Aaron Conant  0:18

Happy Tuesday everybody. My name is Aaron Conant. I'm the co founder Managing Director here at BWG Connect where a networking and knowledge sharing group of 1000s of brands we do exactly that we network and knowledge share together to stay on top of the newest trends, strategies, pain points, whatever it might be, we just crossed the five year mark now, so have over 8000, probably pretty close to 9000 brands in the network now that participate. So thanks to everybody who sends in topics and makes recommendations across the board, I spend a lot of my time talking with brands to stay on top of those trends. And when the same topics come up over and over again, that's how we get topics for anything that we do. For these virtual events. Where you do, we're going to do close to 100, in person dinners this year, four to five full day in person events in New York City. And then some random happy hours, just scary, I'll get to hang out and network together. We launched a podcast earlier this year, if you'd like to catch up on any of these strategies on a weekly basis, we bring in top people like Udayan in and other people, industry leaders that come recommended to tackle those biggest topics. Try to make it you know, consumable in 30 minutes or less. So check that out, I put it in the chat. The other thing is we're getting started here, three to four minutes after the hour, we're going to wrap up with three to four minutes to go. And the last thing is we want it to be as educational and informational as possible. So at any point in time you have questions or comments drop into the chat, you can even drop into the q&a if you want if there's q&a section there. And we can tackle those as we go. And with that, I'm going to kick off, you know, this is something that we do on a quarterly basis. All right, with your day and as a whole for a while now, I think ever since the pandemic kicked off. Yeah. And but mostly, you know, two and a half years. Yeah. And you've been hanging in there as everything's been changing. But this is the 2022 eCommerce trends as a whole as we kind of come out of q2, what's going to happen in q3, looking into q4, what we're seeing so far. But again, everybody, Udayan's been a great friend, partner supporter, the network has an awesome company called NetElixir that's helping a ton of brands out in it. You know, top Google part, partner, UPS partner, they're just all around fantastic people, just a wealth of knowledge. So, Udayan, you know, I'll kick it over to you. If you want to do an intro on yourself. And NetElixir, that'd be awesome. And then we can kind of jump into the conversation. I know there's a slide deck here. And then we'll try to keep it conversational as we go through the slides. So I'm good.

Udayan Bose  2:42

Fantastic. Thank you so much, Aaron, for a very kind and generous,

Aaron Conant  2:46

You are a great friend. Yeah, don't mind it at all. Yep.

