Why merchants should prioritize digital channels and 1st-party data

Major shake-ups in the ecommerce industry have made it harder than ever to predict consumer trends. Understanding your audience calls for introspection, as merchants and marketers alike should always ask themselves how they can improve and make their stores more successful.

Jason Goldberg, the Chief Commerce Strategy Officer of worldwide marketing agency Publicis Group, has plenty of experience with this type of self-assessment. Uniquely positioned to understand what customers want and how to cater to them, Jason serves on the board of directors at the National Retail Federation. 

He also runs the Jason and Scot Show podcast, as well as the consulting firm Retailgeek. With this in mind, it’s hard to deny that Jason is a Renaissance man—one who eats, breathes, and lives retail and ecommerce. 

We feel Jason is a bastion of knowledge and support for ecommerce merchants—one who could not only help smaller merchants, but also larger businesses and established ecommerce marketers.

What do you do on a day-to-day basis?

Jason Goldberg: The Publicis Group is a holding company with over 400 agencies in it. A lot of those agencies specialize in helping brands and retailers with commerce problems. 

There are digital agencies that build ecommerce websites for folks like Target, there are marketing agencies that make Super Bowl ads for Walmart, and there are branding agencies that make logos, such as the Amazon logo. So I get to work across all of those agencies when the clients aren’t working on sticky new commerce problems.

As a general rule, I work with the ‘biggest of the big’. Through the National Retail Federation, I try to do some mentoring, and via the podcast, I get to meet some smaller entrepreneurs. But usually for work, it’s pretty big established incumbents—our clients.

Let’s talk more about the smaller merchants that you work with. You started the Jason and Scot show almost six years ago. Can you tell us a little more about the work that you do with the podcast and its goals?

Jason Goldberg: There used to be an independent trade organization for ecommerce in the US called Shop.org. It later got purchased by the National Retail Federation, but with Shop.org, they elected their board members. Myself and a friend of mine, Scot Wingo, we’re both board members at Shop.org. Four times a year we’d have meetings, and we’d discuss issues that were relevant to merchants that were getting into ecommerce.

After the meetings, we’d often go to a bar and we would continue to talk shop. Scot said, “Gosh, you know, this may be interesting and a few other people, we should record these conversations.” He jokes that I ran out that day and bought a bunch of podcasting equipment.

We started recording the show, but we didn’t think it would be very popular. We thought it would mostly be for Shop.org members. Over time, it’s become accidentally popular. Today, 20-50,000 folks download the show each week. We get to talk with a lot of interesting entrepreneurs, and we talk about issues that are relevant to folks that are trying to sell stuff on. It’s been around five years, so there are more than 300 hours of the show online.

Has the scope of the content of the show changed at all over the years? Or have you stuck to just one tried and true formula?

Jason Goldberg: Full candidness—it’s whatever Scot and I find interesting. It’s a lot of news stuff, like mergers, acquisitions, new announcements. We follow the public companies’ earnings calls a lot and we follow the industry data a lot. 

We talk a lot about how we measure ecommerce and understand what parts are growing and shrinking and where the interesting trends are. And then when there are exciting new changes in tactics or tool sets.

Jason Goldberg, Chief Commerce Strategy Officer at Publicis

We talk a lot about how we measure ecommerce and understand what parts are growing and shrinking and where the interesting trends are. And then when there are exciting new changes in tactics or tool sets. We try to have subject-matter experts on the show that can talk about that.

We tend to try not to get into specific vendors and ‘this email provider versus that email provider’ or ‘this platform versus that platform’. But if there’s a trend in how the platforms are evolving, they’re becoming more microservice-based or mock architectures or whatever, then we might have a show about that—the architectural trends.

I imagine with the amount of experience that the two of you have, what you find interesting is probably going to be what’s interesting and relevant for the industry at large.

Jason Goldberg: We hope so. Again, we don’t really try to make money on the podcast. We don’t sell ads, although we’re offered a lot.

It lets us pick our subjects and not have to chase an audience necessarily. And it just so happens, a lot of people have enjoyed following along for the ride. There’s probably a bias. Scot is very much an entrepreneur, so he’s very interested in new, young companies, but he founded a company that he took public called Channel Advisor, which is a big vendor in our space.

So both of us probably focus a little bit more on bigger companies than small companies, but we hear from small companies all the time that they liked to listen to the show and benefit from it.

