Late last month Salesforce introduced Digital 360, combining their Marketing, Commerce, and Experience Clouds with some new components to help companies accelerate their digital transformation efforts with respect to customer engagement. And earlier this week I had the pleasure of having a LinkedIn Live conversation with Adam Blitzer, EVP & GM, Digital for Salesforce, to talk about how the coronavirus is affecting digital transformation efforts and causing foundational changes to companies will need to engage customers and prospects long after the pandemic is over.
Interview with Adam Blitzer of Salesforce
Below is an edited transcript of a portion of our conversation. To hear the full conversation click on the embedded SoundCloud player.
Small Business Trends: What does “digital” mean to Salesforce today?
Adam Blitzer: So most people know Salesforce as a sales company, right? It’s in our name. And we really started out making Salesforce automation as easy to use as Amazon. That was basically the original premise of the company. But we came to take on many different aspects of CRM. So from sales, we moved into service, really two sides of the same coin in CRM. And then we opened up our platform to let customers build their own CRM apps. But in 2013, we really put our first stake in the ground around digital when we acquired ExactTarget, and that really became kind of the underpinnings for our marketing cloud. Then a little bit after that, we acquired Demandware, one of the leaders in digital commerce, and that became the underpinnings of our commerce cloud. We built a community cloud organically, which let people build digital experiences.
But for many years, we ran those three businesses pretty independently. And they had their own product teams, their own engineering teams, their own marketing teams, and they all became successful businesses in their own right. But when we go to a chief digital officer and we talk about marketing, or we talk about commerce, or we talk about digital experiences and we show up that way, that’s really just sort of one piece of the puzzle. When you think about what’s in a chief digital officer’s remit, it’s really the entire digital experience, how the brand kind of shows up to that end consumer. And so we thought, we have these great leading products across the board, we’re running them a bit independently. Let’s put them all together in one business unit, under one product leader, and let’s really start to think holistically about that end customer experience, as opposed to thinking about it in kind of these very specific silos.
Adam Blitzer: I mean, it has been unbelievable for digital. So of course, the headwinds that we’re facing as a society, the headwinds that we’re facing from a health standpoint, the headwinds that we’re facing economically, they’ve of course been tailwinds for all things digital because companies that were digital second coming into the pandemic find themselves digital only by necessity, right? It’s literally your only touchpoint you have with customers in many, many jurisdictions. And as we come out of this, and who knows when that is, but at some point we will come out of this, the companies that really thrive will probably be digital first. And what’s interesting is exactly, as you said, we’ve been on this path for years, right? Companies that are digital second, they’ve been moving more and more of their mix to digital over the past several years. It’s just that we probably crammed about five years’ worth of digital acceleration into these past five or six months.
And some of the trends that have been really pushing on digital over the past few years are I would say these kinds of digital native direct-to-consumer companies putting pressure on existing ways of doing business. So if you think about the razor market, for example, you and I are probably pretty familiar with that market. And by the way, it’s always amazing when I have friends who say, “I haven’t gotten a haircut in seven months.” And I’m like, “I haven’t gotten a haircut in seven years, I’m thriving right now.” This is the great equalizer for me.
Small Business Trends: I don’t look any different. So yeah.
Adam Blitzer: Exactly, exactly. This is how I look. But you think about that razor market and you think about Gillette, for example, where their distribution chain, having kind of great positioning in every store for decades and decades was such a massive advantage for them. But all of a sudden, you have really these kind of venture fueled businesses like Harry’s Razor, Dollar Shave Club, that can be really smart about going direct-to-consumer, building subscription businesses. And all of a sudden, that distribution channel is not as much of an advantage and sometimes it’s a disadvantage in kind of this zigzag world of going direct-to-consumer. And then you see that start to pop up in industries you never expected, right? Whoever expected to get a mattress direct-to-consumer where your mattress is packed into the size of a pill basically and then all of a sudden, it springs out in your room.