Udayan Bose  2:50

I just want to take you through the trends. But before I even start off, Aaron, let me let me confess that I, we have been doing this presentation every quarter. We used to do it every month in 2020, when COVID hit. But this was the one which took me the most time. When I say me, I'm talking about the entire analyst group and us as we were discussing, because there have been so many variables, and so much ups and downs over the last, let's say seven or eight months of this year, that it it really was extremely difficult to really, really, really get a strong grasp on what are those trends that we all should be focused on? And what are the trends which probably are not very relevant, for the purpose, at least of this of this communication. So before I jump in a quick introduction about our company, and before that, quickly an agenda as to what I was hoping to cover today aren't a quick introduction about the company. I'll share with you some of the key eCommerce and consumer trends from the last couple of years which have been very eventful for multiple reasons. Most importantly, it has been terrible years from the perspective of humanity. And I think as we as we saw in 2022 the world emerging from the pandemic, there have been brand new challenges and struggles that really have emerged which continue in many cases. I'll also be sharing 2022 some of the trends and insights as well. And then we have we'll sort of wrap up with five recommendations for eCommerce marketers getting into the holiday season. Believe it or not, we are just about a month away from the holidays essentially holiday season we are expecting a slightly Early Start given the the quantum of inventory which is laying there. So we are pretty much about a month away from the holiday season. These recommendations are based on a lot of the the real time data analysis that is being done by the the NetElixir retail Intelligence Lab. So before I even start off with the introduction I have to thank all these folks for for their tremendous work in providing the all the data. Our data is pretty fresh that I'm going to be sharing today. We have taken all the eCommerce key eCommerce metrics is at the category level, up to the 20th of August. So it's as fresh as you can possibly get from any, any source as well. And as Aaron mentioned, if you have any questions throughout the presentation, feel free to add to the q&a box I have requested. Again the same request is added that let us keep it conversational and because we are all trying to figure it out together, I think that's the that's the tone. A little bit about the company. We have been around for over 18 years now. We are one of the the fastest growing independent digital marketing agencies currently in North America and what we do we help eCommerce brands, find and engage high value shoppers that require game changing insights. But let me let me again emphasize that acquiring these game changing insight despite really having our own technology, having those business models has proven to be extremely difficult when given the number of variables have multiplied, specifically over the last few months. We offer a wide range of solutions on digital marketing. Starting from helping you with your digital marketing strategy. Managing your paid search, social SEO, Amazon, do a huge amount of analytics consulting, we do a fair amount of eCommerce or web development and provide also content marketing and Creative Services. We are a global leadership circle member. We are one of the top 12 independent agencies in North America for Goobie, which has this privilege of being a group, a part of the group called the Global Leadership circle. And, of course, a Google premier partner. We are also very privileged to be a UPS ready partner and a Microsoft partner Mehta partner and very recently a Tiktok special partner and Amazon partner as well work with a fairly wide range of clients a little over 120 customers currently, mostly in the retail and the direct to consumer business, all of them are eCommerce have been around as I mentioned, 18 plus years, I'll just quickly go through this, I've been very privileged to get an opportunity to work with over 600 eCommerce companies over the last 18 years and be as be a small part in terms of contributing to the growth story. A big driver or a secret sauce is an AI powered digital marketing platform, which helps us to identify those high value audiences that they can we can really then populate and utilize the different marketing channels, whether it is Google ads or Facebook ads to target these high value audiences thereby multiplying the return on investment we are able to get for every marketing dollar by as much as about three to five times I have over 13 years of international search marketing experience working with companies like Lenovo, we have now built campaigns addon for marketers in about 115 countries. And last but not the least, as I mentioned earlier, we are a member of the Global Leadership Council. This is a group of the top 12 independent agencies in North America. And we have we have access to the new alphas coming up from Google and a lot of the thought leadership directly with the Google exec leadership team, as well. A little about me, I mean, I founded NetElixir in 2004. I am very privileged to be an Innovation Fellow at the Columbia Business School's Lang Center of Entrepreneurship. I am also very passionate about teaching and research and sharing knowledge. very privileged to be a part of more of a guest faculty for the Johnson School of Management at Cornell, CUNY Baruch and the Indian School of Business in Hyderabad this way. Let me dive directly into the eCommerce trends. Again, the request I would have is there is a lot of content which I'm going to be sharing a lot of the insights a lot of trends that I'm going to be sharing with all of you. Some of these trends I'm pretty sure you're all experiencing as eCommerce marketers, others may stand out as something which you may not have spent as much time thinking about as much. So the aspiration is if at the end of the presentation, you are able to walk away with maybe about two or three key takeaways, which really helps you to be a little more prepared for this holiday season, which both Aaron I feel would be one of the more unpredictable ones that we have really experienced in the last many years now. We would really consider this presentation to be successful. So please again, let us keep it conversational. And let me dive into the eCommerce trends that we have seen. These are the last two years 2020 and 2021. I'm pretty sure many of you would have seen this graph right. We saw about 10 years of growth in three months, netted when we really analyze these two years. What was the actual growth based on our analysis we felt that eCommerce growth may have leapfrogged by about two plus years during the pandemic. It's a fairly wide range between 1.5 years to 2.5 years. And during this time, eCommerce which accounted for again part of the the Overall retail census data accounted for about 14%. Pre pandemic sales now accounts for about 18 to 20% of the total retail sales. So fundamentally, there was a shift, there has been a shift, there has been an acceleration. One of the very interesting stats, which we saw during this period, 2020 and 2021, we saw a little over 7,000,001st, time online shoppers. And in my opinion, that's one of the most important stats to keep in mind, because many of these shoppers continue to purchase still online. And many of them have gone back to purchasing almost entirely offline as well. And also, very interestingly, and importantly, many of these shoppers were baby boomers, who had never, ever made a purchase online, prior to the pandemic. So we, one of the things for sure that we can, we can see as a trend is, once you really have been able to break that initial barrier, initial barrier to really adopting, or really trying out online shopping. It obviously ceases to be as difficult moving forward. And I think this would be a pretty important thing to keep in mind for every business, as in the many months and years to come. We also saw that after the vaccinations and shopper started returning to physical, many of the first time online shoppers continue to shop online as well. In fact, we had done this survey and I think I presented it almost exactly a year back along with Aaron, that we saw about 17% in categories like beauty and apparel. They continue that these new shoppers continue to shop online 17% We have not done a recent check. But I would not be very surprised if still the number is anywhere between about 12 to 17%. Still, of those new shoppers who have continued to shop online, even in 2022.

Aaron Conant  11:57

I think it's also interesting that it's two years because if you remember, you know, this is the retrospective, you know, when you normalize all the numbers looking back. I mean originally it was, hey, it's leap year, it's jumped five years, it's jumped eight years, it's jumped 10 years. Yeah. But you're looking back, it's like, hey, the actual normalized number is one and a half to two and a half. So an average of two, two years. Okay.

Udayan Bose  12:21

Absolutely. Absolutely.

Aaron Conant  12:22

That's just a new number that that right. I think

Udayan Bose  12:26

I think the key trend, though, I will sort of again, emphasize, to keep in mind, Aaron, is that the first the first time online shoppers. And the reason I sort of wanted to emphasize that because I feel there is an opportunity for many businesses still. I mean, I think there has been a lot of reduction in terms of the shopping experience friction. But I think marketers can do more to reduce the friction, that these still fairly new to online shoppers experience while engaging with their business. And we are seeing some marketers do exceptionally well. There have been some innovations. I'll talk about one one trend that's really having a perceptible impact in terms of overall online sales. But I think that would be one of the focus areas I would definitely want to highlight. How exactly are you engaging your new shoppers, when I say new, the folks who really sort of joined and started buying from your site only during COVID or later, as I wanted to share also some overall consumer research which happened last year, essentially you gov. And just some to understand some of the changes in the shopping frequency during the pandemic, right for example, I now shop much less often in person about 28%. I now shop somewhat less in person was about 21% If you add both of them about 50% seem to be purchasing more online. But again, this data is about a year old now almost a year old now. So some of these behavior also continues to change as well. But net net, I think since we do a lot of tracking of these shoppers, we can really break it down into the different audience segments. One of the things which I believe is a trend, which will which will be there forever, I guess, is every business really needs to be Omni Excellent. You have to stop talking about offline and online separately. It has to be talked about in one seamless customer journey, which straddles both online and offline touchpoints. Because one thing which COVID did was each and every purchase occasion, and I would have to emphasize each and every purchase occasion, has an online touch point. So if nothing else, one of the trends that I feel extremely confident about which I'm very pleased to see a lot of marketers adopting this language. They're stopping to talk about online and offline separately and it all becomes a blended let us talk about the customer Journey, understand as to as to how can we really make the entire customer journey even more seamless, and even more friction free for the customers, and the marketers who are able to do it well, are still winning, big time. So that's one of the trends we definitely has stuck. And we believe that this is a trend which will continue forever, probably.

