I mean as to what is your promotional strategy this year, I think is going to be more important than ever before.

Udayan Bose 43:38

And last but not the least, we believe that just because Green Monday and the shipping cutoff day, pretty much it's almost like back to back. We believe the week of fifth we'll see some of the large online retailers may may come up with a pretty attractive promotional mix. Basically on Sunday and Monday after the event we are projecting very high online sales volume on these days, essentially. And the last-minute online sales purchases are expected to spike anywhere December 19 to 21st buy online, pick up in store will be a massive trend going from the 15th onwards, mobile would be driving a substantial amount of these overall sales volume and the sales demand as such. And yeah, I mean it's just a how creatively can you use this calendar we'll be more than happy to discuss with any of you any questions you have my email address. I mean, I'm pretty sure you guys will reach out to any one of us will be more than happy to get one of our specialists to talk to you and really help you walk through this on the calendar but my request is Please Please Please spend some time along with your team. Try to understand and see as to how well this holiday calendar fits to your overall marketing strategy. Yeah, buddy. Well, no, no, no.

Aaron Conant 44:54

Just if somebody great and very insightful presentation will this be shared with participants after webinar, are we able to connect them with you today and you can kind of shoot them over?

Udayan Bose 45:04

Do you mind sharing the presentation? Absolutely, I will do that definitely. I mean, some of the resources, you can actually download this entire calendar as well. I mean, it's the NetElixir.com slash holiday kit. This can really this will really help you out. And the other part is, if some of you is looking are really still looking for last-minute help with your anything from SEO to content design, we are here to help, you can use this link to sign up for our holiday special these are like short, no obligation, overall discussions that our team can have with you. And if you are interested in signing up, but last but not the least, I think I started with this I will be one of the events with which we sort of really, really sort of most awaited event let us say is on x equals experience, where we really try to bring in professors as well as industry leaders in the same room, we are hosting it at the grounds for sculpture, it's actually in a sculpture garden. On Friday, we will be live streaming our event, the in-person is all we are all sort of pretty booked solid. But I really wanted to invite all of you personally to this attend this or to sign up for this virtual event, which we have on the on the first October we have some amazing, amazing speakers from Jay Wong, who is the CEO of box.com. Jonah Berger from Waterloo and Michelle, she's all flying down from Stanford to present to our audience. So you can use that link NetElixir.com slash events with x experience 2021 to sign up for that. So that's what I had happy to take any other questions, Aaron, and I'll leave my email address with everyone doesn't get anyone or shoot me an email any questions, more than happy to address them? But thank you

Aaron Conant 46:49

for coming in. But don't don't hesitate if you have others drop into the questions or the chat there and we'll get them answered is around PPC. What's going what's happening with paid media spend? I'm hearing a lot across the board, you know that some people are dialing back some from Amazon. They're a little over index there and you know, they're you know, one route is to go to Walmart calm and their media group but that's not panning out. So I have a lot of people just saying, Hey, can I drive sales to my dress consumer site which think about that, then there's more money in there more bids. And that means prices go up? What are you seeing in the PPC side.

Udayan Bose 47:23

But on the PPC side, we saw star sharp inflation on the CPC still about the month of August. But then unfortunately, the sales didn't really sort of line up with their overall sharp CP. So we saw in the second half of August, and we saw some of the businesses advertise a really hot pull back on their overall spends. As far as the CPC as a result of which sort of declined quite some people are not least willing to spend as much on most recently, I'm talking about just the last week specifically, we are seeing again, the numbers go up but I mean, they had a really trending at for certain categories are an almost like an abnormal and unsustainable level of almost about 45 to 50% year on year increase in terms of CPC for certain categories, then we saw a bit of a pullback, sort of they went down all the way to about 14 15%. Now we are seeing that they are still trending at about 20 to 21% higher compared to last year. We believe that this has also really defined the CPC tolerance or CPC inflation tolerance level for most marketers as well. And across categories. We believe 30% is that magic number, that people are willing to spend 30% more in terms of cost per click. But beyond that, if the results are not really in line with how much more they're spending, then they really sort of pull back the spin this year talking about investments, we believe that the investments would really start spiking now. And in many cases, some marketers may be almost like forced to stop advertising on paid media, let us say from the 14th or maybe 13th or 14th of December, just because they will not need to just because they don't have the inventory to really go ahead and promote. So since that, if that is the situation most of the marketers are planning to really, really advance all of their advertising spend starting now and we are seeing that a lot of our clients have really increased their spend starting last week and they are heavily investing trying to get that early on holiday shopper in the mix. And then really trying to really reengage them through the entire holiday season.

