Tiffany Serbus-Gustaveson 0:18

Happy Wednesday, everyone I am Tiffany Serbus-Gustaveson and digital strategist with BWG Connect and we are networking knowledge sharing group, we stay on top of latest trends, challenges, whatever shaping the digital landscape and we want to know and talk about it. We're on track to do 500 of these webinars this year due to the increase in demand better understand the digital space. And we will have done at least 100 in person small format dinners. So if you happen to live in a tier one city in the US, feel free to send us an email or go to our website bwgconnect.com and see where we'll be at in different cities. Throughout the US if you're interested, you can always send an email, contact me Tiffany@bwgconnect.com. And we'd love to have you at one of these centers, they're typically 15 to 20 people having a discussion around a certain digital topic. And it's always a fantastic time, we spend the majority of our time talking to brands that's where we stay on top of latest trends would love to have a conversation with you. So feel free to send me an email at Tiffany@bwgconnect.com. And we can get some time on the calendar. It's from these conversations we generate the topic ideas we know people want to learn about and it's also where we gain our resident experts, such as net elixir, who's with us today. Anyway, that we asked to teach the collective community has come highly recommended from multiple brands within the network. So if you've ever needed any recommendations within the digital space, please don't hesitate to reach out we have a shortlist of the best of the best and we'd love to provide that information to you. Also note that we do partner with the hiring agency Hawkeye Search formerly BWG Talent that we can put you in contact with as well. A few housekeeping items. We want this to be first and foremost fun educational conversation. I'll put as many questions comments you have into the chat the q&a both are enabled, or you can always email me at Tiffany@bwgconnect.com and we will get to them. As we talk and we started here about five minutes after the hour rest assured we're gonna wrap up at least five to 10 minutes before the end of the hour to give you ample time to get to your next destination. So with that, let's rock and roll and start to talk about the top seven eCommerce marketing trends for 2024. The team at NetElixir have been awesome friends and partners in the net with DWG Connect for years now. They are like one of the first partners with BWG Connect. So Udayan, I'm gonna pass it over to you can introduce yourself, that'd be lovely. And then we'll dive into this information. Thank you.