Aaron Conant  15:22

Yeah, I mean, it's interesting too, because you have the traditional, you know, in store retail brands that are selling in store that are blending that with the, with the online, right, the direct consumer, or even, you know, retail, media, Amazon, whatever it might be. The other side is, I talked to a lot of brands that are digitally native brands. And now they have to get in retail. Right, that's like, you know, for the last two years, it was like this huge emphasis around, hey, look at how amazing these direct consumer brands are, in now is at the point where they start to realize to continue to hit growth numbers, you actually have to get in store. And so the blend is going, you know, traditionally, you know, in store brands going and adopting this this blended, you know, online offline media strategy in the vice versa is true as well.

Udayan Bose  16:14

Absolutely. Absolutely. I think one good part that I really wanted to highlight of all of this stuff, the consumer is right at the center of all the strategy, right, so everyone is talking about the consumer. And there has been a tremendous leap forward, specifically during the last about two and a half years, in terms of businesses trying to understand their consumer a lot better. So when you put consumer at the center of each and every strategy, and then really try to map out their customer journey, then suddenly, the overall channel preferences that you have, et cetera, et cetera, becomes secondary, because you're trying to really map out the customer journey, understand how to really engage with them at each and every touchpoint, whether it be a physical retail, or online retail, in a seamless manner, in a consistent manner, and in a very responsible manner as well. So that has been, I think, one of the biggest wins, or I think the positive takeaways from this entire pandemic, that we are seeing time and again, for across businesses across categories, the consumer is right at the heart at the center of everything. So that that I think is a very positive trend, I really wanted to call out. It also has really led to the averaging the consumer as well aren't, we are seeing very clearly, if you talk about digital natives, they have a much higher buying cloud, which keeps on increasing every day, millennials exhibit a slightly different buying pattern or buying preferences, we have the Baby Boomers exhibiting again, a very different track altogether, and so on. But the most encouraging part is businesses are really spending a lot of time, effort and resources, trying to understand these and identify those meaningful differences in consumer behavior. And we are seeing the entire audience segmentation audience targeting strategies go to a very different level altogether. So we very clearly see a trend where businesses are D averaging the consumer, I think the concept of average order value and average, is entirely a flawed concept. And I think there's this this entire drive towards de average in the consumer, understanding the different consumers as much as possible. And then engaging them responsibly is definitely one of the very positive trends, which has really emerged out of it. And we and this is backed by data as well. For example, this was a Google survey, which happened. It's about a, again, a year old now. But we saw that during this COVID. The gap between the baby boomers in terms of their online reachability versus the Gen Z got narrowed quite substantially as well. So that's, I think, a very positive trend, we are seeing a trend which I would say is which I think we should not really undermine the impact of COVID there, which we can call it the COVID lifted boom, is just a little bit of a homogenization of the entire parts in basically, there was a bit of a across spread, whereby people were much more much more comfortable, really being online and sort of really kind of browsing, buying shopping experiencing online as such, which I think COVID There had a had a massive impact on that piece entirely. We also saw during the same time, very interestingly, some of the marketers very consciously and purposefully really question their strategy as well. For example, I was talking to a very large grocery chain, they are actually the second largest in North America, and I was talking to their chief merchandising officer. And essentially, we were talking about a sense relates to how their entire product mix has changed over the entire product mix has changed, and so on and so forth. And one of the things he mentioned is, he said that there are perceptible differences in terms of how an high value customer is really shopping for how an average customer is here and tell me more high value customer, he says that there is a small sliver of customer, maybe about eight to 10%, who are driving a big chunk they are making their average shopping cart size is much bigger. But then when you sort of dive in, and really break it down into Gen Z, millennials, baby boomers Gen X and so on and so forth, you will see certain unique trends emerge. And for their grocery chain, they had seen such a unique trend emerge as well. And they were utilizing that insight that not only that high value and the average customer separation. So focusing more on the high value customers, but breaking it down into the demographic bits. And then really try to even test out different localized promotions specifically targeted at each of these finer units or micro segments almost of audiences, a very interesting concept. And obviously, this was possible because they were able to blend in their offline and online data, they could track their they have about 9000 stores, currently, grocery stores. And they were able to track and measure the combined impact and the lift just through these shifting and changing and testing out their promotional, very targeted promotional strategies as well. So for example, what we are seeing as well, some of these overall numbers, we, we are pretty big in terms of using our data platform, we have this AI powered platform called Alexa insights, which which enables us to filter out the high value audiences and really present these high value audiences and target them directly through Google and Facebook ads, and so on and so forth. So we are seeing some very perceptible changes one, as you can see, in this case, this is for a typical cosmetics shopper. While the average customer spent about $139. in their lifetime, there was a lifetime spend, the high value customer spent almost about two and a half three times more. Right. And their overall number of orders per customer placed wearing this lettuce about last 12 months was about three, they were visiting the website a lot more. So the question is if the high value customers can be separated out. And if marketing strategies can be pinpointed towards engaging these high value customers a lot more? What would that mean, for your entire marketing strategy? What would you do differently to target these folks separately? If as I think data is very clearly confirming that, that if done right, you can you can really increase the return on your marketing spend as much as about three times in this case, for example, right? So they are visiting your site more number of times? What is the unique experience deals that have offered to them? What is their overall from the four key messaging that we do? What does the high value customer purchase in terms of the product merchandise? And how will that really impact your merchandising strategy? How will you really go ahead and remarket to these folks and so on. So if there was one takeaway I would have, and I'm sort of repeating that later, as well, by saying that then the concept of the average consumer is really a myth. I mean, there is there is no average consumer tell me, I mean, we have a pretty big audience join this presentation, how many of you consider yourself as an average shopper? I'm pretty sure no one does. But why don't we really put as much emphasis on trying to understand our higher value shoppers a little more, and really market to them a little more responsibly. So that's the concept, which really became very prominent during the COVID times, because this was the time And aren't we? We're talking about retail mediums, incidentally. That's my next trend, which was there. Unless you but

