How retailers can better adapt to the increasingly digital world

Publicis Sapient CEO Nigel Vaz joins Yahoo Finance Live to discuss how retailers can do a better job serving consumers digitally.

Video Transcript

ZACK GUZMAN: Well, the holiday shopping season is fast approaching. Of course, Black Friday came and went. Cyber Monday came and went. And interesting to see sales actually down on Cyber Monday, according to Adobe Analytics here, dropping 1.4% from last year to just $10.7 billion. Of course, we've heard some warnings from retailers out there, including Best Buy, saying that there could be concerns around this holiday shopping season.

And for more on that, I want to bring on Nigel Vaz, Publicis Sapient CEO joins us right now. And Nigel, when we look at it, you know, it's shaky. It's the first time ever we've seen Black Monday sales actually drop year over year. Not what you want to see heading into a holiday shopping season if you are one of these retailers. What did you make of those numbers? And what does it mean for this year?

NIGEL VAZ: You know, it's definitely looked in at isolation. You'd say it's the first time ever it's really dropped. What's going on? Because more shoppers are clearly shopping online. We saw retail actually increase in the first half of this year over last year and last year over the year before. So what's going on?

And I think some of this behavior is actually being encouraged by retailers, including behemoths like Amazon, who've been touting Black Friday style deals since October. Because a factor for them is certainly getting shoppers to get a headstart on buying their gifts earlier because of bottlenecks around the global supply chain and fears of merchandise out of stock. So some of this is definitely because of the elongation of the sales cycle. What we're also seeing is that the Cyber Monday deals are being extended post Cyber Monday, which we haven't seen in previous years.

And actually, some of the discounting was actually reduced on Cyber Monday relative to how much it was discounted last year and year before last. So I think looked at in isolation, there appears to be some weakness, but I actually think what we'll see is a prolonged set of retail numbers that, on aggregate, are certainly digitally getting significantly stronger with everything going on. But of course, lots of disruption with the global supply chains largely driven by COVID.

JARED BLIKRE: And Nigel, with the huge increase in digital shopping here, including bringing a lot of people into the fold who hadn't previously done this, I would imagine there's some frustration with the process. And I'm wondering what your survey found because for me, it's out of stock items. But I know there's a lot more going on.

NIGEL VAZ: Yeah, absolutely. And, you know, I think what we're also seeing right now is companies that are not really thinking about a digital first experience for their consumers really starting to get punished, right? So no longer is Cyber Monday an ancillary to Black Friday. Cyber Monday is now becoming the more dominant way for people to shop especially during COVID.

So things like out of stock products, our survey, the Digital Life Index, which we did across the world in a number of different geographies, one of the most frustrating things. But also things like poor search function, slow loading time, lack of seller information, the lack of navigation, and this idea of connecting what are you trying to sell and the customer experience and the journey to the technology platforms that they're built on and the seamlessness.

And the customer doesn't want to know where the problem is. Is it because you don't have stock? Is it because you don't know how to design a website? Is it because your tech is not that great? They care about their overall experience. And I feel like when you're trying to get people to do stuff like try on and try new products and buy new things online, these things make the difference between having a successful Cyber Monday or successful business in the retail context than not.

ZACK GUZMAN: Yeah, I mean, obviously, the out of stock message is something we've been tracking here on the show for a while. We've been seeing those issues. But if you are a retailer out there., I mean, what can you do? If you can't get the product because you haven't done the work up until this point, you're kind of SOL on that front in terms of getting things on the shelves now. But when you think about what retailers can do to do that well beyond just stocking, but kind of the experience of shopping-- we've talked so much about omnichannel being important-- what have you seen there and maybe which companies are, I guess, delivering on that?

NIGEL VAZ: Well, it's exactly your question. Every single aspect of the experience can be made better, right? So for example, let me know where the product is if you don't have it right now. If it's en route, where en route is it? Let me know when I could actually get it. Offer me substitution opportunity. Offer me refunds and perhaps allow me to put that towards other products. I think when you think about the entire omnichannel experience, how am I using my physical stores, how am I using my customer support staff in call centers, how am I using my online channel, how am I using chat and AI.

All of these different attributes start to create the experience that customers are looking for to ease the pain of the fact that you might not have stock, even though you are their preferred brand, and they'd rather go to you. And we are seeing big differences between how businesses who are doing this better are faring, right? One simple metric is just looking at the number of substitution acceptances for products.

And if you've got a really good idea of what this person's browsing and search history on your site is, and you have the ability to act on that data, right, really being dataful and being able to act on that data and propose alternatives, the gap between what you recommend and those opportunities, whether you're in the grocery space or you're in big box retail, you know, those make a meaningful difference. Every single percentage point of a substitution offer for a different product versus the one that people were originally intending to buy that somebody accepts adds a significant contribution to the bottom line.

JARED BLIKRE: And Nigel, we got to leave it there. I will say thank you for this. And I hope a lot of those app developers are listening because some of them could use a lot of work. Nigel Vaz, Publicis Sapient CEO, thanks for joining us.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting