62: Deep Dive Into Retail and Digital Trends with Google

Written by Rob Stott

March 23, 2021

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Patrick Tam of Google provides data and analysis around consumer shopping trends related to the ongoing pandemic — both from a product and shopping journey perspective. This episode of the Independent Thinking Podcast was first broadcasted during Virtual PrimeTime as a Main Stage session.

Rob Stott: All right. And we’re in on a incredibly special edition of the Independent Thinking Podcast. If you’re watching this during our normal podcast drop, you are actually late to the game, because this right now, Mr. Patrick Tam of Google, we’re talking. It’s PrimeTime. Listen, we’ve done podcasts from PrimeTime before. We even did some in October when it was Virtual PrimeTime, but this is our first podcast that is actually being run as a main stage session here at Virtual PrimeTime.

First of all I want to thank all the members who are here watching live as we sit down and chat with Google here and Mr. Tam during Virtual PrimeTime. If you’re catching this during our normal podcasting time, welcome, and you’re about to catch up on everything you missed during Virtual PrimeTime.

Patrick, first of all, thank you for taking time and being able and interested in coming to Virtual PrimeTime and joining us here.

Patrick Tam: Thanks, Rob. I’m excited to be here. Excited to be with you all virtually wherever you are. Upset we can’t do this all in person, but regardless, I’m excited to chat with you all and with you especially Rod, today.

Rob Stott: Yeah, absolutely. I’m not going to hold it to you, but we will get you in person and we’ll be able to do this… This is not our first sit-down, so it’d be nice to do one in person eventually when we get back to that.

Patrick Tam: Yeah. I would love to make our grand re-entry into Vegas in 2022, I guess, whenever that all happens.

Rob Stott: Awesome. First of all, I just want to dive in. We have a lot of great stuff to talk about today. The session title says it all, Diving Into Retail Trends and Digital Trends. But first I want to get to know a little bit about you and your role at Google. So let’s start there and just talk about that a little bit.

Patrick Tam: Yeah. I’m coming to you from San Francisco, from the lovely Mission District here. I’ve been at Google for coming on eight years now. I started out at Google working on traditional partnerships with publishers, directories, et cetera. And over time as the industry evolved, I chose to evolve along with it. I spent the last few years of my career working in the ad tech space with technology partners who specialize in delivering marketing services using technology, like Nationwide.

That’s where I’m at today, is in building partnerships with companies like Nationwide with the goal of enabling small businesses across the US to get access to the technologies, to better promote their businesses, to drive sales, et cetera.

Rob Stott: Sounds like a lot of very important stuff that I know we’re going to spend a lot of time talking about today.

Patrick Tam: Yeah.

Rob Stott: Before we dive even deeper into it, I know you’re part of the team there. Nationwide, as we’ve talked about over the years, has been designated as a Google Premier Partner, we’ve got that status. Can you talk a little bit about what that means for Nationwide as an organization, but also to the membership. Why should that status matter to Nationwide’s members?

Patrick Tam: Yeah, absolutely. It’s a great question. The Google Partners program was started out with the intention of really bringing some structure to the marketplace when it came to helping businesses, business owners really find the right marketing partner to help them grow their businesses, because there are, as many of the people watching today probably know, there are many companies out there claiming to offer marketing services, the best in the market, whatever that may be.

But the Google Partners program was created so that we could really have our fingerprints on really highlighting and identifying those partners in the marketplace who are truly doing well by the S&Ps out there, and delivering the best of Google to those customers. So that’s the genesis of the Google Partners program.

And when it comes to the Premier Partner status, there are a few things that we’re looking for to have that kind of higher level of distinction. One is we’re looking for partners who can deliver this excellence at scale. Our goal is to reach as many of the millions of small businesses across the US as possible. And it’s only through major larger partnerships, like with Nationwide, that we’re able to have that type of reach. So we’re looking for scale there.

Next is, going back to that point about excellent and delivering the best Google experience. We have measures in place around product performance, product health, campaign performance, growth of those campaigns, et cetera, that we hold our partners accountable to so that when you’re granted that Premier Partner status, the customer, the business owner has that confidence to know that when I see that badge I know that this partner is delivering not just a checkbox to say, “Hey, I offer Google,” but “I’m doing this well, I’m following best practices.”

