Interview: No One Can Hide Anymore from Digital Commerce, with Jeriad Zoghby, Global Lead for Omni-Channel Commerce at Accenture

Transcript:

Peter Crosby:
Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age.

Peter Crosby:
Hey everyone. Peter Crosby here from The Digital Shelf Institute. We all know the last four years in digital commerce have been earth shattering, transformative, and exhausting. Now, however feels like a moment in time where it's not only possible but urgent to take stock of the shifts of the past several years and reassess how to move forward in a way that works for both consumers and your bottom line. Accenture recently did a new version of their annual massive consumer research, this time across 13 countries that really clarifies the shifts that are here to stay and the clarion call that creates to the C-suite to make sure to build a business that works for the long haul. Jeriad Zoghby, global lead for Omni-Channel Commerce at Accenture Song joined Rob and me to explain what consumers are saying and why you can no longer hide from the new realities of digital commerce, or as we like to call it, commerce. Jeriad, thank you so much for coming back on the podcast. We've really been looking forward to digging into this new commerce consumer research that you have.

Jeriad Zoghby:
I appreciate it, Peter. I'm looking forward to it too and quite excited about it myself. Seeing that we, because we've been doing this for four years now and we did it pre-COVID, we did it the first year of COVID, which we asked completely different questions. We were trying to figure out what's happening.

Peter Crosby:
Yeah, I remember that.

Jeriad Zoghby:
And then last year was the first year of almost a baselining of the new world and then getting to see it again this year it's been quite interesting to see the numbers and how they're coming out and the insights from it.

Peter Crosby:
What a crazy set of years to be doing consumer research in. This will be really fun to talk about. Can you tell us a bit more about the research that you did and who was involved?

Jeriad Zoghby:
Yeah, absolutely. Again, we've been doing this, this is our fourth year. It has evolved every year. There are some questions, especially things like brand recall and commerce environments, which we're going to talk about that have been consistent. But a lot of the stuff changed because we saw such a dramatic change. Some of the things we've evolved this year was 13 countries, this was the first year we added Indonesia and Mexico, or sorry, not Mexico, Brazil. Mexico was already in there. We got a bigger expansion. We can see how, for example, the US stacks up against other countries and then for those countries themselves, if you're a global brand, the uniqueness of each market, because many of them changed very dramatically over the last two to three years. There's 13 countries, 13,000 respondents. We had 1000 respondents per country and then we had 17 categories.
Some of the questions are more broader in nature, but some of them were very specific because we want to understand the nuances between say for example, grocery versus clothing, and apparel versus beauty, that way we could pick up some of the nuances of how people use the various commerce channels uniquely for each category. We wanted to understand the adoption rates. We wanted to understand effectively how sticky and seamless commerce is becoming, which we'll obviously get into. We wanted to understand brand recall because we really feel that if you go back four years ago, there was questions whether commerce was a transaction only channel or was it really brand building? And not everyone realized it is brand building but we have the data now to show the significance of it. And then last, we really wanted to understand how things are shifting around physical store adoption, which we won't get into here, but we were trying to track all of that in one study.

Rob Gonzalez:
First of all, the study and the data is fantastic. And I am selfishly, because I'm in tech and because we're in the good times are over in tech moment, where all the valuations are crashing down to earth and inflation is rising, the cheap money isn't available and all that stuff. There was a set of data in your report that for me just jumped off the page, which was all around the commerce as ubiquitous. And in particular there's a narrative that all this cheap money for the last 10 years has made these delivery models which are lost leading models is maybe the optimistic way to say it, tenable. As soon as the cheap money goes away, can this even be done? The data that you have on commerce being ubiquitous in different modes of shopping I thought was almost shocking stark. Could you go into that data and then demographically in particular what you learned from this latest report?

Jeriad Zoghby:
Yeah, absolutely. It's two things about that I found most interesting. I love that you love that piece too because to me, it was no one can hide anymore. If you went back three, four years ago and you sat down with the division president, many of them would say, "Yeah but online's a small part of my business." And they would use the term online because it meant Amazon shipped a home. And what we watched over the last two to three years with the adoption of things like curbside last mile delivery with companies like Instacart. And what they did is it meant I can no longer hide. I might be selling frozen pizza, I might be selling dairy products and pre-COVID, I really didn't care about digital commerce and now someone can't find my product to do curbside or last mile delivery, I'm losing sales.
And literally no one can treat digital commerce. And that's one of the reasons I use the phrase digital commerce and not online. Online's an outdated word. I'm buying online and fulfilling at my local store. Call it what you want. It is digital commerce. But that's the first thing is that no one can hide. And I think this is why it's become such a prevalent topic across the C-suite. But some of the numbers, to give you an idea, we were looking at this, we watched the numbers jump up about 10% from last year on click and collect or curbside. The US, it's about 60% of people use curbside now.