I think a great way to learn is to create content. I say we don’t monetize the podcast, but it absolutely benefits both of our careers. Because we’re talking to the smartest people every week about these new trends. Then later, a client will ask me a question about that trend, or maybe a client will be interested in that trend and find the podcast—that helps a ton. 

I had a little extra free time in the pandemic, so I expanded. I give talks quite frequently on the same topics, so I said, “Hey, you know what I’m doing all these via Zoom, I might as well record these, and I’ll put them on YouTube.” So I got that sort of experiment with doing some YouTube video content, which was fun.

We’re talking to the smartest people every week about these new trends, and later a client will ask me a question about that trend, or be interested in that trend and find the podcast—that helps a ton.

Jason Goldberg, Chief Commerce Strategy Officer at Publicis

Learning from experience and planning smart

Jason works with both larger brands and smaller companies at Retailgeek. 

Successes and failures have taught Jason many interesting lessons. We asked him about what he has learned, as well as what he sees as common mistakes in ecommerce, and how they can be avoided.

If you go back to the beginning—before you got into retail, before you got into ecommerce—and give younger Jason some advice, what would that advice be? And would it be different from the advice you’d give somebody just entering the market today?

Jason Goldberg: Well, there’s tactical situational advice. I mean the main advice I would’ve given to a younger Jason would have been to buy Amazon stock probably. But there were specific changes that happened in the market. Some of which I was lucky enough to benefit from, some of which I sort of missed.

If I had a time machine, I’d probably cheat and warn younger Jason about those. But the kind of advice I would give a new entrepreneur that’s starting out is that we obviously don’t know how things will turn out. I tend to try to give advice about how to think about strategy and big picture versus small picture.

I hope those things tend to be universal advice. A lot of my career was luck, but I’m very happy with how it all played out and. I would hesitate to muck with the past too much because frankly, some of the decisions I made probably were ill-advised but worked out very well.

If there’s one mistake that you see a lot of brands making, what would that mistake be? And on the other side, is there anything like a best practice that you wish you saw more brands do?

Jason Goldberg: In general, I would say the biggest mistakes or challenges I see both small and large brands or retailers make are the same. It’s not seeing the forest through the trees or getting too focused on the tactics and the issue of the day, and not thinking about how that fits in the big picture. The way that manifests itself at Proctor and Gamble might be different from a small dog food company. 

But in general, like investors in a small company, a board member goes to a trade show and learns about artificial intelligence, and they come back, and they say, “What’s our artificial intelligence strategy, or what’s our social commerce strategy.”

Suddenly the small company with very limited resources is spending a lot of time building an AI solution or a voice commerce solution or whatever’s trendy that week. The same absolutely happens at big companies. Maybe it comes from the CEO instead of from a board member or whatever, but like, “Hey, we have a major initiative to do X. We want to sell 30% of all our products online.”

All of those things are kind of siloed tactics, and too often we don’t think about, “well, like, why are we doing AI? Will having AI make us more successful? And if so, why and how?” and they’ll say “Oh, because it might help us sell more stuff or get better customer satisfaction.”

Why do I want to, if I’m a big company, sell 30% of my stuff online? Oh, well, because that’s where the customer’s going, and we’re losing. We’re worried that we’ll lose shares if we don’t do that. Like the KPI, the goal should be that outcome. Share market profitability growth, not the tactic that achieves that outcome.

Too often, it’s super easy to focus on the tactics or even worse the tools for that tactic, which shop should I buy from for AI instead of that outcome? How much more stuff am I going to sell next month than I did last month? I’m picking on those tactics, they can be really helpful in achieving that outcome, but the success criteria should be that outcome, not the tactic.

Too often we start thinking of that tactic as the destination. When you think about it rationally, it doesn’t make much sense.

Coping with & adapting to COVID

During any discussion about ecommerce, it’s impossible to avoid the ugly topic of COVID-19. Merchants across the globe, both large and small, struggled in their own ways throughout the worldwide pandemic. 

Large companies hunkered down and focused on their digital channels, while smaller merchants rushed to establish any digital channels at all. As Publicis has a worldwide presence, we were curious as to how it was affected.

Tell us a little more about the effects that your brands felt, and if there was anything in particular that you were doing to help those brands kind of cope with the situation.

Jason Goldberg: Well, you’re talking about it in the past tense, which I wish were true.

