How Buying Patterns Are Shifting

What Happened to Zulily? Exhibit “A”…the comeback of brick-and-mortar retailers; higher profits, more foot traffic and improve customer experience. All of this translates to double of profits vs prior to the pandemic. Together, they share how to adapt to consumer demands, the ideal times to target consumers online, and the dangers of offering too many discounts.

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This episode is brought to you by Global Teck Worldwide.

If you are planning to enhance your communications by deploying a cloud-based solution or need help deploying cyber security across your network, contact us at https://circuitloops.com/contact-us/

In this episode…

During the pandemic, online sales skyrocketed, and brands pivoted rapidly to meet demand influxes. Conversely, when the pandemic ended and people returned to the office, brick-and-mortar retail resurged, leading companies to juggle omnichannel sales simultaneously. Tune in to discover how some retailers doubled profits with strategic systems while others declared bankruptcy after failing to conform to shifting buying patterns.

According to online retail experts Rolando Rosas and Dave Kelly, purchasing habits evolve with consumer behaviors, so companies must adapt to these market changes. For instance, individuals working remotely may shop online at specific times of the day and frequent physical retail stores on weekends. Without adequate insight into your consumers’ buying patterns, you may encounter inventory shortages and shipping delays, ultimately diminishing revenue and profits. This occurred with the once-popular online brand Zulily, which declared bankruptcy after relying heavily on email marketing to spam customers with seemingly endless flash sales. In contrast, leading retailers like TJ Maxx and Marshalls experienced slight profit drops during the pandemic before escalating by aligning inventory with demand changes.

Here’s a glimpse of what you’ll learn:

[0:00] Dave Kelly and Rolando Rosas return to discuss the fundamental shift in consumer preferences
[8:26] How — and why — Zulily declared bankruptcy
[13:30] The dangers of consistent discounts
[24:53] Navigating shipping delays, increasing consumer demands, and diminishing profits
[29:45] Does consumer behavior impact buying patterns?
[35:30] Retail returns: how leading brands doubled their profits after the pandemic
[46:24] Tactics for adapting to consumer demands
[55:09] Rolando and Dave share optimal times to target consumers online

Rolando Rosas is the Founder of Global Teck Worldwide, which offers business and office technology for seamless customer communications. In his role, he leads his team to provide insights on e-commerce trends, digital marketplace strategies, and client success metrics. Rolando is also the Founder of CircuitLoops.com, which uses AI to match businesses to the lowest-priced internet service provider. As an entrepreneur, he has founded three startups and hosts the What The Teck? podcast.

Dave Kelly is the General Manager of Global Teck Worldwide and the co-host of the What The Teck? podcast. He holds a bachelor’s in telecommunications management from the New England Institute of Technology, where he focused on the acceleration of networks transitioning from digital IP to support successful business communications. Before Global Teck Worldwide, Dave was the Account Manager at Jabra and the Territory Manager at Polycom.

Resources mentioned in this episode:

• Rolando Rosas on LinkedIn – https://www.linkedin.com/in/rolando-gtw/
• Dave Kelly on LinkedIn – https://www.linkedin.com/in/dave-kelly-a2440811/
• Global Teck Worldwide – https://global-teck.com/
• Circuit Loops – https://circuitloops.com/
• “Creating a Legacy in Digital Media” with James Orsini on What The Teck? – https://circuitloops.com/creating-a-legacy-in-digital-media/
• “Why These Three Companies Failed to Make a Comeback” with Rolando Rosas and Dave Kelly on What The Teck? – https://circuitloops.com/why-these-three-companies-failed-to-make-a-comeback/
• “Work-From-Home: An Unexpected Economic Boom” with Nick Bloom on What The Teck? – https://circuitloops.com/work-from-home-an-unexpected-economic-boom/
• “The Primal Brain: Five Primal Instincts Every Business Should Know With Tim Ash” on What The Teck? – https://bitly.ws/39c4m
• “Building a Tech Company: How To Disrupt the Market With Innovative Smartphones” with Sandeep Chennakeshu on What The Teck? – https://bitly.ws/39c4g

We are a full-service online retailer of professional headsets, webcams, and speaker phones from top manufacturers.

Since 2002, Global Teck Worldwide has provided communications equipment for Unified Communications, Micrsoft Teams Voice, ZoomPhone, Managed Cybersecurity and Business Broadband.

We have served thousands of customers in a variety of industries with value-added services, including ergonomics, employee work accommodations, and hearing-impaired services.

What happened to Zulily? Once valued at $2.6 billion dollars in 2013…. They just declared bankruptcy. They pushed a lot of emphasis pushed a lot of their marketing through the email there was a constant bombardment Dave.. that led to spam fatigue and customer annoyance

They did a lot of flash sales which led an erosion of that thrill Factor you know Imagine an Amazon Prime Day every day where  you’re having all your vendors lower their prices Eventually it doesn’t really  become an exciting thing. The comeback of retail…

I’ve done some shopping recently was  blown away that it was hard to find   parking there were lines there was  a buzz in the air going into a store   touching something holding it buying it you  leave with it that’s that satisfaction all   together immediate gratification I’m impressed  consumers still are attracted to retail stores

5, 4, 3, 2, 1,…. you’re listening to Welcome to What The Teck your gateway to business  strategies and tech secrets shaping today’s   workplace Dave, you know… I saw that Zulily I don’t  know how much shopping you do on Zulily

But I saw that Zulily once valued at $2.6 billion USD in  2013 just declared bankruptcy or went bankrupt what happened to all the money what so tell us so I I know a little bit about Zulily it’s you  

Know where you get your Fashion Wear you get  your fashion and clothes from Zulily don’t you   oh no I you know what I’m a little I am not a  fashionista buying clothing online for myself   not something I’m super comfortable with doing  you know I like to go I like to try things on  