And then lastly is around expertise. We also have standards for certification, training, et cetera, that we deliver to partners like Nationwide. So they’re always on the bleeding edge when it comes to the Google Ads products.

Rob Stott: Gotcha. So basically, to boil it down, members can basically have the confidence that our Site on Time, our RWS teams that are really hands-on with these products, our marketing team who have access to these and are using them to develop the campaigns that our members are putting out, that they have the confidence that those are world-class, top of the line, it’s working in the best of their interests and to the best of their abilities as far as being successful.

Patrick Tam: Exactly right, exactly right. It’s to elevate those partners, but also to give advertisers, business owners the confidence to really be able to find the right partner for them and have the confidence that they’ve been held to standards by Google.

Rob Stott: Gotcha. All right, well now that we’ve got that cleared up and figured out… It’s crazy that, as we’re sitting here, it’s mid-March, we are just about 13 months removed from the last time Nationwide and our members were able to gather in person in Houston for PrimeTime. A lot has obviously changed since then. It’s been quite the year, to say the least. A lot of ups and downs throughout the industry, a lot of challenges that the industry has faced, but here we are today. The resiliency, I think, is a theme that has been talked about over the past 13 months, as well as innovation. There’s been a lot of retail innovation from the shopping experience standpoint and things that our members have done to sort of maintain their businesses.

So I’m wondering, from your perspective, from the Google perspective, is there anything that stands out to you from a retail innovation standpoint? We’ve heard a lot about chat, a lot about video appointments. Are there other technologies or these sort of digital innovations that stand out that you don’t think are getting the attention they deserve necessarily?

Patrick Tam: Yeah, it’s a great question. Well first of all, the past year has just been a lot of things. But in the context of what we’re talking about, it’s really forced businesses across the US across every single category to really rethink their business models and how they engage with their customers in a world where almost everything we do is done remotely.

To kind of put a sense of scale around the level of digital transformation that the retail industry has undergone in just the past year, there was a study that was done by a company called Enders Analysis that was looking at the shift to e-commerce during the pandemic. And they estimate that the shift to online retail was accelerated by four years as a result of the pandemic.

Rob Stott: That’s unbelievable. That’s unbelievable.

Patrick Tam: Yeah. Without the pandemic, they are saying a lot of the factors that we’re seeing today with the shift in consumer behavior and the shift to kind of online inventory was something that was going to happen eventually, but obviously those things were just put into overdrive as a result. It’s forced businesses to adapt, and to do so quickly, and to really embrace innovation in the space. I wanted to set the context there as far as how people, or what factors have really motivated people to adapt-

Rob Stott: A data point that stands out from that… I know we talked about this the last time you and I sat down for a podcast. You think about the start of the pandemic and that shift that you’re referencing. A couple of numbers that stood out were that in the months of, I believe it was April, May, June, those early months of the pandemic, spending online had matched and in some instances exceeded Black Friday spending, the average online Black Friday spending. So you want to talk about just how quickly people ramped up their online spending, that’s all you have to think about is just… Typically we associate the holiday times with when most of the online activity, or retail activity in general happens. It happened for three months in a row at the start of this pandemic. So just a testament to just how quickly the consumer made that transition.

Patrick Tam: Yeah, exactly. Exactly. And it’s also really borne out of a lot of really interesting, really cool experiences to replace that kind of in-person experience on the retail side. You mentioned video and chat options as some of the innovations there. And those have been huge. And especially for major purchases like appliances, or furniture, or bedding, those have been essential. Even speaking personally for me, having bought one of each. I got a new bed, I got a new couch, I got a new coffee table, got a new TV during the pandemic and it was all done online. So I have a personal experience with all of these things, for better or for worse. Probably worse for my credit card statement, but that’s another topic altogether.

But yeah, being able to have that one-on-one experience with a sales person still via video, via chat has been transformational. And it’s something that I hope and expect will continue in the future as people have really woken up to the ease and convenience of this. If you can save yourself a 5, 10, 15 minute drive to the store and be able to get those questions answered in real time while you’re at home, even better.