It feels like we’re still going through a lot of the impacts. I like to say more than anything else, COVID has accelerated trends that we were already seeing in the marketplace. My metaphor for COVID is its sort of the hot tub time machine—it propelled all these various trends two to five years in the future.

What that means is that the speed at which we have to respond to those trends is much greater. Digital grocery wasn’t very big before COVID—it was two or two and a half percent of all retail grocery sales in the US. Now, it’s closer to five and 10% of all sales in the US. We knew digital grocery was going to be a big thing before COVID and sure enough, now it is a big thing.

However, the amount of time we have to learn how to do it and get good at it is much less. There are many more competitive pressures to move a lot faster. The biggest trend of COVID is that it accelerated a lot of digital commerce transit and forced more shoppers to use more digital tools more often.

That fortunately, and unfortunately, that tends to benefit the bigger players in this space. Right? If you’re Walmart, Kroger, and Albertson’s, you were already investing in digital, and even though it didn’t have a great return on investment, and you were making digital moves, and you had hired CDOs and e-commerce teams and things like that.

But if you were, say, Joe’s grocery store, you probably hadn’t because there was only 2% of sales. There wouldn’t be a good ROI and you didn’t have a lot of extra cash to respond to that. A lot of the acceleration trends of COVID disproportionately benefit incumbents and big companies, and they’ve consolidated more sales to the biggest players in the market.

Obviously, everything’s on a spectrum. 2% of groceries is still a lot of groceries. There were people that were already digital, but the other thing to think about is digital impacts different categories differently. The vast majority of all books and music and video are bought online—that industry with Borders bookstore was disrupted 15 years ago by digital.

Today, a majority of consumer electronics are impacted by digital. Circuit city was impacted by it 10 years ago, now maybe 15 years ago. Toys were impacted 10 years ago. All those categories were already pretty digital. So they were less impacted by the digital transformation.

But I’ll tell you, 25% of all retail spending is on cars. Nobody was buying cars online before COVID, but now a lot of people are doing it right. The second-biggest category of consumer spending is grocery—18% of consumer spending. And like we said, that’s two to three%. 

Those two categories were where the most consumer spending was. The vast majority of consumers weren’t using digital a lot for those, so it had a huge impact there. But even when you think about the Best Buys of the world that are more than 50% digital, digital still evolves even for them, right? There was no curbside pickup at Best Buy before COVID, but during COVID they rolled out curbside pickup to all their stores over a weekend.

When you think about the Best Buys of the world that are more than 50% digital, digital still evolves even for them, right? There was no curbside pickup at Best Buy before COVID, but during COVID they rolled out curbside pickup to all their stores over a weekend.

Jason Goldberg, Chief Commerce Strategy Officer at Publicis

Today, while other stores are open, curbside pickup is still a huge part of the customer experience. Customers appreciated that when they started making more of their decisions online in COVID, they couldn’t go to the store and get help from my salespeople. 

So a bunch of consumer electronics stores started letting salespeople FaceTime with customers at home. Now customers expect that on an ongoing basis. So I would argue even in digitally mature categories, the expectations for what digital amenities you have changed a lot. And then of course the very biggest categories of consumer spending weren’t very digital before COVID, and now they’re a heck of a lot.

Handling & anticipating industry changes

Over the past few years, digital channels have seen a few changes in the name of privacy. Large companies, such as Google, Apple, and Facebook, have consistently been updating their privacy policies. However, some changes have had more of an impact than others—with the iOS 15 update yielding potentially disruptive ripple effects to ecommerce marketing.

Experts like Jason will often stress the importance of getting creative and relying more on the first-party data, as well as sourcing data from other sources. We got his insights on privacy updates and how companies can embrace them to become future-proof.

What are your thoughts on these kinds of privacy updates? And do you think there are any metrics that might be at risk?

Jason Goldberg: Those are things that have happened since the early days of SEO marketing. Google used to tell you what keywords drove all that and gave you an actual report with what keywords drove every visitor to your site. So we knew exactly what keywords to focus on for SEO. We knew exactly which keywords converted at what rate on our web. Over time, Google decided that’s too granular an information. There were end-user user privacy concerns, but it also let other people compete with Google too much.

Google started gating that information off and started giving general trends. It started giving ranked priority of words without giving you the actual traffic for each customer in it—it fundamentally changed how everyone had to market. 

