Welcome to The Elfster Podcast, brought to you by Elfster, a gifting platform that strengthens social bonds by increasing acts of generosity. In each episode, we sit down with an expert to share stories about digital retail trends and talk about the future of e-commerce. Our host is Peter Imburg, the CEO and Founder of Elfster, who has dedicated his career to connecting communities, audiences and brands.
On the first episode of the Elfster's Podcast we are joined by Declan Dunn, Chief Growth Generator at Simply Responsive to discuss what this holiday season will look like in 2020, a year struck by pandemic and economic hardship. Connect with Peter and Declan here:
Peter ImburgPeter:
Hello, it's Peter Imburg here. I'm with Declan Dunn today. Very excited to be talking to Declan about the future of eCommerce and what we can expect in the rest of 2020 and beyond. I met Declan many, many years ago at a LinkShare symposium conference in San Francisco. He was actually a presenter there and had my mind spinning. I was amazed at the story he had to say there. One of his clients who was selling gold online. Amazing. So, Declan, we've worked together for many years through his agency, Dunn Direct Media. Declan, glad to have you here today. Welcome.
Declan:
Yeah. It's fun to look at the new world of e-com with whatever quasi new normal cliche we want to put on it.
Peter:
Yeah, that's for sure. Who knows what's normal? Nothing. Anyway, it seems to me. But nonetheless, we, our customers, the consumers all want and need things and hope to give to one another still. In fact, maybe that's one of the bright spots in these tough times, so the show must go on. This holiday season's going to be very interesting. I'm curious. One thing that a lot of people think of a lot with gift giving and the holidays is Black Friday. It seems there are so many different ways things could go with Black Friday this year. Certainly not going to be crowded in a store. I'm wondering, what do you think's going to happen with Black Friday this year?
Declan:
It's going to be really tricky for them. A lot depends on what happens in the fall, obviously with things. They're just not drawing people. People are not doing travel as much, there are people doing it and so I do think that there will be the hardcores who love that rushing through to get their stuff. But, what I'm seeing more and more is that many of the major retailers are, for example, I think it's Target and Walmart are closed on Thanksgiving for the first time. And it's sort of like, what's interesting is they're actually going back to what was more of a traditional Thanksgiving weekend. Jury's out whether they're going to do it, but I really wonder whether people want to do it, is what I'm seeing, because it's not that there won't be a core that love to do that. It's a social thing, it is a saving thing. But, could we do more online, digital, using the same incentives without necessarily having to stumble over each other like we're going for seats at a stadium show?
Peter:
Yeah. Do you think that it's going to be a purely e-commerce event this year and from now on?
Declan:
I don't think it's going to be purely e-com. Somebody is going to do it live. This is the U.S. so somebody will do it live. But I think no matter what, you're not going to have as many people. Here's the thing that I really feel that is different, and this is obviously my own bias loving the internet digital business, e-com, is that since the beginning, since I've been in this since like '95, the prediction was always 20% of overall retail spend will happen online. That was inviolable, every investor says it, it's been true, and nobody argues with it.
Declan:
This bumped us up. This pandemic, even momentarily bumped us up to 25% or higher digital spend. And, maybe that 20% number is really representative of an old dinosaur approach where everybody has to run to a physical store to jump over each other when in the end, you should be able to order it digitally. And I think that you could do some really cool things, like mixing it up and using gamification and putting things in your store that makes it fun for people. The question is, I wonder if that mass sense of running to it, obviously this year I don't think will happen, but will people look at that and say, "That's sort of looking old." Because I think some things are looking old. Not that digital will become the only thing, but a hybrid online, offline that's not as dependent on people going to physical stores or malls.
Peter:
It's interesting that you mentioned that and when we moved to digital, well, everything's open 24/7. Stores may be closing Thanksgiving, but will the digital Black Friday start in Thursday? Could it be even sooner?