Udayan Bose 2:36

Absolutely. Thank you so much differently. And hi everyone, happy holidays. I mean, this is always a special presentation, Tiffany because we have been doing it now for I believe, what five years now. And every year has been so different. But this year, I think I've not really seen any year like this one. So very excited to share some of the trends. And also I'll start with the cyber five insights and results that we have seen as well. A bit of a cautionary note, Tiffany, as you know very well with my presentation, it is extremely content heavy. So if you have an plus my accent doesn't really make it easy. So if you have any, any questions, or I sort of tend to go too fast, get too passionate about it. Just feel free to stop me. And I'm happy to answer any questions. We would love to take any questions you have, please feel free to add them to the chat box. Sounds good. Thank you. So just a quick thing, I'll just do a quick introduction about the company about NetElixir and we'll talk about the cyber five performance inside this was our 16 theater if any of doing the Holiday results tracking. Incidentally, we did the first one in 2008 when Twitter was still pretty much in it's the first year and now it is not even called Twitter anyway. Cyber five high value customer behavior. This we use our own AI marketing tool called Excel insights to track that and then I'll wrap up with seven eCommerce marketing trends based on all the insights that we have been able to gain working with about 150 Plus customers all in the retail eCommerce side. And just extrapolating as to what does the future look for them? A quick introduction about the company. But before that a little bit about me. I am the founder and CEO of NetElixir. We started the company almost 20 years back we will be celebrating our 20th birthday, Tiffany on the 26th of Jan, so about a month away. Congrats. Thank you. Yeah, we can say we survived. She just put it that so we really have had this opportunity to really look at the digital evolution in multiple waves and so on and so forth. I also am very privileged to be an Innovation Fellow at Columbia Business School's Entrepreneurship Center. I love lecturing. So Harvey Johnson School of Management, Indian School of Business and the CUNY Baruch. I sort of do some guest lectures there as well. A little bit about the company and what differentiates NetElixir. We have been around for a long time, I think. In terms of the independently run company, we believe that In the Google top 27, what we call the agency leadership survey, we are the only one exclusively with an eCommerce background of the retail and direct to consumer eCommerce customer base only we exclusively focused on that. We have built our own AI marketing platform. This is more of a vertical AI which works with our customers data, and essentially predicts future trends. Like what is their propensity of churn what is the propensity of someone buying X to buy y and so on and so forth, to a product called Alexa insights, we have a product for small business called Alexa guide and Alexa Analytics, which is a smarter way of doing GFR. Because GF for Google Analytics for normally has a bit of a lag, we have been able to crack the code and really make it real time. We also are a certified Minority Business Council member as well. And last but not least, we have our own nonprofit called Fudan Foundation, where we support young girls from primarily the slums in India, to pursue a better life. So education has been amazing. So just to start with the cyber five trends and results with a little old now. So I mean, cyber five has been but some of the trends are pretty interesting, quick basis, we use our own technology, as I mentioned, to track those numbers. We segmented in eight different industry verticals, by device channels, and so on. And we get a lot of customer data, customer purchase insights data. And as I mentioned, this is our 16th annual cyber five results, essentially, so overall, we saw at least our data set customer data set, we and I'm talking about about 75 to 80 customers, we saw about a 7% year on year eCommerce growth during cyber five. The growth though was not evenly distributed. As you can see South southern states grew at about 9%. Some of the other states didn't really grow as quickly. But again, a little bit of a context that we saw that overall internet shopping or online shopping in the southern states was a little lower pre COVID, we saw a lot of lot of lot of states from the south catch up, specifically during COVID, essentially. And that brought in a lot of first time users as well. So I think that's that new users which they were acquired, but southern states during COVID, continued to drive the growth in south. So we expect that number to continue for some time, at least. In terms of cyber five, this is more of a share of orders and revenue by day. So on top, we have Amazon and the bottom, we have the direct to consumer. So we track both of them separately. So Amazon, and we have really focused only on those customers. So we manage manage a fair amount of Amazon advertising for our clients, as well as obviously, search advertising, social media advertising, for our clients as well. So if you really look at it the trend per se in terms of orders, but not too different, different, it's I mean, it's just a very similar curve. What made it interesting, though, when we started plotting by client by profitability or profit margins, then suddenly, those trends looked very, very different. For example, the profit margins, let us say, on Saturday and Sunday was higher compared to even Black Friday or Cyber Monday. Right. And on the direct to consumer side. Now the profit margins, understandably, on direct to consumer were bigger compared to Amazon, profit margins, and so on. So one of the key takeaways was it's interesting to map not just the orders and revenue, but also the margins as well. When we really go down into the category level information and this where it sort of becomes really a little technical and deep. You would see that beauty and cosmetics, cyber 520 23, we saw about 22% jump in the number of audits. That's a pretty significant jump, right? But look at the average order value that declined by 8%. So what does that say? Obviously, at least one of the immediate extrapolations was there has been heavy discounting in the industry. And this is very clearly a reflection of the heavy discounting. The second thing that obviously cannot really be ignored is the inflation impact as well. The last year inflation number was close to 7.5%. During cyber five, this year, the inflation number going into cyber fibres about November was about 3.24%. So understandably, all of these things sort of factor in but we found that to be interesting. They're all these all these categories, where there was a prominent jump in the number of orders compared to last year saw a decline in the average order value. So the basket size essentially declined the search. And it will not be it one would not be very difficult to think that some of this increase in orders may have been driven by heavy discounting as well. Now the impact on margins is something that we really have to gauge, but just wanted to communicate some of these things. So I've already shared some of this like for example, the surge of eCommerce revenue in the South was pretty interesting, if you really look at the data is ordered trends, just mapping and understanding the profitability trend lines can be interesting. And the strong cyber five results may have been driven by data discounting, it is interesting to assess the impact of the deep margins on retailers bottom lines as such. So that just wanted to share some of these comments. But let me pause here. Any questions at all happy to take that? Tiffany? super

Tiffany Serbus-Gustaveson 10:27

interesting. I was curious about the Amazon, you know, the having October Prime Day? Yeah. And what do you believe that that took away from the orders of cyber five, or it was incremental, didn't matter, we could

Udayan Bose 10:46

not find that actually, we sort of did the October tracking as well, a Prime Day. It definitely took away some of the orders from the remainder of October because time they were the 10th and the 11th of October, and then they are the target Walmart, everyone had their train days also. But we think that it did not have an impact on cyber five sales, it may have definitely advance some of the sales, which may have happened, maybe in the last couple of weeks of October and the first week of November. But overall November sales were okay, but not huge. Yeah. And I think another question I saw is heavy discounting with EOB increase in the mix of purchase channels. That's absolutely possible, Katie, I think it just overall, the product composition also has changed as well. And that to an extent, at least, I'll give you a simple example. So we worked with a fair range of eCommerce companies, different categories. So specifically, I think I'll quote from a let us say, a hardware DIY tools and hardware category. And it was intriguing to see as to their product mix, which sold during cyber five was very different from what they had sold during cyber 522. And many of these unit item prices, unit prices were actually lower compared to what they were selling earlier as well. And that may have been influenced by the change or shift in the consumer preferences also, that were there. And back in 2022, we have gotten out of COVID. I don't know as to how much of that is COVID influence when it went to. But it was interesting to see as to the difference in the overall shopping cart competition in both the cyber fights as well.

Tiffany Serbus-Gustaveson 12:21

Yeah, it just confirms your cyber five when we refer to it. It's Thanksgiving, Thanksgiving. Monday, everyone. Yep. See, after five days essentially. Yep.