And from a consumer experience, these things are incredible. If you’ve ever bought any of those direct-to-consumer products, you have just this amazing experience that comes to you, you have a great return process, et cetera. You can say, hey, these might not be great businesses necessarily, right? They have to kind of ease into becoming a profitable business, but regardless of that, they put tremendous pressure on the traditional way of doing things. And so many of these kind of more traditional companies were starting to pump more money and more resources into their own direct-to-consumer channels. Then you hit today where all you have possibly as a direct-to-consumer channel, or you have severely sort of limited traditional channels. So I think you had kind of this force that was already underway, and now it’s no longer a nice to have, it’s a have to have.
Your example around curbside is another good one where I would say, companies that had best-in-class experiences around ordering, around consumer experience, they were already doing things like that. You’ve made an order, say, “Hey, you know what? I don’t want to get it at my house, I want to pick it up in the store. And actually, I don’t even want to go into the store, I just want you to bring it out curbside, I’ll go grab it.” And that I would say was sort of a best-in-class experience, but it wasn’t a have to have. And then all of a sudden we’re thrust into this world where it’s a have to have. And then as we emerge from it, that’s just reset the customer expectation. Now, customers, that’s just part of the experience you expect. And that builds on the trend, I would say, of companies used to compete only with companies in their industry. So if you were a bank, when you were thinking about the customer experience, you were comparing yourselves against other banks.
But now what’s interesting is if a customer has a great experience with a brand, that’s now what they expect from any brand, regardless of what industry they’re in. So if I have an incredible experience with Harry’s Razors, I now think, hey, every product they buy should be as easy to get as Harry’s Razors, right? Or I should be able to subscribe to any kind of product. Whether it makes sense rationally or not, that has reset the customer expectation for me.
Small Business Trends: The other thing too, when you think about customer experience, supply chain always had some impact on customer experience because people expect to get things they order and they expect to get it in the timeframe that the expectation was set for. It seems like now, customer experience is more so impacted by supply chain and some of these other kind of back office pieces. So how does digital transformation, how has that changed because of kind of the growing importance of things that may not be out in front of the customer, but impacts the experience the customer has with you?
Adam Blitzer: I think as consumers, none of us ever thought about either supply chain or sort of distribution before. You just sort of assumed there’s an infinite amount on both sides of the equation, right? Companies are going to have no problem stocking things. And then when I order something, it’s going to be able to get to me. And I think Amazon, for example, really trained us as consumers that you can sort of order almost anything and then you could get it within two days. And then all of a sudden, during the pandemic, you saw certain items are prioritized, right? Essentials are prioritized. Other things maybe backed up even for a company with the logistics and operational excellence of Amazon. So all of a sudden you realize, wow, there is a finite capacity, whether it’s the postal service, whether it’s UPS, whether it’s FedEx, they can’t burst infinitely.
And it’s interesting to see how that’s playing out for consumers like us. For the first time, you’re seeing retailers who aren’t pinning all of their hopes on cyber week, right? They’re sort of starting cyber week a month ahead of time or two months ahead of time, not because they necessarily think that’s the best possible strategy for sales, but because they know there is an infinite capacity on that fulfillment end and they don’t want to dilute the customer experience by having customers order things and not have them show up in a reasonable amount of time. So that’s a pretty interesting thing to think about that I think we as customers, we as consumers haven’t really had to think about or haven’t had to face, and it’s interesting to see how companies are zigging and zagging to sort of get around that and still maintain an excellent customer interaction.
Small Business Trends: Yeah. I actually heard, and maybe it kind of makes sense for this year, I don’t know, because Amazon had to push back it’s Prime Day from July to, I think it was just last week, so that’s October, that is so close to the traditional start of the fourth quarter holiday shopping season, but it had to have an impact. So how are you helping your customers prepare for kind of the unknown this year when it comes to what to expect for this year’s holiday season?