Declan:
Well, the interesting thing I see people talking about is a week-long Black Friday, because there's a way you can't replace the mass running energy. It's PR event, really. It's just become, "Oh, it's Black Friday. If you're not doing it, there's those crazy people doing it." If you're doing it, they're like, "Yeah." It's like, "And I'm saving things and getting big TVs." Well, they're buying big TVs online like crazy, because you don't have to go see a big TV now to know it's going to be good. So I think in a market like electronics, which has no margin, why are you doing a physical store? It makes no sense. They're not heavy TVs either. I can send it and not spend a fortune.
Declan:
But if you're doing a color of a dress, shoes, things that fit and things like that, and that having grown up in a family of women, shopping can be a really social experience, not just a shopping experience. So, I think in certain verticals that's not, let's put it this way, that's not going to be as present, but the funny thing is you don't really see people jumping over themselves to get into Nordstrom's or Macy's. You see it in the low end electronics, games, things that actually work better digital. And I think you could do something really, really cool, if you're a brand, to actually make live events and do things that are outside of just selling in a store. Almost like Apple does. Again, you're making it an experience rather than a place to save money alone. Does that make sense?
Peter:
Yeah, absolutely. That Apple store experience seems, it's legendary and it's so unique and has the education component and everything else. It's not just a showroom and a warehouse for goods. Maybe that's part of the transformation, I suppose, in retail. So do you think these rumors of the death of Black Friday are greatly exaggerated? It's going to survive COVID in 2020?
Declan:
Man, I think this year all bets are off because it all depends on how crazy or whatever it gets, health-wise. So let's assume that the scenario is sort of like it is now, which is fairly under control, people wearing masks. Okay. But indoor events are still sort of weird. Sp I see some states, like in California, I don't think, no. People are going to have any Black Friday. So yeah, it's dead. Not dead, but it's going to find a digital version. We're only going to turn exclusivity into it. Only 20% get to come in and you've got to apply online and build a following. Then I can take, cause there's a lot of 20 or 50% capacity scenarios going out, like 20%. Like New York right now is opening up restaurants with 20, 25% capacity. If everything's good by November it's 50%, but that's still just 50%. As a business development professional, I'm like, "Okay. Then let's turn that into a benefit," cause what we're really doing is having a selection process that would start earlier than Black Friday, and have those people come in, in a way that's controlled and that's safe.
Declan:
I think next year, if we've got things more under control, I think you can see things opening up, but there's just something that tells me that some of those ways just looks, a lot of things look silly now. And, I'm not saying that is going to go away, but you could use it in such a way to... One of my amazing mentors, a gentleman named Brian Clark, who's no longer with us, a really young guy, actually. He used to do storytelling and he called it "transmedia," where you do an online and an offline event and they are not the same thing. And I'm telling you, he used to do this for major, like Ford, I think it was Ford. One of the major car companies, he did this major PR promotion, but what was really cool about it, the online is unique cause digital is unique. You can't turn a store into digital. It's a different thing.
Declan:
And the same thing with the store, is that if they go there and they're just doing what they did online, then it's just sort of like, it's not exciting, especially with Gen Z, who have been in games and gamification. So making that experience really not just appealing but ... Let me give you an example. And it's an old example. What Nordstrom used to do when I first worked with them in the early 2000's, just met them, they actually brought people online, and what they did is they allowed mostly women, because that's primarily the market, would gather and organize a group shopping experience with a personal shopper.
Declan:
So they would go online and find two or three or four friends and have a really cool day and set it up. Some organizer would do it like [inaudible 00:09:41], somebody would organize it. And they would go out and the spend was high. Nordstrom's so brilliant did this. Sorry, I'm a big fan of Nordstrom, so that's bias. But they're so good at creating the experience. And I see something like other brands waking up and realizing, "Hey, we can create an experience in the store. It doesn't necessarily have to be tens of thousands of people jamming into a store. We could do some really cool things that might make it a little bit less like a Roman Colosseum kind of thing."
Peter:
Okay. Yeah, interesting. It's a pretty innovative thinking, going back to some of the earlier years with the internet, and maybe some of that experimentation will find the times now very ripe, a place to plant and grow business for the changing times.
