We discuss adjusting to new consumer habits and Future Commerce’s most recent report - Retail Rebirth. 

  • There is a new retail seasonality. The market is changing. 
  • Environmental factors that are affecting the market today are repeated history. Protest, social justice, an election year, public health crisis - they’ve all intersected before and were followed by a period of innovation. 
  • The Retail Rebirth report outlines how to help position your business to take advantage of this new market. 

American Optimism 

  • Consumers are optimistic about where they are in relation to the past and are optimistic about where they will be by the end of the year. 
  • 48% of Americans polled in our survey said they will be in the same financial position by the end of the year. 23% said they’d be worse off. 30% said they would be in an even better situation. 
  • For business owners, 60% said they were on track for their revenue goals. 

Digital Comes of Age (Again)

  • In the early 2000s, there was a push towards eCommerce. It’s happening again but this time around, COVID-19 is the cause.
  • eCommerce is now the preferred method of purchasing and physical stores are ‘uncomfortable.’ Digital experiences are now the place to invest. 
  • eCommerce platforms allow you to put more resources in-house and drive more results with fewer expenses. 
  • COVID accelerated whichever path businesses were already on. If a business was going to go bankrupt eventually, it happened more quickly. If a business was set up for online experiences and was going to skyrocket, that happened more quickly. 

“Pants are a Social Construct” 

  • Now that people have nowhere to go, they’re taking zoom calls for work without even putting pants on.
  • Retail that centered on seasonality is changing (back to school, summer vacation, holidays, etc.) 
  • The economy has shifted back into the home. People are investing in home experiences with digital media and working from home.
  • Having a toe in every possible channel is advisable so that in unforeseen circumstances (like COVID-19), you’re in position to get your business ahead. 

Customer Experience 

  • The fourth largest amount of commitment for future spend was under customer experience. This is huge for improving customer retention right now.
  • Surveys show that the majority of consumers want multiple ways to reach customer service - via text, chat, call, or email. Personal experiences mean more than automations.
  • Digital is naturally impersonal, but great and personal customer service is a customer acquisition strategy.

Adaptability is Your Superpower

  • The brands and retailers capitalizing on this moment are the ones who had contingency plans and thought ahead for how to address new problems as they arrived.

Links

Phillip: [00:02:11] Hello and welcome to Future Commerce, the podcast about cutting edge... Cutting edge, Brian... And next generation commerce. I'm Phillip.

Brian: [00:02:20] And I'm Brian.

Phillip: [00:02:21] Brian. Brian, this is like our first episode, just the two of us in a very long time.

Brian: [00:02:29] Since probably Nine by Nine.

Phillip: [00:02:34] Is that what we do now? This episode, by the way, will be a gratuitous patting of the back of ourselves, of how good we did on our last report. {laughter} So get ready. Forty five minutes.

Brian: [00:02:49] You realize we only come together on these episodes now to congratulate ourselves.

Phillip: [00:02:54] It's true.

Brian: [00:02:54] Like that's the only reason we talk to each other now.

Phillip: [00:02:57] Before we congratulate ourselves, there are so many other things we could congratulate ourselves about, by the way, although I am very proud of our Retail Rebirth report. And by the way, we will be talking about Retail Rebirth today eventually.

Brian: [00:03:10] Good.

Phillip: [00:03:10] But if you want to follow along with us, you can go download the report right now. Go get it. It's at FutureCommerce.fm/RetailRebirth.

Brian: [00:03:22] And...

Phillip: [00:03:22] Go on.

Brian: [00:03:24] Well, will this air after you run 40 miles for your 14th birthday?

Phillip: [00:03:30] That's true. Yes.

Brian: [00:03:31] Yes. I'm going to pre-congratulate you now.

Phillip: [00:03:33] Thank you.

Brian: [00:03:34] Congratulations, Phillip. Turning 40. Running 40.

Phillip: [00:03:38] I feel like you're jinxing me in some way. I think this airs afterwards, right?

Brian: [00:03:46] Right?

Phillip: [00:03:46] Ok, I'll take the pre-congratulations. How's that? I'm taking it. I appreciate it. I'm running 40 miles on my 40th birthday. Yes, it will all be in one go.

Brian: [00:03:56] And you say you are running? You mean you have run. You have already run.

Phillip: [00:03:59] Yes. By the time you listen to this. Yeah, you know, it's interesting, I decided to take this on. So I've had people ask me like, do you walk at all? Yes, I walk. {laughter} It's 40 miles. You know, you have to walk sometimes because your body just doesn't agree with you in the running of 40 miles. It just stops working. So and things happen, by the way, it's going to take about nine hours, eight and a half to nine hours to get done. You have to eat. I have to take in two hundred calories an hour. Do you know how hard it is to consume 200 calories every hour while you're actively running, Brian?

Brian: [00:04:41] It's like people out there on the sides of the street handing you beef jerky.

Phillip: [00:04:47] That's right. {laughter}

Brian: [00:04:48] They're like, "Here, have another piece."

Phillip: [00:04:48] Drive by jerky. You got like beef jerky aid stations.

Brian: [00:04:53] {laughter} You know what? You should feel pretty good because it took me about eight hours to do about ten miles recently, but then again I was doing some elevation. So...

Phillip: [00:05:04] Congratulations, dude.

Brian: [00:05:06] No, no, no, no, no. This is not a congratulations kind of hike. This was a fun day hike up the Camp Muir, which is on Mount Rainier. Not the same thing as scaling Mount Rainier. You can congratulate me someday when I do scale Mount Rainier.