Udayan Bose 12:33

So let me keep moving on. I think that some of the customer behavior, we're able to track that pretty deep, because of our AI marketing tool, which is sort of just put a tracking pixel is a first party tracking pixel. And through this, we are able to track the customer behavior or search mobile orders, no massive surprises. I mean, it was though, for the first time that we have been tracking this, we saw fashion apparel 75% of the orders coming from the mobile devices, by beauty and cosmetics was pretty close by 74%. But I mean, those two are definitely definitely outliers. It was interesting to see the jewelry, the percentage of orders coming from mobile devices to be 68%. That's quite, quite significant specifically, because normally the jewelry customers that we work with are selling significantly high or high ticket items as such. So you would normally not think that they would buy have too many purchases through the mobile mobile phones. So we were pleasantly assumption

Tiffany Serbus-Gustaveson 13:35

is they were doing their due diligence on the desktop like months leading up to the sale and knew what they were had their eye on the prize.

Udayan Bose 13:43

And that is great. We absolutely believe that. So I think they may have done the research. But final purchase may have been made through the mobile phone. Yes. Great point. Yeah. Moving on another very interesting trend that we saw. And this one was really interesting. So if you look at it, again, we talked about beauty and cosmetics and how the AO V had dropped by about 8%. Right? Now look at what happened during cyber five again, thanksgiving to Cyber Monday, in terms of the items per order. So in terms of shopping cart, the number of items there, actually that went up by 11%. That makes the situation even more complex differently because you're selling 11% more units or items per shopping cart, but the shopping cart costs about 8% less less, right? So that almost like validates this entire thesis that there has been heavy discounting, pushing up the overall number of audits right. The other part which validates that is the latency as well. So again, we are able to track using our Alexa insights platform, the time between when a visitor lands on the website till the time they make the first purchase, second purchase and so on all in an anonymized format because I mean being a GDPR compliant company, we cannot really store any PII. So it was interesting to see that 46% decline in the number of touch points prior to the purchase. Now we are comparing last cyber five versus this cyber fight, right. So that is a massive shift. That is a massive shift by any any measure any means that they can think of. And we were very intrigued, very, very intrigued with the same for food and gourmet as well, and tools and hardware also. So this one was interesting, primarily because mobile, I don't think that's a surprise. The second one, I really want to point out, I mean, one of the things that we really focus on is identifying any perceptible mega shifts in consumer behavior. And we believe that this, almost like spontaneous the Lightning Deals on Amazon, and so on and so forth, sort of thing, the deal grab behavior where the shopper swoops in very quickly and purchases that before the product runs out of thing that may have been to an extent, induced by the two years of COVID. When inventory was a big problem, if you remember, Tiffany, then we had situation, the massive supply chain problems with the containers stuck in the ports, and so on and so forth. And many of the items were perpetually out of stock. And there were limited quantities of items as well, that may have led to this answer, it may have really led to this entire, entire sort of an immediacy part. So people are likely to buy very quickly, if they recognize that deal is attractive. And we believe the company which really utilize the most to shift the SKU, this holiday season was yet again, Amazon, along with some of the other marketplaces as well, other retail media networks or marketplaces. And also, I believe that this shift in shopper behavior will last for the foreseeable future. Also, it's an interesting trend. So let me just talk a little bit about this theme, just because if this theme is really, really as big as I think it is, then marketers have to think about the four P's of marketing or the marketing mix very differently. And let me explain it or say, let us talk about inventory in this case. Now in terms of inventory, for example, how do you really plan your inventory mix, knowing if suddenly your demand, there is no homogeneity. And it basically constantly spikes and troughs, it's almost like a very jagged peaks and sort of bubble up and down and so on, it's really difficult to really, really predict the inventory per se, effectively, unless and until you really have a technology which is able to understand as to what is the propensity of someone purchasing something. So that's where again, there is a bit of an AI play, understandably, but something to keep in mind, in terms of merchandising, for example, again, it becomes a little tricky, primarily because, again, connected with inventory, what exactly are you promoting? How do you know whether the sudden spike in demand would have for that particular product? And how does that get conveyed? Or communicated through your marketing efforts overall? And last, but not the least, what do you do even with channel marketing, right? Because if you know that, most of the buying is really happening in very specific, very detail oriented manner. How does your entire entire channel marketing plan sort of change or evolve, so that you are visible in the regular hours, but you really over invest to ensure that you're not really missing out on those peaks are such, so it really requires for a very different approach towards marketing, a different perspective to marketing as such. So this is interesting. And I think, at this point in time, the eCommerce businesses really need to analyze the site metrics. Also the shopper metrics as well, things like latency, the time of purchase, the number of items in carts, and so on, and so forth. So one of the things that we have done, again, the building smart promotional models, which really balanced the demand left and profitability, I think is going to be more and more important in the future. I mean, again, I talked about our Alexa insights technology, one of the modules, which we recently launched differently is really helpful. We are able to use machine learning to predict as to if someone is buying, let us say product number 41. In this case, what are the other products or skews that they are likely to buy also, and how much revenue did that can contribute also, right? So suddenly, rather than selling individual skills, you're suddenly selling product bundles, because that's how your customer is really behaving as well. So it has really become a terrific user application of data science, and machine learning to really be able to keep in tune with all of these fluctuations in demand. So this is Alexa insights. And if anyone is interested in just getting a complimentary demo of this, you can scan this QR code or just try out this URL. But we are seeing some remarkable impact of using AI in marketing and some of the results that I'm presenting anyways coming from this as well. Like when you talk