Declan:
Well, Black Friday is such a huge economic event, that they have to do something. Because if it's just canceled, that's really bad. Q4 has got to be good. Not crazy, I'm not trying to get all like, "Oh, it's going to be amazing." But it's going to give people a little faith, a little confidence, consumer confidence. And that's interesting, we'll all see how it plays out. But I do think that it's very important, because if it just got canceled, think of that. Can digital fill that gap this year? That's going to be, I'm watching that so close. Not to literally do it, but if you're talking 25 turns into 30 or 35% of spend, that's astronomically, that's billions of dollars. I don't know, but where else are they going to go? And I think you're going to get an affluent shopper too, and people that for the most part have figured this out, so with the digital experience too.
Declan:
I've got friends selling million dollar homes, and the people never visit them. They're all virtual, because the cameras are 4K. It's not that you don't have to be there, but you really don't. I'm not advocating that, I'm just like, "Wow." If somebody is willing to spend that because of the experience, for example, one of my friends was working with Sephora on voice search. Something Americans are really way behind on, we're so far behind the Europeans on this. The power of voice and talking to be able to search, and foreign other big brands are working on this, because people like, "Ch-ch-ch-ch," or, "Sephora, red shoes," or something way more specific. But being able to talk to it and be able to get in, these kinds of technologies used to, you'd just have to go to a store to talk to somebody.
Declan:
I'm not saying it's going to replace it, but I think some of the things, the personalization, digital can actually do really, really well. We've been used to, well, this is the real world and this is the digital world. And I just see companies are being forced to be innovative right now. It's not a pitch line. You're suffering. It's brutal, but it's sort of like, they've got to be. So I'm seeing a lot of interesting things that people are doing that I don't think, it's not really risky, but it's where branding meets revenue. Branding is trust. Elster's a great example of it. I tell people all the time because I go to here because they could go to a million and one other places or make a wishlist if that was it. It's not the technology, it's works backwards from the customer and their experience of it.
Declan:
And that habit is what branding is. And most habits, what you're trying to do is create a digital habit, not to replace the off store habit. But I'm just, I keep coming back to it. What if we could turn that 20 into 30 or 35 longterm, percent of spend. That turns us into a whole different game, and by the way, the whole [inaudible 00:13:31] rally is based on Fang, Facebook, Alphabet, Amazon, Netflix, and Google, that's it. They're huge. Apple was worth 2 trillion freaking dollars. Wow. That's the kind of thing that really drives it. Now, I'm not saying, those are all the big players, but now you have to think a little bit like those companies. And I think that retailers are going to have to get rid of a model, which by the way, is inherently low margin. Physical space really stinks for low margin items, unfortunately. It's really hard to make a business by selling volumes.
Declan:
It's Walmart, Wayfair, and Amazon now, that's it. I'm throwing Wayfair in there because I like them, but they're not even in that. They're a digital only thing. They're cute, don't get me wrong. Amazon, it's a juggernaut like we've never seen. But I really think that, the takeaway I have for Black Friday is, people are going to spend more online this year I think, guaranteed. I just really feel, and I think it's also something where they're ready. Not they're ready, but it's a holiday. It's enough.
Peter:
So taking it back to Black Friday this year, of course COVID and the social distancing requirement challenge there. It's also a really challenging time economically, for the US, and still better, but still 8.4% unemployment. How important do you think deals are going to be a part of holiday shopping this year, compared to years pass? And if the sales don't come in on Black Friday, do the merchants need to ramp up the period between Black Friday and last minute Christmas shopping?
Declan:
I think they do. I think that's a really key, I think it's one of the laziest things most retailers do, is they bet it all on Black Friday, Cyber Monday, which is huge. But there's a two to three week, sometimes longer, depending on product, system. I've consistently seen, everyone says, "Oh, we can't sell it in December." Every time people do, because there's market there. The effect and unemployment and things, is going to be really interesting, interesting and actually humbling. And I think sometimes that some of that experience needs to turn back where it's really important to people to be giving back, not just throwing, chucking a big check to a charity. But really giving back in brands and stuff and standing for something particularly.