Phillip: [00:05:21] Well I believe pre-congratulations are in order, Brian. {laughter} I pre-congratulate you for this thing.

Brian: [00:05:27] I really hope this airs well before I summit Rainier.

Phillip: [00:05:33] I believe it will because it's slated to come out in the next three days. I don't know. I have no idea, actually, when this publishes. We are talking about Retail Rebirth. We'll get there. A bunch of things have happened that we like... I just I have to... If you're listening to Future Commerce or you have been listening for a while, you'll know that we are on our game. If I do say so myself. We're incredible. I'm truly amazed at how often we are correct. I know you're laughing...

Brian: [00:06:09] We warned you up front. We warned you up front that this was a self congratulatory episode.

Phillip: [00:06:15] It really is. It really is. And it will continue to be. I can't get over the fact that every now and then we just hit it on the nose. I don't know. OK, so there's a bunch of things why. We were talking some time ago about education. We had written a piece called The New Formal, which I felt like was really, really interesting. Right before The New Formal came out, you wrote a piece about...

Brian: [00:06:58] Maximalism.

Phillip: [00:06:58] Well. That was one dimension to it.

Brian: [00:07:01] Fashion economy. Art. All of the above.

Phillip: [00:07:04] It was called The New Dada. And it was how Dadaists are very contrarian and utilize art to make statements about things.

Brian: [00:07:17] To make a point. Yes. Correct.

Phillip: [00:07:17] And how those things are sort of reactionary. So the original Dadaists were a reaction to like the bourgeoisie and the sort of like opulence of England and France and how maximalism would be a reaction to the current minimalism or the like the prior generation's minimalism and Nordic minimalism. Like you said this very specifically in this piece. It's called The New Dada. Hopefully we'll link it up in the show notes. It's not always guaranteed. And we got this right. There was actually a piece that fell not so long after this, I believe it was in The New Yorker. The New Yorker had a piece about Gigi Hadid and Drake's homes sort of being this ode to maximalism.

Brian: [00:08:12] It's pretty cool, actually, their house.

Phillip: [00:08:15] It's very cool looking. I mean, it can be done in such a beautiful way. Kyle Chayka, who I follow on Twitter, wrote a piece that basically kind of says all the things that we said, but obviously better because they write for The New Yorker. But yeah, trendspotting. We're 100 percent on it. We're on top of it. I'm very proud of us.

Brian: [00:08:40] More to come on that, too. Actually, maybe it's already out by now.

Phillip: [00:08:43] We need to stop trying to do the... Yeah. That. Whatever it is you're doing right there is very confusing.

Brian: [00:08:54] It is.

Phillip: [00:08:54] So anyway, Retail Rebirth actually is such an interesting piece because I feel like we were on top of the trend spot there as well. So we actually... When did we conceive retail rebirth?

Brian: [00:09:09] So this would have been probably four months ago, roughly.

Phillip: [00:09:13] So April or May?

Brian: [00:09:14] Yeah, roughly. Yeah, probably like April. As we were coming out of March.

Phillip: [00:09:21] So we created this report. We actually began work on Retail Rebirth simultaneously as we were finishing up Nine by Nine. And the idea, or the premise, as we had originally sort of conceived it... And I can actually read from our abstract, which is kind of nice that we can do these things now. Our original creative brief for Retail Rebirth was that there would be a new seasonality, like a new retail seasonality, and the rhythm of retail has been disrupted. You probably heard this if you heard that jazz concept piece that we did that announced Retail Rebirth, it said all of this stuff. And it said, you know, purchasing patterns have been shifted around. Retailers are going to spend much of the next 18 months trying to persuade customers to return to normal. And the report is going to inform what that new normal is to retailers and how consumers are preparing for their future, how merchants can adapt their strategy for success to grow their business. And yeah, we partnered with Method + Mode again, and we did some broad consumer research. We did some qualitative with business operators in our Future Commerce expert network. And we found a lot of really, really interesting themes. And that's what Retail Rebirth is all about. We teased out five themes, and I think it's one of our best reports yet. I'm really proud of it.

Brian: [00:10:46] Oh, for sure. One of my favorite parts of the report is just the artwork. It's super fun. We had some visions for this and it really turned out like right in line with how I had it in my mind that it would turn out. And so it's a really pretty report. So anyway, it's fun to read. At least I found it fun to read.

Phillip: [00:11:08] Yeah. It's a really great read actually. And you know us, it's not short.{laughter} It's like 14 pages long. It's not a quick read. And I think that, you know, you get your money's worth there in that you trade an email, you trade some contact information for I think some really deep retail research insight. One thing that came out in talking about this. So our new creative director, who we just brought onto the team, Jesse Tyler, who joined us, actually helped pitch in for this report. And one of the early concepts was the environmentally, like a bunch of environmental factors that are happening right now, are things that have happened actually in the past. These are things that have intersected before. Protests, social justice movement, an election year, a public health crisis... These are all things that happened once before and it was 1968. And there's a bunch of things that happened that year that actually created an environment that set up a whole... It set up three decades of innovation afterwards. So without getting too deep and like reading the report to you, a few things that converged in that moment in 1968 was while Douglas Engelbart had The Mother of All Demos, which was that computer, the oN-Line System, that demoed what the personal computer was to become. Also the Whole Earth Catalog was launched by Stewart Brand, who actually happened to be a non-technical collaborator for that Mother of All Demos event. And Stewart Brand developed the first Whole Earth Catalog, which you might say was like an analog precursor to Amazon.com. And all of that moment in that turmoil of the 60s and the early 70s actually gave birth to what we know now as The Information Age and the proliferation of personal computing and having information at your fingertips. And so if that moment in all of its turmoil could give birth to a great age of innovation, what could this moment in all of its turmoil give birth to? That is Retail Rebirth in a nutshell. And there are five concepts that we believe will help you position your business to take advantage of what this is, which is at the beginning of a new cycle. How's that for an intro? That was pretty good.

