Ned Hayes [00:00:00] Welcome to Spark Plug, where we talk to smart people working at the intersection of business and technology brought to you by SnowShoe, Your smarter loyalty leader, Sparkplug is excited to welcome Michelle Grant to the podcast today. Michelle is the director of Strategy and insights for retail and Consumer Goods at Salesforce. She’s a globally recognized expert in the retail industry. She’s appeared in The New York Times, The Wall Street Journal, ShopTalk, the World Retail Congress, and she has many speaking engagements all over the world. And Rethink Retail named her as one of their top retail influencers this year. And Footwear News honored her as one of the six most powerful women in technology last year and 2021. So we’re absolutely thrilled to have Michelle on the podcast. Thanks for being here.

Michelle Grant [00:00:49] And thanks for having me. It’s a pleasure to be here. 

Ned Hayes [00:00:53] Well, so you’ve had such a career in retail and you’ve worked in a number of different capacities. Now you’re at Salesforce. So what are some highs of your career trajectory so far? 

Michelle Grant [00:01:06] Oh, definitely. I think one of my highs was when I was at Euromonitor. I was the head of the retail research and we conducted research in and they still do in nearly 100 countries. So I was able to go around the world to speak to different retail executives. And so that was definitely a high point, being able to talk to those executives while also exploring new countries and their retail scene. So that’s something that really I enjoyed. Obviously, there’s a lot more of that pre-pandemic. And then just another highlight of my career is just really getting to know people in the retail industry. Everyone I’ve encountered is just so passionate about it and really loves what they do and it’s such a fast moving, dynamic industry that there’s always something new to be thinking about and acting upon. So just, just the the network and the people involved and the industry has been a real highlight to get to know everyone. 

Kira Cleveland [00:02:13] That sounds like a lot of fun. And, you know, just within all of that fun, you’ve had those focuses on travel and retail, consumer goods industries. You know, how how have you advised companies in this area to focus on the future of retail? 

Michelle Grant [00:02:29] I always say start with the consumer and really understand what the consumer is doing now and how you might fit into their lifestyle. Consumer behavior change is very difficult too, but if you’re able to add convenience or lower prices, there are some fundamentals that do in that do encourage consumer behavior change faster than than sort of a normal process, really. My blanket advice is to start with the consumer, understand what’s going on in all aspects of their life, because what they see and experience in one industry is going to set an expectation for your industry. And then really, aside from that broader consumer behavior, understand your target customer and what they’re doing and how they’re living their life and how can you show up to enhance their lifestyle. 

Ned Hayes [00:03:29] Mm hmm. So? So working in retail really is about enhancing lifestyle. Do you have any favorite moments that you’ve actually had that kind of retail face to face interaction? 

Michelle Grant [00:03:42] Oh, my goodness. I am. And I’m a sucker for a good sales associate. I really am. So any time I go shopping and there’s someone who takes the time to listen to me, understand my preferences and, you know, surface new items or brands that have thought of, you’re going to convert me. And so I always tell my husband, I warn him a bit when I before I go before I go shopping, because if I encounter someone who’s is really patient and knowledgeable and takes the time to really help me, I will be purchasing something. 

Kira Cleveland [00:04:23] Well, it seems like in your career you blend data and insights into content that helps companies understand how new technologies will impact their future business. Is that a fair summary, would you say? You know, I’d love to touch on the kind of data you look at and through and what the important pieces of data are. 