There’s been too many times where I’ve even just  purchased something from a store but something   that I didn’t try on nine times out of 10 I find  myself returning it oh my well you know that’s  

What a lot of people when they shop they buy  you know I I don’t do too much online clothing   shopping period but when I do I do get three  or four items because like for shoes they don’t  

Always fit great sometimes the especially for me  pants don’t always fit great so I always get a   couple just because I know I may have to return  some but I’m sure some of this change and shift   in consumer preferences you know talking to other  people that are in the industry talking about how  

Customer preference have changed since 2020 and  as we were looking into this and looking at the   research it surprised me Dave I’m sure it may  have surprised you too that the retailers the   physical retailers themselves have in some cases  doubled their profits since 2020 you would think  

Maybe not maybe they’re barely surviving but it’s  not the case their net profits in some cases as   we’re going to highlight today doubled I find  that amazing sure maybe they’re like maybe more   people like you they don’t want to shop online  as much maybe they want to go into to the store  

And try their pants and shirts and whatnot I if  I’m ordering something online my expectation has   only grown over time if I if I was getting it  in two days in the past now I want it in one  

Day if I was able to return something within 30  days now I want 60 days to return it I want it   to easier I want a better experience and frankly  the the online shopping experience from ordering  

To getting it delivered it’s my experience hasn’t  been super great you know over the past 6 months   or so it’s a little worse oh my goodness well  things are about to get hairy cuz I don’t know   if you’re following Dave what’s happening in  the shipping industry but anything coming out  

Of the Middle East that was going through the Suz  Canal it’s going to be delayed by at least 3 weeks   three to four weeks cuz now they got to go all  the way around Africa to come out of there and  

Deliver Goods into Europe and and the rest of  the world the rest of the western world so if   you’re waiting for your your Persian Sombrero why  they don’t have sombreros here what do they have   over there whatever Goods dates you like your  your dates I love dates you know a lot of them  

Come from that part of the world I’m going to be  waiting a little longer hopefully they don’t you   know go bad in the meantime but when we’re talking  about online shopping you know that’s kind of in  

Our wheelhouse we’ve been we’ve been uh on selling  on Amazon for a long time and we’ve seen some of   those customer demands shift uh from 2020 2021 23  24 now where we’re in a I don’t want to say New  

Era cuz it’s not really new it’s new and that it’s  different but the a shift has definitely occurred   we’re going to highlight some retailers who have  doubled their profits since 2020 as well as one   really big one we just talked about Zulily which  is on the decline well more than decline they’re  

Out of business basically and others Etsy is  reporting lower profits as well so there are some   huge shifts happening in the entire economy in the  marketplace in the online landscape that business   should be paying attention to yeah for sure and  with the increase with some of the retailers  

The physical retail outlets you know that we’ve  researched for this I think it’s very eye opening   consumers are not afraid to walk into a store they  want they not only not afraid but they’re doing it  

They are doing it yeah and before we jump into the  research that we uncovered for this episode I want   to give some big props big props to James orini  AKA Jimmy the pencil who stopped by the podcast  

Uh earlier uh on another episode you know he was  if you don’t know about James Orsini let me just   tell you two second maybe 10 seconds about him  he was handpicked by Gary vaynerchuk AKA Gary  

Vee to head up his organization within a Search  Group the he’s right now uh heading up the Sasha   group I understand he may have some news in in  the coming future with regard to uh what he’s  

His role there is so I’ll wait for him to break  that news but Jimmy the pencil you know reminds   me a little bit about I told him you remind me a  lot of Al Pacino and I put a vote I put my vote  

In right now for when they do the reboot he is  the lead actor for the role of the new Michael   Corleone James Orsini you get big props today  and you know Dave I can’t wait till he comes  

Back second time because he’s got a lot going on  and I know that when he was handpicked by Gary   Vee the biggest reason he told us he wanted to  avoid the big business mistakes that come with  

Businesses that have been in business for 26 30 or  more years and he was at the helm him James at a   lot of other organizations that were large other  media companies at agencies and he wants to avoid  

The traps and mistakes that those agencies made  well hey in respect to avoiding traps and mistakes   the Harvard Business Review study reveals  a sobering fact did you know that employees   can switch between 22 different apps nearly 1200  times daily that’s context switching you know that  

Mental juggling it takes a toll it increases  stress it slows productivity it completely   undermines Focus now picture an organization  that’s Tethered to outdated systems the stress   of budget cuts shifting customer preferences right  so in an uncertain and rapidly changing economy  

You want a partner like Global Tech worldwide  with over two decades of business Communications   expertise to seamlessly integrate diverse tools  for your workplace a failure to update technology   it’s not just a risk it is a threat to your  company’s survival so Global Tech worldwide  

Not only offers a solution but Global Tech offers  a Lifeline inviting businesses to navigate the   uncertainty of rapidly changing technology book  an appointment at Global tech.com that’s Global dte.com to get started today thank you Dave  terrific so we were just talking about online  

E-commerce and talking about the changing  preferences I just want to ask the question   what happened to Zulily Dave what happened to  him you know I mean what What’s happen what’s   happening in the on online e-commerce space  today because we’re in a new place than we  

Were in March of 2020 we’ve had invoking James  orini he said you know companies can swell and   companies can grow organically and he had a front  row seat you know he worked as a as an analyst I  

Think I recall as an analyst for Goldman Sachs the  financial analyst and so he had a front row seat   to numbers to IPOs and all the rest and he told us  he says you know you want to grow you can grow but  

You can swell or you can grow organically which  you can sustain and I would imagine that a lot   of companies during covid some of them shrunk  because their Industries got hurt and some of   them just grew especially if you were anything  online and you could ship it out tomorrow or the  

Following day and you know my question to James  it had to do with you know what are the dangers of   what’s the danger of a swell a swelling business  versus a growing business and we’ve seen this in   the communications industry right so during during  the pandemic people needed solutions they needed  