Aaron Conant  23:56

I'm just saying it from this standpoint, like this is what separates the good from the great is this strategy right here. Right? It's the difference between spending money and paid media on everybody who hits your site, and or being able to spend money in paid media and personalization around, you know, who you've identified as your high value customers. And so, I mean, the next one is how do you identify the high value customers

Udayan Bose  24:27

Exactly what it is and this got extremely amplified during the during the last two years, because if you if you note the specifically during the COVID trends, there was an intense amount of competition. So overall, I think the first three four months spent was pretty less but then everyone understood and acknowledged the value and the importance of online and we saw a tremendous spike in the overall advertising spends between let us say the q3 or q2, more likely q3 of 2020 all the way till about holidays of 2021. And at that point in time, it was just a crazy rush people throwing the budgets. But we saw also during that time, and we were able to validate it for many of our customers using Alexa insights, the the AI powered platform that we run, that by really targeting and your higher value customers, you can actually make a massive dent in your return on investment, you can really sort of get a lot more, right rather than chasing an average customer, who anyway, probably will not really come back and buy from you again, after buying once and 70% of the online shoppers actually across retail categories by only one from the website. Still, people really keep on chasing the average customer. So this caught some of the sophisticated and advanced marketers really sort of latched on to this. And they really benefited tremendously. And they were able to grow their in house database, the customer base or the customer file in a much smarter manner and a much more data driven manner. So that was a trend, I think that the concept of the average consumer got completely broken or shattered during during these last two, two and a half years, essentially.

Aaron Conant  26:08

I mean, it begs a couple of questions to which we might get to it the, you know, Google and third party cookies and identifying it and Google Analytics for and performance Max campaigns, everything is coming out. But also the fact that you know, I think, you know, as marketers, a lot of money was thrown at us to go just make digital happen. And you could for a while just pour money in and money would come out. iOS 14.5 updates. I know cookie, you know, deprecation is going away for you know, until 2024 Now, but the flipside is retail media. So as marketers, all of a sudden, were forced to be smarter with their money in the spend that we're supposed to deliver above average performance. And oh, by the way, there's, you mentioned retail media, which I hope we get to everybody. Every retail now is a retailer now is asking for paid media budgets, right? Like, so, exactly. You might see a trimming down, you know, as I go to the digital marketing team and say, hey, well how we're gonna divvy up this spend, you know, between the retailers in our direct to consumer side. I mean, it's gotten really complicated. So you have to be smarter with your money, because the other thing is like, the CMOS now have gotten to an education level where they they're looking at the metrics, and they're putting metrics out there. And we've been, you know, teaching upward for the past two years around, Hey, what the right KPIs, what are the right metrics to follow, and now we got them in place now, we're actually being, you know, expected to keep to those metrics. So anyways, interested in?