Michelle Grant [00:04:44] The first piece that’s unique to Salesforce is our shopping index. So we’re able to see the transactions flowing through the Commerce cloud platform. And after we clean the data, privatize it, anonymize it, we’re able to get a wealth of real time and transaction data. So this is exactly this is exactly what people are buying, how much they’re spending. What financial tools are using to spend, what the average order value, how many units per transaction. So it’s it’s a data nerd’s dream to have access to all of this information. So that’s sort of our core data point. And we publish that data actually every quarter called the shopping index and in a Tableau dashboard. So everyone globally can go through and look at these different metrics as well, either sorted by country or by vertical like apparel, handbags, beauty. So you can get an idea of what’s happening in e-commerce real time. So that’s our major data source right now. Since we’re in the holidays, we’ve been publishing data more frequently every week so that people can see how that important holiday season is shaping up. And then the second data source that we have is consumer surveys. They’re talking about understanding consumer behavior and consumer lifestyles. We do surveys throughout the year to understand holistically what the shoppers are up to. Right? Because our our platform insights only applied to e-commerce and bulk of transactions happen in the store. So we really keep our eye on on that segment through surveys as well. And then, you know, I’m reading the trade press signing up to second secondary sources, other great analysts coverage out there. So those are the three key components of things that I keep an eye on to help form my opinions on what’s going to happen in the future. 

Ned Hayes [00:06:50] You said something really interesting there. You said the bulk of transactions are still happening in the store. So even during COVID, even during the pandemic, you’re seeing the bulk of things still happening in in-person. 

Michelle Grant [00:07:02] Mm hmm. Obviously, with COVID and it really differed depending on which country you were in, because non-essential retail was closed much longer in other nations and it was here in the United States. And of course, we we cover those countries as well. So we’re still sort of looking at that data 2019, 20, 2021 comparisons to really understand the full story, because we saw such a huge growth in online because non-essential retail was closed or limited in some capacities. So in some cases, you know, you could see e-commerce declines, but it was because you were trying to comp a 50% growth rate. That’s really so very important to know kind of from the baseline of 2019 to today where that e-commerce is. And overall, every vertical for the most part from the when I was looking at the data for the first half of the year, everything is still much higher than it was in 2019. So that online habit stock, but we’re not seeing the same stonking growth rates we did in in commerce. And then when non-essential retail opened and we had widespread widespread vaccinations and things became more people became more comfortable being in store, we did see that behavior change. The one vertical where there was accelerated growth and higher penetration here in the United States is grocery. So that’s probably the most transformed vertical when it comes to e-commerce. Because of the pandemic, everything else is sort of on the same trajectory and growth rate wise when it came to when it comes to online penetration. So again, COVID was that big experiment with actual stores close, you can’t go in the stores. How would the consumer react? And it turns out they are still going back to the stores and buying most of their purchases there. Very hard to change consumer behavior. And of course, stores offer a lot of advantages over e-commerce as well, like that store associate experience that I mentioned, being able to touch and feel that merchandise try. Iran when its apparel and accessories and shoes. Get it? Same. Immediately. We still like to go buy and bring things home immediately for that gratification. So yeah, it’s it’s been fascinating to see how all of that has played out, given the fact that for at least in the United States, at least like two months of non-retail non-essential retail closures in 2020, but again, even in 2021, some of our markets were still with the second wave last year, they shut down again. 

Kira Cleveland [00:10:00] Definitely were had some interesting ups and downs and innovations and and changes during that time. And, you know, but retail has always been kind of an evolving area. Like you said, I’d love to ask. 

Michelle Grant [00:10:13] What are what are your biggest. 

Kira Cleveland [00:10:15] Retail changes that you’ve seen in your career over the years? 

Michelle Grant [00:10:20] I think the biggest change is sort of the direct to consumer movement of brands where you get started online. Being able to leverage, you know, people’s greater security around, you know, inputting their credit cards. The rise of social media that enabled effective marketing. So that DTC era was probably one of the biggest changes where you could see a lot of brands kind of grow online only And now the past few years realize that again, you’re going to hit a natural ceiling in any channel, right? Certainly within e-commerce as well. And then, you know, either going the route where they build their own stores or they go wholesale or do all three. But I think sort of the biggest innovation would be being able to go direct online first and meet your customers and find that product market fit was probably the biggest change. And of course there is a lot enabling that. Like I said, the social media platforms, the comfort around, around putting in your payments and the different payment types and of course the reliability of shipping to your home, those sort of things. 