Tiffany Serbus-Gustaveson 19:52

about Lissa friendly reminder questions, comments, put into the chat or the q&a, and we'll get to them

Udayan Bose 19:59

and lastly, I want to also touch upon the impact of performance packs, there has been a lot of talk about AI this very clearly has been a year when AI really became very prominent. Now, one area led, we do a huge amount of Google advertising, budget management and advertising management and performance Max was introduced just in Feb 2022. Last year, or was it the year before, I mean, just sort of my memory that probably last year 2022 JFM. And it already accounted for almost like 61%. aggregate across. So that's how important AI modules have become. Now, as anyone managing performance, you don't really have that much amount of granularity and control and so on. And we firmly believe that this will keep on increasing whether it is Facebook's advantage plus or whether it is performance Max, the channels will keep on bringing and driving traffic, or bringing in new AI modules. And it's our belief that by 2025, at least 80% of all paid media orders and budgets would be flowing through the AI modules. As such, the application of the third party cookie, which starts essentially next month, will really lead to channels intensifying their efforts as well to strengthen their walled garden. So that's where I think the AI modules really fit in. And, again, to really succeed with AI powered modules, you really need vertical AI tools. Again, NetElixir insights with what I mentioned is particularly AI tool to supply those high quality audience signals, which, which really allows you to conduct those, what I call the rapid adaptive experiments at the channel level, because the entire game of advertising management has become a lot more AI driven. And it's a lot more data driven now, and data driven marketers we are seeing are having a significant advantage of anyone else. So those are some of the stats I wanted to show before really moving on to the seven eCommerce trends, which is the key theme, but wanted to share some of these tabs as well. Now some of these trends and themes are based on the observation we have had, collaborating or partnering or managing the campaign's of, as I mentioned over 150, retail and direct to consumer eCommerce companies, and a really significant amount of brainstorming within our NetElixir team, just to understand as to what can we see what can we really project. So the first thing that some of these maybe look a little into the future as well. But we feel that we will start try to start seeing the impact pretty much in 2024 directly. The first one so I was doing a little bit of a chat GPT led discovery process during Black Friday, Emily, and I wanted to check whether the Black Friday deals were good on Amazon, let us say or a certain company, right? And I asked Chad GPT can you really research and tell me are these good prices. And I was amazed to see the accuracy with which Chad GPT four was able to do this research and tell me what prices were actually the best prices and what prices were not the best prices. So essentially, I had used something which I firmly feel will become extremely important moving forward. And I really wanted to emphasize that as the big theme. And that is AI essentially changing how we shop forever. And the emergence of what we call the personal AI driven shopping agents will become extremely important because they remove the shopping friction leading to a spike in eCommerce sales. And that's my my first big point that I really wanted to emphasize differently, that the personal AI driven shopping agent is the future of search. And I also believe that that will really remove a lot of friction within closed ecosystems like meta, and Amazon, as well as the open ecosystems like Google as well. And in the spirit of making a prediction or forecast, if any. This is what typically the eCommerce retail sales data from the overall US Census coming in, and they measure it as a percentage of overall retail sales, which happens as you can see during the COVID, you see that COVID bump, and so on. And it seems that at this point in time, for the US Census, the number is about 16% 15 and a half percent and 16%. It's my belief that adoption of these personal shopping agents or AI based shopping agents may actually have the next impact, very similar to what what a big force like pandemic has had in terms of the spike. And it is my belief that it will not be impossible to think that the number will spike to 20%. So the next big spike or stimulus to Growing the overall online shopping behavior and online shopping purchases is here now, we can call it the age of abundance in eCommerce. And that would really be the second fundamentally big shift or mega shift that will forever change eCommerce. And the companies which are able to embrace this personal shopping agents, they are able to build their own chatbots, almost like a concierge for their websites will be able to write this wave. And I'm talking about the outcome of this wave. As you can see, again, I'm called copying, comparing with the census data would be 20%. As you can see, during during COVID, it was it went up to about 17%. Right, so we are talking about the next big push will potentially come from personal shopping agents. So any questions happy to sort of put

Tiffany Serbus-Gustaveson 25:54

them in the chat q&a, because these these are some big topics excited, but big topics