Communication solutions they needed platforms so  we saw some public organizations just go through   the roof within a very short period of time and  when that happened they had they had to hire they  

Were on a hiring move it’s like we need as many  people as we can and I think of organiz gz ations   like Zoom Zoom that they became a household name  in such a short period of the time I didn’t follow  

Their stock price and I I I feel like I I should  have spent more time analyzing that but obviously   the business is growing customer demand customer  expectations and then once the pandemic kind of   moved along and people started going back to the  office and people were using different platforms  

Than just Zoom that the need for all these  employees was no longer there you know so they   went through kind of a a budgetary I don’t want to  call it necessarily a crisis but we had a lot of  

Contacts that were with Zoom one day and no longer  with them the fin the next um that and that’s kind   of the like what you’re saying writing that wave  and so we like you said Dave writing that wave  

And going back and understanding how did this  all go down you know are there some things that   are happening cuz Zulily is not in the same boat  I mean you Zulily Etsy and I want to say there’s  

Another online retailer jane.com forgive me if I  botched that one but I know there was another one   floating around that was um contemplating uh  bankruptcy as well when those kinds of things   happen those are signals that there are shifts  because you know overnight um things can change  

And that happened at the beginning of the pandemic  and I wouldn’t say overnight things have changed   since the pack because it’s not overnight it’s  just been a rolling thing like work from home   hybrid work all of these things have contributed  um but in this case study when we’re looking at  

Zulily there were some factors that led up to  where where they are now which is essentially   bankrupt so Dave if we look back um I’m going  to look at my notes because there’s a there’s   a lot of stuff that we um we’re looking at a  timeline it turns out that Zulily’s marketing  

Was predicated heavily on email marketing which  is interesting because you know uh we I heard a   video where gr Gary Vee talked about back in the  day early 2000s Zulily was re uh or he I’m just  

He did a ton of email marketing and the open rates  were through the roof like 70 80% that’s not the   case today so if you’re relying heavily on email  marketing and we’re showing a video here if you’re  

If you’re listening to us on the audio platform  we have a video of Zulily playing on the video   side um they’re really catering to the to the  market female Market um the the 20s the 30 year   olds U and that demographic that’s also budget  conscious and that demographic has changed and  

We’re going to talk about that later on as as we  jump into the uh retailers that are succeeding in   this current environment but given that they push  pushed a lot of emphasis and pushed a lot of their   marketing through the email there was a constant  bombardment Dave that led to span fatigue and  

Customer annoyance which is interesting I I don’t  know about you but I get tons of spam every single   day I hear that Google’s doing some major things  that they’re planning on doing to cut down on the  

Spam um but we’re going to wait and see here in  2024 how that all plays out one other thing that   came up that was interesting was that they did  a lot of flash sales so constant flash sales uh  

Which led to an erosion of that thrill Factor you  know think about what Amazon does with Prime and   Amazon Prime days there used to be one now there’s  two usually one in July sometimes they they throw  

One uh in Q4 as well and so imagine a prime day  every day or something of that sort where you’re   having you know very all your all your vendors  uh lower their prices eventually it doesn’t   really become an exciting thing eventually it’s  not really a sale it’s not really a deal per se  

And I know when I worked in the consumer package  industry that was also the case you run the risk   if you’re constantly quote having a sale then it’s  never a sale there’s never really a deal because  

The consumer starts becoming used to the fact  that what was a deal a special deal it no longer   becomes special in the mind of the consumer and  that’s one of the things I I really hate when I’m  

Shopping for something online or even doing some  research online and I haven’t just seen it with   physical Goods I I get spam I get email marketed  every single day and sometimes it’s one company  

And the messaging is always you know it’s 50% off  it’s 60% off it’s always a buy one get one which   is 60% off like it’s always this the exact same  offer and I say to myself do they think that I’m  

So stupid that I have to jump on this you know I’m  looking um we have a gym we have a new gym that   just went up about five miles away from my house  five days ago I went on their website I was just  

Curious how they offering anything for you know  end of year beginning of 2024 and they did they   had a special and that special ends today this  was five days ago I went on their website last  

Night and it’s giving me the same thing it’s like  the special ends at midnight tonight and it’s the   same offer that I was looking at five days ago  so I’m thinking to myself what’s my hurry don’t  

Trick me don’t trick me into um the the your  call to action you know the marketing people   out there it’s always this call to action put a  put a timer up that’s the worst one Rolando the  

Timer there was backwards yeah yeah a lot of of  websites have gone to timer uh some of the travel   websites have been very notorious for doing that  and there was a video that was circulating on the   internet recently uh when Black Friday happened  um I believe it was Target this this this this  

Woman was with her camera going around taking um  so at the stands in in the kiosk that where they   have these deals like you know this big pallet of  of paper and and socks and whatever the heck it  

Was they had the call outs the price call outs  right that sit above you know these kiosks and   on it it said Black Friday sale and then the lady  took off the there it is that’s the one so so if  

You can watch this on the video ory you are spot  on today you get a clap ory look at this Black   Friday so pause that aie we go back and when  when she’s taking the the price out the yeah  

What right there look at this look at this and she  found this throughout the store Dave so so this is   the physical version the physical manifestation  of what you were just talking about now it’s a  

Little Switcheroo it’s not it’s saying save it’s  making it seem like a deal it’s not really a deal   because it was the same deal that was there  yesterday and it’s all you’re doing is putting  

A new cover on it thing at Black Friday sale and  you could see if you’re watching this video so if   you’re not watching it it’s a Tik Tock video  that went viral with a lady shopping through  

Target and she’s removing the um the prices that  are on the call outs and they’re the same that   they were previously there’s no difference so if  you overplay your hand at this and it seems like   Target got caught here um in doing a little bit  of the switcheroo then eventually the customer is  