Ned Hayes [00:11:43] So you have the privileged position of being able to see trends coming and being able to see them kind of across across the board. I’m curious if if you if you could grab the ear of small retailers. We have a large audience of small retailers. What kind of trends do you think they should be aware of? What kind of waves are coming that they should prepare for? 

Michelle Grant [00:12:05] Mm hmm. I think when I think I think there’s a lot of easier opportunities for small business when it comes to e-commerce and definitely looking at the payment methods that you offer. So we’ve been tracking, you know, the rise of buy now, pay later, but truly sort of a big winner that we’ve seen in payment methods that Apple Pay. So having that enabled on your website is probably a great step to removing friction and getting someone to to do it a more of an impulse purchase. And, you know, any time you have to fill out a screen of all of your credit card numbers, people get frustrated. And so it’s been really interesting to see Apple Pay accelerate because of the pandemic. And then so that’s that’s something I would recommend small businesses look into. The other thing has to do is ask the mass marketing. So we’re seeing a lot more ads still. When we look at the data from our marketing cloud platform, it’s still a small portion of messages being sent over. All email is still dominant, but what we find is that the people who are willing to give you your phone number are your superfans, and they do want to receive high value messages in that channel because people know that channel isn’t crowded yet, like my email is. It’s I sign up for a lot of things for my job, but I get a lot of marketing emails. So I’m not the average consumer, but that channel is very crowded. But with an SMS, with photos, you get a lot of engagement and a lot of conversion rates. Even though your list is going to be smaller than your your email list. So SMS, I think is something that is again a relatively easy left for small businesses to implement and get get a higher return on that investment. 

Kira Cleveland [00:14:10] Well, what I’d love to see is if if you could kind of take all of your experience and take wanted to kind of major pieces of advice for retailers of any size. What would you what would you offer them? 

Michelle Grant [00:14:23] Mm hmm. Again, I’m going to my truism, right, is go to the consumer and understand what the consumer’s doing, because each. Generation is changing and has different relationships with brands and retailers. So really understanding what the consumer behavior is and then the consumer behavior of your target audience is not going to lead you astray. And you have to be creative about it too, because you’re really going to need to be creative because you don’t want to be insular, right about what your perceptions are. You have to have an open mind, a beginner’s mindset about consumer behavior, especially with younger generations, because Gen Z really grew up fully immersed in the Internet. They had very dramatic differences in how they interact, and that’s whether that’s being in Roblox or Fortnite or embracing new social media platforms quickly, You know, livestreaming all of those things really resonate with that younger generation, more so than the older ones. And so you have to keep in mind what they’re doing and not just within your own industry. How are they interacting with Starbucks? How are they interacting with their other favorite brands? Because again, that really informs how you can deliver an experience that resonates with them and that knowing your customer right is the my biggest piece of advice, really understanding them and understanding how you can fit into that. And then the second is because there’s all these changes happening within consumer behavior, it’s really important to have some sort of your budget dedicated to experimentation because we just don’t know which innovation is going to hit, whether it’s within your own industry or an outside industry that influences you. It’s always important, especially as we go into this murky economic situation, to make sure that you’re retaining some of your budget to to do experiments, to see if that’s what resonates and therefore you should invest more in it. 

Ned Hayes [00:16:47] You’ve talked about what we’ve done, what retailers have seen happen in the past. You’ve talked about what what retailers should be doing now with CMOs, with Apple Pay, etc.. And so if we could jump ahead a few years, I mean, where is this whole world of retail going? I, I see a lot of things like livestream shopping coming in to the forefront. I see people using VR. I know, I know that you mentioned Roblox is kind of the metaverse. Are all of those trends going to accelerate or are there some things that we’re missing that we should pay attention to as well? 