Adam Blitzer: Well, so it’s interesting. One of the stats that we talked about on our Q2 earnings call was that GMV, so gross merchandising volume, or kind of the amount of merchandise flowing through our commerce system is essentially double from the same time period a year ago, so roughly 100%.
So what that means is that companies are experiencing holiday level traffic. So on the marketing side, they’re probably doing holiday level kind of campaign execution, but on the commerce side, certainly they’re experiencing holiday levels surges and purchasing every single day. And so I think what’s crazy to think about is, how much more holiday can holiday be? And the biggest impact of that is not that these companies don’t think they can get the sales, they think they will be able to get the sales, it’s on the fulfillment side, right?
Can they actually get the orders to the end customer? So we’re doing, a couple of things. Obviously, from a capacity standpoint, we’ve had to just normally we have this surge of readiness for all of our systems. I mean, anyone who’s operating in the consumer space would do the same to make sure that we’re ready for holiday season. We had to do that starting in March, right? So it was just a different level of preparedness that you might have as a vendor like us in a different amount of your R&D is focused in that area. The other thing is we’re working a lot on kind of order of flexibility with our customers. So when their customers place an order, where does it go? How can it be rerouted? Can it go to a local store? Can it go to a last mile sort of career to get to them, as opposed to sort of a traditional means of delivery?
And so we’re playing in a space that we hadn’t traditionally in the order management space. We launched a product around order management, right at the beginning of this year, really before the pandemic hit in Europe and in the US. Sometimes it’s better to be lucky than to be good. We just happened to be launching that product, but it wound up becoming an incredibly important part of the customer experience to be able to manipulate the order and figure out where exactly it’s going to be and send it somewhere else. So those are the ways that we’re helping our customers through this, really around capacity planning, and then also flexibility around that customer experience.
What’s interesting is, on the direct-to-consumer side, we’re seeing brands that had never done direct-to-consumer in any way. And they felt the pressure, I think, of being disintermediated from their customers, right?
If you were a consumer packaged goods company, you have a little data about your customer, but chances are the retailer that you’re selling through has a much richer relationship with your customer than you do. And so they’ve kind of felt this need to get closer to their customer, but all of a sudden during the pandemic, that’s become a true liability for them. And so you see consumer packaged goods companies, manufacturing companies, standing up e-commerce sites for the first time. And I would say it’s quite different from a traditional retailer e-commerce site where everything is pixel perfect. The experience is absolutely perfect. It might be a really complex headless experience branching out into all the different channels. I would say this is much more quick and dirty.
Put a stake in the ground and say, hey, for the first time, we have a way to transact with our customers directly and we’re just going to get something out there. We’re going to learn from it, we’re going to iterate, and I think it’s been a much more agile approach, whereas probably whatever was in their plan before was much more of the big bang pixel-perfect, we’re going to take years to stand something up. So that has been pretty impressive.
We’ve also seen brands that have had direct-to-consumer parts of their business just really take over as much, much stronger channels for them. I was talking to the CEO of Sonos fairly recently, and Sonos is an amazing manufacturer of sound equipment in people’s homes and soundbars and subwoofers and things like that. And they’ve had a direct-to-consumer channel for more than a decade, but still were primarily selling through Best Buy and Amazon and things like that.
And they saw their direct-to-consumer business surge 300% in Q2 year over year. So an absolutely incredible amount of growth, and one by necessity, but two, they’re actually thinking about all the different ways to drive that flywheel and make it stronger and stronger. They’re also adding a lot of things into their products to drive more usage because the more a customer is using those products, the more they learn about them, right? Because of course the products are instrumented and they can also pick up signals that a customer’s kind of ready to have a deeper engagement. They might need the next product, they might be willing to be an evangelist of the product. So you see them kind of layering in more services like Sonos Radio, different ways to engage. And I think that’s going to be increasingly common. Companies not only have direct-to-consumer channels for the first time, but they’re also building into the products a deeper level of engagement to continue to learn, to continue to build profiles around those customers.
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This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.