Declan:
So, cause that big gap will probably be there, and that's not anyone's fault. It's just, it's probably going to take til next year to recover from the 8.4%. It'll help some unemployment, I don't act like anybody really knows this, we're going to have to see. But let's say if these companies, here's the one thing, they have to work Black Friday, cause this year's been bad. So if they don't, this could be total tipping point, not getting rid of companies, but are you a dinosaur doing it the old retail way? And I'm not trying to point fingers here. It's like, they're a very slow ship that rarely turns fast, that's retail. Now something like this has made all of them scramble, has gutted the debt-ridden end of retail, which has already was on it's life support. But this one just went, "Bye!" It's like Darwinian, "No retail for you." It's gone.
Declan:
And I've never seen anything like that, but then you see these really intriguing brands coming up, and we forget that at times like this, it's the stuff we don't see. A lot of times the bigger older companies adapt slowly, it's just part of being big. It's hard to be really lean and to really keep agile and all these fancy words. It's like, you're big, versus somebody coming up and being able to do something different in retail. Here's what I think, it's got to be a hybrid between digital and retail. Not, "This is where they shop offline. This is where they are online." Because the complete experience, if you're with the big brand, they have it all interconnected, the store visit.
Declan:
Everything is data driven, but we can change it from trying to drive them into a store, just to buy, to creating special events, creating special reasons for them to come there. I don't know what that is, but I think it's going to be different than the previous generations have created. And it's going to be inspired by what people do digitally today, which to your point, is probably in this Black Friday, not much, in terms of the physical stores. I just don't think they're going to be able to replicate it. So if you're the CEO, what do you say? "Let's do it." There's no choice. Not that we're going to replace it or maybe, but wouldn't you try?
Peter:
Who do you think are the merchants, you mentioned Amazon and Walmart dominating in both actually, proving themselves incredibly nimble and innovative actually, right now. But, outside of those two, who are the innovators there? Who's experimenting or succeeding in the new landscape of eCommerce?
Declan:
The eCommerce has been so assimilating, getting smaller. The ones that I see, the things I've seen, I've seen Urban Outfitters doing specialized campaigns with TikTok people, which is separate from other social channels, by the way, which is totally brilliant, I think. Because they're approaching the younger brand, and not a brand that you can approach usually through advertising anymore. So, I see companies like that. It's really hard to tell what some of them, the big ones I talk about, even Wayfair, has done some really brilliant things. They are seriously number three, but they're a digital first company. I like looking at them, and they're a marketing company, so I don't want to say like I know them all, but they're not from brand and retail, but they've mixed that.
Declan:
And they're doing some really innovative things to turn a feel like you're belonging to Wayfair, where you naturally feel that with Amazon right now with Prime and Walmart is doing Walmart Plus. Will that replace, not replace Prime, but will it be their Prime? Is it worth it? Blah, blah, blah. I don't know. Just sounds to me like, I've seen other people try to do it and no one's been able to replicate the Prime experience, which is where I, and many people just, that's just where we buy stuff. Who's going to come out and actually, not just hit Amazon, but in their niche, really become that vertical. I'll just give you a real quick analogy, like Airbnb is a really big company, and they're IPO'ing. But there's all these little vertical specialty travel companies that are coming out.
Declan:
And I think you're going to see the same thing in retail. You got this big thing, but then this person's going to specialize, like Kendra Scott. I like what they do. They're very small, relatively speaking. But very innovative, got a set number of shoes, really work on it, really work on the whole experience with their customers. You can just tell, the way that they get it in my opinion, versus some of the older companies, which are, a lot of them are just afraid because they're in debt. I don't mean they're just in debt, but they're shaky business. It's what happened to Toys R Us, it was a great business, but it was saddled with hedge fund debt, and destroyed it. So, that practice in retail, that's where I think long-winded way, the digital retailers that I'm looking at are really organized around fashion. I love watching Ulta and Sephora, just because makeup, beauty, fashion.
Declan:
It's not what I necessarily do, but they're very leading edge, like a fashion influencer can do a million in sales in a day. All right. If I was a fashion PM, I'm not trying to speak for them, but if that's just basic partnership, you'd be like, "Okay, which one of our partners has that capability, reach, influence? And how can we set them up over the holiday season to be able to focus on them, drive sales, but also drive brand in a way that's about the people and less about how great the brand is?" Because with the influencers, it's interesting. As the people say the brand is great, and the people are like, "Ah!" They want to follow that. And so I see a lot of that in fashion, and I know that's, again, fashion and beauty are very different markets. But do you have a lot of smaller companies doing all sorts of beauty things and partnerships.
Declan:
This is the kind of time. When time is tough like this, people start doing things on performance. You all are going to be working with Apple, and when I went to see about the partnership at Apple, it didn't sound like anybody, wasn't frankly like TV could be allowed in, and it was all cost per action, is no payment. This is a company that's normally, I would assume used to spending branding dollars with big companies. But what they're doing is saying, "Let's work together," and what they're actually saying, Apple saying, and I totally agree with them, "This is our brand." This is their experience, and if you want to get in, it's sort of like the App Store. It's 30%. Why? It's 30% because they're not going to Android anytime soon. And it's arrogance, but by the way, Apple's always been arrogant since the day in a great way, it's one of it's geniuses things. It's beauty, because it's not arrogance. As an old picture used to say, it's not bragging if you can back it up.
Peter:
Yeah. Okay, interesting. So some great call outs and strong predictions about who's innovating and going to make it. What are you particularly ahead for 2021 in retail, brick and mortar, the malls, as well as online. What happens when we resume to life a little bit more as we knew it before 2020?
Declan:
The weird thing is we knew it, but a lot of those, the people who are weak in retail, which is a huge part of the market, it's such a hard market, are gone. I don't mean gone, gone, but the smaller ones are gone, the really big chains are in there. But I think you're going to see, what happens when you have this gutting of a market, it's going to be brutal, but it's where the opening comes. Cause here's the deal, there is loads of money out there that has no place to go. It's not going to go the stock market. I'm talking about the real investors, they're sitting on cash that's losing value. And when you have markets like that, they are going to go invest in things, and there's a lot of things I would say in retail, really developing hybrid digital models, gamification apps, belonging experiences, where people are actually going to the store and really feeling a comradery.
Declan:
And I don't want to keep piping on Apple, but it's really set the trend, where Starbucks used to be the experience and still is, but they took it to a high end product line. And so I can see that in fashion, I can see people actually being forced to develop a hybrid model. And the question I have, Amazon's taken all the Sears stores and a couple others, I forget which others. But, that's their delivery point. Brilliant, I think. Walmart has already got its presence everywhere, but I think Walmart can do some stuff and other stuff. It's just so big. How much bigger can you get?
Declan:
So I think those will dominate for a little while, but then people will yearn for something that's not seemingly, cause everything is made in such a process way, that that old bringing it back to quality and also bringing it back to US-based businesses, which I hope if you want to recover the economy, this is a small business thing. And there's a funding and money that's sitting around that, I won't say it's not a bubble, but it could go into real estate, but it's more like, I think it's going to fund a new generation of retailers, who are very forward-thinking, who do not think like my generation. Thank you, thank you. I mean that.
Declan:
It's like I don't mean to brag, but we grew up, it was special to go to a mall, not for me, but it was. It's not. But it is special to go to a store, so what are you going to see those malls turn into? Some are turning them into a place because they can't get rent, they're making deals so if somebody succeeds, they could pay them a higher percentage. That's one company is actually using them like an incubator. And Amazon did, it's like, "Let's take that cheap space and turn it into something," because, what it is is someone else's garbage, not garbage, but it's unused space. There's tons of it, commercial spaces through the roof is open. That's me in a cool way is like, "Ah!"
Declan:
So temporarily it sucks, but what it does is it creates opportunity too, and that's where I'm seeing something that maybe our vision of the 20% was my generation's vision, who owned the malls. Because if I'm an entrepreneur now, there's no way. I'm going all digital. They're born beyond digital, they're born with phones. They don't even look at a computer. I don't have kids, but if I'm them, I am so not doing what my generation did, and that's the cool thing. And I think that's part of why I'm watching a lot of what gen Z is doing, not that they're trendsetters, but they tend to see the way a younger generation uses this technology and actually integrates it, is what really teaches everyone else up the food chain a lot of times what's cool.