Udayan Bose  27:40

Absolutely. So that sort of leads me to my the third trend that we are seeing. So I think the cookie thread the cookie crumbling, or the third party cookies going away, I mean, the world saw the impact, I think, for the first time on the 26th of April, last year, right? When the IDFA, or the iOS 14.5 happened, and suddenly, we saw social media, you could not no longer track back very accurately the same happened for search as well, and so on, et cetera, et cetera. So that, I think was the first big shock almost for the marketing community, which forced most marketers to really sit back and start considering that this is something which is coming. And once chrome deprecates, the cookie between Chrome and Safari, it's about 85 or 86%, of the overall browser market in the US and globally, probably a very similar number as well. So 85%, we are unable to really address them properly or measurability is limited or attribution is not possible, then what do we do? Right. So it was I think the time for, it was almost like a wake up call for a lot of marketers that this is coming, let us start getting ready. And it's it's just happenstance, and it's probably a very, very positive, but a lucky thing to happen is now Chrome has really shifted the replication day to 2024. But marketers now have taken note of this, right? And they also have seen with the iOS 14.5 shift last year, what can really happen so people are rarely rarely trying their best to make the most of just thinking or envisioning a situation as to once we really move to a first party cookie, how it will really things shape up. And one of the trends which became pretty apparent was that once you don't really have a relying entirely on the first party cookie, the digital marketing suddenly becomes extremely fragmented, essentially, because all the channels we already have have seen and we have acknowledged the power I think, with 50% of the overall eCommerce sales in the US, you can't really say no to the power of Amazon, right? We have seen as to what happens when businesses really build their own walled gardens. Similarly, Google, I think, is trying to build their walled gardens because they don't have an option. They don't have the liberty of utilizing the third party cookie any longer, meta will try to do the same. And all these other circles that you see in this in this graphic, essentially, each one of them is maybe a new walled garden, which is coming up. And these walled gardens are called the retail media, which became the new battleground for growth. So we saw a massive, massive drive and people really rushing into an every major retailer now really wanted to have their own retail media network and so on. Right, and the promise was strengthen brand building, and obviously monetization. And it was also sort of moving into new ad formats like CTV, and so on and so forth. But now we have almost about a year of data in terms of companies trying to build their own retail networks. I am not aware of too many who are succeeding very much. I mean, I don't, I'm pretty sure he would have given the number of brands and companies you talk with a primary or better lay of the land. And it's happening primarily because one is they're struggling to get a consistent flow of traffic. The second part is the monetization model still is a little unclear. And the third component they have I mean, we can't really ignore the fact I mean, it's just too big to be ignored, they have been impacted by a bit of an online retail sales or purchase slowdown as well, in the in the first eight months or seven months of this year, so far as well. So it is becoming difficult for them to scale. Now the operating costs are quite substantial of if you're running your retail media network. And understandable it's a steep learning curve. And the operating costs of scale are different. It's very unique, you can obviously start the starting cost is easy, but scalar costs is difficult. So it is really I think at this point in time, a lot of those businesses who may have thought about creating their own retail VDI network, I think are going back to the drawing board and rethinking their entire strategy as well. I mean, they are thinking whether this is attractive enough. I mean, this is an E market graph, which shows that the retail media ad spending is expected to cross $52 billion by next year, whether they really want to play in this game, or whether they want to select specific walled gardens that Google walled garden or the meta walled garden, whatever it is, right, and really focus their efforts in trying to own the different touchpoints of the consumer touchpoints with the walled garden. So it's almost like a moment of reckoning, I think, which is the first checkpoint which is happening now as we speak, essentially, in terms of should I have my own retail media network? Or am I better off selecting the walled gardens that I really want to play in? So that essentially, I think, is the third trend that I really wanted to sort of focus on as well. So this this is basically getting questions that brand conglomerates and aggregators are competing to own the digital shelf. And how can you hold your own without sacrificing your profitability, I think is a key component.

Aaron Conant  32:58

Yeah, I'll just have a quick comment two brands. So I'm talking to 20 or 30 a week. And it's, you know, as in the network as a whole startup to Fortune 100. It's fashion to CPG. And everything in between. And nobody's figured out retail media, yet. There's people working, I would say there's leaders in the space who are figuring out the strategy. But you know, the amount of pressure now, that is on how you perform how the money was spent the return on adspend that you need to have in the sales and conversion rate you need to drive. And because every one of these retail media networks are new outside of Amazon, and everybody's trying to figure out how does the platform work? Do I need an agency to help me out? Do I need an ad tech tool to plug in on the back end? What is the right percent? Based on GMV? That I should be allocating? Does it come out of the trade spend? Does it come, you know, out of traditional marketing spend? That's what everybody's trying to figure out right now. And so if you don't have it figured out, you're not behind. You're just in this massive slog is everybody's been hit by 150 new retail media partners. Hey, come spend money on us everybody from you know, the Piggly Wiggly to the world to targets and Walmart. So anyways, just wanted to have that call out for brands that are listening. If anybody wants to have a follow up conversation on what's going on, like shoot me an email, it's more than happy to put time on the calendar and chat with you on the retail media side for sure. Anyways, I just want to have that call out. Cuz I know there's a lot of brands right now that are scratching their head on what they should do strategy wise and what are best practices and we're trying to figure out best practices right now. Yeah, so yep.

