Salesforce, Inc. (CRM) Earnings Call Transcript & Summary

Hi. My name is Matt Marcotte. I am the Senior Vice President of Retail, Consumer goods and manufacturing industry advisers here at Salesforce. And we are so excited to spend the next 45 minutes with you, talking about a topic that is near and dear to everyone's hearts right now, and that is generative AI and its impact on retail. Now we have quite a great lineup with lots of people who I'm looking at right now that -- who'll be sharing some incredible information with you. But before we do that, it would not be a Salesforce meeting if we did not talk about the fact that we are a publicly-traded company. So please, please, please make all of your purchasing decisions of products and services based on things that are currently available, all right? Cool. Now the important part, which is to say thank you. First, thank you to NRF for putting on this incredible, incredible meeting every year and for inviting us. Thank you to all of you for spending the next 45 minutes with us. We hope is a valuable time and you'll be able to take away a lot that you'll be able to apply to your businesses. Thank you to our customers, our partners and our employees. Honestly, your success is our biggest priority. So we are -- we take that very, very seriously. Okay. Now. I know this is a new idea and you probably haven't heard this before, but we're in a new world shocking, I know, right? Think about how different your jobs are than they were 2 years ago. Think about how different they are than they probably were 6 months ago, right? We know it's a very challenging time in the world, a very challenging time in retail but still incredibly exciting. However, we know there are a lot of things that are challenging the ability to be successful. Some of those things like inflation, supply chain disruptions, shrinking budgets, inventory strains, labor disruptions, I swear to God, this is the only negative slide we have. Never mind the proliferation of data that's coming from all of the new technology and sources of customer information. It is a more than a full-time job just to try and figure out how to rationalize, manage and activate that data. So one more very interesting statistic when you think about trying to do those last 2 things that I just said, on average, retailers are using 44 systems to manage the customer experience and 71% of retail systems are disconnected. So we talk about being able to connect with our customer and drive results. It's only getting more and more challenging. So what we're going to do is to talk for the next 45 minutes about how we, as a retail community can actually think about what to do to not only address these issues, but to also figure out ways to drive more growth, more profitability and ultimately and most importantly, better customer experiences. So what do we have in store today? The AI revolution, I mean, honestly, we know that any anyone that wants to have a meeting that people attend, put the letters AI in front of it, everyone's really important -- wants to be part of that. So we know it's everywhere. We're going to talk about the impact on retail and share our latest research about how consumers are impacted as well as business realities. Number two, we'll talk with the AI playbook. Everyone in this room I know is already either there as far as how important AI is or potentially even testing some things. But we're going to talk about the steps you should all take or potentially we see the steps you should take today to prepare yourself for the future. And then finally, retail trailblazers. I am looking at 2 incredible leaders right in front of me, who I will have the distinct pleasure of interviewing later on, people who like you do it every single day that will share with us how they're actually using AI in their businesses how they're thinking about it and obviously what they're excited about for the future. So hopefully, it sounds like a good use of your time. So I'm going to stop talking and actually bring up our first real expert, good friend of mine, Rob Garf, the GM and VP of Retail at Salesforce to kick us up.

Give it up for Matt. Fellow Bostonian friend -- here we are. I got to tell you, I'm still buzzing from yesterday and the Retail Orphan Initiative event where we raised money for kids and need. And we had Darryl McDaniels from Run-DMC, talk about his journey from foster care to icon in the rap in our world in general. And by the way, later today, just in a little while, we're going to hear from Marc Benioff in a fireside chat with Jeff Furner (sic) [ John Furner ] from Walmart. But in the meantime, I hope to keep the energy and excitement up by talking about the AI revolution, especially how it impacts the customer experience. So if you're one of the, I don't know, 180 million people who have tested out generative AI with the likes of ChatGPT, this isn't going to be a lot of news in terms of impact on your personal life and your business life. And by the way, it's also not new. We've been at this at Salesforce for the better part of 10 years with predictive AI. And that's why today, we generate 200 billion recommendations every day. And of course, all the buzz now is around generative AI, how to create productivity, how to create efficiency, but also how to impact the customer experience. We'll hit autonomous types of AI when your agents are talking to other agents to order pizzas at 12:00 at night because they know you're going to be hungry and of course, artificial general intelligence. You know what? We're just at the beginning, but it is also having so much impact already. According to our research in our shopping index at Salesforce, 17% of all sales online during the holiday season, November and December, were influenced by AI. Think about that 17% of all your sales. All right. So as we think about this, -- it's not just an AI revolution. It's a data revolution. It's a skills revolution, right? It's an organizational revolution. And most importantly, it's a customer experience revolution, including trust. So many of you are testing and learning and inspiring from your artificial intelligence initiatives. And why that's so important as it relates to the customer experience is, today, consumers traverse 9 different touch points in any given shopping experience. That's why 58% of retail marketers are using Gen AI for product creative. We have a customer who has reduced their new product introduction process from 2 weeks down to 2 hours. And I mentioned that 17% of sales over the holiday season for Cyber Week alone, $51 billion globally was influenced by AI. And don't forget about service as well, 88% of service decision-makers have increased their use. It's not just for chatbots. And oh, by the way, it's not just in the call center, it's bringing this service into the physical store. So your frontline workers, your store associates aren't just focused on the checkout process which is about speed and efficiency but the check-in process where you can engage and learn and ultimately break down the friction between inspiration and purchase. And finally, what we're seeing because of it being an AI revolution, there's a 2x increase in the use of data to personalize engagement. That's why you're seeing in large part, a big uptick in loyalty programs, whether they're being revamped or spun up for the first time, the ability to have a value exchange by learning more about the consumer and then using that to drive personalized and frictionless experiences. All right. Here's my wah, wah slide. I'm sorry, Matt, I had to come to the table with something here just to keep us here in check. There is a gap that has emerged. On one hand, we all are in -- well, we anticipate a vast majority of retailers are increasing their investment in AI. I mean let's just see by a show of hands, how many of you increased your investments in AI and plan to this year? Yes. Many of you have. But on the other side, us as shoppers, as consumers, there's a distrust, about half of us don't trust AI. Why is that? Privacy issues, data control issues, hallucinogenics -- not just hallucinogenics -- hallucinations but that could be part of the two, toxicity and bias. There's a trust gap that has emerged, you know what? And that's why I've been talking to hundreds and hundreds of retailers around the world. And they are talking about AI. And what we've done is we've correlated all of this. We've seen patterns. We've seen themes. And what it comes down to is every retailer needs an AI strategy now. So what are those themes? Let me walk you through that today. First of all, focus on the customer experience. We were holding our retail customer advisory board just a couple of months ago this summer. And there was a nice healthy debate around is generative AI for bottom line improvement or top line growth? And really, what it came down to in an agreement was it's all about the customer experience. Thinking about the customer, working backwards to understand every day, how are you going to solve problems on their behalf. The second piece is around data. This is a data revolution. Data isn't new. Let's face it. We've been collecting data since the advent of the digital cash register in the mid-70s. We've been understating the product. In many cases, we've been understating the people and the loyal shoppers who have been traversing our touch points. But we haven't done a great job of collating that data, aggregating that data, making sense of the data and ultimately activating that data. And by the way, generative AI consumes a lot of data. The most important data is your own. What you know about the consumer, their preferences, their profile, their shopping behavior, service queries and history, taking that, coupling that with your product data, the attributes, the style, the color, the brands and that Venn diagram comes together to create magic in turning that data into action. And you also must embed AI in the flow of work. What do I mean by that? Well, according to our research, let's just look at the store alone. I grew up in the store, so I have a very big bias towards empowering our biggest brand ambassador today, according to our research, they have to log into 12 different systems on a daily basis to do their job. So this isn't about opening up a whole new user interface, but it's about embedding it in the flow of work, whether that's at the headquarter or that is in the front line within your stores. And we must keep humans in loop. Almost anybody I talk to, it's not about displacing the human, but it's using digital and AI to humanize the digital experience. If you think about what Gucci is doing with their Gucci 9 service center. They are using AI. They were actually customer zero with Salesforce to be able to create scale, create consistency to ultimately empower their service advisers to uplift and upskill to be digital advisers. And finally, we must prioritize practical use cases. We can't just look at every shiny object. Again, we need to go back to solving a problem on behalf of the customer. Just over the summer leading into the holiday, we have the executives from Ralph Lauren in our offices around the corner in Bryant Park. And they challenged us rightfully so what can they do this holiday season to have an impact. And we rolled up our sleeves and realized what can be done today. You can also look at Boot Barn. I don't know if you've been in Boot Barn lately, but they actually have what they call a BANDIT, which is an AI-generated digital tool to help people find the products they want. John Hazen, their Chief Digital Officer, he's always had the mantra of let's not let technology get in the way and in between the customer and the sale and the product, let's make sure we can break down that friction. That's what he's testing out right now. All right. Just really quickly before we keep on moving on. Salesforce has been at this for some time now, about a year and I, being part of Salesforce for the last 8 years, have not seen a dramatic pivot like I saw last February and March. We really recalibrated our organization to focus on AI. Why? Because when you bring together AI with data, with the applications embodied in CRM, along with trust, it creates magic. So for marketing, we're helping with that email creation, commerce, one retail customer once said to me, AI is the new UI. Think about that. AI is the new UI. Is the search box going to look like it does today? Probably not. And service, we talked about that with Gucci as well allowing people to find what they want more quickly and opening up your service agents time so they can help provide personalized service to those loyal customers. Speaking of loyalty, loyalty also is such a portal into your enterprise and layering on AI through the app which becomes the remote control to a lot of what the consumers do with you really unlocks a lot of magic. All right, I'm going to take a breath here. We want to bring this to life. So I'm going to invite Michael Richards, up on stage. You might know Michael Richards, as the Rockstar Solution engineer for Retail at Salesforce. But today, he is the merchant for the active apparel category at a global brand. So let's give it up for Michael. Looking sharp my friend, you're ready to do this. All right, let's make it happen. All right. We're going to do this in the context of holiday. We made it through another holiday. I know we have a couple more weeks to go through the end of the fiscal year. I know there's still a lot of returns, a lot of gift card purchases that are being redeemed. But let's look at AI and data through the lens of the holiday season. What you're looking at here, Michael is going to the Salesforce Shopping Insights page like many of you are already doing today. And what he's going to do in a moment is click on the peak holiday season. But before he does that, let's just think about what you're about to see. If you think about Salesforce, we are able to see billions and billions of consumers as they traverse the Salesforce platform. We aggregate that up. We have a bird's eye view and it becomes the de facto standard. It becomes really the benchmark in digital. And so we manifest that self in our shopping index. So let's go right into that today. So Michael is going to check out the shopping index. And you can see shopper engagement. Really interesting that we saw a 37% increase in SMS and push, email is still there, but let's connect directly to the phone. But I really want to see or Michael really wants to see order conversion and sales. So he comes here and he sees a global view, oh, interesting, Michael, did you notice that Black Friday and Cyber Monday saw really nice surges? Yes, it's really nice. Actually, they pulled in sales from before and after. And we started to see a spike because retailers like Michael weren't providing great enough discounts. But let's look at the U.S. for you because I know that's really important to you. It's a big part of your business. When you look at the left side and you see the sales growth for the U.S. and then go to the active apparel category, you can see that wow, Black Friday looked pretty good, but Cyber Monday saw a little bit of deficit. So he's going to want to look into just in a moment what correlations might be existing. He has a hunch, it might be discounts. So hold that thought for a minute. Before we do that, let's look at order details. He's happy to see that order -- average order value is basically flat year-over-year, which isn't so bad given that we were seeing some decreasing signs in that way over the last couple of years. But now let's go to inflation and inventory because this has been top of mind for both us as consumers and for retailers. What we're seeing here on the left side for all categories is a 4% increase in inflation, the average selling price. By the way, that's really good. You know what this told us is that for the first time in 5 quarters, growth was driven by increased demand and not increased prices. And that is because we saw 10%, 11%, 12% increases in average selling price quarter-over-quarter for the last several quarters. Now let's check out payments. Payments is important as well because we're seeing the buy now, pay later trend. Credit cards are still really strong, Michael, you got to feel good about that. But when you look at the right side, look at the wallet pay, Apple Wallet and the like, 50% growth, maybe you should pay attention to that next year and get it more into the checkout funnel. All right, cool. So that's what we want to see here, but now I want to look at it through the lens of generative AI. How are we going to do that? We're going to actually click on the sales force logo and be able to get right into Tableau Pulse. Tableau Pulse is Salesforce's latest innovation that democratizes data, democratizes insights and puts it in very easily digestible words, text and numbers. This is our tile homepage with the key metrics that Michael likes to look at every day. And remember, I said he was really interested in seeing if there was a correlation between sales and discounts. So why don't we click on that tile right now? It gives you a little bit of verbiage there and plain language of what it means. But you can also see in the bar chart, right, Michael, what's that spike we see in the middle of the holiday season? Ah, a 27% discount rate during Cyber Week. And if you were to compare that to what happened even outside the holiday season during Amazon's Prime Day that happened in October, it's a 40% increase. Ta-da, there was a direct correlation with discounts. Consumers were patient. We talk about pulling earlier holiday sales that didn't quite happen and here you go. But now we want to more of a breakdown, and that's the great part about Tableau Pulse, anybody, not just data scientists can look at this. And he's seeing by week. He sees Cyber Week was the biggest week for discounts, trailed off by the pre-Cyber week, we started to see a drumming up of demand. But finally, he wants to see and ask the question in plain language through generative AI, what regions have the highest discount rate. And you can see here, Middle East and Africa and North America. Finally, how about the segments? I know you really care about, Michael, the active apparel segment, right? Sure enough, you see that the active apparel segment was in the top 5 of the discount range. So while you're up there, you might need to tweak it a little higher and play with that and do some scenario planning. All right. Thank you so much, Michael. Fantastic, great job and a very successful holiday season. All right. Let me bring this home before I turn it over to my colleagues here. So I talked about the why, talked a lot about why and how is more important. How do we do this? Well, we have our Customer 360 built on Salesforce Einstein 1. It provides you a host of applications from sales, service, marketing, commerce, you have Tableau for insights. You have Mule Software integration. Most importantly, you have Data Cloud to have a unified view of the customer. This unified platform brings together data, your own data, AI, it exposes it through an intuitive interface, and it's done and based and grounded on trust. And that creates magic that will allow you to gain market share, create relationships and maintain them and do it profitably. All right. So now really let's dive into it. I'm going to bring [ Julia ] up on stage, who's going to walk us through the how around the AI playbook. Let's give it up for [ Julia ].