Aaron Conant 49:34

It will be really interesting to see on the back end if people start running out of inventory. If you know you still everybody sells out at the end of the day, you know what I mean? If it's gone then you go shift and buy something out yet. Yeah. It's gonna

Udayan Bose 49:52

be the option is I think there is an opportunity for marketers to be tracking their competition very closely as well. If you really do our tracking, you'll be able to figure out, I think, with some amount of data analytics as to what does the competitors sell? And where exactly what do you sell. And you can actually do the merchandising accordingly as well in a very smart manner. And you can sort of tie that merchandising plan with very clearly in advertising, and also in a pretty strategic manual as well. So I would think, like one of the tools that we are essentially developing for all of our customers is we are developing a direct link with their inventory feed. And then really using the Google API to turn the ad off the moment, we haven't run out of inventory. Just because there is no point in misleading the customer with an ad, when you don't have the inventory. And things are really moving at such a fast pace that you really need to do it in real-time as you can do instead of wait for someone to really come the next morning and sort of just turn it off because your customer you're with the customer dissonance is something that you really have to be careful of. No, I

Aaron Conant 50:54

completely agree. Especially I have a lot of brands that, you know, we're on Amazon, who was their primary, a outlet for, you know, their digital strategy was Amazon, the pandemic hits now they've they branched into direct to consumer, once they've updated their eirp in the back end, they can individually pick pack ship now they're like, Well, why don't I, you know, grab a platform that helps me launch on all the different marketplaces that are out there. And now, you know, it's not just managing the single inventory feed from a direct consumer side, it's being listed on multiple marketplaces, and that inventory feed being updated, you know, need to be updated real-time. So no, I think that's Yeah, you just got everything got more complicated. Exactly, exactly. Yeah. So I see we're about about a minute and a half year, you know, any other things that you thought might come up today or key takeaways or thoughts? You know, as a reminder, everybody, thanks for dialing in fantastic conversation. Thanks for the great questions, you know, look for a follow-up email from us, we'd love to have a conversation with you 100%, in a worthy conversation with Dan and the team at NetElixir, or, you know, the are all around data-driven digital experts across the board worth the conversation there. You know, again, like key takeaways as we wrap up.

Udayan Bose 52:09

The first one is, I mean, the thing that we all I think know and should appreciate, I mean, this would be a very unpredictable holiday season, right. So having a plan B, I can't really emphasize the importance of that, I would strongly recommend everyone to use our holiday calendar, because that can really help you plan a little in advance. And the third part is, it's extremely important to be data driven, right? Without this data, you pretty much can run a completely irrelevant advertising campaign, with knowing that maybe without even knowing that your overall customer is responding in a different way, you can just taken completely different paths. So please utilize that real-time data to really make and drive your decisions in terms of marketing, and especially the four Ps of marketing mix.

Aaron Conant 52:53

Awesome. Well, thanks again Udayan. And thanks for being such great friends, partner supporters, the network and tons of brands in it. Again, thanks everybody who dialed in a look for a follow-up email from us. I'd love to have a conversation with you. If you need any help across the board, digital strategy, advisory, whatever it might be. We don't sell anything here. We're just a networking group. But more than happy to network and knowledge share. They do need help with service provider selection. We've got a shortlist provided by you know 1000s of brands, the network they've been vetted out today and in the team at NetElixir are one of those top partners across the board, so don't ever hesitate to reach out. With that. We're gonna wrap it up here. hope everybody has a great Tuesday, a fantastic rest of your week. Everybody, take care, stay safe and look forward to having you at a future event. Let's get it in 31 Thanks. Alright, let's see.

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