Rob Gonzalez:
Whoa. 10%. And COVID gave this a massive boost to begin with and then it's up another 10% year over year after that jump?

Jeriad Zoghby:
But to your point, and I think this is where it gets most interesting, if you look at the demographics, we looked at all the ages, we're looking at Gen Z, Millennial, Gen X, Boomer Silent. And if you think of that as a trend, as you would expect, who uses that the most? Gen Z. 81% of Gen Z are using curbside for stuff, 76% millennials. And that's the big interesting thing to me is there's three big buckets, people under 40, which is very insulting to me because I'm falling into that bucket.

Rob Gonzalez:
Okay, nobody here does.

Peter Crosby:
I'm sorry.

Jeriad Zoghby:
They got to recognize they see the world differently. Then the Gen X is a next step-up, which is 41 and 56 and then everybody after Gen X, the Boomers and Silent generation are a third bucket. If you look at that, what you see is the 40 and under crowd have huge numbers. 77% use curbsides, that's more than three quarters and 72% use last model delivery. You're talking about three quarters of that population using one or the other. And yet when you get to the Gen X, we see those numbers drop by almost 20% each. They're down and there's still big numbers. There's 60% on average for curbside and 47% for last model delivery. You're still having on average about half using one or the other.

And then when you get past that group it drops by another 20%, actually even 30% for last mile delivery where all of a sudden you're seeing that group who is 57 and older, only 36% are using curbside and only 15% uses things like last mile delivery. We see these two big step changes, 40 and under, then that Gen X group, and then who comes after Gen X being the next step-down?

Rob Gonzalez:
There's a couple things that are amazing about that to me is I wouldn't have expected anywhere near that difference between twenties and 30 somethings and forties and early fifties somethings. 20 points is huge.

Jeriad Zoghby:
That caught my attention too and I think it's really important, when you think about family dynamics, because you see things and as you would expect baby in the house, 40 and under with kids, those are the highest numbers you see, they're looking for convenience. And let's be honest, it's something I've been talking to a lot of clients about is even though we've seen some leveling off, when we get into the winter months and it's freezing outside and it's dark early and people have kids in car seats, they're not getting their kids out of car seats to go into a store if they don't have to. They're going to find whatever convenience they can. We're going to see a bump as we get into those winter months for this stuff.
This was actually surveyed this summer and that's my expect is those numbers will jump up through the summer and again you'll start to build more habits, which is really what COVID did. It got people over the barrier for signing up for things, got them familiar with it and it basically created adoption rates that there's almost a switchback cost to go back to the old world.

Rob Gonzalez:
I got to tell you on the car seat thing in the cold, my daughter is a half an inch and three pounds away from being able to do the booster seat and I have to stop myself from measuring her every week. The car seat graduation is going to be a good day for that reason.

Peter Crosby:
Dad stop measuring me.

Rob Gonzalez:
And my family runs short too. That half inch is going to take a little bit.

Jeriad Zoghby:
I hear you. But by the way, one note that really, now this was most surprising me, I agree with you the fact that there was a big difference between under 40 and over 40 because I would've thought that Gen X were closer to that. Here's the two big takeaways for me. One is this is your younger families. If you're selling to larger baskets, that's a big concern. And you see it the highest numbers 40 and under with kids, the lowest numbers over 40 without kids. You see it that convenience factor being a major driver and digital commerce adoption as you would expect, what did surprise us is there was virtually no difference on income. In fact, we did low, medium and high and we did this in each country. It's a very nuanced thing but it's very minimal.
But the lowest income was actually the highest adopters of curbside. It was 62 versus 58 versus 61. It was almost virtually no difference. And the same thing for last mile delivery. You look at that and you go, "Is it really just higher income using digital commerce channels?" Absolutely not. It's younger people and people looking for convenience for example, if they have small children.

Rob Gonzalez:
I've got a jumping off question from this, which is more about just picking our heads up from this one year of data and looking across the industry. E-commerce growth has outpaced retail growth basically since Amazon was founded on a percentage category basis. And in COVID the first year 2020 saw a massive bump. And it seems like in 2022 there's been a little bit more reversion to the meme and E-commerce growth really hasn't outpaced retail growth by much depending on which data you look at.
And a question is, if I look at the penetration numbers that you're talking about, especially under 40, are we looking at a future where if commerce is ubiquitous, online only versus just ubiquitous commerce buy online, pickup up store, you phrase it as digital, are we looking at a future where we should expect these digital channels to basically grow at the same rate as normal commerce because we've reached such high penetration rates? Basically they're going to grow as sales grow rather than grow faster than sales grow because people are switching channels. What do you think? Does the data give you any hint as to how that's going to go?