Udayan Bose 26:01

is a very big topic. And on the same note different adding the emergence of search agencies also here as well. So what I showed him the chat bot in the previous slide, I mean, I was using chat GPT as my search agent, right, it was sort of finding the the deals and also answering if these are the best deals available, right. So that I think will become very popular. Now what does it really mean for search, it will obviously, obviously lead to some people, probably not spending enough time, really scrolling through those links and finding out as to what they want. I mean, why, quote unquote, waste so much time, when some you can really get that information delivered to you by a chatbot, which is your own research agent. And the second victim I really wanted to talk about is a search generative experience as well. So it's very interesting, just a few hours back, Google announced the launch of Gemini, their most powerful AI process. And yesterday, Microsoft Bing added Deep Search generate a feature, which is just incredible. It really, really is all just takes it to a different level. So deep search effectively is more of a generative AI feature, which really helps answer the complex questions that don't have simple answers. And potentially, it may actually sort of cause a lot of stealing of clicks from the regular web search, organic search letters SEO listings as well as the SEM listings and so on. I saw some questions come in. So let me

Tiffany Serbus-Gustaveson 27:39

Yeah, we have quite a few you want to go into real quick. Okay. Yeah, sure. Absolutely. Yeah. There's some great questions. So first, is is a trend more to have a personalized shopping agent on a specific direct to consumer site? Or what customers go to Google or Amazon to shop across brands?

Udayan Bose 27:56

That's a great question. I would say all differently. That's what my again, prediction is, I mean, at this point in time, that's what we can do is predict. Amazon definitely is going to have one, I mean, 100% that's the reason their investment in anthropic is very clearly to that thing. Beta is going to have one very clearly that meta IBM Alliance, which was announced just last week, I think, is an effort to this. And they actually have also launched or introduced, effectively a meta shopping agent as well, which, again, is an another trend, which I think will sort of really, really drive tremendous amount of social commerce activity as well. So that's happening and Google obviously through Bard Baker going to the Denver election. Now, this is where I think there is a big opportunity for the businesses or the eCommerce, the direct to consumer, as well as the retail companies as well, to have their or invest in their own own shopping agents. So once the customer is there, on your website, there is an opportunity for you to communicate in your brand voice that is only yours, right, we can't have your brand points, you can have your brand price. The second part is really, really show it in a way that you really want to effectively show. So I think you have a lot more control effectively. And the third component, which I'm super excited and confident about is one of my later themes that I'll be sharing is the cookieless world and the duplication of the third party cookies, you will get a tremendous amount of extremely valuable first party data, which can be incredibly powerful in helping you creating a much better experience for your customer as such. So I think it's a combination of all but I would urge any direct to consumer and retail business to seriously think about having your own chat bot which can communicate with can be your brand ambassador literally, effectively which can engage with your customers as such.

Tiffany Serbus-Gustaveson 29:47

Excellent. And how do you feel SEO will play the role of all of them? That's an

Udayan Bose 29:53

interesting one because sir generative experiences I think, understanding the E at work Couple more important authority part. But deep search, essentially, I mean, if you think of it just even a very, very sort of a high level, but seems to be logical in the sense that if you're getting all of these different options as well, without really having to even search twice or thrice or five times, then why would you not do that? So it may actually eat into some of the organic search listings. The second part? Also, I think, which, again, all of this is a prediction, we don't know what we don't know, I think it would really get into a lot more personalized form. So thing from the personalization is what the horizontal AI technology is, like, whether it is barred, or let us say being being effectively would be driving. So from that perspective, I mean, what are some of the tactics that you can really do to really promote and support personalization in terms of search would be the next one. So I think we have talked about the structure data and all of this stuff for a long time. But it is just just going to be at a next level in terms of how much meaning are you able to provide in the search listings? But most definitely, most definitely. I mean, the indications are pretty clear with the Deep Search and so on, that there would be an impact on the regular web search.

Tiffany Serbus-Gustaveson 31:22

And is it safe to assume that many of the products that chat GPT is recommending are already in a top search position? Actually

Udayan Bose 31:31

not surprisingly different? Actually not? That was what I was surprising about, for example, in my search, if you really look at the previous slide, I talked about shields, if you really look at shields, it's not really there on the right at the top. If I think there was the next one. So yeah, just Yes, shields effectively was not there at the time, but they were able to find out and try to promote that to me. Right. So that's, I think I was pretty intrigued with that. So we didn't really see any direct correlation, though, or very direct correlation here.