A couple of other things that I found really interesting in terms of embracing technology for retail experience. One is augmented reality is one of those things. And for those of you who aren’t familiar with that, it’s essentially using your phone and using your camera to project a virtual version of the item that you’re looking at. So if it’s a coffee table, being able to point the camera at your living room floor and being able to see a virtual version of the coffee table in its kind of real size so that you can see how it looks in your space, and see how it fits along with the rest of your furniture, and if it can even fit. So I found that to be personally really helpful for me when I was looking for a couch and a coffee table for my living room. So, would love to see that kind of adopted further going into the future.

Another thing that I found really helpful was the shift for in person shopping, using appointment setting to, one, help with social distancing and safe shopping, but also it really opened the doors for a more personalized shopping experience. I did this when I ended up buying my coffee table at a furniture store right down the street from me. It was something that I just really look back on afterwards and go, “Why don’t we do that for everything we do?” Because they not only had a time set aside for me, they essentially had the store closed except for me for social distancing purposes, but then they also asked things like, “What are you looking for? What style of furniture are you interested in? Can you send us photos of your space right now so we can get a sense for how big or small the furniture will be?”

And when I came in, it was like I had a personal shopper who knew exactly what I wanted. They already had pieces lined up ready for me to look at, rather than me having to walk around the store for half an hour and try to figure out, get the lay of the land. They had all those things determined for me, and I was essentially in and out because of that. But that figured out everything I needed to know within 5 to 10 minutes. It was fantastic.

Rob Stott: It sounds counterintuitive because you’re shutting down the store for one customer, but those appointment settings, and I’m sure a lot of members who are watching and listening would attest that as opposed to having 15 people in a store that maybe are just perusing or browsing the aisles and browsing your product, you have one meaningful customer in there who you know is… If they made an appointment, you’re going to get a sale.

Patrick Tam: Exactly.

Rob Stott: So to be able to-

Patrick Tam: Exactly right.

Rob Stott: Yeah. To have those conversations and get the personal touch and provide a better overall experience for that customer.

Patrick Tam: Yeah, exactly. Think of it like when you’re going to see a doctor. When you set an appointment there you let them know, “Hey, I’ve got back issues,” or, “I’ve got a cold,” whatever it may be. By the time you get into the office, they already know what you’re doing. They already know what you’re doing in the office, what you’re there for. They’re not spending 15, 20 minutes trying to figure out what’s going on. And it’s something that makes a ton of sense to the retail experience.

To your point, I’m already raising my hand and saying, “Hey, I’m not just interested in shopping for furniture, this is exactly what I’m looking for. I’m giving you information about what space I’m looking for, what style I’m interested in. I’m giving you all this invaluable information.” So while, yes, it may seem like it’s more effort to have an appointment towards a dedicated salesperson, this is an extremely qualified lead, in marketing terms.

Rob Stott: We might have… Kind of moving to the follow-up question here in that, we’re talking about all the digital and trends that stand out to you. Do you kind of see any of these outlasting the pandemic? I think chat, again, chat and video are functions that, like you said, this space has been fast forwarded by a number of years, not just on the consumer front, but how retailers are engaging with their customers in these spaces. Are these the same sort of trends that we’ve already talked about that you think outlast this? Is there any other trends that you can think of that retailers should have their eyes on from a digital perspective that could outlast this pandemic?

Patrick Tam: Yeah. I think the one thing that will certainly outlast this is the embracing of e-commerce. The shift and focus on the digital storefront as a primary or first entry point for a potential customer is something that we’ve seen explode in the past year and will remain something that remains kind of a heavyweight when it comes kind of a sales driver going forward.

We often talk about how your online store, your website is really your best employee, because they’re always working, they’re always available, always helpful. And now that we’ve embraced e-commerce, now it’s something that can drive sales for you, it can be a research point for a potential customer, et cetera. I think that overall, as a foundation, is something that will remain. And the layers that have been built on top of that, bringing traffic to the store via things like Google Ads, shopping ads, et cetera. I think those will be hugely important going forward as well, because it’s one thing to have a storefront, it’s another thing to be able to promote it and get people aware to drive traffic to it. So I think that will be something that remains.