Jeriad Zoghby:
The data doesn't but the other trends we're watching is going to basically imply that we're going to have trouble separating those numbers in the future. One of the things we're seeing in the retail space, we have a separate study which I won't go into here, but I think it was 90% of, is it retail retailers or grocery retailers can't remember which, are planning to change the front end of their stores to create more room for the backend. Because they have to deal with all the operational complexity. Why is that important? If you watch the news, you see what Carrefour's doing, you see what Walmart's doing, you see what Amazon's doing, they're bringing digital media into the physical store.
As we bring digital into the physical store, what's going to happen is, I'm going to be walking around the store and I'm looking for Halloween candy that's gluten free and allergy free because of some kids in my neighborhood. I'm going to be using a digital interface to check that. I'm going to pull up my phone, take a look, it's going to show me the content and because of that what we call digital commerce is going to get very blended with physical commerce.
And in media play and we don't see this. They're looking and going, "If I'm this media growth that we're seeing, retail media's exploding, if I can extend that into my physical store," which they're all planning to do, not all, but the ones I'm mentioning, that's not only extra revenue for them, but that again drives digital commerce component to physical. To your question, I think what we're seeing here is, and I saw it recently with Walmart's numbers that came outward, to your point, E-commerce growth year over year was twice what we were seeing in same store sales. I think that's less about true incremental growth and more about people continuing to take advantage of these conveniences.
I think what we're going to see is it will plateau at some point. Physical's not going away, but it's going to have to level off at some point and digital commerce will be, it's already material but it's going to reach a level where effectively it just blends with physical and we stop talking about them as two separate, almost like institutions. If you think about it, that's the way it was set up often in many companies.

Peter Crosby:
That's why I was picking up earlier when you were trying to, in a way almost struggling to define it because it's now almost becoming, it really is becoming just one thing and yet the organizations are not set up in process or even in people in the organization to think about it in that way and to maximize value across the whole business rather than these narrow silos. And part of that must be, you'd mentioned it earlier about it becoming a C-suite conversation. You talked to CEOs across the commerce industry all the time. What are you seeing of the impact of this new ubiquity on their overall strategy?

Jeriad Zoghby:
It's interesting to bring this up. It's become a CEO topic, which I think surprised a lot of us. We are fortunate enough to have those relationship going. It's interesting because it went from being a CEO topic as commerce as a function and instead being more like commerce is this disruption to my industry and the risk of my business shareholder value. And that's why it's become the C-suite level. And probably the easiest way to explain, it's really not even in the data and don't get me wrong, what's really important this data about it being ubiquitous is it used to be that not all the division presidents for example were worried about this. Now they all have to worry about it and it's at risk. It's a simple story that often we talk about with the CEOs where we say, let's say for example you sell diapers, we point out and go, "Hey, digital commerce is great, but Walmart launching curbside didn't create more parents, more babies or more baby poop."

You're not selling more diapers because of curbside, it's just the reality. It sounds silly but it's such a practical thing to keep in mind as your market is what your market is. Now if you can find a way to create a new occasion on curbside shopping, awesome, but at the end of the day, we're not having more consumers because of this. What we've done is created more convenience for consumers. I can now go buy that through Walmart by walking through the store. I can do curbside, Instacart can pick it up from Walmart. All three of those are the same local Walmart or I can have Walmart ship it to me direct. More convenience means more costs for the businesses. And we saw something similar with financial services companies a few decades back with ATM machines thinking that they were going to replace everything when in fact they were just incremental costs for the same fees and convenience.