Michelle Grant [00:17:23] I think the broad thing that I’ve been thinking about right, is social media and e-commerce, right? Because we have Facebook and all of its apps embracing commerce, right? You can make purchases on Instagram and through Facebook. You’ve been through WhatsApp in certain countries, and then you have retailers like Amazon with their new Inspire sort of tick tock format or their own livestreams, right? There’s a gap in e-commerce between discovery and inspiration and actual purchasing. And we have these two types of companies trying to solve for that. And then there’s even a third, a new generation of e-commerce players that are being built with all of these features and functions together. So one is called Flip the Beauty App or network. The flip has a tick tock ask user interface that you open up, but you can go shopping. It’s blending the both of them. And network is livestreaming for collectibles, using influencers to highlight the product and make their purchase. So really, I think the biggest trend going forward is of these three players who is going to resonate the most with consumers Because we know these habits happen. People follow brands and influencers on YouTube, Instagram, these historic social media companies, but then that trying to get that purchase to happen right away so you don’t lose that person’s transaction is their difficulty. And then you end up trying to search on Amazon to find the thing that you really want. And so Amazon is obviously trying to adapt that as well. So I think that’s sort of the the key mega-trend going forward is how do we bring discovery and transaction together in a better. Perience, because I don’t think at this point that anyone has solved it to runaway success. And the second trend is sort of the is like roadblocks for night like I said, with the younger generations are spending so much time in these virtual worlds and it’s only been in the last two years when the pandemic happened that we saw a lot of big brand activations and roadblocks where they set up their virtual games or they I know a lot of like fashion retailers now sell Fortnite. Like Ralph Lauren has a polo shirt with the Fortnite icon on it instead of the polo player. So this, this, this gaming aspect is is again, more culturally relevant to Gen Z. And as they grow older and into their earning power, that’s something I’m also keeping an eye on. Is this activation in these worlds from a marketing perspective. But Roblox is also said like the biggest request they get from their brand partners is the ability to shop within Roblox. So not just buying the digital products but to link out or link within to make purchases of actual physical goods within the roadblocks platform. So for Gen Z in particular, and again, as they age and Gen Alpha comes after them, this full gaming and immersive world trend is going to be very important because that’s how people are going to discover products or show their brand loyalty by seeing these brands appear there and then and then buying the related merchandise. So those are sort of the two sort of very sort of online things that I’m thinking of. And then when it comes to the store, right, it’s about what purpose does your store serve? Again, people are going to spend all of their time online. They do want to go out and shop. They do want to do it in a social way. So how do you produce a store that is well laid out, well merchandised, well staffed? And then if you want to be extremely creative, right, build an immersive world, have things like livestreaming studios on premise, have guest speakers, and really build into that experience side of things. But there’s still the need for convenience and being able to get what you want right away, and that is still a very important experience. So do you have curbside do a buy online, pick up in store? Is everything easily accessible to purchase? Do you use self-checkout? So there’s still a lot to think about in the store as well and what that future looks like. 

Ned Hayes [00:22:20] Right. Well, you spoke about Flip, this kind of beauty app that has this tick tock type of experience. And then you talked about virtual worlds. There’s one other thing that is really catching my interest recently, which is all of this kind of generalized A.I.. So you have lens with this kind of face stuff. You’ve seen a lot of people playing, playing with facial representation, using lenses, A.I. Then there’s Chat GPT, which is doing almost human quality textual information. And so I’ll just throw through a ringer your way. Do you see these kinds of trends in AI changing the face of retail? 