Thank you, Rob. Awesome. While I'm not from Boston, I'm still part of the crew, I guess. Welcome, everyone, from NRF. Thank you so much for spending this time with us today. I know you have been hearing a lot about AI, but I'm here to tell you how to make it happen. And that is with our playbook. So it's all about getting us started. And you heard us mention this before, data plus AI, plus CRM, and you can't forget the most important piece, trust. That's the magic playbook to getting this whole new world figured out. So we're going to walk through what each of those steps really mean to you today. So first, we need to build that source of truth. It's all about the data, and I know it's hard. You need to get your data in order, and we can help you with that because it is daunting, but it's the first step. We got to unlock that data to deliver frictionless commerce, personalization and activate across all of those digital channels. And then we have to learn. That's training these systems. A huge component in the new LLM world and AI is learning about those use cases, figuring out what works best and making sure that it's all trusted data, whether it's inside or outside of the system, bring it in, make it yours, make it trusted. And then let's do the fun stuff. Let's activate this across all the channels. Ultimately, that's what we're here to do in retail. We want to deliver the best customer experience, and that's at every channel, every point of interaction with your customer. And that's how you simply create, you create those new AI experiences, we're all so excited to experience. So let me dig into a little bit of these. You probably have heard a little bit about Data Cloud. It's a huge component of Salesforce's new offering, all around data and unlocking this. Now of course, we know it's daunting, but we have a few steps to do first. And I promised you taking the time to get this step right is the key to all the rest. So you need to unify your data, you got to figure out what looks good, analyze it, generate it, automate it, make it work faster for you and then let's use it. Time to create those use cases and bring them to life. And then we go back to that training component. We have to make sure that what we're doing is right, it's trusted and it's good. And that data is really important. And that's why we always focus first and foremost on our values of trust. I've been with Salesforce over 12 years. Company has been around for over 20. And this has been part and parcel to everything we do. So we want to make sure whether that data is in Salesforce or coming from one of your other systems, we'll keep it safe inside the Salesforce data cloud. And then last, this is the fun stuff, let's do something with it. Let's activate that data. So whether it's within the Salesforce ecosystem or outside of it, bring it together, make it work for all your customers across all their channels. Did I make it sound pretty easy? I'm sure you don't think it's that easy, but I promise you we have Trailblazers that have done this already. So let me introduce you Rossignol. Rossignol is an amazing brand out of France. They've been a customer of ours for the last 12 years with service, marketing and commerce, and they've seen over 28% growth during this time in our partnership. Now again, don't take my word for it, let's take theirs and let's see it come live and in action. So he's not a global merchant this time, but Michael is going to play the role of my merchandiser and my commerce team. So this is how it all begins. This is the central place for our commerce team and our merchandisers to build the launch of a new product, the Super Heretic Bike. It's what we're really excited about here at Rossignol and we're going to go ahead and get our commerce website up and running. And the first thing we knew, product descriptions and there's a lot of them, right? We need all our websites all ready to go, but guess what's here to help me. It's Einstein and Gen AI taking away the work. Now don't forget, we saw Rob talk a lot about making sure that the human is still involved. Every step of the way you as a merchant can go ahead and make sure you have the right description, it's in the right place, you can refine content, but the heavy work that's already done, let Gen AI and Einstein take care of that for you. Now I did mention Rossignol from France. And so they have one more complication with their product descriptions, translations. How many of us have sat before typing and retyping and googling and making sure we have the right translations? No more, Gen AI can take care of that. Now even more so, Gen AI is so intelligent in its learning that it can create brand nuanced voice and even understand cultural translations. So one thing we might be thinking about for this new bike is that it is a phrase called [ coup de foudre ], which means in French, love at first sight. So it's a beautiful way that I can convey to all my customers about this new bike. But in English, if I make this mistake, I'm going to tell you that this bike, when you see it, it's like you're being struck by lightning, it's not going to work. So with one click of the button, voil , I have translations that are appropriate for each audience and don't worry, you're not going to be struck by lightning if you purchase this bike, you're just merely going to fall in love with it. All right, Michael, let's get those on the website. Let's make sure our product pages are up and ready to go, and let's go ahead and start building our data cloud segments. So we talked about data. It can be inside or outside of Salesforce coming in all together into a trust layer, but this is where our marketers are going to start to take advantage of all of our data unified in one place, making sure that we can unlock each segment at the right time in the right audience. So we have of course a few ways that you can do that, making it really easy for our admin to generate with Einstein, a classic builder or a package. But shockingly, we're going to use Einstein because Einstein is helping me take away all the extra work that I don't have to worry about anymore. And with a click of a button again and just plain, easy text, I can identify a segment that works for this audience. Make sure I get the right businesses enthusiasts with the best customer lifetime value, and there's my segment. Now again, marketers are still in control. You have the understanding of your customer base even better than Einstein, although they're pretty good, too, and they can go ahead and help you refine that as a marketer, you can go ahead, understand your segment rules, refine it, make changes, added on the fly. But that heavy lifting, leave that to Einstein. Once we have this segment up and running, let's go ahead and start building that campaign. Now one of the things that we've heard from our customers over and over again is marketing content, it's eating up your time and your cost. It's arduous in a lengthy process to get relevant, personalized content across all your channels. Guess who's here to help? It's Einstein again. So again, one click of the button, I can go ahead and I can find the best subject lines that are going to make this email pop. I'm going to drive those click-through rates and make sure I'm getting the best of all my past email campaigns used for this new launch of my bike. And again, you can always edit it as a marketer. You have the control, you maintain that piece of the puzzle every click of the way. But Einstein is going to give you the best subject lines. You can edit from there. Now of course, a few things we can do. We can update the content, we can make it relevant. Einstein is going to help you build that content, make sure it works for all your segments. And then we can even go ahead and put in a map. I love this option because it gives you one more place to connect your customers coming directly to your store. Hopefully, to even try out this new bike before they make the purchase. I know Michael is making this look really easy. It's just a click of a button, drag and drop, get it into your email campaign, then you get your customers into the store. Okay, Michael, let's go ahead and schedule this campaign out. We're almost ready. So like any good product campaign, we launch it, we get it out into the public and you're all ready to go check it out. Go see that bike. Inevitably, you're going to have questions from your customers, and that's where service comes into play. With the true Connected 360, you have all of the connected apps within your Salesforce ecosystem, all working together to develop that personalized experience from that single unified 360 profile of your customer. So sure enough, when someone calls in and has a question about their mountain bike and the suspension system, I have Einstein there every step of the way, making sure I know exactly what the historical experiences have been with that customer and also providing recommendations along the way. So I can easily answer this question with a recommended post from Einstein, make sure my customer is happy, but I can also take a step further. I can be proactive with the help of Einstein. What other biking trails might you be interested in because you're looking at this mountain bike? What other trails are open this weekend outside of New York or wherever there's better weather? Where can I go with my mountain bike? And I can go ahead and take that. Now service is integrated in that 360 I mentioned, which means commerce is here, too. I might have someone calling in about service, but I know I'm going to try to get a sale out of it as well. So I can make a recommendation in one click on a product that would be appropriate for a mountain biking trip this weekend. So here's a new backpack. Now in commerce, not only do I know who I'm talking to and what their past has been, but I can create and close that sale, right, inside the chat itself. And good news, Einstein is still there to put together an entire summary of everything I just did because that's going to live in that connected C360 profile of my customer. Success. We have a happy customer that not only got the answer to their question, but they even have one more step in one more piece of the product of Rossignol. I hope you're just as excited about what you saw as I am in the future for each and every one of you and your customers because this is what Rossignol has done, and I know you can too. Thank you. All right. Matt, let's hear from some real of the trailblazers.