Now some other things that I think are going to be really powerful as a result of this shift is, with shopping ads for instance, and with e-commerce in general, you have this streamlined feedback loop where you drive traffic into the store, the person makes a purchase or they don’t, but you have that direct feedback when they make a purchase. And you can use that information to really get a finger on the pulse with respect to where the market is at in terms of what people are interested in buying using tools like Google Trends or top sellers report on Google Merchant Center. That’ll tell you, hey here are the products or brands that people are most interested in, and this is something that you can leverage to make merchandising decisions or ordering decisions when you’re restocking your store.

So I think being able to leverage this suite of digital tools to be able to not just promote your business or to drive sales, but to also make sort of foundational business decisions around how you can best meet your customers’ needs is going to be something that’s huge.

Rob Stott: Yeah. I feel like we’ve talked a lot, not just today, but just in general as far as the importance of these digital tools and the opportunities they provide retailers. There may be no better example of that than just what retailers have had to go through over the past year. Being tossed into this and really… It goes to the resourcefulness and nimbleness of this industry to be able to react as they did and adjust on the fly.

But you talk about a crash course in how these digital tools work and the opportunities, I think a lot of them learned that over these past 13 months, what happens when they turn to these tools and implement them into their online strategies, and just their regular business flow. It’s been kind of cool to see.

Patrick Tam: It’s been really cool to see. It really speaks to the kind of resilience of people both on the retail side and the consumer side. It’s going to be really interesting to see which of these kind of continues to outlast past the pandemic, but as mentioned, I think there’s some foundational things that are definitely going to remain now that we’ve kind of cracked the door open and opened some minds into how convenient and easy it is to go this way.

Rob Stott: Absolutely. The first portion of this talk here, and our time has been spent talking about the tools and the ways of what retailers can do from a digital perspective, and how they’ve been able to adjust their businesses.

I want to focus in a little bit, kind of have more of that fun product discussion that… I always love talking products, and I know you guys, you talk about all the data points available to you. You can see. You guys have your fingers on the pulse of what’s going on from a product standpoint, so I want to talk about that.

We think back to the last time we talked. I know freezers. I think they’re still a thing and they’re still hard to come by. But they were a big talking point at the start of this pandemic. What’s been sort of those high level trends or product trends that you guys have been keeping your eye on the past couple of months as far as where the consumer’s looking right now?

Patrick Tam: Yeah, at the start of the pandemic just looking at a high level, I think you saw a lot of the search trends and purchasing behavior really focused on things like basic needs, meeting basic needs like sanitation products only cleaning products, et cetera. But over time you’ve seen as we’ve gone through well over a year into the pandemic, there’s been a major shift with all this time at home to really focus on really making the home a safe space and a haven for everything that we do.

Rob Stott: A place that you actually like to be.

Patrick Tam: A place that you actually like to be, exactly. So we’ve seen that kind of bear up in terms of consumer trends over time. At the start of the pandemic, lots of focus on, lots of searches for cleaning products, et cetera, but over time we’ve seen a lot of those searches really diversify as we’ve turned our homes into an office, or a test kitchen, or a gym, or a theater, or even a meditation room. So there’s been a big focus on things like, obviously things like standing desks, and KitchenAid mixers, gym equipment, projectors, TVs, video games, yoga mats. So lot of those things have really kind of risen to the top as far as what’s top of mind for consumers.

Rob Stott: One are you talk about, and I think about it maybe because as I’m staring at this Zoom screen I see the Murphy bed behind me. Converting these spaces… Night & Day, by the way. Just a nice little plug for a vendor, unintended. However, you talk about converting spaces into usable working spaces. I’m sitting here in a home office kind of diving deeper into the products that our space cares about.

Patrick Tam: Yeah.

Rob Stott: Are those searchers, and are the shopping behaviors, really pointing to those bigger purchases now and things like, you mentioned the standing desks, but other products that this space of appliances, furniture, bedding, and CE retailers would care about?

Patrick Tam: Yeah, absolutely. Looking at the top level categories and how those have progressed over time, major categories like appliances, furniture, bedding have been incredible resilient. And in fact, have grown quite a bit over the course of the past 12 months here. Through this January, for instance, appliances were growing in terms of weekly search volume by 30% year on year. Furniture, 32%, kitchen and dining, 41%, bedding, 47%. So it’s really been borne out in terms of what people have grown to care about as they spend more time at home. That’s hopefully trickled down to everyone who’s watching today and they’re seeing that in the marketplace.