What a lot of these CEOs have realized is, "If my market's not growing, my market size isn't. And I have to manage multiple channels to sell the same products. One, my costs are going up, do I actually know what those costs are?" And to your point, they weren't built for this. They haven't actually gone and baselined what my cost is and just as importantly, what do I project it to be? Because we're not in a stable state right now. Everyone's still going through a transitional phase. That becomes a really important thing for CEO, from a shareholder value perspective. And two, they grew up in a world that has dramatically changed in very short order, which means their business model, the way their customer organization is, the way their commerce organization, it wasn't designed for this. And they've been iterating, surviving through that COVID rapid transition and now they're taking a step back going, "Okay, that was good, that salvaged me and we did a great job with it. But is it the right model for the future?"
And most of them are realizing it's not and it could put their business at risk if they don't fix it. In multiple cases that conversation has led to, "Cool, I need you to come to the ELT, spend two hours with all my division presidents, all my C-suite," because usually the CFOs in that initial discussion with me and they all see it and they go, "Okay, this is now our top priority that we got to solve." And it flows from everything from retail media to product pack, architecture to supply, but commerce is the driving force. That gets back to that ubiquitous thing. It's no longer something people can ignore. And it reminds me of what we saw with retail when Amazon started disrupting it. Sorry for the ramble here, but this is really important.

I always call it from A priority to the priority. Amazon was A priority for retail 15 years ago. They would talk about in board meetings but it was never the priority. They would talk about it but they didn't act on it. And then it got to a point where some of them started to actually fill the risk and we know some of them died because of it. CPG seemed to have recognized and learned from that lesson. They've rapidly moved digital commerce from being A priority to the priority. It is a C-suite topic, it is a board level topic that's surprising in some of our people going, "Wow, I can't believe the board talks about this." And you're like, "Absolutely I have no choice anymore." Hopefully that answers your question. I think that's why we've seen this elevate so fast. It's not just the data, it's the practicality of it.

Peter Crosby:
Rob and I were talking about this literally today about if you think about the past number of years, partly due to COVID but just it was the trend where consumers are in charge and that became the thing to respond to. They've changed their behaviors, you've got to catch up. Now it feels like the PnL was in charge again. Which is okay, they've had their way, we've innovated and rightly so in a very pressured time and now is the time to step back and sort of rationalize the business and what is the experience the consumer needs to be able to find, decide to buy and then have the right experience to actually get their product in their hands successfully in a way that the business can afford. And that experience is going to be challenging to rationalize at this point in the structure.

Jeriad Zoghby:
I totally agree and I love the point about it being PnL lead again because that's what was protecting this from being the priority at first and now it's gotten to a point of material impact, losing share, margin dilution where they're saying, "I've got to get the right model to protect my business longer term."

Rob Gonzalez:
I want to get a little into the cost focus in C-suite right now, one of the big topics that I've heard people discuss in the last few years is how exactly you fund retail media. Is it a net new line item? Is it just an additional cost of doing business? Do you move money over from brand marketing? P&G CMO a few years ago had a big brew haha around cutting a bunch of TV ad spend and basically shifting it over to various digital channels. And correct me if I'm reading into this a little bit wrong, but at least part of what you're saying is some of this stuff, it's more expensive to do business in this seamless ubiquitous commerce multi-channel world than it used to be. Retail media is one of those additional costs and that just is what it is. Given the expense of these things, I could see why it goes up to the board level for these companies. Is that a fair statement or am I missing something?

Jeriad Zoghby:
You're spot on. If the market size isn't growing and your costs are going up, you got to band. And let's be honest, we know retail media's going up because we're seeing the numbers coming from the retailers talking about how fast it's growing.

Rob Gonzalez:
Huge.

Jeriad Zoghby:
There's high incremental budget for it and it's not like their trade dollars can all of a sudden just magically go away and they can refund it for that because they still got to run their trade business. It gets back to a basic principle of do you even know what you're spending? Are you optimizing that return? Because again, to your point, it's not a bigger market. In fact in many ways it's a more competitive market because what we've seen, what Amazon really enabled and I would say Walmart is now doing as well, is they've democratized brand building and route to market.
I could today go and invent a new product in my garage and start selling it on Amazon and I could be right there competing with the biggest brands in the world. That couldn't happen 20 years ago. That's usually a joke I make. I'm going, "20 years ago if I bought a product online and ate it from a company I never heard of because a thousand strangers said it tasted good, I just sound like a crazy person." And that is the world we live in today.

Rob Gonzalez:
I never thought of it that way.

Jeriad Zoghby:
And it's not because of ratings and reviews as much as we want to believe it is, it's because when we look at the product pages and the branded storefronts, these companies are doing a phenomenal job building a brand experience that competes with these other brands. When you ask, "Does it matter?" You're like, "Absolutely." Because what's happening is it used to be those smaller brands were nipping at the hills of the bigger brands, but this democratization of it has actually given them way more power and it's good in a lot of different ways, but it means that it's going to push the bigger brands to also elevate what they're spinning in these channels to maintain share or to claw some of it back.