Udayan Bose  34:41

So moving on out. And I think let me let me go into some of the more recent ones. Absolutely. So this is some of the stuff that we have seen in the last year right 2020 and 2021. I really wanted to call out and share some actual stats and numbers as to what we are seeing in terms of you your data in terms of the year on year growth data at the category level, as well as also highlight about five trends, which we believe are important that we have now after about seven and a half or eight months in 2022, that have become pretty prominent as well. Before I start off, I think I wanted to share two of the LinkedIn posts screen captures from two of my very good friends Andrew  and Ajit he heads, the DTC worldwide. And understandably, I mean, as Andrew mentioned, the myth of the permanent eco eCommerce acceleration setting the question that we are all forced to ask is, was the 10 years in 10 weeks growth, a gross distortion? That's what I think Andrews question was right. And I think the verdict is still out there. It's pretty open. But understandably, we, I'm pretty sure that all of you would agree, when I say that. Yeah, it's definitely not 10 years worth of Spike. And as Aaron and I discussed, it's probably more like one and a half to two and a half years worth of Spike, but it's not bad as well. But let us understand as to what are those trends which are likely to stick? And what are some of these things as to how exactly can you really plan for the future based on these trends, which I am highlighting essentially, in this presentation. So in terms of category wise eCommerce growth, and we have, we have really our own data set, we have been tracking this since 2008. Now, and this compares H 120 22 versus H 120 21. So you see a lot of reds there, right? Understandably, there was a decline. And now h one had an inordinate amount of impact because of a very strong q1 2021, where the online sales still benefited from the direct COVID impact or the COVID Bump, as well. But we saw a parallel was at about plus 7%. Beauty and cosmetics plus 19%. So overall, I think this has been this matches fairly close getting the overall online sales were down by about minus 7%. But it was across categories, right. So I think I wanted to highlight two things, right? The first thing is, I want you to look into these categories from a perspective not only from COVID versus the post COVID, or this is the post COVID trends comparisons. But I also want to look at you to look at it from the perspective of some of the other variables which may be having an influence or an impact as well. They have already talked about the COVID impact. That's, I think, an inordinate online demand. If we really layer on that, maybe the importance of a supply chain challenges that has been experienced in certain categories. The third is actually the category type. There are certain essential categories, there are certain categories, which are non essential. And typically, if you have a if you have more or less a fixed wallet size, essentially the share of wallet unfortunately got skewed because of the inflationary pressures, gas, as we know, sort of crossed that $5, Mark, and so on and so forth. Right. So that may have had an impact in certain parts as well. The fourth part also is there are certain categories, which saw a massive jump during COVID. So are we really looking at a much more of a stretch longer, almost like a recalibration time, whereby things settle into a much more steady state. But it takes longer to get into a state. I'll call out two categories, specifically one consumer electronics. And the second is home improvement in this case, right? I mean, specifically, in 2020, we saw Home Improvement sales really spike and sorted hardware and tools, consumer electronics, we were everyone was sort of buying their own laptops for the home laptops, and so on and so forth. So it'd be interesting to see or understand, probably even try to think as to how will these categories pan out in the long run? And one question that I would have for you is, as you're really comparing the year on year trends, is it even right to compare last year versus this year? Or maybe, maybe it's a much more appropriate comparison to compare the 2019 versus now, not only in terms of overall sales, but the key metrics as well. And I'll share with you some insights that we have been able to derive there as well. But before I go there, I wanted to also share with you the last two months of data or q3, first of July until about 28th of August, we saw apparel, which was still clocking a plus 7% suddenly go down to minus 2%. So there was a decline compared to last year. But again, that may be impacted because the apparel sales really went up. Once the vaccination started specifically in q2 and q3. Specifically, we saw the apparel sales slowly sort of inch up and move out during COVID times that was one of the categories which saw a negative impact specifically the outdoor apparel, part, beauty and customer Tex continues to be steady. The other categories slowly are making their way up, right slowly the the negatives are declining. And overall, when we really consider the entire retail category data set that we are analyzing, there is still a decline of about minus 4.5%. But on a more positive tone, it's, instead of minus 7.2, it has now become minus 4.5, as well, but it is still still rough out there when it comes to eCommerce. Now we keep getting asked the same question as to based on this information, is it possible for us to forecast and predict how the remainder of the year would be? And at this point in time? My answer would very similar to what Aaron has also highlighted, the number of variables are so many, there is a state of confusion that I am seeing very clearly the entire industry, which I have not seen in my last 819 years of running this company. And when you talk about, I'm talking about businesses, or eCommerce companies, or retailers, everyone trying to figure out and latch to some trend, which they believe can be impactful, or which can really help them plan better for the future. I'm also seeing just because of a lack of clarity, a lot of conservatism, or a lot of I would think being a little more limited and tight fisted Nest sort of coming in as well. Now, probably that's the obvious reaction, specifically, when there is a lack of clarity. Understandably, people become a lot more conservative as such, the question that I would sort of pose there, is there a way for us as a community to figure out these trends on a much more of a real time basis? And can we really, somehow really have a slight, slight change in how we really operate as a business, and really are able to be a lot, a lot more nimble in terms of how we operate, therefore, not really missing out on any, in many cases, very, very time bound opportunities that may emerge as well. Because while conservatism is a conservatism, vism is a normal response. There is also an opportunity for smart, data driven marketers to grab valuable market share during this time, as