All right. That was awesome. Thank you. [ Julia ] and Michael. I hope you guys are as impressed all of us were that have seen this over and over again, it never actually stops being impressive. but what's equally as impressive is being able to talk to people like I said, who are experts in what they do, who are your peers, your counterparts who are actually leveraging AI in their current business. So please join me in welcoming Ekta Chopra, the Chief Digital Officer at e.l.f. Beauty; and Rochelle Ezekiel, the SVP for Digital Retail at Canada Goose. All right. So let's sit here. I was going to try and sit in the middle. It's not going to work. Alright, so this is my opportunity to become a top show host, hold on one second, please. Okay. So let's start by telling us and everyone about your AI journey. Where are you guys -- where are you in your AI journey? And how are you bringing the leadership team and your organization along with you. So Ekta, do you want to start?

Yes. So I think people are talking about AI now. But as we heard from Rob as well, like AI has been around for a while in the form of personalization, recommendations where -- what we're doing now is taking it even further. And I think that starts with education because you've been hearing AI, but Gen AI is actually a new novel concept, right, that ChatGPT has made available to everyone. So it starts with education. We have an internal portal called [ e.l.f. U ] which is about learning. And we do sessions there to -- and one of my goals is to make everyone in my company a prompt engineer because it's about what are you asking? How are you asking it and really learning sort of the power of the right question. So I think that's one of the things that we're doing from just up-skilling people, making them comfortable about AI. We're bringing in external superpowers, we call them, to really educate our exec team on what can AI unlock for the company. And it's, of course, consumer experience is a big part of it, but it's also employee experience. How do you make it easy for your employees to really be more efficient? How do you give them time back so they can actually think and do some amazing consumer experiences. So it's about really infusing AI in the external consumer journey, but also internal.

That's amazing. So how about you guys? What are you doing?

So we're early days, but we have -- we're a test-and-learn culture. And I think that AI plays so nicely into that test and learn, and we're taking off big pieces of things we know we can demonstrate success in and how can we like really get good at that, so really going slow to go fast. And you asked a question about how do we get people on board? And I think the best way to get people on board is when we pick these areas, we know we can demonstrate success, we're using insights we have about our consumers and how the consumer demand, we can address real consumer demand with what we put in place.

It's interesting that both of you talk about how you bring your organizations along. I was at this conference not too long ago, listening to a Chief Digital Officer from a company talking about how one of the things that they did was to make it very transparent how they wanted people to use AI because they were saying, they had employees that were using things like ChatGPT, but secretly. So it was very much not a company-driven kind of process. So the idea of educating your employees and communicating and bringing people in and sharing insights, it's really important to get the entire organization to be part of this, right, from an awareness, communication, education perspective.

Absolutely. And I think that also, in my mind, gains like organic momentum and the right momentum because we are a Public company, we have to be careful about how you use AI. If you are going to go ChatGPT, what are your guiding principles? You shouldn't be putting what's company proprietary stuff. So I think there are policies that you have to create because I wear an IT governance hat as well and security. It's really important for me that people understand that, as we saw in your slides as well, that it comes with inherent risks.

Yes. So talk about obstacles. Since we're kind of in that whole like the inherent risk piece, what are some of the obstacles that you are either currently witnessing, having or anticipating and how are you overcoming them? I don't know Rochelle, you want to start with this one?

Yes, I don't -- I think we've talked before about how everyone's a little bit afraid of AI and what it does. And I don't really see obstacles. I think we all have to embrace it and put it in a normal course of business, like how are we moving forward using this technology in the way that's right for us and our business, our brand?

Ekta, how about yourself?

Yes. I would say not really obstacles. I think it's really being comfortable with taking a risk. And in some cases, like how do you do it with knowing that you've got to take that risk. It's about -- this is a constantly changing, evolutionizing sort of a technology. How do you take that risk, but have the right tools in place to monitor, educate and really make sure that you're using it to do the purpose, to serve your consumer, to serve your employees to make an impact to the bottom line as well. Ultimately, that's not the first priority why we're testing and learning but it is going to help the bottom line as well. So how do you really connect the dots 360 for your stakeholders that are consumers, employees, investors as well. So I do think it's more than -- so I don't think it's obstacles rather. I do think it's an opportunity to like really take those risks and refine the use.

So you both actually use the term test and learn, which I think is really powerful having come from one retailer where we issued 1,200 store pilots, which is really not a pilot, it's a change. It's really important to think about where you're spending your time and how you're kind of ring-fencing certain things. But in the world of reality, how do you all think about balancing the keeping the lights on investments, right, the registers that need to be maintained, with the investments for more innovative kind of work that you're thinking about with generative AI and all the sort of thing? How do you balance those decisions, how do you balance those resources and those investments? Whoever wants to kick it...

Sure. I think -- and I think it sort of follows the last question is it's one and the same. I can't really see them as differently because if you want to keep the lights on, you have to be investing in somewhat in AI. You have to be thinking about what's right for you and how you scale your business, how you evolve your business and how you move it forward.

Slightly different take. I do see that ultimately, they do become one, but there's the reality of running your business, keeping the lights on and what's needed to do there, but then there is sort of innovation that's coming down the pike. That means up-skilling your teams. That means maybe new superpowers, new people that you have to bring in. That means new things that you have to connect the dots on. So I do think it's slightly sort of different right now. It's going to converge at some point because right now, resources are scarce, and it's really hard to find that talent as well, and that's just the reality of it. Like to really unlock AI, the talent is scarce because everyone is an AI expert and no one is. So I think that's where we're trying to find the balance.

Yes. So to that, I want to kind of ask you this question Ekta. AI innovation is actually interesting. AI innovation at scale becomes the kind of Holy Grail, right? And that's transformational. So you're obviously responsible for kind of deploying digital and business innovation across multiple geographies, right? So think about -- or talk to us a little about the implications of deploying those innovations on things like productivity, on things like efficiency and how you actually think about maybe it's a human capital piece well and make sure you have the right talent to do that.

Yes. I mean I think if you can measure it, it's hard to sort of justify it. So we do have about 5 different products that we're testing with right now. And one is in sort of you have 4 million Beauty Squad members, we call them. That's our loyalty members, really understanding their journey and how do you sort of really personalize and target that messaging and so forth. So there is use of AI that's happening there, and it's -- the return is just phenomenal. But then you have other innovative ways internally, we're using what we're calling [e.l.f.red]. Basically, it's an AI product that we rolled out that helps my support team answer questions internally. What we're seeing is that it's doing the work of one human body. So how do you learn and then showcase even that, yes, we are innovating, and we are asking for more budget here, but guess what? We also have a potential for saving. So I think that's where we're testing and learning in translations. So a great example. As we scale and grow, it's about local hyper-personalization in new geographies, and you cannot keep up with it unless you have AI strategy. So I do think that there's so many different examples where you can hit the bottom line, be efficient and really unlock the power of AI.

That's awesome. And so as you said, trying to keep up is such a huge piece. And I think it's been brought up a couple of times. Rob talked about it. [ Julia ] talked about it. I think everyone probably talked about won't point about it's coming for our jobs, right? But there's so much to do. And I know Rochelle, you feel very strong about this. I'd love to get your take on where is it important to keep this human in the loop? And how do you think all of this affects both employees and customers from a human perspective?

I think there's a lot of talk about AI coming to take my job, and I just don't think that's the case. I think that you'll always need that human engagement with AI to kind of set AI straight. I think especially for luxury, if we think about what AI can do for you and how it can -- how is it best representing your brand? How is it best delivering the experience that you want? How are the products done the way you want it to be in even than translation? Did you want it to come out that way? Did you want it to say it that way? And I think that it will just be different. It's not the same, but I think humans are -- need to be there.

Yes. It's interesting both of you, like you talked about luxury and beauty. Both of those categories are so dependent on a relationship with the brands, right? Like knowing me, serving up the right offers, making sure you're teaching me the right things or making me feel great about being associated with you as a brand. How do you see generative AI impacting loyalty? Like how do you think about utilizing it to further what you're already doing or to actually kind of explode that loyalty piece?

Goes back to the theme of this whole session. Data is at the center of it. And we -- as I said, we have 4 million loyalty members who are happily so engaged. 90% of them actually shop on our app, which is incredible and really learning about them. So as long as you are actually serving them the right content, the right messaging, you're hyper personalizing their experience, they're more than willing to give you information to better the experience. So I think that sort of -- that's the way to build the loyalty is really don't use it for stuff that's nice to have, but that's meaningful to build that emotional connection with your consumer.

Awesome. And Rochelle, how about you?

Yes, I think I would echo a lot of what Ekta said that it's really -- it's a closer relationship with your consumer. It's all about the data that you're going to get back and at Canada Goose, Canadian warmth is our approach to our guest experience. And so it's mixing that human -- going back to the last question, too, it's mixing that human with data. And if we can make that data even better for the humans that are having those conversations or setting forward whatever they're doing on our website, then we just make them so much better at their job.

I want that T-shirt set AI straight...

That's -- we do bumper stickers -- bumpers.

We're merchandising. Fantastic. Okay. So last question, advice. What advice would you give to people who are just starting out on the AI journey for to either be successful or to kind of mitigate some of the risks?

Luckily, it sounds like both Canada Goose and e.l.f. Beauty have a test and learn culture. And I think that's really important. I do think that testing it yourself, I'm absolutely a strong believer. And if you're going to talk about something you learn about it, and I'm a lifelong learner. So actually playing around with these platforms, testing and learning, prototyping. I think that's really important. And not being scared of it. It's not a scary big behemoth thing. I think this is Internet all over again just in a new way. And how do you embrace that? And how do you sort of take microsteps? Don't think about I have to create this big giant strategy with a lot of things that I have to talk to the Board about that start learning, testing and learning, it's going to inform your strategy.

Definitely test and learn, right? You can't do anything without test and learning, but don't innovate for innovation's sake. Your true authentic self, and I think then you'll get the right results from Gen AI, right? And I think that it will deliver on your brand promise, it'll deliver on who you are. And I think that, that's key to that.

Yes. So the idea of test and learn, authentically, I love what you guys said about also bringing along your employees with you, whether it's through awareness, communication, education, up-skilling them and transparency, letting people know what's going on, right? Awesome. Well, thank you guys so much for your time. Appreciate it.