Tiffany Serbus-Gustaveson 32:05

And our consumers accessing AI shopping through chat GPT primarily, or are there other sites or avenues that are

Udayan Bose 32:12

actually my next slide sort of talks about that all those. So effectively, I think this is the core search market. And I have a pretty big prediction to make, I believe the core search market being share may actually increase by 8%. Plus, for example, today, Google made the Gemini Announcements it will be rolled out slowly. If you look at it, Gemini altra will has not been rolled out yet it will be in the future. It's my belief that Chad GPT, five we'd get rolled out before that. I mean, if you really look at the blog post today, Jamie and they have tried to compare it versus Chad GPD. Four. And it's significantly comparable. And we are talking about Ultra comparing, which is like the more of the complex searches and so on and so forth that asks. Now if you really look at Changi PT five, I think that will be a game changer, which will really accelerate the entire, the entire curve in terms of more people searching on Bing. So that's, I think what my prediction is, already if you really compare this is from comScore. And as you can see, October versus November, already been has gained some amount of share. As you can see, the Microsoft sites has gone up from six to 26.9% Share to about 27.6% Share, even though it is point 7%. Remember, it is one month, and we are talking about a massive number of searches overall. At the same time, Google has declined 61.4% to 60.9%. Right, so many of them are accessing through chat GPT like myself, but if you combine chat GPT with Bing search, which is bigger at this point in time in terms of ecosystem, I think we are talking about some significant significant impact to the core search universe one positive thing which I think comScore also highlighted, the overall number of searches will go up. Because a conversational search as we call it, is really leading to some steep increase in the number of searches almost like a 5% increase happened in total number of searches as well. So I think the entire ecosystem is our universe is expanding. But within that, that Bing chat GPT combined, is slowly starting to make an impact or move the needle. For the first few months. It was not even observable. I mean, this is your September October if you had gone to August, minimal minimal shift, but it is starting to happen now.

Tiffany Serbus-Gustaveson 34:39

Here's a really interesting question. So do you think like a chat GPT will ever implement advertising or sponsors within the answers? So if you're looking for a pair of shoes, and then a sponsored ad comes up with