Going to find out information’s instant today  right back in the day 10 15 20 years ago you   could probably get away with the switcheroo you  can’t today customers are going to share that   information and I would imagine over time it’s  nothing special Dave it was just like you set  

The same deal it was two weeks ago to be in one of  those board meetings with those marketing Geniuses   right bunch of Ivy Leaguers like well what’s our  move for Black Friday and someone said let’s spend   money let’s spend money to look like people are  getting a deal let’s let’s reduce let’s reduce  

Our sales margins increase our operational expens  all for the sake of fooling the consumer yeah I I   feel like there’s a lot of that happening and I’m  insulted I am I am insulted by it well you’re not  

The only one because when you look at the Timeline  here so in 2015 according to what we found in 2015   uh these flash sales started eroding for Zulily  the thrill was gone the surprise factor is gone  

And in some this is probably Dave the same thing  that we just saw on this video from Target was   happening a 48 hour sale on Friday so you think  okay I better do this before I get back to work on  

Monday you go back on Monday you go if you go back  or Tuesday you see that’s a 48 hour sale again you   know there is another retailer actually online  I won’t say who they are cuz I know who these  

People are they they sell hundreds of millions  of dollars and they use this tactic for years 48   hour sale you go back on Friday it says still 40  hour sale you go back on Wednesday it still says  

48 hour sale so and they said it was workinger  right yes a timer counting down um so they they   could do that because sometimes C customers don’t  come back every single day to their website and   they know that the the traffic You by looking at  the analytics you know that that’s not happening  

But if you’re trying to build customer confidence  you’re trying to build uh brand loyalty you’re   trying to um have build a community of customers  that are coming back over and over again because   that’s where the money’s made Dave coming back  repeat customers you can’t Resort uh to these  

Tactics forever because they’re not going to work  over time so in two 20 think about 2015 Dave so   around 2015 2016 Amazon really starts ramping up  their efforts when when you’re talking about prime   so one of the things that we saw was that Amazon  around this time is ramp amping up their efforts  

Especially around the subscriptions around Prime  and so if you look at the Timeline between 2015   and and right up until the pandemic 2020 you  see that um over time things start happening   to uh Zulily um you know they they do get they get  acquired in 2015 by a group called the quate group  

Or qate Retail Group and when you bring in a new  set of eyes new set of management you inevitably   are going to have friction some people in the  company being acquired are going to see things  

One way the acquirer is going to see it another  way and so one of the things that we found was   that this management um L this new team that took  over um there’s obviously some conflict there in  

The in terms of the vision and this turmoil you  know is never good for any organization and as   it all plays out and it’s and you move forward  in time you get a couple of other things that  

Start popping up on the radar Dave and what we  found was that um they they started running into   shipping delays and being in the online space  ourselves being sellers on the on on our own   website and on Amazon you know like what you just  said about customers customers today want delivery  

Next day and in some cases can get delivery same  day right with with delivery and in and in more   retail stores curbside pick up the same day so  the expectations the preferences of the consumer  

You know who you know who told us the same thing  James orini told us the saying big props to James   again he said he was sitting uh at a at the mall  and he’s like you know um why am I sitting here  

Waiting 20 or 30 minutes I actually I could get  this to delivered today by Amazon so so when you   have competition like in the way of Zulily they’re  competing against Amazon in some ways and Amazon   did ramp up their fashion um their they um they’ve  ramped up their efforts to attract fashion brands  

To their website and I and I really remember that  in a strong way because you know we get emails all   the time from Amon every single day as a matter of  fact and more and more started popping up on the  

Radar when it comes to um sellers in the fashion  business sellers that sell clothing sellers that   sell to women they started changing their policies  um so in in the background you don’t always know   what’s going on over there you know and Amazon  plays a very strong a very good role here because  

As a competitor they can influence the landscape  in ways that others can’t and during that time   frame Dave if we if we move forward and you think  about shipping delays you also add inventory   issues you add the fact that you know these 48  hour sales or Flash sales are not real sales  

Anymore what do you think that’ll do to a a brand  when you know things don’t arrive on time you   have inventory issues deals are not really deals  anymore what do you think starts happening you   know people get excited about a hyped up brand so  if they make if they’ve made the purchase they’re  

Waiting for it to arrive and then if the product  is stuck because of bad delivery or there’s no   inventory available if the consumer has to cancel  the order they’ve probably lost a lot of Hope or   desire you know for that brand it Market marketing  and getting that brand loyalty is in creating the  

Excitement around a brand is so hard with all  of that work and effort to then not be able to   to deliver the physical Goods man all that work  for nothing and you absolutely and think about  

The time frame where U you know the pandemic hits  all the all of the um 20120 hits you have shipping   global Shipping so now you you throw a brand  Zulily who big Focus was on clothing and and and  

Marketing towards females every single container  ship that was out there in 2020 and 2021 was   absolutely being called to the Call of Duty rates  were through the roof companies were also going   out and purchasing their own um container ships or  ships to move cargo because it was what was $2,000  

Or $3,000 a container went up as high as $220,000  a container ouch wait a minute I’m going to hit   the wrong button hooray hoay for the shipping  guys they made it they made profit hand over  

Fist retailers if you depended on clothing which  most of it isn’t made in the US Dave most of it is   made off offshore China Vietnam you know Pakistan  India where all the all the in Central America you  

Can’t get Goods fast enough during the pandemic  right just like you’re saying so now things start   swelling but you run foul if we ran into some of  these issues customers need this I want this give  

Me this I need a headset I need a phone I need a  this I need of that because we got to send people   home now we can’t get Goods so you go fast forward  into 2022 you haven’t resolved those issues a  

Lot of the third-party sellers that are on their  platform become uh a little bit um annoyed let’s   just put it that way with what’s happening there  you you start you start a vicious cycle and then  