well. So I really wanted to call that out. And I really wanted to, again, at the, at the cost of emphasizing it a little too much emphasize the importance of capturing this real time data to really define and somehow really, really govern your overall business decisions, even though it may be for a shorter span. Some of the specific trends again, calling out the first one is pretty straightforward. Nothing, nothing surprising there when mobile phones drove about 58% across categories or fail a little bit 56% of online orders. It they still accounted for about 64% of all the website visits, but about 56% of all the orders came from mobile phone for fashion and beauty mobile phones drove about 75% of all the orders. When you really move on. This is I think the interesting one, when we compare to h1 2019, we found that that that statement, which Andrew made the distortion statement, I think probably is valid, but not to that level that we didn't really gain anything. Right. So we saw that each and every eCommerce metric when you compare 2019 versus now we are stronger. Now the average website traffic is 21%. Higher. Website audits are about 12% Higher. The website average order value is about 24%. If you multiply the average order value with the website orders, we will see that the overall website revenue is up by almost about 30 35% or such. So based on this pattern, we can very safely say that the pandemic led to an impact, which cannot really now be shut off any more as maybe a temporary destruction. We feel that based on the data that we have been able to aggregate, the pandemic actually led to a 1.5 to 2.5 years of eCommerce growth. Again, it was very category dependent certain categories, it was not really as much of a lift, but other categories, the lift was a lot more like grocery. So a massive lift, I would probably have to say that grocery industry when it comes to online, daily leapfrog by about 2.5 years because of COVID. So those are the things just to be more practical and more data driven in terms of making those statements. One of the observable parts and which I think is again a proof that a lot of businesses really became a lot more nimble. Most retailers have made drastic changes to their product mix and I use that word very carefully drastic. We have seen in certain In cases, I mean, as I mentioned, we work with over 120 retail clients, at least, at least 20% of them. The percentage of the products that we are selling now on their behalf for network marketing on their behalf, is probably only about only about 15% are the same as they were, what they were promoting or selling in 2019. So they have really been nimble enough to understand the consumer behavior, the consumer preferences, they obviously have been cognizant of the experience the supply chain and inventory challenges. In fact, I was talking to Aaron and I was there at a large, large home improvement retailer, one of our clients in the Midwest, about three weeks back. And their biggest struggle is they have about seven months of inventory. Still, in many cases, we have the same we see businesses, which about a year long inventory in one year of inventory, and so on, which is obviously influencing the reorder rates and so on. And that last part also was very interesting. I mean, a lot of businesses were very open and very observant of all the changes in the competitive landscape as well. So, net net, what did the retailer do, they really changed their operating model to become a lot more nimble, thankfully, became a lot more data driven, and also really focused a lot more in terms of being relevant to the different consumer segments, as well as an inordinate focused on different SKU level margins as well. In fact, I'll share with you a simple example again, with the same retailer I'm talking about, they're about a half a billion dollar company, effectively now, I'm pretty sure many of you are running the performance packs, campaigns and Google and so on and so forth. So, we have been able to model and the entire setup based on individual SKU level profitability margins, and the impact has been quite substantial. So effectively, we are also seen, advanced data driven marketers are able to really combine their efforts when it comes to merchandising or retailing, core retailing, as well as the marketing are working hand in hand a lot more closely compared to what our observation was, let us say in 2019, pre COVID. So maybe COVID really led to a closer interaction between the supply chain side and the and the marketing side, which fundamentally in the, in the long run, I think can be of a massive competitive advantage for any company or any business moving forward. The fourth trend I really wanted to call out is we have seen the high purchase frequency categories continue to do well, the categories like grocery I already called it out, or cosmetics continue to do well online, I think it's a combination of multiple things. One is a lot of these businesses in these categories have constantly tried to lower the purchase friction, especially in the essential category, so make it very seamless and very seamless overall shopping experience. And therefore they have been able to induce a higher level of habit formation as well. And as I think Andrew calls it out as well. Effectively the habit formation, companies have really spent a lot of thought as well as utilize a lot of the consumer data to really understand as to how do they lower the entire friction and the barriers in the entire consumer journey, and really induce the habit formation a lot a lot better, let us say. And also they have been able to engage the new to online shoppers a lot better as well, during the pandemic. The last trend I wanted to share is in the only my personal opinion, I feel that BNPL may have been the most important sales catalyst during the post-pandemic times. It may have been it we have seen that the entire Klarna and affirm their adoption went up substantially during the last about two and a half years. But somehow I shudder to think what would happen because the inflation definitely is impacted the overall demand, what would have really happened had BNPL options not been there. And specifically, we also saw the emergence or the increasing buying clout of Gen Z, millennials already had a pretty substantial buying cloud, and their adoption of BNPL really made a pretty big difference, essentially, for the businesses as well. So these are five eCommerce trends, which we feel very confident enough confident enough to really present to all of you. And the question I would ask is, how exactly will utilize or what is the applicability some of these trends would have on your business? And let us say, in helping you really define some of your strategic plans for at least the remainder of the year. I mean, given the number of variables and the uncertainty, I think that's a fairly long time to plan for would be my question, but let me pause there and And then if you have any questions, happy to take them now, I just have a couple of more slides. And yeah, yeah,