Udayan Bose 34:54

me like I wouldn't discount this possibility because if you think about the over On all monetization models, per se, right? I mean modern size and model at this point in time chat GPT is for the Plus users 20 bucks a month. That's basically what the monetization is. However, they have to be careful if they go into the advertising part and clearly calling that out, primarily because otherwise, I mean, the entire thing is based on the credibility part as well, right. I mean, one of the one of the big struggles, which I have mentioned very bluntly, to the Google team, last year, or actually this year beginning as well, I mean, much of the Google page, the search page before Chad GPT came in and they sort of came up with this search or the chat side had really come to resemble more of a flea market, there will be ads all around everywhere, right? It was just a bad consumer experience, sort of searcher experience. And that is something which I feel was a mistake, which Google made I just being very direct and blunt about it. And which really led to a competitor coming in, and they are able to have switch those searchers are search users of Google, who were not really completely, completely heard of, let us say, a little disappointed or frustrated with this inferior experience on the Google search page. And they were the first to move and there was a mistake to do. Thankfully, because of the Google name is so strong, and the Google overall experience overall is so strong with the legacy. I think they were able to still maintain and preserve most of this but they still lost share. If they didn't lose to the chat GPT being combined, they also lost to Amazon and marketplaces and Tik Tok as well. Tik Tok became suddenly the number one search engine for the Gen Z focuses search. Right? So I think it's it's extremely important for the channels to constantly, constantly focus on improving the consumer experience for them the searcher experience, rather than just trying to really make entire thing a paid billboard. But having said that, other monetization models, I'm pretty sure they are being tested. We don't really know of any upfront. So that would be my very long answer to your great question. Yeah, very interesting. So let me keep moving on. The next one is even more stark, and some of my predictions are pretty big. So we'd all talked about retail media, and this is my good friend, Andrew, from a market that has a lot of research on this, the entire intelligence and so on. So overall, they're expecting a terrific sort of almost like a growth on retail media networks. The thing I am concerned about, I have mentioned in the bullets as such, right, so if you didn't look at retail media networks, Amazon continues to account for 75% of all that spent. And we all know that there has been such shift from Google on to Amazon, there has been media spend shift to Amazon, and so on. I don't see that balance 25% coming down, and it has been about four years of talking about it and media networks, Amazon has pretty much maintained their 75% Hold. Hopefully Walmart and some of the others target Kroger etc, can really pick up the 75% may decline to 70%. But that 5% shift will not really go to the smaller players, it will most likely be distributed. Among the next four hours, the retail media networks, which is Walmart, Kroger, target and eBay, right. So I cringe to think as to what would happen with the smaller retail media networks and so on. So as a thought of it, I mean, this was an interesting graphic that I'm going to show you this is from McKinsey's study on unleashing the power of retail media networks. And if you really look at what are the features, which brands care about, as they really are decide to advertise and not advertise on retail media networks? And the first one is delivers performance, or deliver performance? Does this retail media network channel deliver performance, which I can't get anywhere, right requests? Does it offer access to audiences I couldn't reach otherwise? Now, if really, if you really take just these two points, unfortunately, many of the smaller retail media networks which have started, don't have enough traffic, and don't have definitely enough unique traffic as such, right. So still, whatever we say, I mean, the the overall audience is still pretty concentrated to the bigger players. I mean, the smaller ones, retail media networks, unfortunately, don't really have any any sizable, unique audiences so as to say, and that is a struggle. And we feel that 2024 would be the year when we will start seeing that struggle really come to fruition effectively because of the first mini ShakeOut. Some of the smaller retail media networks have come up. They're struggling like the oxygen for them is basically traffic. And they don't have as much about the unique audiences and they'll see marketers switch to more, I mean, bigger and more popular retail media networks as well, where they can actually make money. So that's the the overall prediction. It has nothing to do with AI we still believe very firmly we are in line or in alignment with Let us say the market or retail retail insider Intelligence Group, when they talk about the growth in the space, but the space growth will be very lopsided, it will be very clearly skewed towards the top five retail media networks, which between them, just FYI account for almost about 90% of the overall overall traffic as well as advertising spend, we're sort of going in there. Marketing to always on socially conscious deal hunters has to be really focused, I have mentioned it earlier the deal grabbing behavior as well. Now we can as I mentioned, through NetElixir insights, I showed you the example of those product bundles and predictive product bundles and so on. They can provide smart recommendations, but I think it's important for marketers to reorient their entire approach. I mean, Thriftiness essentially is the norm now almost, and the customer is always on, always connected. And the last but not the least, nearly half of the US Millennials are likely to consider carbon neutrality and they are definitely socially conscious as such, right. So differently I was discussing before we started this webinar, as to what we talked about a lot about Gen AI, and AGI let us say, generative AI, but the amount of energy consumption of all of the servers and the entire, which is required to really support this generative AI models is enormous. It's just enormous. And that goes exactly opposite to the carbon neutrality areas, specifically the focus on the causes of the sun. So it's an it's important as well, while as humanity, we are obviously enthralled by the by the potential of generative AI to cause as many of the many of the leading thought leaders, especially in the Silicon Valley, I've called the age of abundance, but age of abundance shouldn't really be coming at a very, very high cost of just the carbon neutrality and the climate changes, and so on and so forth. So it's going to be a fine balance. And that's going to be the main check, in my opinion, which really, to an extent, causes at some point in time, the the nonstop growth of generative AI to slow down a little bit in 2024, and more innovations to come out of what exists, primarily because we really need to be responsible, as we are constantly investing in these technologies as well. Absolutely. Moving on, the next one, again, is a big one, and there's a lot of conversation about the social commerce etc. So, there are two forces which are important to keep in mind. The first part is the inclusion of the Gen Z buyer. In the entire social commerce group, the people who use social media to the ones who are buying using social media is just about 50% per e marketer again, now, that's I think, one thing and Tik Tok really addresses that particular user base, because as you can see very clearly Gen Z overall social media and their social shopping behavior has will constantly keep on increasing effectively, and tick tock shops will be driving that very clearly. But at the same time, it's also my belief that meters investment in for example, this was a, this was an update just a couple of months back on the meta blog effectively. So, I think again, that entire concept of an advanced conversational assistant will break down some of the frictions effectively, that are being experienced in the social shopping space. Because if you look at it, this is the social shopping space has been and E marketers projection is it will stay flat 50% roughly about 50% That is about 6.6% 48.4 50.9% It is my belief that these advanced conversational assistants are let us say AI agent will remove the frictions and lead to a lot more targeted shopping recommendations, etc. Smart buying recommendations, which don't seem like you're getting sold, it's almost like and they would really have a tremendous power and obviously a very different level in terms of the capabilities when it comes to what product are you really even showing to let us say a Facebook or meta user at any point in time and so on and so forth. And it is my belief that at least 65% of all the social media users and meta by 2027 will actually actually have shopped using our from meta or Instagram shop and Tik Tok shop and so on and so forth. I think it's more of the Instagram and the meta shops effectively that would be there. So I would actually be a lot more optimistic compared to what a marketer has forecasted almost by about 14% increase in shop socials. offers, again, cons, really led by the the prevalence and the adaptation of just just the shopping agencies, very smart AI driven shopping agents as well. So again, one thing, which I, you probably would have guessed, this is the third time I am mentioning about the shopping agents are such, the shopping agents making an impact as personal agents in terms of helping you do the research pre purchase, helping you to really do search research. And this is where research in terms of I think one of the questions was, will face the channels also develop their shopping agents? I believe so yes. And this was an example as to how meta shopping agent will actually reduce the shopping friction, and really increase the number of shoppers who engage in social commerce as such. The next I think, is something that I I've we've I've talked about it at least for the last couple of years. And so it's not really new. But now we are, I think they are we are, I mean, Google has used or alphabet has used all of its let us say rainchecks. Overall to now we really have to get this thing done. I mean, Google will be starting to disable the third party cookies for 1% of Chrome users starting next month. And they plan to complete the entire process by end of 2024. And I cannot really emphasize the importance of you having a first party data strategy, right, because we are already seeing some of you may have seen it's a bad analogy. But still a GA for Google Analytics for is a potential analogy as such, right the since the move from Universal Analytics, we saw only about 50 to 60% of the people really make the transition. And everyone has struggled, right? I mean, that data refreshes after two days. And it's not very granular. And you're used to using Universal Analytics, you can't say expect very similar things to happen. When this happens starting from next month, you are going to see massive deviations in terms of the actual numbers, what what is reported number and so on. So I would request if you have any need, if you we will be happy to help I can really get our data team into action to help you to make this transition to the first party data world. But I can't really overemphasize the importance of doing this today. So just to summarize the the seven eCommerce trends the AI commerce powered personal shopping agents will lead to significant growth over predicting about 20% of total retail sales by 2025. conversational search will drive a 10 to 12% increase in total search query volume. Personal search agents will make the search process frictionless and less tedious. being shared of course search will increase by about eight percentage points by the end of 2024. Retail media and networks will continue to increase primarily because of their bottom of the funnel value. However, the total argument and share of the top five will remain pretty much constant at about 90%. I don't see that changing tremendously. Smaller RMS unfortunately will start falling off the grid in 2024. Vertical AI tools like I talked about NetElixir insights can help eCommerce businesses adapt to this new shopping patterns and so on. We just using our own AI that we have built in where we set up our product innovation center Tiffany in 2017. It's like six years of work culminating into this machine learning models that we have really built so this can help tick tock shops will drive more Gen Z shoppers social shoppers, while AI agents will continue to make social shopping more frictionless and effective. And both these factors will lead to a spike in social commerce. So I know there was a lot there just wanted to share all of this stuff. Happy to answer any questions. I also have an offer for all the attendees today. I mean, again, an extension of our AI tool. Google ads will get impacted and understandably with REMAX etc. It is getting impacted. If you scan this QR code, it's almost like a you can generate your own Google Ads account future ready scorecard, which tells you as to how far off your account is in terms of readiness to this to this new world of AI driven Google ads is. So that's what I had in terms of presentation I'll end with again what I started with probability theory that we have the foundation which supports this young girl very proud at this time. 22 Girls are being supported by us. Many of these girls, they didn't really have much of our support to study beyond 10th grade, and three of them actually are working in large multinational corporations. At this point in time, it really gives us a tremendous amount of pride and we are extremely thankful to our clients partners and most importantly, to Netflix their employees and team members to daily support. This call starts if you really feel in place and have any interest please scan this QR code. Go to our site, just check it out. There are some other words that we are doing. Even a $10 $20 can go a very long way in supporting these girls pursue their dreams of a better life. So that's amazing

Tiffany Serbus-Gustaveson 50:04

organization. I went on the Giving Tuesday and checked it out and donate it and beautiful organization. Well done. Thank you. Awesome work.

Udayan Bose 50:13

Thank you very much. So that's what I had any questions? This is a Google Ads scorecard. We already talked about it happy to answer any questions that we have. Yep, no

Tiffany Serbus-Gustaveson 50:22

questions, comments, put them into the chat. We're almost at time. We do have a couple more questions here. We can run through real quick. Should we wrap up? So how do you think about advertising on the RM NS versus using the ad dollars on Facebook or Instagram or Tiktok? Shops?

Udayan Bose 50:40

A great point? Again, I would say it depends on the tests that you should do. I mean, as a marketer, I think testing will become the number one competence and I'm just repeating that experimentation and testing will be the number one competence for marketers in the cookieless world because you'll have to deal with a lot of unknowns, right, you wouldn't know the impact and so on. And with the AI modules, like advantage plus, and so on, are becoming more and more difficult as that. So I think one of the parts of testing is really looking at your channel portfolio, right? And really looking at and testing out and reserving something, setting an expectation and seeing whether this works or not. So there is no foolproof answer. As such, it's just that it may be safer for you to really not put all of your eggs in one basket. But effectively your basket of channels or portfolio of channels may look very different from let's say, Tiffany's basket or my basket and so on. But I think testing is the only option for you to find it out or the only way for you to really find this out as such.

Tiffany Serbus-Gustaveson 51:40

Okay, cool. But Udayan always brings so much awesome content, so much information and you always get it done. Was it an hour boy there's like a whole semester course here like we got it set at like 15. We definitely encourage follow up conversations with the NetElixir team. They are fantastic. We will be following up with everybody with contact information and we'd love to have a conversation with you. That's how we get the content ideas for future events such as this, so feel free to email me Tiffany@bwgconnect.com, I'm on the calendar. So with that it is a wrap. Have a lovely Wednesday all going into the weekend. Happy holiday season and hope to see you on another event soon. next time.

Udayan Bose 52:23

Thank you.