Rob Gonzalez:
There's a data from Benedict Evans who's an analyst out of the UK and I think there's UK specific data, but the US data isn't far off where if you look at the brands that are purchased in a physical store location, 75% of the brands tend to be what we would describe as big brands. But if you look at brands that are purchased in an online pure play, only 30% of them are what you would describe as big brands. And that's just a straight-up market share trade on channel by channel.

Jeriad Zoghby:
I love that data point because in many ways that's what we're seeing too is the route to market like building a new brand is different because you can go on Amazon, build up credibility, then move your way onto walmart.com and then eventually move onto their shelves. And we are seeing that they build that leverage, they build the loyalty and they're actually taking a different route versus I'm going to wait six months to a year to convince Walmart to move me from a regional to whatever there is other routes now to market to compete.

Rob Gonzalez:
There's another aspect of this cost conversation, not to linger too long on it, but I'd imagine that if you're adding costs related to the channels that your report highlights are growing so dramatically over the last few years, the costs tend to be much more variable and unpredictable compared to traditional retail costs. Even with trade and whatnot, brand marketing, trade marketing, you're signing up fronts, you're doing quarterly or annual reviews with your partner. There's a pace to it. Whereas online retail media spend, at least now at the state of maturity that it's in appears to be much more volatile. And I can't imagine that once it becomes a large enough line item on your budget, that's got to be stressful for CFOs to try to manage. Is the volatility of the cost relating to these new channels something that you're hearing come up in the C-suite at this point or is it still a small enough percentage of the pie that it's not yet stressing them out?

Jeriad Zoghby:
I don't think they have enough visibility into it. And it's a great point. It's retail media, it's all the content production costs, both working and non-working. That was a big thing about a year ago we started seeing a lot of companies popping up saying, "I need to get my hands around this." And they would say, "I've got my numbers." Okay, do you have your non-working dollars? All the people working on this before it even hits. "We hadn't even thought about that." There's all these little hidden costs, all your case management costs, your vendor set up.
There are things that are sometimes not visible and when you get to the C-suite, this is the first time they start to see it and realize, "Oh my god, this is happening and it's hidden from me." And that's one of the things everyone's trying to get to is can you help me baseline what the cost is for each channel so I can start thinking about this the right way and to start getting the cost under control? Because to your point, there is a lot of variability. Especially when you don't have visibility into what you're even spending. It's all over the place.

Rob Gonzalez:
We could spend a long time on this. Let's zoom out, let's zoom back out here. When you're talking about commerce being ubiquitous and you're talking about how consumers seamlessly buy across funds of channels, you had specific data on grocery buying habits and subscription buying habits that I thought was fascinating too because it didn't, this might be because I'm one of the older demographics on the list, but it doesn't jive with how I spend money online. But the data shows that there's a ton of people are spending money online and in certain ways. I wanted to dig into some of those data and highlight it. Commerce is seamless and sticky. Can you give highlights and overviews for the audience?

Jeriad Zoghby:
A little context here too, because we started the sticky question last year because we wanted to understand, there was a lot of questions about subscriptions and that's usually where everybody's brain goes through. And we were going, "Subscriptions are important but so are reordering features." If I use last week's grocery list to populate this week, that's very different from walking to a physical store because I walked through an aisle, I see competitor products, display ads, new product launches, coupons, and then all of a sudden I'm doing, "I'm just going to order thing I got last week." There's a power to it of stickiness. It's almost like it's a non-committed subscription model. And that's whether you're using buy again features on Amazon, your previous grocery list, your previous restaurant order because we even look at food and beverage from the restaurant side.
And a couple things on this one, I'll start with stickiness. That's that piece. Seamless we did just this year. I'll treat that one a little separately. On sticky, what's interesting is you see that under 40, Gen X, over 57 step again. The under 40 group, 69% of people under 40 are using stored lists for reordering.

Rob Gonzalez:
That's amazing.

Jeriad Zoghby:
69% across the board. And I'll talk about some of the categories where we see it's the strongest 50% of people under 40 are using subscriptions for some category or another. There's this familiarity that's already building. Now we watched that drop about 10% going to the Gen X and we see a drop a little bit more than 10% believe it or not when you get to the 57 and over. But what's important there is that's what you see.
And what's interesting is where we saw commerce being ubiquitous and curbside being really driven by especially babies in the house and stuff. You see the pre-teen family actually being higher here. And I guarantee you, I've got a teen and a pre-teen trying to figure out what the hell because they're at a point now where they're have specific requirements for the food they eat and the grocery and the size and all of a sudden you're like, "Oh my god, I don't want to remember that. I'll just reorder what they got last time." I think that's a factor in this and this is the first time we also see income being a factor. When we start seeing the features, that's when we see the higher income using this stuff, starting to be a differentiator. But I do think this is really important because it is truly sticky whether you're using subscriptions or a reordering list, if you're in the basket, it's gold.
Because for the first time we can start to get to where we can measure lifetime value and understand how long do they stay in the basket when we put in which we couldn't see before. And two, if you're not in the basket and your competitor is, it means out of stocks become critical to you. Your competitor's out of stock. I can see that at a store level. I better act on it in real time. I better go get it because I know whoever gets in that basket it's likely to reorder next time.

