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Cyber week turns into Cyber November as holiday shopping starts early

In this article:
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  • CRM

Rob Garf, Salesforce VP & GM of Retail, alongside Yahoo! Finance's Dani Romero, discusses how holiday sales both in the U.S. and worldwide have shaped up in the wake of continued supply chain tieups, a shift to online shopping, and rising inflation.

Video Transcript

ADAM SHAPIRO: We're going to shift gears because we want to talk about what's going on with the retail numbers, especially after we've seen some big digital sales increases on Cyber Monday. So let's bring in Rob Garf, Salesforce vice president and general manager of retail, along with our reporter, Dani Romero. It's good to have both of you here. Dani, why don't you take it away? First question.

DANI ROMERO: Yeah, Rob, what were the biggest takeaways in this report? Because yesterday, you had obviously the updated sales numbers, but now, following Cyber Monday, was there an increase? Did we see that?

ROB GARF: Yeah, well, first of all, it's great to be here and see you again, Dani. Yeah, we saw a real moderate growth over the course of Cyber Week. And it really was kicked off or, you know, what we saw most recently was Cyber Monday a nice growth of about 4%, which represents about $11 billion. But the real headline throughout the entire holiday here is that demand has been pulled earlier in the season. And there are really two factors. One is, you know, there used to be big spikes on Black Friday and Cyber Monday. And those don't go away, but there's really a smoothing out of demand because people have so much connectivity because of their mobile phone now. We saw over the course of Cyber Week 61% of orders were on mobile.

Now, the second factor, which is really acute this holiday season, is, the consumers have been reading headline after headline of what's happening at the port of LA with the containers being stuck outside and not being able to be brought into the inbound supply chain. And there's also inflationary concerns as well. So they're buying earlier and often, which, by the way, is a dream for retailers. They only wish to have this happen. And finally, it is this holiday season.

DANI ROMERO: And Rob--

JARED BLIKRE: And I just want to--

DANI ROMERO: --one thing that was very-- I'm sorry.

JARED BLIKRE: No, go ahead, Dani.

DANI ROMERO: I just had one thing. Yeah, I was just going to say that what was really interesting in the report is that even though, obviously, inflationary pressures were pretty evident, shoppers still decided to finance gifts and use the Buy Now, Pay Later option. So why is that?

ROB GARF: That's right, Buy Now Pay Later is really this generation of layaway. And we saw about a 30% year over year increase representing 8% of all sales. And, you know, consumers are positive. They're happy. They're splurging on, really, wants, even though over the last 20 months, they've been focused on needs.

But they're really being prudent with their budget. They're seeing the incremental costs that are happening in grocery, at the pump. And they're really being judicious about how they spend and where they spend their budget. While the prices are higher, we're seeing about an 11% increase of average selling price. That means consumers are buying fewer items at fewer retailers. And they're using that Buy Now, Pay Later option.

JARED BLIKRE: And when we think about the supply chain crunch that's affecting everybody, I was getting anecdotal reports that this led to fewer discounting and also lower inventory levels. I'm just wondering, how did that affect shoppers this Cyber Monday?

ROB GARF: Really, that's a great question. And that is what happened, is they pulled the demand earlier. You know, we've been urging consumers since the beginning of November, if you see that deal, take advantage of it. You're not going to see these incremental discounts as we get later in the season. And in fact, that's what happened. On Cyber Monday, which is typically the largest discount day of the entire holiday season, we only saw actually a decrease of 8% year over year in discount rates. So, really, consumers heeded the issue around inventory availability, and they bought early, understanding inflationary concerns.

DANI ROMERO: Yeah, and I guess, you know, back to the other thing is, why are consumers so inclined to the order online, pick up in-store option? And how does that affect retailers who don't really use that or don't have that, I guess?

ROB GARF: Yeah, it's a great question. Loyalty over the last 20 months has really been defined at health, safety, convenience, and trust, which if you think about the common denominator there, that's removing friction from the shopping process. And that's exactly what the ability to buy online with the confidence with picking it up with the convenience and safety in and around the store takes place. In fact, over the course of Black Friday, those retailers that had that fulfillment option saw a 50% higher increase in digital sales. And it's because consumers want, again, as a baseline, that health and safety and confidence that if they're buying the product, they know it will be available, so they're willing to take on that last mile and go to the store to pick it up.

JARED BLIKRE: And Rob, before we-- yeah, Rob, before we go, I've got to ask you about some news that just dropped, along with your earnings. And that is Brett Taylor has been promoted to vice chair of the board and also co-CEO with Marc Benioff. We've had Marc Benioff on our program many times, friend of the show. Was this something that's been in the works for a while? And where is your company going with this?

ROB GARF: Well, you know what I can say is I'm personally really excited about this announcement. And, you know, as Bill Belichick-- I'm a New England Patriots fan. We're on to Q4. We're on to Buffalo. So, really excited.

ADAM SHAPIRO: All right, we appreciate your being excited. Those of us who are Cleveland Browns fans can remember about two decades ago, don't bring up Mr. Belichick's name. Rob Garf, Salesforce vice president and GM of retail, thank you for being here, Dani Romero as well.