We used to build product detail pages that knew exactly what you had done on Google before you came to that product detail page—now we don’t. We used to have perfect analytics about which of our SEO efforts were yielding sales—now we don’t. 

When that change happened, it seemed like a disaster. It seemed like it would break the whole industry. Over time, people learned how to execute those tactics with more top-level data and less granular data, or they went and had to create alternative surrogate forms of data to get those pictures.

We used to build product detail pages that knew exactly what you had done on Google—now we don’t. We used to have perfect analytics about which of our SEO efforts were yielding sales—now we don’t. When that change happened, it seemed like a disaster. It seemed like it would break the whole industry.

Jason Goldberg, Chief Commerce Strategy Officer at Publicis

The current big privacy issues that tend to affect digital marketers at the moment are the depreciation of third-party cookies and the depreciation of mobile app tracking. Both of these things are forcing us to evolve our tactics. The old playbook doesn’t necessarily work anymore, but a version of that tactic probably does still work, right? Using that personalized data to create more relevant experiences—it’s still a good tactic. We just have to use more anonymous breadcrumbs instead of personally identifiable breadcrumbs to decide what relevant content would be relevant to a particular visitor.

Regarding native email clients, I still run into marketers, both big and small, all the time that talk to me about their open rates. I always chuckle and ask, what do you think your open rate is? Many email clients often escape the relatively simple pixel tracking of open rates, but the data that marketers get is wildly inaccurate.

You should still use it to inform your marketing, but assuming it’s hyper-accurate is probably a mistake—and now, so are a lot of these other tasks. That leveraged third-party cookies retargeting ads and analytics, based on those third-party cookies. We’re still able to use versions of that, like analysis from Google, but we’re going to have to learn how to use things more broadly and get more data from other sources to fill in the gap. 

The big picture of these changes is two-fold—they increase the value of your own first-party data, and they increase the value of your own direct relationship with the consumer.

Big changes to privacy like iOS 15 are two-fold—they increase the value of your own first-party data, and they increase the value of your own direct relationship with the consumer.

Jason Goldberg, Chief Commerce Strategy Officer at Publicis

For a brand that mainly sells on Amazon, or mainly sells through Google shopping, it’s more important than ever to capture the transaction on your own property, so that you have first-party data and not third-party data. If you’re a grocer, it’s more important that you sell groceries to the customer yourself and not through Instacart. After all, the value you can extract from first-party data is much greater than that of third-party data.

The same thing happens to the platforms we use. Facebook might’ve been perfectly happy generating traffic and sending it to a website to a Shopify site because they could use third-party cookies. They could monetize that so that they could tell advertisers how many people they sent to that Shopify site. Today, they could collect revenue without third-party cookies. They can’t tell advertisers exactly how many people install the mobile app, so that means Facebook has to sell more of that stuff themselves.

They have to keep that customer in the walled garden. So instead of referring someone to a Shopify site, Facebook would rather sell a pair of shoes to that customer on a Facebook platform. That means that we’ll see Facebook leaning into commerce experiences more, and we see Google weaning in the commerce experiences more.

I talk a lot about the latest iteration of privacy, really putting the Shopify PI’s of the world in indirect competitions with the likes of Facebook and Google.

Is there anything that you would advise merchants to do to future proof against a lot of these changes? Is there anything that you would suggest retailers and brands do?

Jason Goldberg: I generally feel like people need to build more relationships directly with end-users. This equals collecting more first-party data. For a retailer, that means selling more stuff yourself instead of through marketplaces. For a brand, it means selling directly instead of through wholesalers.

I generally feel like people need to build more relationships directly with end-users. For a retailer, that means selling more stuff yourself instead of through marketplaces. For a brand, it means selling directly instead of through wholesalers.

Jason Goldberg, Chief Commerce Strategy Officer at Publicis

If your KPIs are based on sales revenue, you might want to sell direct, rather than selling through the likes of Walmart. However, the ROI of selling direct sucks compared to selling through Walmart. That’s true because you’re using the wrong KPI, right? You’re thinking about revenue, not profits, and it turns out you don’t get to keep the revenue. You only get to keep the profits. So your KPIs should be based on profits and direct sale is generally more profitable than wholesale.

But the much bigger picture is that you are capturing a customer that you should be monetizing for years—not just making an individual transaction. The way to judge all these different marketing tactics against each other should not be based on the success or failure of an individual sale—it should be based on the lifetime value of that customer.