Brian: [00:13:37] That's a good intro, and these five takeaways we are going to cover in some detail here. And I think the first one, which we kind of laughed about, is the power of American optimism. And so this is one of the biggest, like, most astounding things about the data that we saw come in, and that is that people are not too concerned about the future {laughter}, which blew our minds. Going into this. Phillip and I were both like, "OK, right now people have some money, but they've got to be thinking out like ahead of stimulus packages and looking ahead to the end of the year when unemployment's going to start to run out, and "will things start to bounce back?" and at least people might be a little bit nervous about this.

Phillip: [00:14:35] You would think, but you would be wrong.

Brian: [00:14:39] You would be wrong. Yes. Exactly.

Phillip: [00:14:41] And we had some of this too, again, one of the takeaways or one of the feedback items, and I think it's just 2020 in a nutshell. But anything that takes any sort of amount of time to produce starts to... It takes on the air of the moment in which the question is asked. You ask people a question in the middle of April or early May, and by the time end of June comes around for you to put out the printed report, that consumer sentiment may have shifted. In this case, like it doesn't seem like it shifted at all.  [00:15:20]Consumers are just fairly optimistic about where they are right now in relation to where they've been and how much better off they'll be by the end of the year. [00:15:28] So a couple of takeaways... Even though we're coming up on an election, even though we're in the middle of a second wave of coronavirus, and even though our one step forward, two steps back, phased re-openings, school... Back to school? Even though all that's happening still 48% of Americans polled in our nationally representative survey said that they will be in pretty much the same position financially at the end of the year as they are right now, which this was at the beginning of H2 2020. Only 23% said they'd be worse off, and 30% say they'd be in a better situation. I have a hard time believing that that is going to be the case. I have no idea where I'm going to be at the end of the year. And I'm not dependent on fiscal stimulus to make those ends meet. I think it's going to be a really interesting few months ahead of us. And the majority that we polled said that they do not expect things to be continuing in a downward trajectory, despite all of the other evidence that might point to the contrary, which I think is just super interesting. So that's American optimism.

Brian: [00:16:47] Not only are consumers optimistic, I think even eCom operators that we poled from our expert network...

Phillip: [00:16:55] Yeah business operators...

Brian: [00:16:58] Were a little bit more optimistic than I think we even expected. And 60% said they were on track to their revenue goals for 2020. I mean, obviously there's the other 40% aren't on track. But it was even more than,  especially at the time... When we first started doing this research, and we're not seeing the absolutely insane move towards eCommerce that we've seen recently.

Phillip: [00:17:25] Yeah.

Brian: [00:17:27] And then the move in retail, 1% up year over year for what was it, June? June that we were up 1% year over year?

Phillip: [00:17:38] Yeah.

Brian: [00:17:38] Which I thought would have been like the worst month to be up year over year.

Phillip: [00:17:43] Yeah, it was actually... I don't have that number in my back pocket. I felt like it might have been 2%, but we comped up over last year's monthly retail sales, which is the number I think that you're quoting from the Commerce Department, the US Commerce Department, and that we comped up and a lot of the sort of guidance that was given around that number that came out at the time from some banks is that well, that's propped up by stimulus. And we're looking now at quarterly earnings from Walmart and Target, and it's like, well, yeah, maybe it is propped up by stimulus. Walmart had like a 200% growth in eCommerce during Q2.

Brian: [00:18:25] Lowe's up one thirty five.

Phillip: [00:18:27] Insane. Target had a record quarter as well. And so, yeah, it's an incredible, incredible surge that have gone to those businesses. You know, something we had talked about a lot during those early quarantine like re-openings, as states were starting to reopen, was a phenomenon that had popped up of folks that went shopping because there was nothing else to do. You were stuck at home. The only thing you could do is maybe go to Target or go to Walmart. There was nothing else open because they were considered essential. And you're sort of like mindless wandering around the aisles at Target, picking up a couple of extra things. I think that did contribute to improvement in retail sales numbers, at least during Q2. But now that there's other things to do, when you look at places where businesses say that they're planning to drive revenue in 2020, based on our survey, business operators have already spent... Like 68% of them have already invested in identifying new customers. So they're probably going to spend a lot less time there. Only 27% say that they're planning to identify new customers. Of all the things that we asked, which there were a number, only 5% plan to make additional staff cuts or layoffs, which is shocking.

Brian: [00:19:50] Unbelievable. Yeah.

Phillip: [00:19:50] So they've cut it already or they decided not to and decided to put their efforts into other things. So rather than cost cutting, they're looking to try to drive additional revenue, which I think is really interesting.

Brian: [00:20:06] Yeah, I think that that is, again, just goes back to that power of American optimism. I have a feeling and maybe this is just the sample that we drew from, which was our expert network, which is full of incredible people, but I wonder if maybe the cuts are coming from different parts of the business. That's the only thing I can think of that maybe is a little bit of an outlier here. The types of people that we poll are maybe more focused on acquisition than they are on [00:20:37]... You know w [00:20:37]hat I mean? And so that's maybe one addendum to it, but I really believe that this is really reflective of how we view business in America. And I think that sometimes our optimism can actually pull us out of a hole.