Okay, we are -- I know we're getting close to time, so I will kind of keep this brief. But this slide you've seen a couple of times, if you've ever worked with us, you know you see it all the time. This is a slide that we use to help educate our customers on the importance of the connected ecosystem to create a single source of truth for the customer across all the touch points they have with you as a brand, and it's only becoming more complex as you are hearing today. One of the things that we're seeing in retail is the shift from point solutions and all of the challenges that those things bring to more enterprise platform kind of investments and strategic vendor partnerships. In fact, if I go to the next slide, we actually had [ Force ] to do some research for us on a bunch of retailers who invested in Salesforce 360 for retail. And what they found was over 3 years and get this, if you think about how expensive it is to invest in things, based on their investment, both the product services and health support, they were still able to realize a 257% ROI. I'm sorry, that's pretty world class. Any one should feel great taking that, okay? So we know that there's an opportunity, but think about that, what the potential is for upside. Now regardless of where you are in your journey, we hope that Salesforce and we know that Salesforce, we believe that Salesforce has a solution for you, whether you're a small or large, whichever verticals you are, whatever geographies you're in, we really want to make sure that we can help you to achieve the success that you want. We are the #1 AI CRM, and our job is to help you get closer to your customers and to unlock data that drives more participation, more loyalty and more profit. And we actually have the most capabilities of any CRM vendor, and we are super proud to be able to get a chance to work with retailers just like you. So that is the end of our personal segment here, but there's more always. Don't miss the conversation that Mark is going to have with John Furner, the CEO for Walmart in about 3:30 today, about half an hour to make sure to go over there and listen to that. And then come on back, we actually have a great session on data and AI, giving commerce, some superpowers. Tomorrow, marketers will not want to miss top 5 ways to build lifelong customer loyalty with data and AI. And then there will be a great conversation on Tuesday about Slack and the future retail consumer goods around productivity. So thank you for your time. We hope it was worthwhile. Thank you to Ekta. Thank you to Rochelle, Rob, [ Julia ], Michael, and to everybody. Have an amazing interim. We'll see you around. Thanks, guys.

My name is Alex Bucher, Vice President of Product Management for Salesforce Commerce Cloud. And I'm your host for today's session. We're continuing to fill in here, but we're just going to kick right into it as we have only so much allotted time. Today, we'll talk about how generative AI adds value in the retail landscape and how it can give your team superpowers to do more. As with every Salesforce session, we start with a reminder that Salesforce is a publicly-traded company and ask that you make all purchasing decisions based on current and available products and services. And we'll begin with a thank you. Thank you for coming to the session. Thank you to our customers, prospects and partners and those here on stage with us today. We truly wouldn't be here without you. But we are in a new era of commerce. It's a transformative time in technology where our customer experiences are frankly more vital than ever. One bad experience can turn a customer away. In our recent state of Commerce report, we found that 84% of organizations have tried generative AI and seen significant increases to productivity, operational efficiency and overall revenue growth. And all at the same time, data is exploding, unlocking unprecedented insights if you can possibly unlock them. So what sits at the middle of all of it? It's AI coming through those vast volumes of data unlocking those unprecedented customer experiences and business insights across the board. No wonder AI is the #1 priority for CEOs. So what's that mean for commerce? It's a future that's exciting and dynamic to a future that's customer-centric, data-focused and powered by AI. But that also means that the old playbook no longer applies. Today, Commerce is embedded in every industry, from media to manufacturing. And the traditional customer storefront no longer applies. Customers demand a more modern experience where they can purchase where they are through the channels that they use and interact with on a daily basis from WhatsApp to social media. And commerce has become an omnichannel revenue machine touching every portion of your business. So consumers also demand those hyper-personalized experiences that only generative AI can deliver. But what obstacles do customers face when trying to implement rich AI customer experiences? Well, 90% of companies in our State of Commerce survey responded that disconnected systems and the lack of a single source of customer data were the #1 challenge. And so what that means is that it's impossible to glean the insights that they need necessary to personalize interactions in a way that they find meaningful. And privacy and security, trust are more important than ever in an era where data breaches and AI hallucinations make headlines. So how do companies create those customer experiences that the consumers expect. How do they empower their already stretched teams to be more productive? Enter Commerce Cloud, named the #1 commerce platform for the eighth year in a row. Commerce Cloud powers revenue growth at every touch point in the customer journey. From AI guidance insights, automation from storefront setup to revenue growth, it unlocks your team's true potential and personalize its scale with data from every aspect of your business through Data Cloud, while connecting digital commerce to sales, service and marketing channels. It's the trusted AI, those pieces that really drive this overall experience and give your team superpowers. Commerce Cloud is no stranger to AI. We have over 12 years of AI innovation driving an average revenue uplift across our customers of 8%. So today, I'm excited to announce Commerce AI for retail, giving your team super powers to do more. First, it starts with commerce for merchandising, empowering merchandisers to leverage technologies like our announcement of Page Designer AI, allowing anyone in your organization to build beautiful shopping experiences. And our Copilot for shoppers goes beyond search, it conversationally allows your customers to browse and connects consumers to products in ways never seen before through natural language conversations. And of course, finally, AI that grows revenue everywhere. AI insights for inventory with our inventory insights, recommendations on how to improve returns with return insights and customer and product insights to improve merchandising across the board. And all of that is possible because of the Salesforce Customer 360, seamlessly integrating customer experiences to platform, to data, to Einstein, through Commerce and Service. And because Salesforce is built on trust, it's the only platform that can unify your data in a way that impacts all of your business. And so with that context in mind, I'll pass it over and introduce Genna Gwynn, SVP of Sales for Commerce Cloud, to kick off a discussion with some of our amazing customers and partners.

Thank you, Alex. Can everybody hear me okay? Now you can hear me. All right. So thank you for being here, and thank you, Alex, for that great presentation. I'm super excited to have an awesome group of panelists here today, to talk to you about the reality of generative AI. You're going to walk around this hall and hear so much about AI. What we would like to do in this quick panel here is just bring a little bit of it to reality. What are some of our top brands out there doing today? And how can they make it possible to do something, hopefully, by next holiday. So with that, before we get into the discussion, I want to ask the panelists to introduce themselves. So Jenna, I'll start with you. Does everybody just want to come to the podium, it's not going to be that effective.

Hi. My name is Jenna Flateman Posner. I'm the Chief Digital Officer of Solo Brands. We are a portfolio company that owns brands like Solo Stove. Not sure if you also are awesome Snoop campaign that hit the universe last month, had a lot of fun there. We also own Chubbies, which is a men's swimwear and leisure wear company, Oru Kayak and ISLE and a bunch of outdoor lifestyle brands. Really excited to be here.

Thank you, Jenna. Jason?

All right. I'm Jason Purcell. I'm the Co-Founder and CEO of Salsify and I've had the honor of working with Jenna 20 years ago in Deca. So we've been in the commerce space together for years.

Hi. And then I'm Scott Lux, the Global EVP of Technology and Innovation for Esprit. Hopefully, some of you in the audience remember Esprit, we're relaunching in the U.S. And then we have a strong global presence in Europe and Asia. So excited to be here today.

Thank you. So Jenna, I'm going to start with you. Can you provide some examples of the way that generative AI is really impacting the retail landscape.

Yes, absolutely. I mean, first of all, it really put the power of AI in our hands as retailers, which is really, really empowering and exciting. I think I'll talk through 3 scenarios here, that I think would be helpful for this group. One is bringing AI to your existing -- your peers, right, your executives is actually really hard. One thing that's really worked for me, which I'm sure you guys are all trying to figure this out, is dig in to your existing technology, right? Salesforce is a great example. How many retailers in the room right now? Lots of retailers. Do you guys all have fraud providers? If you all have fraud providers, you're already using AI, right? So helping your executives, helping your peers understanding the fact that AI does have value, you're already using it as a great way to get alignment. The way that we've seen success in market is actually twofold. One is on the copy creation side. I'm sure that's a no-brainer ChatGPT put all of the copy creation power in all of our hands, which is cool. We saw a lot of success there, a lot of efficiencies, some of the major challenges that I think a lot of retailers think they have to face is that their copywriters are going to not be interested in using tools to actually generate a copy. That's not the case. What we found is that doing more of the mundane tasks by utilizing efficiencies that you get out of ChatGPT and OpenAI actually frees these resources up to be more creative. They actually get to create better content that's ultimately more valuable for SEO. It's going to get more storytelling and ultimately add more value to the brand. So we saw a lot of success with that. The second use case that I think is worth bringing up, you want to keep going? I'll just keep going, yes. The next use case I'd love to walk you guys through is the concept of Chatbot. I know you've heard about it before. A lot of us have Chatbots. But a lot of those Chatbots actually require human intervention. So you have to actually create the flows, you have to think through, okay, if a customer says this, then we're going to have the bot reply with that, and you have to continue to evaluate and understand utilization and use those utilization metrics to determine, what the next flow should be. It takes human capital to do this. The benefit of having Generative into these Chatbots is that they can actually learn and they can actually decrease the workload in order to maintain those bot experiences. And so in our experience, we just saw a 37% decrease in workload, when using a Generative Chatbot versus a manually supported Chatbot. So that was really great. Additionally, we saw 40% of the outreach that was happening in Chatbot was actually sold for by the bot. And so that meant that we had customer service agents and representatives are actually available for our customers that needed escalation, and that was incredibly valuable to us. So overall, I think getting some of these use cases in market, looking at content creation, copy creation, asset creation, looking at Chatbots as a way to augment your customer service responsibility to your customers is a really great way to get your feet wet. And happy to share that with you today.

Jenna, thank you, I think what's really interesting about your answer is that when you're going to come back from NRF and talk to your executives about this conference and what you learned, it's also bringing back to helping them understand they are doing things with AI today, and you gave some really great examples. And it's about how you can do that better now with the capabilities of Generative. So it shouldn't be this big scary thing. It's something that you are doing today, how do you continue to iterate and leverage what Generative is bringing to the table? So with that, in all these areas where you're using Generative, Scott, in your experience, just a question for you, do you see in areas of the business that have been slower to adapt these types of technologies and why?