Compound that with the fact that and I want to  give you the numbers here so if you’re if you’re   a nerd like me and you just give me the numbers  I’m going to give you the numbers on their on  

Their profitability just so that you can get a  timeline you know the lack of profits will make a   company will put a lot of stress on a company so  in 2020 uh they reported a a negative margin of

18.9% net income margin and these are Financial  numbers that are being provided here on Google   and 2022 a minus .08 margin and uh up to 2023  for for the records that are available a -1 12.73% Amazon Amazon in all of those years that I  just mentioned 2020 2022 and 23 was right around  

2 to 3% margin 2.99 in 2020 all the way to 2.4 so  far in 20 23 so even though was still only a few   points in profitability profitability is different  than negative you’re in the negative you’re in the  

Red you can’t survive you cannot last you got to  be able to make profits to survive so all of these   things compounded Dave which in the end if you’re  not making profits you’re not going to be around  

For a long time so what was interesting that you  just shared was in 2020 that’s when they started   to started to feel a kind of a drop in Revenue  uh the in in net income well I didn’t look back  

We didn’t look back to 2019 or 2018 but what we  could get was from 2020 to 2023 and and in those   um years it was all negative I don’t know prior  to that um if it was positive or not but what I  

Do know is that their valuation peaked right after  their IPO and just kept steadily going down um   based on on the on the information we have so if  if their stock valuation keeps going down then you   probably going to run into some issues here uh  when it comes to profitability because the the  

The market would only hang on so long and asking  where’s the profits it’s interesting with Zulily   being fashion how fashion you know I’m thinking  2020 height of the pandemic yeah fashion was no   longer a priority right people were in their homes  right and and who knew who knew think about 2020  

Now we’re jumping back to 2020 from we did not  know that um everybody was going to be hanging out   at home forever right um or that work as we knew  it and I remember in March 2020 having to cancel  

Meetings and I and I remember telling a couple of  our suppliers that we’re going to we’re going to   meet well you know I’ll see you in a I’ll see you  in a month don’t worry about it that turned into  

Many many many many months two weeks two weeks  yeah don’t worry about it in a couple weeks you   know we’ll get this under control and that didn’t  happen but here’s the thing Dave after people   started getting a taste for working at home right  now we’re around 25 a quarter of the workforce  

That can work is working some kind of hybrid  or remote work that number is not insignificant   and you know we we talked to Stanford Economist  Nick Bloom who said that there are major shifts   happening in worker preferences so one of the  things that you have to ask yourself if customers  

Patterns whether it’s at work or other patterns  are changing Can it have an effect on the online   buying patterns and I say yes and we have some of  our own data that we’re going to share in a little  

Bit to show that it does change so if customers  are now also changing what they normally do on a   given day that affects what I’m going to buy based  on what Professor bloom had told us people are are  

Doing less of their like regular daily personal  care or hygiene they’re showering less they has   to save time on on the shower they would have  taken they are shaving less so they’re they’re  

Saving time on the the shave that and all of this  can add up to about 70 extra minutes 70 it’s a big   amount of time so now Dave the question I ask you  if you’re one of these workers that gets to work  

Home whether it’s two days a week three days a  week or even fully virtual wouldn’t you think   that since my pattern has changed regarding work  that that would also impact other parts of my life   in what I’m going to do in my experiences in my  shopping Behavior yeah absolutely absolutely you  

Know I used to buy a few pairs of shoes every  couple of years because I’m using them all the   time same thing with my pants and my shirts and  you know my my dress my dress clothes my work  

Clothes I haven’t had to update anything CU I  I really haven’t gotten a lot of miles out of   the clothes I not I haven’t left I haven’t walked  as many miles in my shoes my clothing is lasting  

Longer because really I’m wearing track my my my  workout clothes my sweats my my athletic wear my   casual stuff is kind of what I live in you know if  I’m going to be on camera I might throw something  

On what do they call that waist up attire but yeah  you know if you saw the sneakers that I have that   usually or so sorry if you saw if you saw the  shoes that I had that I have right now you would  

Be shocked if I told you that I’ve had them for  six years I haven’t had to I haven’t had to wear   them all that much so yeah you know if you’re not  without that normal wear and tear it’s going to  

Last longer so you won’t need to spend your money  on it to replace it right and so I I I recall a   conversation I had with um I believe it was Tim  Ash who told us that you know to create change  

You only need about 20% 20% of people to create  change if you’re talking about an organization and   um other things 20% seems to be the the the mark  where it then starts making an impact and we’re  

Over that margin over the 20% when it talk when  we’re talking about people working from home and   just like you said Dave you know you think about  behaviors changing you know again we if we were   to cite Nick Bloom’s research from Stanford  he talks about leisure activities increasing  

Golfing and gyms he said gyms were were about to  be gone right and they and so golf courses and   now it’s reversed people a lot more people used  to live in cities people moved out some of those  

People have been recalled with return to office  mandate but a lot of people moved around changed   their lifestyle changed their priorities travel  right now to foreign countries is as high as it’s   been since the pandemic uh so people have shifted  their dollars it’s a shift of dollars maybe I I  

Did buy an extra a tie and you know or if if if  I’m W some heels and I’m buying some extra heels   because you know the other ones broke from going  to meetings and conferences that’s not happening  

Nearly as much and one of the things that we had  on one of our previous episode is those signals   the signals being ignored can overtime lead to  really big problems so one week a little little   lower okay fine next week third week if if that  isn’t being watched when especially when it comes  

To inventory big problems can happen you know  and in in the case of the pandemic post pandemic   inventory and Logistics scks are all a mess all  of them are a mess and if you don’t have it down  

Cold or if you’re not having real tight systems  to manage this because all of a sudden consumer   preferences start changing the inventory that took  you know nine months to bring in is going to sit  

There for a lot longer and tie up a lot of cash so  now during the pandemic Dave because we’re talking   about a shift you know things started opening up  people started shopping again stores they went  