You shouldn’t judge different marketing tactics by the success or failure of an individual sale with a customer—you should judge them on the lifetime value of that customer.

Jason Goldberg, Chief Commerce Strategy Officer at Publicis

The best thing that I can advise anyone to do is to get ready for the future. Accelerate their transition from transaction-based metrics to lifetime value-based metrics. Start making business decisions based on the value of acquiring a new customer for your particular business.

This isn’t the same as the value of capturing an individual transaction. Acquiring this first-party data will be much more valuable to you than when you were just looking on a per transaction basis. So those are the strategies I tend to start with. 

Then there is a tactic, but a lot of this is all ‘pie in the sky’ style thinking. The tactic is that, before you collect a bunch of first-party data, you need to get your own database and privacy rights in order. It’s tragic to collect a bunch of first-party data and then not be allowed to use it next year because of new privacy laws that get passed worldwide. So a tactic that I always encourage people that are starting their journey to get their data governance in place.

It’s tragic to collect a bunch of first-party data and then not be allowed to use it. I always encourage people that are starting their journey to get their data governance in place.

Jason Goldberg, Chief Commerce Strategy Officer at Publicis

Make sure you have contemporary, modern, and forward-looking privacy policies. Make sure you’re disclosing to your customers how you intend to use the data that you’re capturing so that when you do capture it five years from now, you’re allowed to use it. I run into clients all the time that think they have a good pool of customers but they’re not going to be permitted to use the data they collect from them. They might want to use it for things like AI learning and training five years from now, based on the trends we’re seeing in privacy rights.

Challenges with changes to privacy

Over the course of our conversation, other large changes to the ecommerce industry naturally arose. A prime example of these shake-ups was when GDPR hit. One unexpected side effect from these changes meant that many retailers in the US found it more difficult to do business with Europe.

It was these surprising repercussions that we covered, along with their effects that are still being felt today and how they affect the future of ecommerce.

Effects on the industry, like GDPR, were wild to many merchants. They were an example of changes to the industry that gave merchants time to adapt, and yet no one did. What are your thoughts on shake-ups like these?

Jason Goldberg: In the case of GDPR, it became easier to just turn it off. Those notifications pop up everywhere, you could just turn them off. If I look at that on a transaction basis, that was a good decision. 

I would argue that’s really just the tip of the iceberg, that we’re going to see a lot of evolution of the existing privacy laws and a lot of adoption of new privacy laws. You’ve experienced it when it happens in a couple of big geographies—it impacts the world.

Ultimately, those things are better for the consumer, but it’s true that it’s not necessarily benevolent from the point of view of these companies. Would you say they’re more interested in keeping that data siloed for themselves?

Jason Goldberg: It’s tricky. I feel like a lot of people with all these policies have their hearts in the right place.

There’s reason to be concerned and to see progress in privacy. But you know, governments are, by design, inefficient vehicles. Right. In the United States, legislators think the internet is a series of tubes. They’re probably not the best people to write future privacy laws.

So privacy laws tend to be highly flawed and they’re overly influenced by lobbying and who’s in the best position to lobby the biggest and richest practitioners. A lot of these privacy-wise people optimistically think they hurt Google and Facebook. No, they’re written by Google and Facebook. Google and Facebook already have the data and now they get to pull the ladder up so that other people never get the data.

A lot of privacy-wise people optimistically think they hurt Google and Facebook. But no, they’re written by Google and Facebook—Google and Facebook already have the data and now they get to pull the ladder up so that other people never get the data.

Jason Goldberg, Chief Commerce Strategy Officer at Publicis

It’s a big challenge, thinking about all this privacy law stuff. It’s balancing entrepreneurship and reducing barriers to new entrance and to inventing new solutions. All of this is, at the same time, while trying to protect the consumer. 

Those occupying the ecommerce industry have encountered many challenges over the last few years. If Jason is to be believed, these challenges will only continue to pop up. 

They may not be as world-shaking as COVID. However, ever-changing privacy policies and the constant fluctuation of sales percentages over digital channels are more than enough to keep merchants on their toes.

There are many ways a merchant can weather the coming tides. They can opt to capture first-party data to better understand their audiences or they can work closely with wholesalers to try to improve ROI.

Alternatively, they can invest in new marketing solutions— such as a robust, expansive, and adaptable marketing platform like Omnisend—that leverages first-party data to the fullest.

For more from Jason, check him out on LinkedIn and Twitter.