Yes. I think that's a really interesting question because I look at AI, if we were here 5 years ago, maybe a little bit longer, we'd be talking about Omnichannel. And I think AI is very similar. There's a lot of different definitions that are out there. So Jenna's example with how it's leveraged with chatbots. And I think that's a challenge for a lot of retailers is where to start because obviously, ChatGPT exploded on the scene and I think a lot of times, it's easy for us to look for, okay, what's that shiny object, what can we implement really quick that's going to give us that positive customer experience or upside on the business results. And I think that's where it's an inherent challenge for retailers to figure out where to start. For us, I look at it more as a journey because if you think back, we've actually been using a variation of AI, and this is also part of the complexity around machine learning. That was kind of the first incarnation. So for us, and for other brands I worked with, to prepare for machine learning, it is about taking a very specific data set but making sure that was your gold standard. So transactional data, whether it's from POS, e-com, what you could get from wholesalers, it had to be pristine. And now AI is kind of shifting that a bit, where it's more on how much raw data can we actually ingest. And how do you strike that balance? Because also you can pull in as much as our marketing team would love to ingest everything from Facebook or Google's API, there's a cost with that. So I think for retailers, it's how do you strike the balance where AI can be much more intelligent, everything you were speaking about on learning and being prepared from behavioral, transactional is a challenge for brands on where to start. So for us, I think it does go back to a couple of paradigms that we're looking at, tying customer experience, so really understanding acquisition costs and our customer because that piece with rising media is can we afford to acquire new customers, what type of new customers do we need to acquire? And then how can we leverage the capabilities of AI to tie that back to future performance. And that doesn't always mean profitability. It could be tied to product behavior, product that we've bought into and how can we have quicker lens and insight to perform it. So I think those are some of the challenges is where to actually start. And if you think back, I equate to AI, it's where the iPhone was 17 years ago. We all knew we had to be aware of it and participate with the iPhone, but we had no idea of what it was going to unleash for us. I think that's the same with AI, is starting with a very principled approach on what do we expect to learn and how do we think it will benefit. So you do have to take that step back. And I think that's also difficult for a lot of retailers to have that introspective to say, okay, what is the business case or challenge or customer experience we want to solve and let's focus AI to help us in that path, first versus saying, okay, let's go do everything because it can be too much.

I think you bring up a really good point, and that kind of leads me to Jason, a question for you because you can't do this all in a vacuum and you clearly can't do this all yourself because you have a business to run as well as a retailer. So how, Jason, from the ecosystem perspective, running a company, founding a company like Salsify, do you see Generative AI really helping these retailers with the time to market and with the demands and the consumer expectations that are out there for what they want?

I think a lot of that's going to come down to how much can AI help? Is the collaboration between the retailers and their ecosystem of suppliers, right? There's just a ton of processes that -- to get a product listed at a retailer, you have to go through. And I think Generative AI is going to help a ton of them. It's going to help with promotions, suggestions and price negotiation and all of those. But I think one of the ones that we're seeing people actually do real-world things with today is improving the content onboarding, right? So we have a customer who's taken the entire Walmart style guide, taking their entire catalog and rewritten the product detail page information through the lens of the Walmart style guide, right? And it's something they can never have done, maybe they could have done it for Walmart, but they could never have done for that broad set of retailers that they work with. So I think a lot of it is, as a retailer, Generative AI is really reducing the burden of things that you never would have asked your suppliers to take on. It's changing that balance. There's now a lot more that you could ask of those suppliers that you couldn't before. And I don't think we're going to go back to the world where the retailer goes, ah, I still think that there's going to be a human in the loop, the suppliers are still going to be very engaged in owning the brand equity and representing the product, but I think that the balance is shifting where retailers can actually ask more of suppliers they could before.

Can I get in on that? Cool. I think from a PIM perspective, too, and I put a lot of pressure on you right now, I think it's an unbelievable place to be implementing AI use cases. In many cases, a lot of retailers are racing to get their products live, right? And so your product enablement process is your path to cash. The faster you can enable your product, the faster you can sell your product against your competitors, the more you can gain momentum on Google, et cetera, and your rank and your performance. And so having the ability to actually utilize PIM, whether it's content creation or it's rewriting or it's dynamic attributing or it's automatic categorization or I'm just writing your product road map for you right now, I think of PIM as an unbelievable place, to help augment that process, and I love the work that you guys have done with that. So awesome.

Yes. I can add one piece to that because I think it goes back to what you were asking. That's one of the bigger challenges is everything that both Jen and Jason just spoke to is how do you have that right foundation, so you touched on a little bit before you kicked this off around governance. So governance is key, having the right foundation that if Jenna's team is saying, okay, we've got to push for a product like you were saying, that's one aspect. We touched on marketing. We touched on planning, so for us and for retailers, I think it's coming back to the same type of foundation we would talk about for an e-commerce teach stack is you have to have that scalable solution in your data infrastructure first and foremost before you can start unlocking AI. And I think you can't leave governance and privacy out of that conversation. So that's the other challenge with it because it sounds great to pull in all this data. But in GDPR, it's really, really tricky because you can't handle some of the data unless you have explicit permission. So how do you take full advantage? So that's where it comes back to that foundation and framework is key.

One of the -- you touched on how do you even get started with it. Some of it is just forming an intuition about what's possible, like not getting caught up in the AI buzzword. So I honestly think practically everybody should be trying and get out there on Build a GPT, it sounds daunting, and it sounds difficult. It's not hard, like anybody can go in there and actually try out little experiments that you're interested in personally, I'm telling you, it's hard even for me as a tech company to keep up with the flow. But there's like just forming that basic intuition about like what's hype and what's legit and real. And I don't think you can do that if you don't actually put the work in and spend a few hours actually trying it out, and it's -- the burden is so low. I think that's true of executives. And I think that's true of the people that are out there doing the work that Jenna was talking about. Like who's launching a new product? They need to be exposed to what's possible. I think without that, it's just going to stay in this ether of like, I don't even know where to start.

I think what's interesting is during the last presentation, I think the stat that was used is 14% of consumers are not satisfied with their online shopping experience. When does that change, right? And how do we get that to change? We are at a really interesting time with Generative, that I think if you think about some of the comments that were made earlier about the quality of the data, how the data gets to the consumer, there's an opportunity to really improve that stat and really meet the customer where they want to be met. Jenna, when you think about that stat being 14%, which is just so daunting, and that's not everybody. I'm sure Solo brand score is much, much higher. But what are some ways that you think Generative AI can really just lean in and improve that experience in the near term?

I hope this is the near term. I've been talking about this use case for a couple of weeks because I'm trying to speak it into the Universe. But the more and more I think about it, I was actually sitting at our Client Advisory Board meeting with Salesforce when I -- this came out of my mouth for the first time. So pressure is on. So I mean, listen, when I walk into a physical store today, I have an incredibly great experience. I come in, I'm greeted, I'm asked what I'm looking for, I say, I'm looking for a pair of red shoes. They say, okay, cool. Like what are you doing? Going hiking? You're playing basketball, like what's -- why are you going to be utilizing the shoes? I don't think it's utilizing, that's more a tech term. So I answer, I'm going hiking. And they say, okay, what's your size, 7.5, all right, let me go on the back stock, I'm going to come back and bring you a couple of pairs of shoes. Come back, try them on, get my shoes, make my purchase and walk out. Today, when I'm on an e-commerce site, and I try to find a pair of red shoes, I go to a search bar, I type in red shoes and some poor store associate goes in the back and brings back every possible red shoe they have, in every size and every gender. And as a consumer online, I am expected to wade through those results and find my way through the stock room to actually get to the shoe that is meant for me. And I think the Generative would be a perfect place in search. I think that how do your conversation in that search experience, much like you would when you walk into a physical store to inform what that result should be. I think it's a huge missed opportunity right now and something that could really smooth out getting our customers to their desired outcome as quickly as possible, which is our desire outcome too, right, get them to the purchase. So I like that one.

Yes, I do, too. I mean, I think about my first discrete purchase, way back when, about 20, 30 years ago. And Scott, I'm looking at you for this question. As you think about continuing to improve the experience for that new young consumer out there, how do you see Generative really helping shape the future?

Yes. I would say what's interesting to me is just quick question, how many people in the audience have gone into a store or doing a store tour, while you're at NRF? Wow, that's it? How many people still shop in a store? Okay, much better. The reason I bring that up is because I do think you're seeing a little bit of the pendulum swing back. So as you alluded to with Esprit, mean it's a loved brand by a generation of people that were my age, Gen X, '80s remember it, but how do you bring that back? And I think what you're seeing with technology is 5 or 10 years ago was, to your point, push more tech in front of the consumer, whether that's in store, magic mirrors, you name it, even on e-com. And I think that's why it's so challenging for the e-com experience. What I think a newer generation or the shopper or even generation my age is looking for is getting back to that paradigm, where tech is running behind the scenes and you have the brand and product and creativity is becoming more at the forefront. And that's where I think Generative AI will have the most impact is what I'm excited about is internally because retail, as we all know, is in the moment, it's hour by hour, minute by minute, but there's so much friction internally. How do we come to the decisions, what we're trying to sell, what do we market that I think Generative AI will make businesses much more efficient at being able to get their brand story and product out into the marketplace. And I think if we go back to that first and foremost, that's what customers are really looking for is getting to that experience and saying, how do I interact with the brand and the product the same way I've done with stores for 100 years? So to me, Generative AI gets us on that path where it's more behind the scenes, servicing brands and the creative product and enabling us to just be much more nimble with how we serve our customers.

Yes. I think we're finally at a point where we can actually look to see some results, if we think about next holiday, based on what Generative AI is going to bring to the table, that's exciting. And I think, Jason, as you think about talking to retailers and how we can help them, how the ecosystem can help them, what are some of the ways that do you think we can help people future-proof these plans, so that we really can improve those stats next year and delight the consumer in all of us?

I think there's a few things. So I honestly would reiterate the point about building that intuition yourself, so that you can engage in the discussion, right? It isn't a lot of work. I think it's pretty low-hanging fruit, but without that, without that foundation, it's really, really hard to talk about what's even possible. I think one of the easiest things to do to future proof is we're all conditioned to thinking of workflow, as like this process that requires many, many, many people. And I think what is going to change is that there's going to be processes that involved 1 person -- 1 creative person, you would never put into the workflow in a Salesforce flow or your PIMs workflow. I think you need to start thinking about doing that now because that's going to be the natural hanging off point, you're going to be able to automate this. You're always going to have a human in the loop, so it's a really natural point to plug this into. I think the other one that's maybe a little bit more far reaching, as you're thinking about your road maps and how you're designing your product and your retailer site, I think you got to start thinking about the language models almost as a bit of a consumer, right? Like to do what you talked about, Genna, to have that experience where somebody doesn't just come and search or browse for red shoes, but it actually understands who you are and what you've done and what you'd be looking for, that context has to be surfaced to the models, right? There's this whole retrieval augmented generation is kind of where I think this is all going. And so you have to start asking yourself, am I surfacing the customers' purchase history, am I surfacing what they've searched on in the past and what they didn't click on, all of that in a machine-readable way so that it can be incorporated. Incorporating it is actually really easy. I think the hard part is going to be getting that data surfaced into the hands of the model. So it's counterintuitive. You don't think of the language model as the consumer, but I think you have to start thinking about that because some of those are going to take a year or 2 or 3 to actually do.

We talked about Generative AI being the superpower, right, that's going to supercharge these sites. And as you go back to your teams and you think about, how do we really do that? Jenna, what's just one piece of advice for the folks out here, in terms of how to get there?