Phillip: [00:21:00] So that's a really interesting point and something that I think that we probably discount here or we don't say it very explicitly in the [00:21:10] report. I think to be optimistic to some degree is to be human. It is uniquely human, I believe, to see the hope or the opportunity, even in your present circumstance. It's [00:21:28] the thing that has made at least this country the land of opportunity. Right. And it's the thing on which we've built in the United States our economic model, and the ability that most people have despite... There are environmental challenges. Certainly don't want to put those aside. I know that there is systemic racism. There are things that have held people down, especially certain people groups. But when you compare us with the despotic government of, say, like, you know, the People's Republic of China or the Chinese Communist Party, we have a little bit of a different economic system that provides more opportunity for more people. And that's something that's come through in this report in a big way.

Brian: [00:22:23] Yeah. Yeah.

Phillip: [00:22:25] We are widening the aperture. I'm not sure... Now you've got me thinking about when this podcast will come out. Rebecca Boxall of Native Shoes is going to give a more global perspective from the Native Shoes brand and how they think about it globally and what their experience has been like in battling this time. And it sounds like they have a very optimistic take on the way that they're pivoting and serving more customers during this time and rising to the challenge as well. But that's the first point. As per usual, we spend way more time on the first point than all the others. Point number two, Brian. What is point number two on our report?

Brian: [00:23:04] Digital comes of age. Again. {laughter} And I think that it's interesting, we look back at the early 2000s and the bubble that happened there. And we were kind of all like all of the companies that tried to do eCommerce then were maybe a little ahead of the curve. Right? And there was a big bubble around it and no one was ready to do it. And the thing is, this time around, we had a big challenge, not the stock market crash, not the bubble of vaporware, but we had COVID and everyone stuck at home. And so actually, all of a sudden, eCommerce becomes the preferred method for people to make purchases. This is the opportunity and this is the position we find ourselves in where brick and mortar used to be like the end all to be all of retail, where the highest of high experiences, the most amount of money was put into flagship stores and these physical experiences. And Phillip wrote a phenomenal article for Future Commerce Insiders, which he made a great reference to the movie Freaky Friday, where there's a body swap, where the mom becomes the daughter and the daughter becomes the mom. [00:24:37] Well, all of a sudden we're in a situation now where digital is now the preferred experience and people are afraid and uncomfortable going out into stores and making purchases. They're this gives eCommerce the opportunity to become what it could become. And now digital is your flagship. That is your number one place to invest. If [00:25:03] you are getting... If we're on a trajectory to see 50% of our sales come through digital, then your digital experience better be the best experience that you offer your customers. And so that is what we're headed into now. This is Retail Rebirth in a nutshell.

Phillip: [00:27:44] And by the way, of the business sector in the eCommerce vertical that are part of our Future Commerce expert network, which by the way, if you would like to join our expert network, go to FutureCommerce.fm and sign up for Future Commerce Insiders, which is our weekly essay. Join That Community. The welcome email will give you some information on how to join the expert network. But the expert network weighed in and 61% of them said they are shifting business funding to their website. So 61% are looking to spend more on their eCommerce site, where 30% said they would hold the same. Only 9% said they were looking to spend less online. And those are likely ones that were probably over leveraged or on legacy platform that's costing a lot more money. One thing that you and I have seen in the agency space is that you can have renewed interest in eCommerce and be putting more manpower and effort into having a better eCommerce experience, but be spending less overall.

Brian: [00:28:51] Yes. Totally.

Phillip: [00:28:53] And that's because the modernity of eCommerce platforms allows you to put more resources in-house, rely on less outside agency help, drive more results with fewer people. And that is like that is the efficiency of that channel that is beginning to put the power into the hands of the operators. Something we talked a lot about last year. Yeah.

Brian: [00:29:18] If you are on the legacy eCommerce platform right now, to me...

Phillip: [00:29:26] Careful what you say. I'm very scared about what you're about to say. {laughter}

Brian: [00:29:26] No, to me, you need to make a move to something that makes sense for your business.

Phillip: [00:29:38] Yeah, but here's the rub. Right? If 61% are spending more on their website or eCommerce, I believe that there's a shift that needs to happen there in that they need to be putting the money towards the right things because you can certainly spend money on the wrong things online in eCommerce and bells and whistles and sort of digging a deeper hole for yourself. I think is a less about feature and functionality, more about, in many cases, just having products to sell people. Right?

Brian: [00:30:10] Yeah.

Phillip: [00:30:10] And five years ago we might have worried about keeping websites online during high traffic. Now it's like, how do we just keep our customer service teams happy, so that they don't quit on us, so that we can drive retention business. And that's another area where we saw probably the second largest amount of commitment for future spend... I'm sorry, the fourth largest amount of commitment for future spend was under customer experience. So technology and infrastructure, website and content were number one, two and three, and those all kind of sound like they're in the same space. Customer experience was right behind that. And I think that that's where if 43% of business operators are looking to spend more on customer service or customer experience, they're probably doing so in reaction to less foot traffic in stores and looking to make those experiences better overall. But you don't get that by sinking money into your website. A lot of that's retention business. And so you have to really think about how you're spreading... Don't you wish that there was like a roller coaster tycoon for eCommerce? {laughter} You know what I'm talking about?

