20 Nov, 2019
Marketing to Gen Z: How retailers are reaching consumers this holiday season
Cloud

With fewer shopping days in the 2019 holiday season, retailers are trying to reach consumers, particularly younger buyers, through social media exclusives, flash sales, messaging apps, and even voice-powered assistants like Alexa.

At Dreamforce 2019 in San Francisco, TechRepublic spoke with Salesforce VP of industry strategy and insights Rob Garf about the 2019 holiday shopping season, ways companies can digitally advertise to consumers, and the influence that social media and other everyday technologies have on purchasing decisions. The following is an edited transcript of the interview. 

Bill Detwiler: Salesforce collects a lot of data, and some of that data can be used to analyze trends in the retail markets. Luckily, I’m here with someone that can speak to that. I’m here with Rob Garf, who’s vice president of strategy and insights for retail and consumer goods. Rob, tell me a little bit about your role at Salesforce and how it relates to retail. We think of Salesforce as a CRM company, as a platform company these days, how does that relate to retail?

Rob Garf: I have the fun job to manage a team that is responsible for staying out in the industry and understanding where the market is going. We do that through listening to the customers, to the consumers. Partly with all the data that’s flowing through our platform, with every tap, with every click, with every swipe, we bubble that up, and we’re able to analyze shopping behavior, as you referenced a moment ago.

We also do a lot of research as well. We do primary research to really understand where the future of shopping is going. We take that information and we use it internally to help shape and influence our solution direction. We also turn that over to our customers to help them and really inform what they’re going to be doing in their business.

SEE: Digital transformation in retail: How consumers are using tech to make shopping easier and more enjoyable (TechRepublic Premium)

Bill Detwiler: As we go into the 2019 holiday season, what are some of the trends that we expect to see?

Rob Garf: We at Salesforce have crawled through the data. My team has really looked at this inside and out–really the backdrop here, and we saw this really early on–is that we have six fewer days between Thanksgiving and Christmas. A lot of consumers are going to wake up from Thanksgiving, get out of bed, and realize, ‘Wow, we have to scramble to make our last-minute gift purchases.’

What retailers do when they realize this, they’re trying to stretch the holiday season on both sides of what we call ‘cyber week.’ On the front end, you probably saw already in terms of, not only more discounts… there’s always been this game of discount chicken between the retailer and the shopper. But what we’re finding is more new and creative ways to drum up demand. Whether that’s collaborations with celebrities, limited edition product, or even flash sales. Retail is really trying to create some scarcity, trying to create some exclusivity.

Bill Detwiler: What about technologies like mobile, social media? Those have been huge in retail for the last five, 10 years. How is that trending this year?

Rob Garf: The backdrop, first of all is digitally, we’re seeing and anticipating a very strong holiday season. 13% here in the US, digital growth and 15% globally. A lot of that, as you’ve just referenced, is being driven by mobile.

If you think about it, the mobile phone is the remote control of our daily lives, right? We use it all the time. The holiday season is no different–particularly on Thanksgiving. You’re done with your Thanksgiving meal, you need a little break from your family, what do you do? You take out your phone, you scroll through your texts, you scroll through your social feeds, you look at emails. You’re either inspired or distracted, whichever way you want to put it. 

Because of the ease, because of the access, we’re seeing consumers just shopping right there and then. To your other point, what we’re finding is social playing a key role, particularly with younger generations. Not only being used for inspiration and communicating with their friends and families and colleagues, but rather, down the funnel for purchases as well. Our research found that younger generations are three and a half times more likely to actually make a purchase on these third-party destinations.

Social is one of them, but also messaging apps, voice. For my 13-year-old, that might even be gaming consoles as well. Actually, speaking of my 13-year-old, just this past weekend, he made a purchase that he learned about on YouTube through an influencer. Now we own a couple pairs of socks. So, it’s happening, not just pulling the consumer to the retailer property, but pushing the brand to wherever the consumers are.

SEE: How Sephora is leveraging AR and AI to transform retail and help customers buy cosmetics (cover story PDF) (TechRepublic)

Bill Detwiler: I think that’s an important point to maybe expand upon. What should retailers be doing to reach those younger, the Gen Z population who are, maybe they’re not making the purchase, but, like in your case, they’re certainly influencing the purchase.

Rob Garf: They are, and so it’s really pushing the brand to where the consumers are. These younger generations are hanging out on these third-party sites. They’re not necessarily coming to the .com site, if you will.

While again, digital is strong. The store, which I’d love to get to in a little bit, is also thriving. But, retailers really need to reach the consumers. One tactic we’re finding is social exclusive deals. I know it’s on the peripheral of traditional retail, but Cadillac–when they introduced their new line of automobile earlier this year, it was done on social only. They went away from their traditional print or broadcast and went right to social. Why? That’s where the consumers are hanging out and being inspired.

Bill Detwiler: It’s so important. I guess I’ve heard from a lot of people in the retail industry to reach the consumers where they are. And it seems like on mobile devices, on social, that’s where they are. What about voice assistance nowadays? Increasingly, everyone’s got a smart speaker in their house, and they’re wanting to interact with retailers, interact with technology using voice assistance. What kind of role is that playing in retail?

Rob Garf: Actually, half of US households have an Alexa, which is pretty astonishing. I know for my 10-year-old, he talks to it all the time. It’s part of our family, if you will, during dinner.

Bill Detwiler: I have two of them in my house and an Apple HomePod, so, yes, I understand.

Rob Garf: We’re all connected, and behind every connected device is a consumer. While we haven’t cracked the code yet on the actual buy button via voice, it’s certainly being used throughout the shopping journey. So we have customers at Salesforce who are using it around marketing, but also think about it for service. Trying to automate some of those fairly basic questions that you’d get calling an 800 number. 

Like, what’s the shipping cutoff date for this retailer? Or, where’s my order, or where’s the closest store? So I encourage the viewers to think about voice broader than the buy button, but rather how you can engage, cut down that friction, create some faster ways to remove the manual nature of some of the shopping process. And voice is a great way to do that.

Bill Detwiler: Since we’re here at Dreamforce, let’s talk about some of the announcements that are being made here at the show. How do those relate to what you’re doing with retail analysis?

Rob Garf: There’s a lot of great announcements happening here across the board, across different industries. For retail, it’s all about bringing our shoppers closer to both their customers and their employees. So we’re seeing various innovations, whether it’s in service cloud, marketing cloud, commerce cloud, to really help break down that friction, get the retailers closer to the shoppers and make that transaction happen. But it’s more than just transaction. 

What we’re finding based on our research is that 83% of consumers say the experience is as important as the product. And that’s essential in this day and age with so much competition, a lot of digitally native brands, some large marketplaces really taking market share from traditional retailers and brands.

It’s essential to really move beyond, in many cases, what are commodity products and really creating that experience through service, through experience in the store, or through service and marketing as well. But I guess, what’s getting me most excited to answer your question directly, is AI. 

With Einstein, it’s really able to take all of the information that a retailer knows about the consumer, whether it’s their profile, their preference, their shopping behavior, and be able to take all of that information, connect the dots, and provide a personalized experience. And that’s critical when consumers are looking for that experience.

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