Yes. I mean test and learn. I mean don't be afraid to fail. I think that we learned through our failures, just as much as we learn through our successes, it's not going to be perfect. I mean, I'm a very big ask for forgiveness, not for permission kind of a leader. And so we've had the benefit of being really early on adopting some of these use cases and technologies. I personally am waiting for the day where I can just have a giant swath of unstructured data that is simply sitting there that can be supported and augmented by AI, that is using that to determine how and when they communicate with my customers. There are great tools that are already out there, though, that can help you really measure the value. There's a Session AIs, there's the OfferFit, there's a lot of tools out there that can really help you put AI to work just on the top layer of your site, to start making sure you're communicating the right promotions at the right time or engaging those consumers most effectively. And I just really recommend that you try them out. We all need data to support these investments in these priorities and the tools are out there for you to start testing.

I agree. Scott, I'm going to just turn it to you for probably our final question today. As you think about similar to the last 2 questions we asked, just how to get started, right? How to think about this test-and-learn concept that Jenna has been talking about here with Generative, what are your final thoughts for the audience out here on how to get going?

Yes, I would say it's kind of what Jenna was saying, I think, one, just asking yourself, what's the biggest challenge we're trying to solve for and really being clear on saying this is what we need to solve for, where we think there's a need to leverage AI. Second piece is you have to define what success looks like, so that you know you can go back and determine is it working or not. And so that could be around merchandising, it could be around just workflow efficiency and it could be around just product, but you have to start with that filter and then you can prioritize from that based on the business or customer impact. So I think that still holds true. And then AI will help you get to that path of saying, are we on the right direction for success or not. And if not, how do we course correct?

Awesome. Well, as we wrap here, I just want to thank our lovely panelist and thank Alex for the presentation earlier. Look, I think we're all excited about the future of Generative and where it's going to take us. Hopefully, we'll be sitting here next year, and the stat is going to be all of us are extremely delighted with our consumer experiences, conversions off the charts. And we're all just starting new brands because we're so excited. So anyway, thank you all for the time. And please feel free to check the QR code and get the State of the Commerce report next. Thank you.

So I am Kathy Kimple. I'm your Master of Ceremonies for tonight this afternoon before the snow rolls in. First, a little bit about the topic today. Supercharging your Retail Strategies with Data and AI. You're going to have learnings from GoPro, Kacey, who's here is going to talk as well as Rob Garf. First, I'm Kathy Kimple. I head up Digital Strategy at OSF Digital. And for those of you who don't know OSF, OSF is a digital transformation company. That's a big mouthful. But what does that mean? That means that we do at OSF, we can do strategy. We can do product innovation. We can help with technology solutions. We can integrate those technologies. We can help you optimize. And we can also help you with something that we get to hear a lot about now, change management. How do you change when you implement new technology? And last but not least, we can help you optimize and manage the technology that you do implement. I run Digital Strategy. My background is all retail. I will not say how many years I've been coming to NRF because, quite frankly, it scares me. And I always swear, NRF in January is nothing but the best. Snow coming in tomorrow. My background is retail, both brick-and-mortar stores for over 13 years. I ran distribution and transportation for Children's Place for a number of years. And I've been in the digital space since 1999 working with retailers like Linens 'N Things, Dick's Sporting Goods and The Knot, which is the retailer, if you didn't know, but also a media company. The consultants who work in the Digital Strategy group are folks like me, who have retail as their background, and I refer to myself as a recovering retailer quite often. With me today is Kacey Sharrett. Kacey also has extremely deep retail experience and starting with, let's say, where she is today, she's at GoPro, VP of direct-to-consumer, handles global direct-to-consumer, all of customer experience for direct-to-consumer. So we're going to lean in on her skills there a little bit. And her background is also very deeply seated in retail, it was 5 years at Barnes & Noble, and 21 years at Toys "R" Us, and she reminded me earlier that she was the first person in the country with Omnichannel in her title, which when she is VP of Omnichannel in 2008. Not that we're dating you, Kacey.

No. We're going to go with that, though, unless anybody wants to challenge it.

Also with us on the stage is Rob Garf. We are thrilled to have him here. Rob is a wealth of information. So if we don't cover things on the presentation today, make note of Rob, find him. You could ask him a million questions. He always has the answer. He's VP and GMM of Retail at Salesforce. So ready to get going? Kacey, a little bit -- you want to do a little bit about GoPro before we get started?

I would love to. So just in case anybody doesn't know what GoPro is, people know us for our cameras but we like to think about our business as a place where consumers go, where they are connecting and collecting their memories and it's an opportunity for them to share them with the world. So we have platforms that we use to go ahead and allow customers to do that. We like to think about kind of powering up those extreme experiences that a lot of you know about, but there are many, many people out there that share them for the everyday fun in the backyard and the pool with our kids. I love the company. I've been there for 3 years, and it is just -- it's an amazing place to work. The content is rich, we got a lot of user-generated stuff that's like a wealth of really, really neat people and a lot of good fodder for fun on the site. So yes.

Rob, anything you want to say about Salesforce?

Yes, sure. But my first GoPro memory is my son losing the GoPro in the bottom of lake, while he was water skiing. So I need to get the latest model. I'll talk about that after. But Salesforce, so Salesforce generally is the world's #1 AI CRM. But in retail, think about it as the platform to fuel the unified shopping experience across marketing, service, commerce with data and AI in the middle. And I have to say it's a thrill, Kathy, to be with you and OSF. I came by way of the Demandware acquisition, which is now Commerce Cloud and OSF might be the longest-standing partner, I'd like to say that you are integrating Commerce Cloud into Service Cloud and Marketing Cloud before Salesforce was. So it's a really nice partnership.

After the kudos to Rob about data, we'd be remiss if we didn't talk a little tiny bit of a look back on 2023 and holiday and then how that might affect what we think about for 2024. So let's get into it.

Yes, let's do it. So just for context, part of my role is overseeing our shopping index, which looks at all of the data that flows through the Salesforce platform. It's billions and billions of shoppers on a regular basis. And that allows us to have a bird's-eye view of what's happening in the industry. It's available on salesforce.com, again, built on Tableau and available for everyone. And over the holiday, you can imagine a lot of you -- a lot of retailers are looking at this data crawling through it to benchmark what's happening in the industry. And when we think about the holiday, it really wasn't a big surprise where we landed. We had forecasted 3% year-over-year increase globally and 1% in the U.S. I don't think many executives I talked to, I'd be interested, Kacey, what you saw is anticipating a blowout holiday. So getting out a bit unscathed, being at a good inventory position was a main objective, but that doesn't tell the full picture. First of all, sales followed the discounts. So we were really low in the discount rate early in the season, actually, we saw a 40% higher discount rate than Amazon, big deal days in October. The other piece, which was really encouraging for the first time in 5 quarters, growth came from demand largely rather than just increased prices. So we saw the first time people were actually buying a little bit more. So when we think about the themes, I'll just click through this really quickly because it really sets up what a lot of what we're going to talk about today. How many of you have heard of AI over the last day or so? Yes, if I got a nickel for every time.

Dollar for every AI mentioned.

That would be really nice. Yes. Inflation, I guess, I was quoting Flesh, but you're right, that was actually 30 years ago, so it probably should be. Anyways, AI. So according to our research, 17% of all sales were driven by Predictive and AI. This was really the first AI holiday. Returns played a big role. We'll get into this a little bit more, but retailers are pulling back their returns, their once-liberal returns policies. We saw that 20% of orders. And we still have a little way to go working through it, after the holiday rush. But 20% of the orders were returned, and that was basically flat. So that was actually a pretty good sign. BOPIS played a huge role, especially after the shipping cutoff date. So those that had buy online, pick up at store, they saw 1 in 3 orders were from buy online, pick up store after the shipping caught up there, which doesn't make a huge surprise because consumers wanted to either, a, not spend the high price for expedited shipping and they want to make sure they got the product before the holiday. Social was big. Actually, it drove 5x higher traffic than other traditional media, and then service was big as well. More automation to help put more of the rudimentary questions. So the service agents could help more with higher value, more complex. So a lot of interesting things. What often people say when I go through this is, okay, great, that was a holiday. We're behind it. We're wrapping up our year. We're trying to close the books through the end of January, who cares. Actually, a lot of people don't say that, but it sounds good. But really, we should just acknowledge that oftentimes we see there's a shopping behavior and what happens in retail, during the holiday becomes really the new watermark for the coming years. So I think these things will transcend itself. And I think Kathy will walk through some of these details.

Yes, we're going to go through some of the details that all we relate back to the points that are on here. But I wanted to put Kacey on the spot a little bit. Did number four, Social surprise you or not really?

No. I was actually going to definitely comment that, well, number one, AI, I guess, it's here to stay. So let's get that straight. But no social shopping is something that I think really started to emerge probably in the second half of the year, and you saw a lot more. Also, I've seen a lot of brands put it on the sites, too. So complementing their product detail pages with video and then taking that out. And I think headless infrastructures have really allowed for brands to be able to take those experiences off-site and be where the customer is.

What I think GoPro has and its benefit is that the social is oftentimes outsourced and crowd sourced by your loyal customers, right? So it's still authentic. The other aspect we're seeing actually is that Social isn't just for social media managers at the headquarters. More and more store associates are becoming social media managers. So there's a lot of authenticity to that, not just looking to the paid influencers but -- and creators, but actually the people, our biggest brand ambassadors in many cases.

And then traffic is a critical element that we hear from our clients over and over and over again of the cost of marketing, getting more traffic. And it is very interesting to see how much social is starting to drive in a way of traffic.

Yes. I mean it is the top of the funnel. And conversion is still a little bit relatively lower than other channels. We're still making a little clunky for people to actually break down the friction between seeing something they like and actually buying it, but with embedded payments and other ways, especially from mobile, we're making a little bit easier time by time.

Great. So let's talk about the Omnichannel Retail Index. So the Omnichannel Retail Index is a multiyear study. We launched this in 2015, I was pleased to be involved with that launch and in conjunction with NRF. And we have been running the index every year since then. And why -- what do we do and why do we love this and why do we do it every year because it's a big undertaking. We benchmark 120 retailers and brands, sometimes a little bit more. We look at 14 different verticals. So we want to make sure that we've got retailers and brands in all of the verticals that might be important and that we have good cross representation. We benchmarked 200 features and functions. And since we've been doing this since 2015, we have the ability to say, how is one vertical performing against another. How is a vertical upping their game in terms of digital features and functions, web, mobile cross-channel? And where do we see traction starting to happen with new features and functions? So one of the things that we do, and we're going to move into some numbers but we look at it and say, if there are 120 retailers and brands, what percent of them have adopted a feature and function. So for example, 95% may have auto suggest on search. But if you don't, and we then say 95% do, it becomes a conversation starter. But we also look at some cases where feature and function, a year ago was at 20%. And today, it's at 45%. And we're starting to track and get a sense of, why are those features and functions picking up in utilization by retailers and brands. Our hypothesis always is, adoption means success. So if something is successful, retailers are going to adopt it, they're going to lean in. So we use this index when we work with retailers to help inform and if you're not part of the index and the list is here, we could benchmark you against the index, show you where your gaps are and work with you to identify priorities because not every vertical has the same priority. So a vertical of apparel or jewelry might have the need to have a fit and to be better able to see fit, where as a vertical like GoPro might want to have more in the way of recommendations and comparisons. So the index is very powerful. We use it every year, and we benchmark every year, and we use this extensively in our work with clients. The other thing we do is it's about numbers because we're a very data-driven group, but it's also about what does good look like. And so it's not just, are you doing faceted navigation? Are you doing BOPIS well? But what does good look like? And that's something that we bring to bear when we work with clients. And we'll do a little bit today about what does good look like and some of the cool things we may have seen during holiday. So first up, the theme of NRF as I walked in the building today, I noticed it was make it matter. So we stall a little bit, and we're going to make -- basically have a theme of make it. So first up, we're going to talk about make it easy for your customers to find what they're looking for. And these are stats. Remember, I talked about those percentages from the index from 2023, 95% do auto suggest. Okay, not something to get terribly excited about it. I think Kacey said to me, oh, it's old news. On the other hand, we know that customers who use search, convert 3 to 4x higher than customers who don't. Only 38% of retailers who are doing -- are really looking at search, remember the search terms that I used, 43% this year in a number that's growing and growing up from 26% last year, populate the search bar with top searches and top trending items. What a smart way to do of getting product right in front of your customer? Kacey, you had mentioned when we were talking about search, the difficulty of understanding where the customer comes into your site and how you handle search. Do you want to weigh in on that a little bit?