Brian: [00:31:30] {laughter} Oh, yeah, totally.

Phillip: [00:31:32] You know, it's like the role playing game aspect and scenario planning and sort of like optimization like efforts of... You know, it's funny, I didn't mean to work the same here, but Tobi, Shopify Tobi, Lütke had said recently that his playing of like Command and Conquer and Starcraft is what has made him like a prolific business operator, and that he understands the micro and macro at the same time and how strategies and tactics work together to create a cohesive plan of action and how to adapt when things don't go the way you think they will. I think that that's a really interesting take.

Brian: [00:32:12] It is a really interesting take. Another thing that I think this points back to is actually our vision report from earlier this year. Very, very interesting. I feel like this is an acceleration of a lot of the things we thought would start to take hold this year. This is speeding it up. We talked about how this was the year that businesses like finally, finally invest in the types of things that they need to invest in to have a legitimate eCommerce business. And so I just think this is a really... COVID accelerated all of our predictions in really big ways.

Phillip: [00:32:57] That's true.

Brian: [00:32:58] Side note. Grand millennial's. Right? Like the whole DIY, like learning a scale thing... Oh my gosh. Like that was I think one of the last things we had in our predictions report. And that was probably our best prediction.

Phillip: [00:33:11] Yeah, that's it. So you make a really good point there. I've referenced it maybe three times now. It had such a profound impact on me. But Scott Galloway had a really interesting interview with Kinsey Grant on the Morning Brew podcast about COVID being an accelerant, and COVID was an accelerant in pretty much every area. It's like if you were a business that was going to go bankrupt, eventually, it just happened faster. If you were a business that was going to skyrocket eventually during, you know, because you were really well positioned in eCommerce, that happened faster. And if you are in education and you were well positioned to deliver digitally, then the online adoption is shift to digital for you happened much faster then it probably would have otherwise. All of those shifts were accelerants as a result of the channel shift into digital. For all kinds of reasons. But you had written something, I think, in this section here that said if technology powers or even influences 50% of our transactions based on data. So we had 43% of folks in our survey said that they were doing... I'm sorry of the consumers polled in our survey, they in aggregate said that 43% percent of their shopping was done online prior to COVID-19, where 52% would be retained or 52% would be doing their shopping primarily online afterwards. So that's a 9% gain. And your position here was basically if 50% of our transactions take place online or are even influenced by online interactions or experiences, then that means digital is your new flagship and that's where you should be putting your investment. I think that's an astute point, Brian Lange.

Brian: [00:35:16] Well, thank you. Philip Jackson. I think the interesting thing here is, as we've seen continued investment into this space. That if you don't invest, that you're going to get left behind. That's kind of what I was trying to say earlier. And I think it's Crystalized as we got to the section. Investment in eCommerce is going to accelerate. And if you don't keep up, you will get left behind. So now is the time to be making those investments because you're going to be going along just fine, and then there's going to be this moment where everyone else is ahead of you and you've missed the boat. And so that's something that I think is a big cautioning point coming out of this, is that if you're not investing more in eCom, then you're you're actually missing out on the future.

Phillip: [00:36:15] Can I just say how... We worked and somehow our partner Gladly let us get away with probably the wittiest report we've ever written.

Brian: [00:36:28] True. It's true.

Phillip: [00:36:29] I don't know how.

Brian: [00:36:30] Thank, Gladly.

Phillip: [00:36:31] Thank you.

Brian: [00:36:31] You are a great sponsor.

Phillip: [00:36:33] We love you guys so much. Thank you for being a great partner to us. We somehow simultaneously mention Weekend at Bernie's as in like brick and mortar is being propped up like a dead corpse a la Weekend at Bernie's. We somehow said that nobody got mad. We also said pants are tyranny and that people are doing Zoom calls without pants on. We worked that in. Peter Pan gets a couple of mentions. We have Tiger King in and toilet paper hoarding are mentioned on more than one occasion. It's a fun report. Let's talk about seasonality as a social construct.

Brian: [00:37:16] Yeah. This is where the pants are tyranny thing came in.

Phillip: [00:37:21] This is true.

Brian: [00:37:21] And also brilliant.

Phillip: [00:37:23] Pants are also a social construct. We're in the middle of it right now with back to school. And we're currently working on an education report that will land very soon. We're diving into this moment of distance learning or in person learning that will dramatically shift to distance online learning when things go awry. This moment has taken the seasonality out of 2020. We began the lockdowns in Spring. We're going into the Fall now. We're heading toward Labor Day here in the United States. And we still have most states are not reopened in any official capacity. Yeah, it's the dissolution of the social pact, you know? Monday through Friday, 9:00 to 5:00. These things are our normal boundaries. Like what is summer if you can't go on vacation? And what is back to school if kids don't need shoes and backpacks? So these these are things that drive retail purchase, especially things like travel and apparel that are very locked to seasonality. We're probably headed for a holiday season that is going to look unlike any that we have ever had, and that means that spending shifts around. So in our report, we outlined that 51% of consumers are spending more on groceries now than before. And 7% are spending more on travel than before. But 78% are spending less. That's a shock. Obviously. No one's traveling anywhere. But one thing that I think is really interesting is that 48% they're spending the same amount on digital entertainment. But 35% are spending more.

Brian: [00:39:19] Right. That's a lot.

Phillip: [00:39:19]  [00:39:21]Yeah, when you start looking at like one in three people are spending more on digital entertainment than they were before, one in two people are spending more on groceries than they were before, the experience economy has relocated back into the home. [00:39:33]

Brian: [00:39:34] Think about this, too. I almost guarantee you that 40% that are spending the same on digital entertainment were probably spending as much as they possibly could.