Peter Crosby:
Jeriad, do you see that that big brands have an advantage there? We were talking earlier about digitally native. In this stuff, are they winning that battle to be on the repeat list?

Jeriad Zoghby:
I love that question. We did not ask that. I do think it's a really important question to know who is winning that battle the most. I don't know. I can't even speculate. It's a really interesting thing because I think from what we're seeing, it is very much a convenient factor, less so than a brand factor. But I do think you're right. I think it's probably driven by, "I need to get the exact same thing."

Peter Crosby:
When I saw a lot of the behavior that you were calling out in the survey was that consumers in varying percentages when they think of an item that they want, they're immediately adding it to their shopping list or they're ordering it right then to get it right then. Which I thought is super interesting. And I'd love for you to talk a little bit about that trend.

Jeriad Zoghby:
That seamlessness I think is really interesting. That was the new question this year that we wanted to ask. We started realizing that historically people would create a grocery list. Then there was digital grocery lists and then we started saying, "How many people are just putting something in a basket the moment they realized they have any?" And this one is specific to grocery, we intentionally picked grocery. Normally we were asking across every category. This one we're like, "No, we're just going to ask this for grocery items. What do you do? Do you put it on a list? Do you put it on digital list? Do you put it in a basket to buy or do you just buy it immediately?" And here's where it gets interesting. Again, the under 40 group, people who are putting the basket or let's say basket or buying immediately 45%. In fact, 26% of that under 40 just buy it the moment they see they have a need.
They're walking through and this has been a joke internally. You're waiting for the kid to come out from school, you realize you have a need, you're sitting in the bathroom. I hate to admit it, but they may really have a need. And the point of it is, wherever you're at in your life, it's become seamless. It's almost transparent. And that's unique about commerce that it's changing. Commerce used to be I go to a store, I go to a register and then we got self checkout. We've seen this is the next evolution where commerce is just seamless as part of her life. You might just be in another room picking up something and realizing, "Kids out of deodorant." What do you do? Are you buying it immediately? You may be buying it immediately or putting in the basket immediately. And there's a lot of power in that, which gets back to that stickiness thing of saying whether you're a retailer or a package brand, you want to make it as easy as possible for that to be seamless. Because if you make it difficult, people are going to lean towards that convenience.

Rob Gonzalez:
It's interesting. If I think about the era of Madison Avenue brand building and competition, I think about the recent trout book, the 22 Immutable Laws of Marketing. And they have examples like Listerine versus Scope. Listerine's number one. Scope comes out with an ad campaign that basically says, "Listerine tastes terrible. You want your mouthwash to taste good?" And you see Scope sales start spiking. Listerine fights back with, "Yeah of course it tastes terrible because it works. What medicine have you ever taken that tastes any good?" And then there's this back and forth messaging that happens. You see it with Pepsi versus Coke and all that. And what's interesting about the implications of the stickiness is the competition becomes a lot more about on the ground winning that battle to be in the lists on almost a consumer by consumer basis. I could almost see guerilla warfare tactics. Like with Coke, you go into the local grocery store and you just buy all the Pepsi.
Force out of stock and then run a local conquesting campaign because nobody can buy it. Maybe Coke and Pepsi are not the best possible example, but you can imagine Pampers versus Huggies or whatever it is, it's maybe cheap dollars to out of stock a store if it means that you can get on the default list for consumers for the next 10 months or 12 months or whatever. It's interesting. What's the battleground between brands in this world where 50% of purchases in grocery are coming from a list for under 40 people? It's a different competitive dynamic.