Michelle Grant [00:22:58] Certainly, I think I’m not sure the technology behind the lens, but obviously that speaks to the way that people are changing how they interact with the Internet. And I think again, that’s been a I mean, not that particular technology, but the idea of an avatar that you can change and you dress and you buy the skins for is been around probably you know I can decades in the gaming world and so that iteration of it again is just sort of an evolution of it and maybe reaching more of a mainstream audience. Then as someone who has all of their, you know, who’s big into gaming and has all of their avatars there. And I will say like Nars Cosmetics just came out with virtual brand ambassadors. So I do see that as a trend within social media that you as that brands create their own virtual ambassadors, they control the narrative, they control the story, they can highlight the product that they want to when they want to. So I do think one’s is it good whether what the technology is, You know, it’s certainly something to keep an eye on because we could see more virtual avatars or representing brands online. There’s there’s quite a few already. One is called Magaluf, and she represents Mag magazine Luiza, which is a Brazilian retailer. And so she. You know, they have her with a story arc and she promotes different brands and she’s online only. So that and it’s a trend in China that’s really big as well. So I do see like that virtual avatar permeating a lot of different aspects when it comes to marketing brands in a virtual way. And then the chat GB t funny enough, I was at a wedding and had the groom used it to write his thank you speech because he was into technology and it was flawless. So I do see that as definitely maybe something to sort of with copywriting, marketing messages, product description pages. It could be a great first draft, right? But I don’t think it’s going to eliminate the need for a copywriter or an editor. Right. But it’s a great way to sort of start and save time and be more efficient and then have a human go in and add that creativity and innovation, that knowledge, that context. We need these SEO words to enhance it. So yeah, definitely two things to be keeping an eye on for sure. 

Kira Cleveland [00:25:50] It’s fantastic. Well, you know, kind of sticking with this future trend and looking forward, how do you see customer loyalty trends playing out in the New Year? 

Michelle Grant [00:25:59] Yes. So I think customer loyalty is being tested right now because of inflation. We’ve seen in our research that people are spending more time looking at price comparison websites actually going into stores more because you can find deeper discounts on those sales racks. But the third most popular behavior is signing up for loyalty programs to get access to those discounts and free shipping and other perks that’ll save you money. So you have both a challenge and an opportunity. The challenge is that people are very price sensitive now because of inflation, but they are more open to signing up to the loyalty program to save money. So leaning into that opportunity of getting people to sign up into your loyalty program, that enables you to get a lot more data on their behaviors so that you can market to them better, improve your product development, add new awards and engagements that develop an emotional connection between people. So I think really looking at loyalty programs in 2023 to drive that customer loyalty in the near term, sort of leaning into that personalized discounts, free shipping, those economic reasons to be an active member in the loyalty program is going to be key with the AI of long term converting this person into sort of a long term retain customer that automatically goes to your brand because they were able to benefit from the sort of price those cost saving perks into. You know, when times are better, they just automatically default you and enjoy other aspects of your loyalty program. 

Ned Hayes [00:27:54] Well, I know we’re talking about the big idea is loyalty programs. All of these you know I and everything else. But if we can bottom line it what makes somebody loyal to to a retailer? 

Michelle Grant [00:28:06] That is a good question. And its product. First and foremost, you need to have the product that the person wants at the quality that they wanted. But what we’ve also seen when we’ve asked consumers why they choose retailers over going direct to brands or to instant delivery apps or marketplace, it’s really about service, really. If you’re a retailer, your standout is having the service infrastructure behind you and including easy returns. So one, you have to have the right merchandise, the right products. But then in a in a in the world today, Right. Anyone really can find those products anywhere unless they’re exclusives. So what you need to really focus on is that experience of purchasing from you and how easy you make it, how that sales associate engages with you, how that service agent handles your case. That is how you keep customers loyal to you. 

Ned Hayes [00:29:13] Well, I remember when I started in the tech industry, I’m kind of dating myself. Salesforce was a brand new thing. So I’m curious, what value does Salesforce add for retailers today? One, why should retailers look at Salesforce as a market changing dynamic for them? 

Michelle Grant [00:29:32] Mm hmm. So Salesforce offers a 360 degree view of that customer because we offer all of these clouds that are easily integrated with each other. So if you need sales cloud the most customers have marketing, cloud, commerce, cloud and service cloud and then loyalty management cloud. So again, you’ve got all of these different best in class products that easily integrate with each other. They give you that unified view of that customer that allows you to be very efficient in marketing to them, in selling to them, and then serving them when there’s a problem. That’s our our key differentiator in in the retail world. 