Phillip: [00:39:44] Yeah, yeah. They were already spending a tremendous amount of money on digital entertainment and they were probably spending it an equivalent amount, but in out of home experiences. Those things are being relocated now. You know, there's an interesting phenomenon here. I'm going to ask you and I'm going to regret it because I'm pretty sure that you don't have the same answer as me. You know, Disney+ will be releasing Mulan for $30 come September 4th, I think it'll be over Labor Day weekend. Is that something that you would buy in the Lange home?

Brian: [00:40:21] Yes.

Phillip: [00:40:22] Oh, my gosh, I'm so surprised.

Brian: [00:40:25] Well. Elizabeth loves Mulan.

Phillip: [00:40:28] Ok. {laughter}

Brian: [00:40:28] {laughter} We just talked about this. We're totally going to buy it.

Phillip: [00:40:34] Is that something a year ago that you would have spent $30 on a digital download?

Brian: [00:40:39] Well, no, because we would have gone to see it in a theater.

Phillip: [00:40:42] And you would have spent how much at the theater?

Brian: [00:40:44] We would spend more than thirty dollars.

Phillip: [00:40:46] But a $30 digital download on top of a subscription service would have been untenable a year ago.

Brian: [00:40:54] Yeah. So we did the same thing with Onward. We bought Onward and a few other movies that we wanted to see.

Phillip: [00:41:03] We did the digital, theatrical or digital premiere, I forget what they called it, for Troll's World Tour. We spent like $20 to watch that twice.

Brian: [00:41:14] Yeah. Yup.

Phillip: [00:41:15] And those things are things we probably would spend more money on out of home. We're spending less overall, but it's the category has shifted.

Brian: [00:41:26] Channel is just totally...

Phillip: [00:41:26] The channel is totally different. Right.

Brian: [00:41:29] Yeah. And actually so that's something I wanted to bring up. And this actually goes back to the last point more than anything else, the last section we talked about. But this is interesting. Looking ahead, and I might do a whole article on this or something, or just tweet about it or something. I'll have you tweet about it. {laughter} Because everybody who's been following us knows that I'm not a big Twitter person.  [00:41:56]So I think that a lesson to be learned here that we should have put in the report, but I didn't realize until recently, is that you should have your toe in just about every channel that you can, even if it's not in a very good way. Here's why. Because even people that had some kind of eCommerce presence and were in the channels that they needed to be in when the channel shift happened. [00:42:24]

Phillip: [00:42:24] Yeah.

Brian: [00:42:24] And so having some kind of presence in those up and coming channels that you're like, "Why would I? I'm not going to make much money off that." Having something there is important coming up because you do not know what's coming down the pike. I think COVID kind of proves that out really, really well.

Phillip: [00:42:44] Yeah, there's something else here, too. This wasn't in the report, but you've jogged my brain now. I'm thinking about a tale of two shopping centers near my house, and there's a strip mall near my house which has completely renovated the whole shopping center parking lot. The first two spaces that are not handicapped spaces that are closest to the shops are reserved throughout the entirety of the shopping center. And they're reserved for in-car delivery. So every single company that has a store in there has the ability to deliver to their customers inside of the car for a contactless pickup. They don't have to get out of their car. They can pull up, they text a number, boom, it's done. And the shopping center across from that which has more desirable stores has not made that investment. [00:43:37] I think property owners also play a role in helping brick and mortar have the same kind of capabilities. There's a new channel and it's the in-car delivery channel that is more restrictive and more... It's incumbent upon property owners to also modernize and make the investment in that new channel as well. [00:44:00] So I think like the channels aren't just digital channels.

Brian: [00:44:04] Yes.

Phillip: [00:44:04] It's emergence of all kinds of like infrastructure channels that are things that are probably harder to control or harder and outside of your control that require investment from the folks that you depend on.

Brian: [00:44:17] You've been saying it for months now. Best Buy curbside pickup. Who needed that before? But they were there.

Phillip: [00:44:25] Yeah.

Brian: [00:44:25] And so all of a sudden it made a lot of sense and people started to use it much more frequently.

Phillip: [00:44:32] Last point here in the section that I thought was really impactful was and remember now like we're saying this... We were saying this back in July when this report landed. So remember, now, when you're listening to this now and it's probably September, we were the first to say this. Thirty seven percent of respondents in our consumer survey said that they will not resume flying for at least six months from now or until there is a COVID-19 vaccine. I think that indicates not only just a sluggish return for airline, hotel and hospitality, but also like, what the heck do the holidays look like in 2020? Are you going to buy a gift for grandma and grandpa and nieces and nephews if you're not there to give it to them in person? Where is that gonna happen? Is that also a shift? Do those gifts now come in 2021 when you actually get to see them later? Do you send it through the mail? Is it going to be eCommerce? Is it just going to be saying hi to them on FaceTime or Zoom? There's a lot of uncertainty of like the banality of a gift that just arrives in the mail. The real thing that you want is not to get a present. It's just probably to be with people.

Brian: [00:45:50] Right.

Phillip: [00:45:50] It just feels like there's a lot of uncertainty around that.

Brian: [00:45:55] We'll see.

Phillip: [00:45:56] We're coming up the Black Friday. Black Friday is actually quite a like selfish holiday to some degree. Like you wind up buying a lot of things that you probably were meaning to buy on your own for yourself, but that's just me.