Jeriad Zoghby:
No, absolutely. In fact, I find this quite, I don't know what's the right word for it, I want to use the word obscene but it's a little too much. But there's retailers that allow you to advertise your product on a competitor's page when they're out of stock. That's equivalent to being in an old school downtown retail area, and you see that your competitor's out of stock and you walk over and put a sale sign, you're like, "Hey, we have inventory across the street." And you get to put it right on their window, you're like, "You can't do that." I guess you can do that. I think what's interesting to me, and it reminds me a little bit what we see in financial management where we started seeing people literally working the edges of stuff across currency exchanges and trying to do work off those pennies and how fast it would add up.
And you look at this and go, what was really interesting about COVID is we started to get more accurate data at a store level that was digitized because they had to. They had to know if the inventory was in stock, they had to know the assortment, they had to know the pricing. I literally can look up a product right now at the Walmart around the corner from me. If I'm a brand that competes with that other brand and I see they're out of stock at 250 Walmart's around the US and I can act fast enough, that's a big question mark then I get to what you're getting at Rob. It's a warfare thing at a much more micro level, if I can act quick enough to act on it, which means I got to be ahead of it, I got to be planning for this kind of stuff and systematically I got to be able to act on it.
And we do see there's some stuff, in fact the company required the stable, had some tools for that kind of thing. We're seeing it all over the place. Everybody's starting to figure this out. But if you go two years ahead of now, I think it's a massive play because again, that whole stickiness piece, the seamless piece of going the moment, someone has a need, they want to solve that need. If I can solve it for them, full account, the value of that is substantial.

Peter Crosby:
And I would imagine the big deal for Accenture here is that that will require massive shifts in people process and technology to make that. Because the only way that you can respond that quickly if a lot of it's automated.

Jeriad Zoghby:
I totally agree.

Peter Crosby:
And that data's going back and forth between brands and retailers at speed so that you can respond in realtime.

Jeriad Zoghby:
It's a great point. My phrasing is a little overly selling to be honest, but is you got to be as digital on the inside as you're on the outside. You're building all these big front ends. But if the back end of how you do all this, if your supply chain system isn't talking to marketing and your supply chain's, not talking to retail media platforms, then you're expecting people which you have talent shortage issues, you got legacy operating model. If the systems can't do some of this on your behalf, you're really going to be held back. And I do agree with you, I think it's getting the systems to start talking to each other, data intelligence cloud, whatever it takes so that you can act in real time. If not, and the competitor does, you're at a huge risk there.

Peter Crosby:
You've been talking a lot, Jeriad, for years now really, but even more so intensely with this new data of the importance of viewing these channels as not only performance marketing channels but brand building channels. And I'd love to hear more about the data from this research that's supporting that effort.

Jeriad Zoghby:
This is one of the questions we've asked for four years and it's funny because we used to do this thing, there's a person I worked with who actually did one of the keynotes for you all some years back and it was fun. It was almost like a standup routine. We'd get everybody, we'd say, "Okay, who's bought a name brand product on Amazon in the last three months?" And just about everybody's hands go up. "Keep your hands up, can you remember anything about the product page, imagery, description, whatever, keep your hands up." They'd all keep their hands up and then we'd say, "Okay, can you recall a TV ad associated that product?" And everyone's hands would come down and they'd all start laughing. And we're like, "Okay, we're onto something here." We're going to start tracking this from here on out.
And it is been really interesting to watch. The first year we did this was 2019 and about 81% of people had recall of product patients and we intentionally picked Amazon. And by the way for the 13 countries there was two things we would do. One, we would always make sure to use the leading marketplace, which gets interesting because if you're in Brazil, it's pretty obvious. UK it's obvious. You get to Indonesia, it gets a little more complicated because you don't have dominant players with Shopee, Lazada and stuff like that. Then you get to also make sure they understand what we buy name by products. We always work with our teams around the globe to make sure that not only it's the right marketplace, but we're making sure they understand the question. And the numbers are always 80 plus. US was 81% 2019, 84% today.
84% of people have recalled that and it makes sense. Because we go to those product pages, we're trying to make a decision that was the mistake that people were making three or four years ago and we started running experiments with this because clients were curious, doesn't make a difference. And what we found is it can make a substantial difference if the content is there. They thought, "Why put a video on there? People aren't going to watch a video. They know what they're going to buy." And in fact the videos drove up not only conversions but time on page dramatically. Then when you ask the recall of the TV ads. Today it's 30%, so it's 84 versus 30. What's interesting is that number's actually come up and it's because TB ads mean so many more things now. Four years later with all the streaming services, many of them having the advertisement layered into it with the stuff that's there like Hulu and Paramount and stuff, we've seen that number come up.
And in fact that number is pretty consistently in the twenties and low thirties around the globe except in markets where there's not streaming services predominant. And that's what we've seen as the big thing. And it's not to say that TV ads are bad, or even video streaming ads are, they're absolutely needed. What we were trying to point out was, "Are your brand teams even thinking about this as a brand channel?" And what we're finding is they weren't. Too often the commerce teams were getting leftover assets because they built all the assets for social and for TV and for other streaming stuff and they didn't even think of commerce and realize that not only as commerce a brand building channel, it's a unique brand building channel.
The things you can do in these channels is so powerful versus what you can do in some of the other ones. It's not only a shame not to build content for it, you should be building creative experiences for. And for example, Cannes now has an award just for creator for commerce. I think we're going to see a dramatic growth in this, but I think it's going to be driven from the fact that flat out this is where consumers are learning about brands and products on a regular basis.