Rob Stott: Absolutely. And just to tie in, I know some other data too that we’ve heard recently, particularly in the appliances and furniture space. I know the National Kitchen & Bath Association had their show recently. Talked about the state of the industry there and finances. I do not have an economy degree or anything like that, economic background, but I know numbers and the fact that interest rates are so low right now and people are refinancing, and having the equity in their homes to be able to tap into low rates right now has really driven a lot of that. We’re seeing a lot of that in the appliance and furniture. Redoing homes, redoing kitchens, remodeling, upgrading appliances. So nice to see that it is translating to increased search as they go online and start these processes online.

Patrick Tam: Yeah.

Rob Stott: Plenty of opportunity. Getting product is one thing, of course. We know there’s challenges there, but demand is clearly, I think, still strong and will be throughout 2021. Judging by those numbers, it’s going to be very strong.

Patrick Tam: Yeah, so far so good. So far so good. It’s been really promising. We’re still going to be at home for a bit longer, so yeah. For those of you watching out there, I would stock up on those bread makers, and stand mixers, and TVs, and all that because interest will remain high there.

Rob Stott: That kind of lends itself nicely, a nice segue to what I was going to ask next. And that is, how life at home and all the social distancing, how are those things driving shopping trends?

Patrick Tam: Yeah. Like I mentioned earlier, that focus on making home a better space for hobbies, for work, entertainment, well-being, fitness, et cetera. I think that’s really driven a lot of these trends. From a product level, that’s how we’re seeing the market shift.

From a shopping standpoint, from a buying behavior standpoint, we’re seeing a greater preference for obviously online shopping. And the expectations that become learned when you become accustomed to online shopping, even for categories you never bought before, like a TV or a kitchen appliance. You start to learn about the conveniences of online shopping for those items, and your expectations as a consumer evolve as well.

Rob Stott: Yeah.

Patrick Tam: Some of the things that, as we’ve done things like consumer surveys and studies during the pandemic that we picked up on, are a big preference for locality proximity, local businesses. So is that furniture store just down the block from me, or is across the city? Many people raising their hands and saying, “I prefer something really close to me, just so I can kind of get in and get out safely.” Curbside pick-up obviously has been a huge boom during the pandemic. Or fast delivery options, free delivery options is something that people have really gravitated towards and embraced during the pandemic.

A really important thing that is something that people have grown to expect is real time stock updates as well.

Rob Stott: Yeah.

Patrick Tam: So being able to go online, go to your website and say, “All right, do you have this item in stock? Can I get it today if I wanted to buy it?” Having that reliability in terms of what is the inventory versus in-store, I think, is hugely valuable and is something that I think will remain important for consumers and retailers going forward.

And lastly, but certainly probably the most important, is with e-commerce and with online retail, you have the benefit of being able to do a lot more research on the product that you’re buying. And by the time a customer comes to your site, they’ve probably read a dozen reviews on that product and done some comparison shopping on the manufacturer’s site before they came to your site to buy. So being able to kind of cater to those well-informed customers, or to help them get informed by providing things like product overview videos, or links to professional reviews, or providing ratings, et cetera, I think those are going to be something that are going to be differentiators amongst the many retailers who have embraced e-commerce during this.

Rob Stott: It feels like retailers acting as sort of content providers, in a sense, because you want to… Publishing background, you want to keep the customer on that site as long as possible, provide them with the most valuable information, and ultimately hope that it leads to the sale with you. So the more information and more ways that you can provide it, the better it is, not only for your website to have that information, but also potentially to use it to convert sales and look almost like a thought leader in your space and in your market for these products.

Patrick Tam: Exactly, exactly. Being helpful is the biggest differentiator here when it comes to driving a sale, especially when it comes to online sales and e-commerce, you don’t necessarily always have someone by your side even via chat to help answer your questions. So as much as you can provide up front that’s already on the page, that’s going to be one notch in your belt in your favor to help close that sale.

Rob Stott: Now, I know you’re running through all of the preferences and things customers are looking for when they shop. One that kind of stands out in particular and always have an interest in kind of looking for numbers on this when available, do you guys have a sense of the buy online pick up in store versus someone delivery? Is there a preference one way or the other? Does it sort of lean either way for the customer, or is it you just need to have it and the idea of having it is enough for the customer?