From being closed a lot to opening uh and having  hours where um you know early hours for seniors   you the the the vulnerable folks could a shop  and and more and more uh places started doing   pickup curbside pickup um same day pickup and as  as things started opening up to my surprise Dave  

I you know we’re we we sell tons of stuff online  but to my surprise and and I think uh Professor   Bloom kind of planted the bug in in our heads  a couple weeks ago when he came out he said big  

Enterprises doubled their profits when you look at  2022 compared to 2020 and we checked it out and it   checks out Dave I would call it the comeback of  retail especially for these three companies that  

We looked at in this case study you know I I I’ve  done some shopping recently and was blown away   that it was hard to find parking there were lines  there was a buzz in the air you know um there was  

Product on the shelf and here we’re seeing that  sales are up I’m I’m impressed that the that the   consumers still are attracted to retail stores  going going out and making purchases you know I   don’t know if it’s because FedEx can’t deliver  a package anymore I don’t know if it’s because  

Delays with Amazon or where the delays are are  coming but I’ll tell you going into a store   touching something holding it buying it you leave  with it that’s that satisfaction all immediate   gratification it’s an immediate gratification  and I think retailers the the good ones right  

This is not happening across the board but the  ones that were strong prior to the pandemic and   they were growing like TJ Maxx like Walmart like  Marshalls and Ross Dress For Less and the reason   we’re highlighting those four is that those four  have an overlap with the Zulily customer in some  

Cases is particularly the off-price retailers um  and so if you’re a budget conscious female and   you were shopping on Zulily and you have a lot of  overlap in the inventory that Zulily had and now   you know what things open up and sometimes it’s  horrible timing for some companies it’s all about  

The timing right these companies you know in 2020  2021 they saw they saw a temporary pullback and so   they’re thinking how do we bring them back what  do we need to do the consumer consumer doesn’t  

You know like you’re saying it’s top up or what  is it uh from from the waist up from the waist   up you know there’s still people zooming and doing  all of that on camera so that’s still have driving  

Some sales and we’re showing here a graphic of of  TJ Max’s sales and that their profits doubled and   I know we have we have those numbers well let  me tell you a little bit about those numbers uh  

Because they are amazing TJ Maxx after a slight  dip in 2020 TJ Maxx saw its Revenue return to   pre-pandemic Levels by 2021 and they have steadily  reached $6.3 billion do in 2023 with their fiscal   year ending June 30th now get this the important  part is not the Topline numbers that gives that’s  

Just like a ther thermomat it’s telling us more  or less what’s happening but what you want to   know is how much money they put in the bank as  a result of all those sales and here it is in   2020 they generated net income of 434 million  that’s about 100 million every quarter amazing  

They amazing but in 20223 2023 can I say that 2023  they generated income of 88 8 million Dave doubled   almost doubled and that’s exactly what Professor  Nick Bloom told us but it doesn’t end there that  

Was just TJ Maxx you think okay that’s just one  blip it but we found that to be the case with   a few others as well doubled their revenue sorry  yeah doubled their their profits in two years yeah  

That’s amazing so they figured out they figured  out hey uh real quickly we got to find a way to   survive right the pandemic shut us down we got  to find a way to survive people are not going to  

Be wearing as many ties people are not going to be  you know buying Wing taped shoes and all the other   stuff that comes with normal office wear right and  other things and other preferences that that they  

Sold HomeGoods all the rest so your inventory mix  has got to reflect that change what you have got   to get rid of some of that stuff you got to bring  in what the customer wants and not only that Dave  

But then they go in and start doing some of the  Amazon like things about pickup and returns and   improving their processes the customer experience  now gets way better than you know at that zy they   keep messing up my order or it gets cancelled  or it gets delayed I’m not doing that anymore  

Right doesn’t take long for customers to bail on  you when you have that kind of experience so now   the question remains is what we’re seeing in  retail places like TJ Maxx is this sustainable   growth that we’ve seen for the past two years  or is this a swell interesting question Dave I  

Think we before we answer that question we have to  look at what’s happening in the retail space as a   whole especially in these off retail Brands we’ve  got two others that we want to highlight before   we answer that question so hold that question  let’s come back to all right Marshalls another  

Competitor to Zulily there’s some overlap with the  budget conscious Marshalls I’ve found good deals   myself going to Marshalls um I’ve gotten stuff  that’s you know they love selling stuff that’s   uh liquidated merchandise from the retailers or  high Brands those luxury brands that are selling  

Goods at Marshals but check this out let’s look  at the numbers so here’s what the numbers say   about Marshals Marshall’s Revenue jumped back  in 2021 and climbed the Topline numbers jumped   to 11.4 billion in uh reaching I’m sorry reaching  11.4 billion in 2023 here’s but that again ignore  

That part this is just the Topline number here’s  the profits the what’s matters to the investors   what matters to the shareholders what matters  to management net income or profits witness to   rebound they went from 246 million in 2020 to  a whopping 500 million in 2023 in year fiscal  

Year 2023 Dave again doubled the profits  it’s exactly what Professor blo told us   and that’s exactly what’s playing out here  with Marshalls let’s round it out with the   anchor leg of all all the mother I would I guess  some people would call it the mother mother of  

All off brand retailers Ross Dress for Less they  experienced in 2020 a temporary we call it now a   temporary decline in in revenue and returned to  a prepandemic trajectory in 2021 and still since   2021 has maintained a consistent growth in their  numbers where in 2023 the Topline number was 14 .9  

Billion in sales again let’s look at the bottom  line what they kept in the bank the profits the   their net profits saw a steady recovery going  from 378 million in 2020 to 600 million in 2023 so again they almost doubled again  following the pattern that um Economist Nick  

Bloom had mentioned uh during the time and so to  me there’s a clear pattern right now they’ve been   steady growing their profit their bottom line um  usually a good sign of management as well and if  