Brian: [00:46:09] No, I think that's the really good point. Like, there's a lot of I think some retailers caught on to that with the like, you know, buy one for someone else, get one for you promotions that started to pop up with the past few years.

Phillip: [00:46:21] And I think they should double down on that. And I think that's an astute point. What is number four? We got to get moving.

Brian: [00:46:29] We need to move on. Yes.

Phillip: [00:46:31] Yeah. I can talk about this forever, though.

Brian: [00:46:33] Totally. Customer experience is the only experience we have left, which I think I think was really, really interesting and on point. We've seen just a very like... There's a very big mental health thing happening right now with COVID. People being isolated, people being alone and not having as much personal interaction with people as they are not going out as much. And back before we had our bubbles, it was a very isolating. Now we have bubbles, which I think is probably helping.

Phillip: [00:47:17] When you say bubbles, what do you mean by bubbles?

Brian: [00:47:20] Oh, the bubbles being like you have a small set of people that you do come in contact with.

Phillip: [00:47:28] Oh, yes. That's what I was calling your germ circle. {laughter}

Brian: [00:47:32] Your germ circle. Yes. So that's probably true. [00:47:39] But I think there's a lot of opportunity now more than ever, more than offering steep discounts to try and retain customers, more than employing traditional tactics to try and keep people engaged with your brand or bring them into their brand, your customers are going to remember how you treated them during this period. And I think that that all by itself is going to change how the best companies interact with their customers and is going to define and sort of be that refining fire that shows off who's actually good and who's actually good at treating their customers well and who actually cares about their customers. This is your moment. [00:48:29]

Phillip: [00:48:30] It's so true. It's so true. I think that when you're looking at a customer experience, too, in the way that you sort of like treat people with dignity, is that... Where does that happen? Where are you having those more personal interactions? Is it through an AI chat bot? And by the way, if you run an AI chat bot and you want to give us a sponsor Future Commerce, you can do that. You go over to FutureCommerce.fm, down at the bottom click on sponsor. {laughter}  [00:49:07]But the more personal experiences aren't the ones that are going to be automated or self-service. The ones that will define brands right and make generational brands are the ones that are inherently more personal and rely more on creating relationships and not necessarily serving a need as fast as possible and as automated and self-service as possible. [00:49:26]

Brian: [00:49:27] Well, if you think about it with channel shift to digital... You used to have naturally more customer service representatives in your store because they were store associates.

Phillip: [00:49:38] It's true.

Brian: [00:49:38] But what you need to do is start to think about the fact that these digital transactions need people to support them just as much as in-store interactions would.

Phillip: [00:49:50] It's true. And there's this phenomenon that happens. I've seen it twice before. I can't say that, you know, it's something that I'm well versed. And I've only been in eCommerce since 2003/2004, but I've seen it twice before.

Brian: [00:50:10] He's 40. He's 40. He's turning 40.

Phillip: [00:50:14] Oh my gosh. I hate you. I am having a mini midlife crisis over it. But it's OK. We're going to be fine. We're going to be just fine, I promise. In the two economic downturns that I've been in eCommerce through, and totally realizing that I missed the dot com bust and also the 2001 economic recession following 9/11. So I've only been around for a couple. But people don't necessarily pull back on spend in the channel. They don't decide that they're not going to do anything and under invest or decide not to invest. They just look to eke more profit out of it. They look for operational efficiency in these times. And so what I have seen, or what my experience tells me, is that rather than trying to drive top line revenue, they can actually become more profitable in these moments by trying to drive bottom line revenue. And I think that's a... You have to do both, right? You have to do both. But people get really serious, especially in finance space. They get really serious about looking at where every dollar goes and making sure there's a return on those investments. And they tend to do a lot less planning for the future. They look for a lot more return in the short term.

Brian: [00:51:40] Yes.

Phillip: [00:51:40] And so I think that bodes well for us in digital, in this channel, in that like people will continue to invest. But what we're seeing is customer service is the place where customers are telling us they want us to make that investment. I was just going to support it with some data. Four out of five of our respondents, 79%, feel it's important that an online retailer are offering multiple ways to get in touch with customer service. So not just phone, not just online chat, not email, not ticket based support, but like all of it, plus probably text messaging. And like, let me talk to a real human. And if you do that, 33% has said that they will share a positive customer experience or have already shared a positive customer experience with other people. And so if you look at it, you want to drive some efficiency in this time and an uncertain economic environment, you want to look for direct response. A strong retention business can be built on the back of customer experience. If you know what you're doing and you're... By the way, that will lower your overall total investment on what you're spending in digital acquisition and in PPC and in performance marketing. And by the way, even on email volume send and the way that you interact with customers there, too. If they're having great experiences with you, they will become your strongest proponents.

Brian: [00:53:10]  [00:53:10]So what you're saying is customer service as a customer acquisition strategy, which is huge. [00:53:16]

Phillip: [00:53:17] It is. Yeah.

Brian: [00:53:17] Yeah. And I think that's like peak customer service. That and top line revenue growth, which that's like customer service nirvana. If you have the kind of customer service representatives that are beyond customer experience. They're looking to service the customer such that they can sell to them as well, in a good way. Like in a way that benefits that customer. It's going to help that customer. That's like as good as it gets. But I know we're run out of time here. Let's maybe move on to our final point. It sounds like you had one more point here.