Patrick Tam: I haven’t seen any data that speaks to kind of preferences there, but going back to your previous question around what’s going to kind of outlast this pandemic? It’s going to be that flexibility in terms of fulfillment options, delivery options, shopping options. That focus on the full omnichannel presence, where if a consumer or a customer wants to come in store to look at the product in person, they have that option. And they can buy it in store and deliver at home later. Or if they prefer to buy online, having that ability to do so easily on your site. So having that flexibility is going to be the most important thing to cater to as many different needs as possible.

I think that the pandemic has really opened a lot of eyes in terms of how easy it is, even for categories you would’ve never thought to buy online. The number of people who’ve said that they bought a product they never bought online before has grown dramatically over the course of the pandemic. So those expectations, those behaviors are going to stick after this. So being able to meet all of those different needs is going to be hugely important.

Rob Stott: Absolutely. It makes a lot of sense. We talk about the numbers at the top and just how the shift has happened both on the consumer side and just from starting the search online to actually completing it and what that looked like. You’ve got to be there. If you’re not there, you can’t make the sale. So to be there and offer them that option is obviously critically important these days. If you thought the shift was several years down the road, well guess what? The last 12 months have pushed us several years down the road, as you mentioned.

Before we let you go, I know our membership and among the people watching and listening, there are endless and countless examples that we could call out that we’ve had on our podcast over the course of the past year just talking about how they’ve been able to adjust their business models and adapt during this time. Any examples that stand out to you that you’ve been able to see or witness from a retail perspective, a business being able to adjust on the fly that sort of struck a chord with you?

Patrick Tam: Yeah. I’ve seen some really great examples. We’ve been working really closely with the Nationwide team, particularly with the product teams that Site on Time and Retailer Web Services to really meet the needs of the time and to deliver new experiences like Google Shopping, as for instance, to help as many of our members kind of take advantage of these technologies, of these trends as possible. And it’s been really cool to see as we’ve launched new products like Google’s Smart Shopping campaigns for both Site on Time and part of US customer’s, to see the kind of embracing of those to help them pivot their sales in light of the lock downs. To be able to drive those sales online and in lieu of that foot traffic, that is.

So we’ve seen countless stores across a board of people, of members, succeeding. And in some cases, exceeding what they were doing previously. And one in particular that has been really encouraging is a company based out here in the Bay Area, actually, Airport Appliance, who embraced the shift to e-commerce early on. And now online sales has grown to the point that it’s become their number one store.

Rob Stott: Wow.

Patrick Tam: Which is just astounding to think about when you think about where we were a year ago. To see people embrace it to that level of extent is really encouraging and signals to us that we’re really working on the right things. We’re focusing on enabling retailers across the board, enabling these members to get access to these technologies. That’s been one of the most encouraging things to see.

Rob Stott: That’s awesome. I think you kind of touched on it there, but a testament to the fact that it doesn’t take lifelong experts on this. You have the backing of lifelong experts behind you, people that are passionate about this space and passionate about retail success online. But coming into it, it has that connotation of being scary, of being complicated, but it’s possible. You don’t have to be a retail business who’s been in the digital game for years on end to realize success when you’ve got the backing of the Site on Time, and Retailer Web Services teams, and the support of Google as well.

Awesome to hear those stories. We love hearing those stories and sharing those stories, so we’ll continue to do that. And continue working closely with you. Patrick, this was awesome. I just want to say for anyone watching, to say that you’ve never listened to a podcast before officially no longer true, because you’ve [crosstalk 00:40:00] a podcast. So you can go and find all of our independent… Shameless plug, right? All of our Independent Thinking podcasts on the Nationwide website and all your podcasting platforms.

Patrick, I know we’re going to start doing these regularly. I’m not going to let you off the hook. It’s not going to be another almost year before we talk again. This was a lot of fun. I look forward to having more of these conversations as we move forward into 2021 and beyond.

Patrick Tam: Yeah, let’s definitely not wait a year. Let’s do this again really soon. I had a blast. Thanks, Rob.

Rob Stott: Yeah, you got it.

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