Yes. I think, first, I would say, search for me is probably one of the biggest opportunities that I think is kind of across the board in a lot of retailers and brands, in particular, probably smaller assortment, so not as critical as some of the larger retailers that are out there. But when you think about search and you think about comparing that to a store experience, and we're woefully behind. You get a lot of results and they're not necessarily tuned. The consumer has to do a lot of work to get it there. I think we're at the turning point. I think AI is going to facilitate that. And I don't know if anybody's used ChatGPT. But you get into this kind of conversational search where you're looking for something, and I think we're training customers now to start to be a little bit more conversational as opposed to just kind of keyword-focused. But I think search has a lot of opportunity, and it's going to be inherent on retailers and the brands to make sure that they've got the underpinnings of the data for the AI to get there. And AI is not a strategy like there's a lot of talk about it, like how do I have an AI strategy. It's not a strategy, AI is a foundation on which you need to build all of your other customer experiences that draw upon that information. So I know Rob has some good things to contribute there. But -- and I would just say, like I made the mistake of starting online to try and find a new washer and dryer in December, not my plan, but because I had to and it was incredibly difficult going to 4 different sites. And I gave up and I had to go to the store. So I think we have a lot of opportunities still ahead of us to make it better, so.

Rob, what's happening at Salesforce is Search, lots of good things.

Yes, absolutely. I mean, AI, again, is a word that we're hearing or an acronym a lot. And what I hear from our customers is finding practical use cases. We don't want to boil the ocean. As an analyst reached to call it management by magazine, I don't know how much we read magazines anymore, but you get the idea where it's like, do you see something interesting, you want to implement it. But search is a very practical way. I talked about it before between breaking down the friction and where you can apply AI to make that happen. It's interesting. I will talk about AI a little bit on the next slide. I've mentioned that 17% of all sales online for the holiday were driven by AI. I didn't mention the actual number. It's a big number. Over Cyber Week, it was $51 billion globally. Over the entire holiday season, we defined that as November and December, it was $199 billion. So the impact is real and search is a great way to apply it.

Okay. I'm going to reinforce, Kacey said, starts with the data because we've talked about this session and I think the title, we talk about data, AI and the Omnichannel Retail Index, all the Omnichannel Retail Index is serving up the conversation, but it is all about the data and how that enables AI. So when we talk about what does good look like, just an example, so here's an example from Etsy. They're tailoring search results, they're looking to see what the user is doing. In this particular example, I was looking for a customized hat. Did some work, looked at a little searching, favorited an item or 2 and then, oh dear, conference call. I'm late for a Zoom, walked away, came back 2 days later. The beauty of this example is when I came back 2 days later and we look about how AI powers this up, they were smart enough to remember, what I had favorited, served up back to me. I had favorited, oh, I was interested in customized hats with dog monogramming and things that will reflect my lifestyle and my pup. So how brilliant is that because it's not forcing me to start all over from ground zero, and it's helping me convert and really feel great about my customer experience at Etsy. You want -- anything you want to add on this one, Rob?

No, I think we can go on. I think one point I will make really quickly is that there hasn't been a lot of innovation in search over the last 20 years. I mean you talked about type ahead and faceted search, but the big, I guess, revelation was moving it from the left side bar to the right at the top. So I feel like there's a lot of opportunity there. I think a common drumbeat you'll hear from me is mobile because that has been back-end style. We made a huge surge for it over a bunch of years, and we got to a point where we felt like we plateaued in terms of traffic and sales. And then the pandemic happened when we went back to computers, which was really interesting because of the former -- the large form factor, and we weren't traveling but I think there's an opportunity relative to search as people are in the small home factor and wanting to get what they want much quicker.

Great. So let's talk about what are we going to make next? So make it relevant and fun. So when we talk about relevance, making it easy for the customer, as we look at guided selling, that has increased. So a year ago, guided selling was 26% of the retailers in the index. Today, it's 40%. 81% of those guide shoppers based on fit or size, so again, it's where fit becomes more important, 15% of folks in the index, and this is new and trending and this is something we're watching and seeing how we can use visualization tools to help people understand, fit, how it fits on the body, how it's a virtual try on, how it can drive experiences. Kacey, GoPro certainly makes experiences fun. And you certainly tackle that challenge, but how do you get people to the right products?

Yes. So as you can imagine, we have a small number of SKUs. Unlike a former life, we had $50 million that we had to manage, and search was a completely different story there. But so we have a smaller number of SKUs, but it's a higher ticket and there's a lot of technical components that I think not a lot of our consumers want to understand with specs but it's also because it's a big purchase. It's one that there's a lot of thought that's given to get the consumer to a place where they're ready to convert. So we have several paths that we offer just depending on where you are on the GoPro side. And so two of them kind of speak to the guided selling. So one of them is a product finder, which is a bit of like a quiz. So if you don't know what the GoPro is that's right for you, we kind of take you through a list of questions and then you get an output of recommendations, which is great. By the way, our younger consumers love the quizzes. They want the quick hits and they love kind of getting in and getting out. We also have our Shop by activity pages. So these are really amazing, beautiful, visually prominent pages. They do a lot of storytelling but these are designed around activities. So if you're going to go look for something for snowboarding or water or what-have-you or you're a creator -- a content creator, we have a page that basically takes you through a lot of how you would use the product and what mounts what accessories and what things kind of to consider as you go through. That's really a hit for some of our, we'll say, more mature consumers who like to kind of sit and take in content. We also find that, that is also, as you were saying, a little bit more of a desktop component, whereas the quiz is much more utilized on mobile. So a little bit of an interesting dynamic there. So we have a couple of different ways that we get consumers to the product, but I do think you said a keyword is intense. The more signals that you can take in with your data to understand where the customer has been and what they are trying to get to, and this is where AI is going to be such a critical component, the more of those pieces that you can put together and the better results that you can serve up, the better off your brand is going to be.

Yes, [ they skewed ] that 0 party data is gold for you, especially when you're getting it direct and then you can turn that into segmentation and trigger certain engagement with them.

It's also worth mentioning the customer expectations have gotten higher and higher and higher. And AI just drives it even higher because suddenly it's like, wow, this is really cool. Why can't you do that? So it's -- how do you make it relevant and fun? How do you really drive engagement? This is an example from a Kohl's campaign using Generative AI and you're inputting in a little bit of customer data. The wonder of it all is this is about Jeff, and we'll see a little bit more as it moves on. Yes, it's all about Jeff. And Jeff is very into baseball and grilling. And as a result of that, this generates and then absolutely cool ode to Jeff. So that's sort of whimsical and cool, and I probably would have told one of my friends, you should go check this out. But it's not just about whimsical and cool, it's about converting. So with links in the document that are shoppable and it will take you right to the product, so you've in essence, sent this to Jeff and it can become a Christmas wish list. So let's talk about make it convenient and clear.

Before I do that, Kathy, you might jump back for that one moment.

You're going to make me go back?

I know you don't have to go back. Everybody can visualize it. I'll look at that, voila, Matt AI must have heard us. First of all, I want to say, every year, I'm up here, I love seeing everybody take out their phone and take pictures. It just shows how gold this index is. So I encourage you to download it. What I was thinking about when you brought this up is one customer said to us recently that AI is the new UI. Think about it, AI, artificial intelligence is the new user interface. And so when you think about the evolution of search, more and more customers, more and more consumers are going to be using AI as the portal into what they're trying to find, whether that's the voice. There's a cosmetic portal now that you can go to and through Generative AI figure out what cosmetics is perfect for you and it's an affiliate marketing program. It gets you to the brand, and they then get a credit for it. The other piece, too, I'll say, was relevant and fun, but also the guided selling you talked about. I don't know if anybody has a chance to go to Boot Barn. I actually didn't, but Michelle Grant on my team, who is always seeking out the most innovation and she tweets about it, so a follow her on Twitter or X, I guess it is. She talked about this, and this is John Hazen, who's been in the business forever. His whole mantra through his career is, let's not let technology get in the way and in between the store associate and the consumer. And that's what he's deploying through what he's calling BANDIT, which is a digital app within the physical store to guide people through based on AI, what they ultimately will want. And so it's relevant, it's fun, but it's ultimately solving a problem for the customer. It's breaking down that friction. It's making it more personalized as well.

I think there's something important because for that customer in that moment. That's certainly really helpful. But then think about it from a brand or retailer perspective, the data that you get by following the consumer's journey then helps you to be predictive, right? So the next time that you have a similar kind of opportunity to presents information, you're now using insights, rig real data as opposed to just it being once and done.

Yes. That's a good point. Even if they don't buy it right there, you then can continue the journey somewhere else.

Benefits all around. So make it convenient and clear. This one is a personal favorite of mine because I launched BOPUS in 2004, even though I didn't have the title, Kacey has deeply been involved with Omnichannel and BOPIS, but only 59% of the folks in the index allow shoppers to refine their selection by store availability. The example on the screen is Carter's because anyone who has worked with or knows a young mom who is on the go and doing everything on our mobile device. She wants you to make it easy for her. She wants to know I can pick it up curbside. I can pick it up with my local store, and she wants to know where that availability is. So we call them out as someone who has really leaned in to BOPIS doing this right. We also talk about how we make it convenient and clear to offer back in stock notifications. That one's a little controversial because sometimes it's sell what you have versus telling someone you can take a back order. Kacey, anything you want to say about that?