They’re able to keep their finger this is what I  would say getting back to your question about is   it sustainable they’ve doubled their profits in  two years three years right 2020 2021 2022 2023   so three years they’re doubled their profit you  know if they grew 80% in one year which is what  

Happened at Logitech that’s unsustainable right  because it you need a lot of stuff to meet the   demand when 80% growth is what you experience and  so a lot of companies that were in the tech space   that were in the hardware space uh and others that  delivered Goods into into homes and into people’s  

Um lives to make it better during the pandemic saw  a huge drop off because now I can go back to Italy   I want to go to Rome Dave I want to go experience  something in France I wanted to I wanted to travel  

You know a lot of RVs took off RV sales took off  during the pandemic now a nice Glide down the   patterns change so having the finger on the pulse  of the customer whether they’re buying RVs whether  

They’re buying cameras or now flying to Monaco or  France or Brazil or wherever that’s going to have   an implication on other things a ripple effect  and really good companies are paying attention to   those signals and the signals sometimes are just  hidden because you really think oh that’s that’s  

Not going to affect me but hold on there because  you can end up oh in a real bad situation when one   thing leads to another leads to another leads to  another which is what we’ve found in the case of  

Z one thing to another their competition was doing  better offline retailers are improving their game   and now if the experience with your customer is  poor and which seems to be the case as well things  

Are going to go bad well I’d be interested to take  these three companies and kind of see what they   were doing pre pandemic it’s my feeling that it’s  my feeling that there has been a shift where folks  

Want to go to a retail environment but this it we  don’t have enough information here to really to   really gauge that if it’s my opinion um well you  could yeah well it’s you know I’m I’m think I’m  

Considering that if if for TJ Maxx for example if  they were able to double their net earnings in two years yeah what were they doing prior to the  pandemic because if it if it’s still flat is  

That a is that a major win but we don’t have  the numbers to compare it well you think about   retailers that have been in business you know  some one of the key indicators is that uh really   good organizations are able to learn from failures  you know we I’ve heard that recently from several  

Several guests watching other podcasts they have  other experts on it learning for failures is key   you know we learn for us just internalize it to  our own experience uh both pre and post pandemic   is that you’re going to have to make pivots  sometimes several pivots you know for us we  

Had to change the way we got inventory the way  the inventory went out the types of products   customer wants uh the CER customer at once and  today that has changed as well simply because   the customer needs are different than they were  two years ago 3 years ago even five years ago so  

Meeting that customer demand is it can be very  elusive um because data can have a lag on it um   weeks sometimes months but having a good um a  strong connection to both the customer as well  

Well as the data to back up you know the hunch or  or a decision is where companies tend to excel um   you know there’s a lot of company there’s a lot  of data out there today on all sorts of things  

And I would imagine that those companies that as  part of their DNA as part of their culture look   back and re-evaluate what’s happening rather than  saying hey you know it’s all good we we don’t need  

To change we we we got the best widget in the  world I mean we had the president of blackberry   former president of blackberry that was on mean  and that that whole business has changed right   Blackberry was great they are no more compact was  great they are no more uh digital was great they  

Are no more and so you’re only as good as your  your your your desire to keep up with change I   would I would say for us in the it business  that’s especially true because of the rapid  

Change rapid Innovation things are changing AI who  knows what’s going to come down the line with AI   That’s moving so fast but the ability to say hey  look we don’t have all the answers today but we  

Know things are changing and we always have to go  back and re-evaluate what are we doing right what   are we doing wrong what’s working what’s not  working and be willing to say you know what we  

Failed at that but we’re going to make the next  version better is something of I think a mindset   and some people don’t want to admit they’ve made  bad decisions or wrong decisions or failed which   doesn’t always need to be a bad thing I’ve heard  what Steven Bartlett say he failed 70 times and  

The ability to learn from those failures and  say okay I’m not going to do it this way I’m   going to do it this way I’m going to run this  experiment instead of that experiment and the  

Keep that going is what allows you to then come  up with this is exactly what the customer wants   this is exact what they want to hear this  is the exact product we should be building   because we tried four versions that didn’t work  and and we learned from those four this is what  

We’re going to put on version five right so I  think that that has to be part of the culture   is to constantly be learning constantly improving  you know I think about my experience with some of   the brands I’ve worked for and every few years  there was always some massive changes we we had  

To change our strategy in our Playbook you had  to evolve with the marketplace you had to evolve   with your customers that’s kind of our our lead in  with with the Technologies or the solutions that   we offer we want to help companies evolve their  technology to meet the changing customer demand  

I’m not trying to put a um a commercial in the  middle of this but this is this is sort of our   Mantra we have access to new technology that can  help the small median businesses upgrade their   technology you have to evolve your strategy your  playbook is changing your customers are changing  

You need to update your technology to meet those  customer demands or else you’re risking the um   you’re risking your business so I I didn’t want  to I wasn’t trying to throw that in there I wasn’t   trying to be corny about it but change is good  if your business isn’t changing their playbook  

Maybe you’re in a market that’s not changing but  how can it but how can it not be unless you’re   a boutique seller of something special and you  know where your clients are but you know not not  

Paying attention to where they are or how you’re  going to change the way that you grow sales or   meet customer demand whatever it might be you’re  you’re not you’re doing a a disservice by by not  

Paying attention to that and so much is changing  and so much will continue to change I hope that   the retail environment I’ll tell you nothing is  more depressing than driving through a town and   seeing seeing a uh the mini malls what were those  called the stretch I don’t even know the names of  

St malls yeah the strip malls seeing a strip  mall that’s just vacant is a very depressing   sign seeing a huge mall with a vacant parking  lot or just 10% of the parking lot being used  

That’s a that’s an ugly bad sign when I drove by  my min mini mall and our full-size Mall uh this   past weekend both were packed and I don’t know why  it just makes me feel good it’s nice to know that  