Peter:
Yeah. Yeah, that's absolutely right. It's going to be really interesting to see how that drives the change in years to come. Declan, thank you so much for sharing your wisdom, insight, experience on this market that we're in. And, I want, before we close it out, I just wanted to ask you, or maybe ask you to share a little bit about your other passion outside of digital marketing and eCommerce, about your project with remember.org, I know also really a big part of your life. So, could you just share a little bit about that?
Declan:
Yeah. And actually that's what got me online was, I sort of combined theater and software development in the early days, that was my idea, is to take the creative aspects of live theater and work them into interfaces. And so I came up with the idea and it's really basic social network sharing stories. And it was an active living library, where I was contacting survivors, there was a big denial at the point, that came denial of the fact that those events happened and it was a big battle. But instead of battling it, what I learned is to, I love the internet and I love people. And so, I went out and shared their stories and said, "I don't know about this subject. I am not the subject matter expert. You all tell me." And that very process I've been doing for 25 years.
Declan:
We won Adobe social impact on award, in 2009, for putting the Museum of Auschwitz online, with helping them with an exhibit, and we also donated money to them, which was massive. But what it was, it's like how cool the internet is. One person who just connects people and love them small, helps them grow, is really becomes a living organism, and that's remember.org is a living story, and I've applied it to other models. That's where I learned how to build partnerships. What can we do together? How can I benefit you? Not me. For real, what can I do to benefit you? Because if I can, if you think that way, you create great partnerships. If you're trying to pitch them your idea, you won't. So I go into companies and say this, and they're like, "Wow, that's really cutting edge."
Declan:
It's like, no, I didn't have any money. So if you don't have any money, you create stuff that works. And what's fun is, now that you have money, it doesn't mean it goes without money, but love spreads twice as fast as hate. And remember.org for 25 years has been engaging. I have thousands of schools who use our stuff. Thousands of teachers come to me all the time, and ask me, and we give it to them. And what's interesting is that developed my business model, which is so unique because it combines storytelling and eCommerce. So thank you for letting me share that because it's not about me, it's about them. And because the subject matter, I'm not directly related to the Holocaust or anything like that, but I've always been fascinated, had incredible Jewish friends that are amazing, throughout my life. Not that that means you get attracted to the Holocaust, but it's like, there have been things that have been there, and these friendships are by the way, so positive, so hopeful.
Declan:
You want to talk about resilience? Please. My friends were survivors, and I get into a bad event, I'm like, "He had a really bad event." It really gives you perspective, and by the way, they would laugh at that too. Even they understand you can laugh at the tough stuff because what gets you through is humor, is love, is family, is support, is belief. And I really love that, and that's where I try to work everybody at work with. It's like, if we can explode this a little bit more and just share a little love, it's not just love versus hate, but my God, everybody's hating today. When I go to remember.org, somebody comes, shares a story, "This is my grandfather's story." "This is my dad who liberated a place and never told my mom until he died, because that's what a man did."
Declan:
And I mean that in a respectful way. "I'm taking this, I'm not going to share this with my family," but then he did, and that bonding that they bring together is so powerful. But check this out man, we actually got some of his photos into a film with Johnny Depp, not Johnny Depp, excuse me. Sean Penn, into a film called This Must Be the Place. So it was like, here's this guy's dad telling a story, I put it up on this simple site. This filmmaker comes to me. "Can we use those pictures?" Of course he doesn't have any money, but none of this is any money. "Sure." I asked the guy's permission, but think about that, that core model is what it's about. Because when you honor people, he goes and tells 10 or 20 people who are listening and care, and we get millions and millions of visitors and huge authority rating. In that subject, I'm one of the biggest authorities next to the museums. It's intimidating. But the other thing is, it's all about the stories and people who lived, and people who were actually doing cool things.
Declan:
So thank you for letting me share that.
Peter:
Yeah, no, absolutely. I really appreciate the good work that you do with that, and I know you're extremely passionate about it, and it's a wonderful resource for all of us. Declan, thank you very much for being with us today, and have a great day.
Declan:
Thanks Peter.