Phillip: [00:53:54] Well, I was going to give an anecdote of my experience. I worked at a what you would now call a digitally native vertical brand. I was early team at a supplement company that did this. Like we had our own in-house customer service. We wrote our own content. We managed our own supply chain. We did our own fulfillment. We were a vertical brand who owned every part of the customer experience. And our call center very, very frequently had the highest retention and drove the highest margin and also had a higher average order value than our digital channel ever did. And this is like before performance marketing was the thing. This is back in the age when people said social doesn't convert. This is before responsive web design and the app economy. [00:54:48] It's a truism regardless of what decade you're operating in. The personal touch and the actual, like, human connection with somebody can drive real results and actually result in happier customers in the end.  [00:55:02]All right, let's move on.

Brian: [00:55:05] In fact...

Phillip: [00:55:07] Now... Yeah, go, go, go.

Brian: [00:55:09] Now, more than ever is probably the time to invest in this, because digital is such like a barrier. It can be, can be so impersonal. Bringing that personal touch to digital is probably one of the best things you can do to right now. Moving on...

Phillip: [00:55:26] And if you're looking for a CX platform that makes the difference for your business, I want you to look no further. Why don't you check out Gladly? Gladly is the best. Gladly provides the kind of personal interaction that your customer really demands and requires of you. And it's no longer just like two day shipping, being personal on every channel and having an understanding of who your customer is and every interaction they have ever had with you is now a baseline customer requirement. You can get that together. You can get that. You can have that. It's super easy to do. And tons of brands are doing it. By the way, from Porsche to Jo-Ann Fabrics to Crate & Barrel and even REI. Brands of all sizes have chosen to put their customer experience and make every interaction personal with Gladly. They are the sponsor of today's episode, and they are the sponsor of the Retail Rebirth report. And I super believe in them because their team is radically personal, and they want you to be radically personal, too. Go check it out today at Gladly.com/FutureCommerce. Ok, last point, Mr Brian Lange.

Brian: [00:56:34] Last point. Adaptability is your super power. I'm super passionate about this because this is true.

Phillip: [00:56:43] It's true.

Brian: [00:56:43] Yes. This point. I mean, people think about adaptability as like being flexible, and it is to some degree. Like that's really, really important part of it. But what I think this really like a really important point. I'm going to jump just to the takeaways before we get through all of the other stuff is that I think this actually means planning more because you are going to fail in your strategies to capture this moment in whatever that means for you. Whether your sales are way down or their way up, you're going to come up against some kind of a roadblock, something that you're doing is not going to work. [00:57:27] And the brands and retailers that most capitalize on this moment are going to be the ones that had contingencies, that thought about additional options for how to address things when they came up. [00:57:39] And so this doesn't mean just, "Oh, we're going to make decisions on a dime." This means thinking ahead and understanding how you can adjust the things. And yes, sometimes the play breaks down and you have to go play some backyard ball. And I just threw in a football reference for no good reason. But yeah, [00:58:00] I think that the best coaches create a playbook that allows for responding to their opponent in the second half. [00:58:11]

Phillip: [00:58:13] I think you said it really well there and the report kind of puts it very nicely. It's like the plan is to fail because to fail is to be human.

Brian: [00:58:26] Yes.

Phillip: [00:58:27] Things aren't going to work out the way that we planned them. None of us are, as much as we call ourselves Future Commerce, we can't all predict the future. But we certainly could be ready for the future. We can try to have an impact and shape that future to be something we want it to be. But being adaptable and being able to be nimble in your business is probably the most important thing that you can have. And this brings us back to our point I think we opened with, which is how inflexible a lot of legacy eCommerce platforms can be and how often those investments that have been made there sort of created inflexibility and lack of imagination in a lot of retailers. They may have been early adopters. And you look at like older, much older eCommerce platforms, one that no one minds us throwing under the bus... Let me think of one. WebSphere or Oracle ATG. When you think of like older eCommerce platforms that have been around for 10 years plus, those are the ones that, like, the brands that are running those were early adopters in eCommerce and probably saw a lot of benefit out of that channel, but probably not a ton of return on investment because it was an expensive investment and the customer expectations weren't that they were driving... Just like I said a minute ago, at one point in time, it was pretty fashionable to say that social doesn't convert. I think you would have a hard time convincing anyone that that's the case today. Entire businesses are built on the back of social performance marketing. Times change. And if you are still running on the legacy eCommerce platform, you probably aren't as nimble as some of those that are nipping at your heels. And so now is the time where being adaptable is your superpower. You need you need to like get the radioactive spider {laughter} and give you some superpowers to be more nimble in that area of the business and be more flexible.

Brian: [01:00:33] And make sure you pick tools that allow you to be nimble. I think that's a really good point, Phillip. Your toolkit, your tool belt, needs to be one that allows you to be flexible. So that's a really, really great takeaway. And I think we're coming up on time here.

Phillip: [01:00:48] That's it. That's all we got. You can read more for yourself by just downloading the report. We want you to check it out and give us some feedback. I'd love to hear what you have to say, what your story of retail rebirth is in your business, where you're putting your investments or what your customers are telling you and what kind of investments you are making. That would be super helpful. So download the report right now, FutureCommerce.fm/RetailRebirth. or drop us a line hello@FutureCommerce.fm, and we'd love to welcome you into the fold and start a conversation with you. Anyway, Brian, last word.

Brian: [01:01:22] Thanks so much for listening. We love that you listen to us and we look forward to talking more with you and experiencing this with you. And we want to help shape the future with you as we talk about this.

Phillip: [01:01:33] All right. Thanks for listening.