People are still out there spending money doesn’t  have to be online but it’s nice that they’re that   they’re out there buying things and that they’re  not afraid to still use their money or get in  

Their car and get out there and you know to do  it not everything can be virtual business um it   maybe it’s part of your strategy but the customers  what I’m seeing from just this past week from to  

Compared to a couple of years ago I feel just from  my own eyeballs that more customers are out in   retail so for me I I like that idea um we’re our  products that we’re selling we’re not going to be  

In retail anyways so we’re selling more business  type Solutions so it’s not an indicator for our   business it’s an indicator that people are perhaps  tired of waiting for a delivery truck to get an  

Item that doesn’t fit that they’re going to return  anyways so well to to speak to that Dave I know we   were we were going to share some actual numbers  around golden hours now what is golden hours so   if you’re selling online here’s some insight if  you can determine when your customer is shopping  

Or the bulk of your orders are coming in online  and you can Target them better through ads on   like for us Amazon is a is a one channel it’s a  very big channel for us and if we can know when  

The consumer is going to be online shopping we  can Target them much better and if we just spray   the ads from midnight to 11:59 p.m. because this  consumers doesn’t shop that way uh they don’t shop   at all hours all the time although shopping is  occurring through the entire day when we look at  

Our data there is a concentration of that so now  if I can find patterns in that data I can better   allocate my budget I can better allocate my time  or resources and targeting those customers so we  

Look back at thousands tens of thousands of our  own orders when it comes to online and here’s what   we found we found that in 2022 there was golden  hours for our products now we are in the office  

Space a lot of our products are used in it our it  products used you know for folks that are sitting   at a desk or Road Wars and that kind of thing and  we found that for example Wednesdays golden hours  

For shopping were 9:00 a.m. to 9:00 p.m. which  means I had a long stretch of about 12 hours   where a good chunk of orders tended to come in  Fridays 8:00 a.m. to 6:00 p.m. so there’s some  

Shifts just within those two days for those golden  hours but get this in 2023 well we found this on   Wednesdays that shifted from that 12-hour window  to 8:00 a.m. to 4 p.m. so the window shrunk where  

The bulk of the orders were coming in same pattern  on Friday Fridays in 2023 we found that 8:00 a.m.   to 300 p.m. were golden hours where again bulk  of the orders tended to come in so the shifts  

In the buying pattern so that if more people are  doing that what we also find that supports the   patterns of hybrid and remote work days when  people are in the office versus at home um   and this pattern and and golden hours is also uh  magnified when you look at summer versus winter  

We found that on Fridays the golden hours instead  of the 3 pm Mark uh that I mentioned I’m sorry 6:   PM during 2022 that we would see that even at  around 2 pm a massive on Friday around 2 pm  

Friday during the summer there’s a massive  drop off in orders and we found this over   and over again throughout different product  lines so Fridays are not friend Fridays are   not a friend of the employee to go into work and  they’re not always a friend for folks that are  

Selling products like us so why would you waste  money when they’re not at their computer they’re   not on their mobile phone shopping it would  be a total waste of your ad spend ad dollars   marketing budget if they’re like a lot of our  customers on during those hours whether they’re  

On their phone mobile phone shopping or they’re  on their computer doing the buying you want to   Target them when they are there and what we’ve  found is a better Roi when we’re doing that and   that’s what we wanted to share with you that take  a look at your um marketing advertising budgets  

If you’re if you’re doing that with digital  ads you will find a pattern it may not match   ours but I guarantee you whether you’re marketing  um something to the consumer or you’re marketing   to a business buyer you will find a pattern and  patterns are hard to break unless something major  

Like what happened with Co and what happened  with after the Pandemic those patterns don’t   change people get up in the morning they log  in to work they start working now more than   ever on their on their laptops at home and those  patterns tend to repeat themselves over and over  

And over and over again finding those patterns can  make you a lot of money I encourage you to find   those patterns those patterns right now if you go  check out those patterns I guarantee you the data   will validate what your hunch and somebody said  this to me recently you instinctively know that  

Whether you’re in a big business or in a small  business this is when this action is occurring   you may just need the Val the validation from the  data and I guarantee you you’re going to find it  

If you look in your data especially if you’re sh  if you’re selling online today Dave did I miss   anything else or you do you want to add something  about executing and targeting customers during   golden hour you know I’m glad that you analyze  this because there’s a lot of money that’s being  

Spent on ads understanding your golden hours when  I’m said I’m glad I said hours um analyzing when   that’s hot is obviously important to keep your  operational expenses in line I’m very interested   to see what happens when we take a deep dive  in 2023 to kind of look at those Trends and  

Of course have our ear to the ground for 2024  Trends coming up I I am and so I can’t say any   more there uh Dave because I think we’ve said it  all today but if you’ve been hanging out here we  

Want to tell you we appreciated your support in  2023 and are looking forward to an unbelievable   24 with you if you want to support us go ahead hit  that like And subscribe we don’t normally say that  

But go ahead and do that it not only shows your  support but helps us bring this program to you   as uh more people will get to see it when you  hit the Subscribe as well as hitting the like  

Button on whatever platform you’re on so we really  appreciated your support in 2023 and if you want   to nerd out on more of these failures Dave cuz  you learned by other people people’s mistakes cuz   I don’t want to make other people’s mistakes  and if I can grab a couple of nuggets out of  

There and put it into play in our business that’s  what I want to do so go ahead and check out some   of these big business failures when it comes to  the missteps made by compact Sunbeam and Sports   Authority we cover those in previous episodes  with actual tangible executable things that you  

Could do so that you can avoid some of those same  mistakes Dave and I will see you in those episodes   now for those that are on YouTube Dave as well  as me will provide you more value on how you can  

Grow your business faster with the videos we’ve  got up here Dave and me will see you in those videos