Rob Gonzalez:
It's interesting. The classic rule for brand building, it's number of impressions and reach and things like that. And you see from the fifties, the lines, you have to see a brand seven times before you'll be able to actively recall it and all those old studies. You would think then that from a first principles' basis, if you're spending brand dollars you would stack rank by eyeballs and impressions all of the places that you could spend brand dollars on and then you would allocate creative resources in some rough accordance to that. And I remember I argued in 2016, I was at one of the top 10 CPG companies and I was saying, "How many people have gone to your cpg.com versus how many people have seen your latest TV commercial?" And I had Nielsen penetration versus streaming data and in 2016 you really only had Hulu as an advertising streaming service.
And then I showed estimates on Amazon product detail page views and the point was similar to what you were making, which is how much money are you spending on creative on this product detail page, which is dramatically outpacing the viewership of the TV versus it's not like you don't want to do TV but you invest your brand dollars in proportion to the viewing. I just love the data from your report that backs up that not only these product detail pages viewed a lot, but people are recalling the information on them and recalling them more frequently than they're recalling the TV. It's just incredible data. We've come a long way in the last five or 10 years.

Jeriad Zoghby:
It's a substantial difference. And I know you guys have seen it but I think it's worth bringing up. But the reason we would show the famous "George video." We have this video with George Clooney and it shows all this great work he does and the TV ads and print advertising and even in the stores they have things of George. And then we would show how Nespresso wasn't using it in commerce. And the big joke in the line was, "Where the hell is George?" We didn't use the word hell, it was a little bit-

Peter Crosby:
I remember the word they used.

Rob Gonzalez:
I love the where is George.

Jeriad Zoghby:
But it really resonated for people because then they would go and say, "That's a really good point. How the hell are we leaving him out of this channel?" And part of it was because organically digital commerce grew up in the sales channel, which makes sense, but it's also a brand building channel. It showed that there was an operating model disconnect because for God's sake this is a channel where consumers are at. Why isn't brand leaning in and making sure all your best assets, not just spokespeople but your corporate social responsibility efforts, the awards you win, the sustainability efforts you have, the great ingredients. And because as we were talking earlier about how small brands are able to level the playing field, they do do that. They do a phenomenal job of talking about their sustainability efforts and small batch processing and organic ingredients and they really know how to play to their audience. And big brands unfortunately because they're best people aren't thinking about this channel are missing it. And I think that's true for all levels, but I just think smaller brands are much stronger at this than bigger brands.

Peter Crosby:
Jeriad, I just want to close out by saying, I'm going to view this podcast episode as one of the moments of shifting for me and thinking about what is this next decade of commerce going to be like? Because through this consumer data we really are seeing that from age of the consumer to age of the PnL and that the consumers are telling us what they need and now the need for the business to do that people process technology shift over the next number of years to be sure they're set up to do all of this at scale and win in a profitable way.
And I think it is coming out of this period of COVID and massive shifts, digital shelf being the only shelf. Now is the moment where I will be thinking about this is where the ship really needed to start to turn. Thank you so much for bringing this to life to us. Because sometimes consumer research can be, "Look at that, isn't that pretty? We've got some numbers." You've really brought up to life in terms of how it's translating into the C-suite. And I think that's a particular moment to pay attention to.

Jeriad Zoghby:
And I love what you said about winning in a profitable way. I think that's where we're seeing the pivot. It went from I've got to survive and win in this channel, which some are doing well and some aren't, but all of them are realizing, "I need to win long term, which means I need to win profitable share, not just share." And I think that's a really good point.

Peter Crosby:
Thanks Jeriad. It's just been a real pleasure having you on. Thank you for sharing this with us.

Jeriad Zoghby:
My pleasure. It was a lot of fun.

Peter Crosby:
Thanks again, Jeriad for the wake-up call. We'll be talking more about all this over the next year at the DSI, so don't be shy. Go to digitalshelfinstitute.org to become a member and be in on the conversation. Thanks for being part of our community.