How to win Black Friday

Overheard

• "While we are still confident about the fourth quarter, the supply shortage issues will stay for us and for other vendors as well." — Xiaomi president Wang Xiang said disruption could persist into next year.
• "We see a huge re-rating of new technology companies no matter if they are making electric cars, ventilators or vaccines." — Principal Global Investors' Alan Wang told investors to "never underestimate the impact of technology."

The Big Story

How to win Black Friday

An underrated aspect of Zoom Thanksgiving? You can shop online while talking to your family. Based on data released this morning, that's exactly what millions of people have been doing. Salesforce estimates that $8.5 billion was spent online yesterday, up 50% from last year. The peak time, according to Shopify, was 4:35 pm EST, when people were spending over $919,000 a minute across Shopify merchants.

• Today's set to be even bigger, too. EMarketer forecasts that sales will hit over $10 billion by the end of the day, up 39% from last year. Cyber Monday could be even bigger, with close to $13 billion in online sales.

Ecommerce can thank store closures for a lot of this growth. EMarketer thinks overall holiday season sales will only be up 0.9% this year, with the huge ecommerce growth offset by a 4.7% decline in in-store sales.

• Even in places where stores are open, a lot of people just don't want to visit them. A survey of over 1,000 consumers by Standard found that 23% of people will shop exclusively online this year, and 36% will shop less in physical stores than last year.

The flip-side of growth is added pressure from the channel shift. "Retailers and brands' infrastructure will certainly be tested over Cyber Week," Rob Garf, Salesforce's VP of industry and strategy insights for retail and consumer goods, told me, highlighting three areas to keep an eye on today.

First, websites themselves will be tested. Cloud scalability is key, Garf said, echoing what other ecommerce experts have been saying all year. Retailers will be hoping that AWS' outage on Wednesday wasn't a harbinger for what's to come.

• Today's performance will show us who prepared, and who didn't. That preparation involves more than just moving your platform to the cloud: Etsy CTO Mike Fisher told me that his team has been gaming out different scenarios, putting artificial demand on different parts of its system to see just how much traffic it can handle. Modern ecommerce systems are so complex that there's a lot that can go wrong — which could cause retailers to miss out on sales.

Then there's shipping. Salesforce expects demand to outstrip shipping capacity by 5% this year, meaning that a lot of people may face long delays in receiving their products. "Shipping will define the winners and losers this holiday season," Garf said.

• The problem is particularly bad this year because of limited capacity: As Bob Biesterfeld, the CEO of C.H. Robinson, told Protocol, the reduction in passenger flights has reduced cargo capacity too.
• Retailers have ways to deal with the problem though. Many are doubling down on click-and-collect options, Garf explained, "essentially outsourcing the last mile to the consumers." Others are using gig economy providers, such as Uber or Instacart, to help carry some of the weight. Or they can turn store workers into delivery drivers, Garf said. That idea — using physical retail assets to help out online — is gaining a lot of traction, with Macy's turning two physical stores into fulfillment centers.

And finally there's customer service, as shoppers try to deal with those shipping delays.

• An awful lot of people are going to be trying to get in touch with stores to find out just where their new consoles and TVs and whatever else are, and retailers need to have the staff on hand to deal with it. Here too, Garf said smart retailers are re-skilling store staff to handle online queries — something those employees are already pretty well-placed to do.

That's a lot to handle, but the potential upside is huge if retailers get it right. In a big year for ecommerce, this weekend is the most important yet.

A MESSAGE FROM SYNCHRONY

Contactless payments are no longer a nice to have.

At Synchrony, we understand the challenges of running a business. Our financial and technology solutions, like touchless payment tools, help you offer your customers more tailored experiences, so they keep coming back.

Learn more about our solutions.

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Up to Speed

• Monday: CoStar bought Homesnap, which makes tools for real estate professionals, for $250 million. It follows CoStar's Ten-X acquisition earlier this year. Also on Monday: AvePoint said it would go public via a SPAC.
• Tuesday: Stripe was reported to be fundraising at a $70 to $100 billion valuation, significantly above its most recent valuation of $36 billion. Also on Tuesday: Ozon raised almost $1 billion in its IPO; Metromile said it would go public via a SPAC; and the SEC proposed a pilot program that would allow gig companies to pay their workers in equity.
• Wednesday: Over in China, JD Health was reported to be planning a $4 billion IPO for its healthcare unit, and a $5 billion IPO for its logistics unit. Marqeta was reported to be considering an IPO too, at a $10 billion valuation.

Coming Up

• Salesforce might acquire Slack. Numerous outlets are reporting that the two companies are in talks and that a deal could be announced next week. Slack's shares surged 38% on the news.
• Zoom reports earnings Monday, followed by Salesforce, Box and HPE on Tuesday, Snowflake, Splunk and Okta on Wednesday, and Marvell and CrowdStrike on Thursday.
• We might also start to hear whispers about the incoming glut of IPOs, with DoorDash, Airbnb, Roblox and Affirm all due to start their roadshows.
• And investors will be paying close attention to next Friday's jobs report, particularly after data this week showed another rise in new jobless claims.

A MESSAGE FROM SYNCHRONY

Contactless payments are no longer a nice to have.

At Synchrony, we understand the challenges of running a business. Our financial and technology solutions, like touchless payment tools, help you offer your customers more tailored experiences, so they keep coming back.

Learn more about our solutions.