Aaron Conant  50:04

I mean, just one was really quick what inflation play into the increase in ARV compared to 29 tears.

Udayan Bose  50:10

And we sort of adopted? That's a great question, we actually did the factoring as well. And we use two metrics. One was our own data set. And we also really poured into the the retail the census data, that sort of probably is the meat of the month, the government detailed data as well. So we believe that the impact of the inflation was about 13%. So an item. Again, this is a very broad averaging, because in certain categories, inflation didn't play an impact other categories that had a massive impact, specifically, in food and grocery, we saw a massive impact of such, but on an average, and average, again, is a bad word, I must really confess that the inflation impact was about 13%. So but even if that probably impacted the EO, V, specifically in this case, but still, I think the COVID effectively led to an increase in average order value, even if you really remove the the inflation part. But 13% is what we are seeing across the cut across I mean, if you really took an average average

Aaron Conant  51:10

in the US just around like the recommendations, right, which I think, you know, you jumped to the previous slide, just briefly, like what are you? You know, what are you advising, you know, the brands you're working with today, what would you tell somebody new comes in the door, like, and they say, Hey, what should we do, you know, as we go into q3, q4, and that's, I think, is key takeaways here.

Udayan Bose  51:35

I sort of share some of them actually, at an appropriate analysis, so to speak, and try to address this. So we have about five recommendations I'll wrap up with the first part is, please have a plan be ready for the holiday season may seem very basic. But when you have such a high level of uncertainty and unpredictability, just having a plan A will not suffice. So having a plan B Ready for the holiday season is absolutely critical. So when I say Plan B, I am talking about again, that same scenario, where I think being conservative is the most obvious choice, right? But are you likely to sacrifice some of your market share by being overtly conservative, wouldn't it really make more sense to really build or collaborate with a real time data system to really keep a closer tab on your consumer changing preferences and the trends and natural eCommerce metrics, and really being nimble enough to maximize and take advantage of these time bound opportunities that may really emerge to this entire process. So this holiday season, if there is one thing which I can absolutely, state with a fair amount of confidence, and that would be that, unlike other holiday season, this holiday season would be one, and I'm using the word one by marketers who are more data driven, and who are more nimble to really maximize the short term windows of opportunity to slowly aggregate market share away, essentially, essentially, so that would be my thing, there will not be one consistent same strategy across for the next whatever three or four months, it would be instead, blocks of time maybe about, I don't know, one week to two week blocks of time, which would really decide as to how successful on an aggregate level, let us know, when you take the next four months or three months, you would really be and for that, just having a plan A and just diving deep and being very rigid enough to stick to only one plan will definitely not suffice. So that wouldn't be my first recommendation again, being in

Aaron Conant  53:44

the next the next few we might have to like speeds or if you said they're five, just because we got about two minutes left anybody? Anybody really quick, anybody wants to follow up conversation? You know, the team over there. They're awesome. They're great friends, partners, they're working with a ton of brands in the network. If you're looking for any kind of additional help here anyway, whatsoever, highly encourage you to reach out today and in the team at NetElixir. They're awesome. You want to chat with me. You have need other service providers chat digital strategy, wonder what's going on with retail media, shoot me an email as well, aaron@bwgconnect.com. I'll put that in the chat there. But yeah, Dan, do you want to, you know, jump quickly,

Udayan Bose  54:24

but also put my email address in as well. Just in case someone wants to reach out and have a deeper discussion. We are extremely data driven. So an initial warning, I mean, as if you have not yet understood by now, so that everything is about data and numbers. So I'm happy to really have an individual conversation with all of you. The second one just quickly going through is building an in house experimentation and insights lab. I mean, you the only way of figuring out as to what would work in future is just fail faster. You really have to keep on going, going going constantly and figuring out and it's almost like you're a certain chunk of your budget, maybe about seven to 8% Shouldn't be only do focus on conducting a series of continuous experiments. The third one, which I wanted to highlight, essentially, is, you really have to understand the shoppers a lot more compared to probably what you are understanding now. And I would also call out the importance of understanding the higher value shoppers as well, because it's our firm belief that over at least the next few years, the businesses which will really win big time with would really not be chasing all the shoppers, they would be chasing the higher value shoppers who have a higher impact on their overall business success. The fourth one is establishing a resiliency plan, because the entire system in your entire operating model, probably the entire business model has gone through multiple changes. And we have seen very clearly the pandemic has now become more of an endemic face. Now as such, it's not really going to go away, we let the lives have to adjust around the lower threat thankfully, COVID really persisting for a long time. So essentially, I think it's extremely important for you to really have that level of responsiveness, which is driven by driven by a reliance on actual real time data, and really building an overall collaborative ecosystem of partners and service providers. And last, but not the least, be ready for the cookieless word. I mean, we have talked a little bit about it. And I'm happy to discuss at length with any one of you separately on a one on one basis as well. And I think it's high time that every marketer really needs to think about the cookieless world and plan for that. Understand what channels would you really want to own your presence in? And what are the channels do you really want to not be a part of? And do you really need to build your own retail media money network? What are the other options available? In fact, we have, we feel so passionately about this entire topic. We have a site, a separate section on our site dedicated only to something called a cookieless corner, whereby we are constantly our our analytics team is constantly updating the latest thought leadership articles, insights and some of the trends that we are seeing in the cookieless corner as well. So feel free to use that link. We can sort of share that link separately via an email with all of you as well. But this is one of the trends I would definitely request all of you to be mindful of. That's what I had in the presentation. Sorry for again, overstepping on the time limit, but

Aaron Conant  57:27

no, that's right. I mean, I think, you know, we kind of tackled a few things along the way as well. And then I was jumping in with some top things that I'm hearing from brands as a whole but I think Udayan, again, is a great friend partner support of the network. So thanks so much for your time today. Looking forward to setting up a podcast with you, everybody, thanks for joining. Across the board is great participation. Thank you so much. Hope everybody has a fantastic Tuesday, a great rest of the week. If you'd like to have a conversation reach out more than happy to have a conversation with you or put you in touch with the day and the team at NetElixir or with that. We're gonna wrap it up here. Thanks again team. I look forward to seeing you at the next event.

Udayan Bose  58:04

Thank you very much, everyone. Thanks a lot. Thanks.