Kira Cleveland [00:30:15] Fantastic. Well, you know, kind of winding down, there’s been so much great information, you know, you’ve been able to share with us and our listeners. You know, I’d love to just kind of poke one more time a little further. What do you see for the future of retail in the U.S.? Where could you see it being in 5 to 10 years? 

Michelle Grant [00:30:35] I see it even more mobile dominated, I think. I think at least 70% of our sales that we see through Commerce Cloud are on mobile. And with that, mobile gives you a lot of opportunity to personalize your engagement with customers, to see more personalized messaging strategy, more personalized push notifications, more personalized websites, so that I’m seeing the, you know, the products that I want to see that they know I will want. And a little bit of inspiration sprinkled into a more personalized future given all of the data that we now have access to and the technology to act on that data in real time to offer. You know, if I’m at the gas pump, the the gas the retail convenience store attached to it could send me a push notification once I’m done filling my tank saying, come in, you can get your favorite coffee for 15% off to drive me. And so I think that personalization and real time enablement of the data is going to be will be really critical for the future and offer that better experience that I was talking about that retailers need to lean into to retain their customers and enhance that loyalty. I think another thing, again, kind of going back to what is commerce, right? We’ve we sort of taken that kind product catalog and just put it online. So I think there’s a lot of opportunity to make it more of a discovery and fun experience. Like L’oreal’s Urban Decay now has like Instagram stories on their mobile website. So you can click through and see different influencers and product people talk about the makeup and how to apply it and really bring that social media experience onto their website. So I think there’s a lot more that can be done in the future. Some of these websites that make shopping online not just a transaction, not just a fulfillment thing, but a fun experience. And I’m seeing other elements of gamification too, right? For a while there, Amazon was doing a spin the wheel spin the wheels, a pretty product, pretty fine feature that I see now, right? A little bit of gamification. Like, Oh, spin the wheel and you could potentially win. Haven’t won yet, unfortunately. But anyway, so some of that gamification play or like do certain things and you’re going to get a badge or things of that nature. And then another thing that we haven’t talked about that is kind of out there and could have its moment in 2023, which is web3 the blockchain. So there are two big announcements just this month. One is that Starbucks launched Starbucks Odyssey, which is their Web three play. It’s linked to their loyalty program. So you can earn what they’re calling badges, which are NFT, and they have different rarities and it becomes a gamified experience embedded in a lot of Starbucks storytelling linked to the rewards program. So that is something to keep an eye on. And then Nike launched DOT Swish, which is linked to their loyalty program where you can collect different and. Used to unlock different experiences, so we didn’t touch upon that. But I do think that with those two big brands of such mainstream appeal, they could be the ones that really bring this new technology to consumers without sort of the complexity of the technology that currently has. They’re really good at stripping that away. And so that’s something else that I’m keeping a close eye on for next year. 

Ned Hayes [00:34:41] But you have to keep your eyes in all directions, right? 

Michelle Grant [00:34:43] I do. It’s never a just never a dull moment in retail. That’s why I love it. 

Ned Hayes [00:34:47] Absolutely. We do, too. Well, we have one last question that is kind of a really important question that I think all of us kind of will reflect on at the end of the year especially, which is what do you want your legacy to be? What do you want to be remembered for? 

Michelle Grant [00:35:03] Well, I want to be remembered for being right in my predictions, right as an analyst I want to be remembered for. And obviously, no one can predict the future with 100% accuracy. If I could, I would definitely be retired living on an island somewhere. But I do hope that my legacy is that I gave really good, valuable advice that helped businesses, you know, prepare for the future. And I did it in a kind of way, in a nice way that I, you know, been a helpful, collaborative person and thinking about the future. 

Ned Hayes [00:35:42] Wow. Well, thank you so much for being that person for us today. 

Michelle Grant [00:35:47] Now, things I appreciate. 

Ned Hayes [00:35:48] Sparkplug is a wholly owned property of snowshoe. Copyright 2022 2023 Sparkplug Media.