I have tons to say on this topic, but I'll keep brief. First of all, the best thing that you can do if you're an online retailer is just be in stock. So let's just start there, like everything you can do just be in stock, right? Consumers, when they go to a store, there's a high substitution percents because I can look at things and I can pull different things off the shelves and they came there with intent but you will -- they'll move on to the next site. I saw a lot of things over the holidays that were super disappointing because when you go in stock online, there's a whole network, a web of other items that potentially you lose sales on because that one item wasn't in stock and the consumers don't -- they don't want to buy a piece, no. They want to buy everything together. But related to be in stock, consumers also want it now. So I share your passion and convenience and clear like that's take a stakes, we shouldn't even be talking about it at this point in time. The UX should be clean, it should be super apparent to the consumer when the product is available, where it's available and how long it's going to take to get there in the product details. One of the things that still frustrates me to this day, having been an omnichannel for many, many years and a little bit less so from a brand perspective at GoPro because we don't have stores, is that we don't really have a great way to get the consumer the products like immediately, right? So you think about BOPIS, we really need to figure out, and this is for all the tech providers that might be in the room and anybody else out there on the floor that needs to hear it, but we really need better solutions to make store inventory available for brands so that the consumer can legit shop any way they want to, anywhere they want to and get the product when they want to. And so it's critical, but we really don't do a good job as brands applying pressure to our partners to make that product available to consumer. For same day delivery, buy online, pick up in-store.

It's a huge opportunity for brands. You and I should take that on.

I'm with you. I'm with you.

We'll take that on in Prime Solutions I think because we believe in it. So let's look at an example of Best Buy. And they do a lot really, really, really well. They remember my home store, where I shopped last. But where they take it to the next level is, well gee, I forgot my power cord while I was coming out here to NRF. So they start to basically give me insights of where it's available for in-store pickup, where it's available with store lockers, where it's available in the 7 other locations that are near me to help my shopping journey. All looks easy, all looks fun. But all of the underpinning there is accurate data. Sending me on the store that, oh, I thought I was going to be able to get lockers or sending me to a store where I could do an alternative pickup. The data that powers this is amazing, but what a great experience when I don't have a power cord and I'm here at NRF.

Yes. I mean I'll jump in. You talked about the convenient and clear, and I love that in terms of the store inventory, it's so critical. And what one of the things that pandemic taught us is you really need to break down that friction and be able to help people find what they want anywhere in the network. I'll take it from a slightly different angle and that's returns. I brought that up as one of the key findings our prediction coming or one of the 5 that came into this year was that 21% of orders were at risk because of poor returns experiences. What we did is we looked at the top 1,000 sites and we graded them on their ability to be clear, to be easy and to be reasonable. And what we found, based on our shopping index, if you didn't have all 3, you had a much higher bounce rate because people just didn't have the confidence and you had a much lower repeat purchase rates. So you weren't keeping that loyalty. And what we'd like to say is you can't play high and seek with your return policies. And so unfortunately, what we saw is more of a flat growth, which is good in terms of the return rate. We still had it at across the various verticals at 20% over the holiday. But it's really important to keep in mind, we got very liberal over the last couple of years as an industry with return policies because a lot of people couldn't go in the store and a lot of people were bracketing, so they're buying 3 products and returning 2 of them. But we don't want to over index. We don't want to make them clear. We don't want to make them hard, and we don't want to make them just unrealistic, right? And so it's important to have that balance a little bit. By the way, this is where our loyalty -- I know, we can talk about loyalty in a little bit, but that's where loyalty plays really well. If you know the customer, if you're segmenting the customer, you know they are valuable. They may have a different policy and experience than someone else. And so that might be another benefit you can consider as well.

Fabulous. So make it helpful and quick. Then not -- again, this is sort of like search, not that sexy topic, but lots and lots and lots of opportunity. 83% of folks in the index have live chat on their site. Of those 48% of our live chat and card. So still not hitting them in the card when I'm getting stuck and I have a little bit of friction. 72% of automated live chat or chat bot responses as well as being able to handle interactions with the customer agent -- customer service agent or store associate. And so we'd love to see a little bit more interaction with store associates because they are a wealth and a treasurer of knowledge. Kacey, you had some passion about service and chat. Do you want to...

I always got passion about service. Yes. So number one, I have some great experiences, I think myself over holiday. And there's -- you mentioned the return experience. The thing I would say, number one, gosh, try and sell the customer the right product to begin with, so they don't have to return it. But then if they're -- they have to be forced to go through some return funnel, right? Trying to make it quick and easy, I'll shout out to home chef, had a great experience with Walmart chat, where it was just -- it was something as simple as a return and maybe a little bit of complexity in there. But within 2 minutes, I was done with both and a fabulous, I think, handling of it. There's sales chat and there's service chat and there are 2 very different things. And I think that's also something that we got to keep in mind. The support chat, a lot of companies had it. And it was built on, if then statements that trailed off 50 times down a decision tree. And it's not AI, but at some point, it dead ends and you ends up with a representative of anybody, and it's like, oh, I just spent several minutes kind of feeding information and I have to start all over validating my name and whatever with agent. And that is not helpful and quick, and that's definitely one of my pet peeves. But I think sales chat is where we're going to really see expansion of AI this year because there's a wealth of information that, number one, retailers and brands have on their sites, but that's also out there in the World Wide Web. And that becomes available to get into these repositories that will feed these interactions. And quite frankly, I see our search bars, you get into that natural and you search and you're asking a question, I see that potentially going off into chat. And I think Salesforce is powering some of those experiences, where then it just becomes kind of a conversation outside, but imagine they don't even make the home page. So I think that all the information is there. We just need to get those pieces put together.

Yes. So I'll give a personal example where we bought a ski rack from Thule over the holidays to go skiing and we got it and we realized one of the feet didn't work. And I was very proud, I used duct tape and made it work, but I called Thule, they picked up right away. And they realized this was like a $60 replacement part, which probably cost, I won't go into the margins, but they were doing pretty well on it. And without any like going back and forth, they went -- took me on the website, and they said, which part was it? I got it, they're shipping out to me for free. And that's going to make me a loyal shopper. It's a quality product. I would have been cranky if I had to pay for it. But I also was able to fix it on my own for the record again. But the real point here is, I don't know if anybody was in the Keynote yesterday with John Furner from Walmart and the Salesforce CEO, Marc Benioff, aside from bashing social media, he also talked about Gucci. It's a really good example, and I know the head of customer service really well. And what they did with AI and thinking about service, and it's a lot around what you talked about in terms of selling, Kacey, is that, they went into this and they have what they call Gucci 9, and they worked with customer service from Salesforce. They will call themselves customer zero because they really helped develop this with us. Their objective was to create scale and create consistency, meaning their advisers can do more. And they're speaking with the brand voice because they're using AI to take in all of the material from brand to advertising to every other service chat that happened. And what that ended up doing is it serves up a draft reply for the agent or they call them the service adviser to Guccify the response. And what they found is they didn't only gain productivity, but they also gained sales. So it turned into not just scale and really consistency but also really empowering those digital advisers. Where I could see the next step happening is put those in the hands of the store associates. I mean they're pretty smart. They're pretty passionate. They're pretty knowledgeable already, especially in a luxury market or if you're calling a GoPro call center or chatting with them. But think about putting that in the hands of the associate, it really achieves the paradigm a bit from a checkout process, which is all about just speed and efficiency to a check-in process, which is like let's engage the consumer. Let's use what we know about them to actually make a better engagement.

Great. So following on that, a quick look is Sephora. They use chat bots. They use generative AI, they analyze tons of product. They analyze how I'm shopping. And when I can't find that in my want and I engage in chat, they can actually make a recommendation and make a suggestion to me a little bit about your Gucci story. They're actually knowing what I've looked at, knowing my skin tone, knowing what I'm interested, closing the sale. We're going to watch time now, and we're going to make it worthwhile. We're going to develop a connection. So loyalty is something we hear about quite a bit this year. Marketing costs are skyrocketing, retailers are really concerned about customer data, zero party data. So folks are leaning in, in a big way to loyalty. In the index, 77% offer some sort of a loyalty program. Of those, 42% are offering a tiered program. 39% are starting to offer loyalty points based on actions. Now you take loyalty to the next level and you start to think about what can AI do to loyalty, and I'm going to quickly skip over this. But loyalty programs driven by AI allow for greater personalization, allow for ways that you can move those customers through your tiers based on what they are interested in, based on their frequency or based on whether or not they're interested in attending an event. So your loyalty program with an AI background can come that much faster. So watching the time. What is the theme here? On every one of these slides that we have touched on or every one of these examples, it's data, data and data. So really, it's about how you develop a customer centricity model in somewhat of a crawl, walk, run really looking at the customer 360 view, build a foundation, how you enable growth and then how you capitalize on future opportunities. Now all of this just sounds so easy. And once upon a time, I had a CEO, it was like, oh, it just happens. It's on the website. It just happens. There are teams of people and there's technology that has to make it happen. It's not magic, even though my CEO did think it happened by magic. It requires team. It requires change. It requires change management because for some companies with small teams, this is fundamentally a huge change. So as we work with companies, we're working with them to understand what's the strategy? What's the data strategy? What's the change management elements? How does your team has to change? And then how do we capitalize on maximizing this data to deliver on the promise of AI, which is where Rob can explain, how very easy this is.

That's -- that's a lot in the slide, downstairs.

Yes. oh, boy.

Very easy this is.

Go Salesforce. Well, I mean, if I back up and just kind of underscore what you said, we've been collecting data for quite some time in retail. According to our research, retailers have 44 different systems to manage the consumer engagement. That's just a lot, right? And we talk a lot about the AI revolution. It's as much about a data revolution. It's about a skills revolution. It's about a trust revolution. And that's really important because it's your data, it's your customers' data and you need to really keep that really close and secure. And so at Salesforce, we really put Data Cloud at the heart of our strategy with Customer 360. And the idea here is, again, being able to aggregate all of that data that exists, and then being able to normalize it and ultimately activate it is really key because in order to make AI work, you need the right data. And by the way, the right data likely isn't everything out there in the Internet. The right data is the data within your enterprise, what you know about your consumers, what your consumers in many cases like that guided selling example, Kacey talked about provided to you already. And even the product data as well, I think there's a lot of magic that we haven't even started really diving into yet as an industry, but then between consumer data and product data and then really being able to serve up that experience. So again, when you combine data and AI and being able to deliver it in the flow of work, there's a lot of magic that can happen.

I love it.

There's one other piece that I think is important because past the delivery, you now have to have people that are curating and tuning the information, right? The outputs because AI is still AI, right? And still the underpinnings, are still a lot of fact-gathering, but that doesn't always mean that the output is going to be what you need it to be or what you would have put in front of a consumer, which I think is one of the watchouts. I think the great thing here is that AI is doing exactly what we needed to do, it's going to power up experiences and make people's jobs easier. But hopefully, you also then are able to kind of create this economy of people around it that are taking that data and then are making sure that it gets put to the customer in a very suitable way. And when it's in your brand voice and so on and so forth. So there's a lot -- and this is a lot of systems on the board, but I think, there's a lot...

Yes. It's magic.

There's a lot of stuff. Yes, yes.

Magic happens.