Black Friday Special

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2:38Plus, global business, finance, and tech news as it happens. The Bloomberg Business Week Daily podcast with Carol Masser and Tim Stenevec on Bloomberg Radio. More retailers turning to the new technology, AI that is, this holiday shopping season. But balancing the efficiency that technology can bring with the trust customers base in human interactions can be tricky. Dan O 'Connell is the CEO of Front, an AI customer service platform. Dan, welcome and thanks for joining us today. So how does Front differentiate itself from other purportedly AI-dominated customer service platforms? Yeah, great question.

3:15and thanks for having me today. So Front's really the only platform that combines traditional email, help desk, and chatbots together in a single platform to deliver exceptional AI-driven customer experiences for incredible depth and breadth of customers. Okay, sounds interesting. So who are your customers and what do they pay you for the service? Yeah, so our customers today are really focused on two things. One, they want to automate low-value repetitive tasks to deliver exceptional customer experiences, and they've got high-value relationships that they want to have a human touch for. And so our customers are B2B customers, specifically in mid-market and lower enterprise, that leverage us again as a way to go and communicate and manage the relationships with their customers.

3:57Carol Massar:All right. I'm going to just cut to the chase because CEOs, they understand and the terminology, but what is it that you really are getting to for one of your clients in terms of the customer information and what you're doing for them? Sure. Every business out there needs to manage customer relationships. And so, again, that can be how do we go and respond to customers over chat or over SMS or over email. They need to understand the insights that are coming from those conversations so they can better route them. And, again, really focus on just these wonderful customer experiences across really any channel that's out there, voice, video, SMS, text and email.

4:35Carol Massar:Dan, I have to say, I think it's either the control rooms around here or everybody around us are like, come on. And we've all had a customer experience where we either don't get the answers or get into kind of a chat bot that doesn't ask the right questions and says, hey, are you all done now? So how do we make it better so that really is this about, you know, customers, companies gathering information or is it really about making the customer experience easier and more productive? Well, I think it's a balance. The earlier segment, we're all incredibly excited about the opportunity for AI to deliver faster responses and instant answers.

5:11We know that every consumer out there wants to get an instant answer to any question or problem they have around an order. And I think there's also a balance of look. We're in this holiday season. It's really emotional. If there's a shipping delay or an issue, you want to be able to go and talk to a person. And so I think the balance of finding this opportunity is incredibly important for every brand that's out there. You can't just automate away the people. You can't just automate away every task or workflow. And so I think the best businesses are going to strike that balance. And I think we're in this real time experiment right now in this holiday season, given kind of the excitement around AI.

5:45So what do you use for large language models? Whose AI do you use? And, you know, where is all that data stored? Yeah, so in terms of we've got a multitude of partners that we leverage to provide our AI. We do some work in-house. We obviously leverage OpenAI and Mistral, who are foundational large language models. I'm sure most of the audience is familiar with some of them. And one thing that's really important as we talk about this data is making sure that our customers have full control to that data. Again, and then when we talk about the customer experiences, nobody wants to be tricked out there in terms of when they're engaging with AI.

6:27And so I think this is also a fundamentally important focus for us at Front, which is make sure that the users have full control, make sure that we're very clear around where there are experiences with an AI or automation and when you're actually engaging with a human. So software as a service, your AI chatbot just brought me over to your pricing page, which thank you very much and is asking me if I have any questions. and you can get a starter pack for 25 bucks and it goes on up to 105. But I imagine it's small and medium-sized enterprises mainly that you're targeting, right? Because the bigger companies are doing it themselves?

7:02No, you would be surprised. And so I think every business on the planet is going through a platform shift right now around customer experience. And so we are working with some small businesses that might have, you know, five or 15 seats. and our largest installs are upwards of 1 ,000 seats. Some of the largest brands that are recognized, Uber Freight, for example, is a business of ours that leverages us. And so again, I think what's interesting at this moment in time is everybody are picking new platforms around customer experience. And again, that's because of what AI is already demonstrating and has real capabilities and real revenue traction.

7:39But I think also people are excited about what are the opportunities that AI can deliver in the near future.

7:44Carol Massar:Hey, Dan, just got about 30 seconds here. You have so much data on your platform. We all care about what the U.S. consumer is doing. In 30 seconds, how would you say the U.S. consumer is doing and faring? Yeah, I think what we see is I am expecting us to have one of the biggest Cyber Mondays and holiday seasons that we've seen. We already know that people are shifting and making more purchases online and through mobile. Again, that increase in volume obviously leads to there's going to be some increasing frustrations and breakdown, and they're going to want to have these exceptional customer experiences across any channel.

8:20And so, again, I'm expecting us to have a pretty big holiday season here.

8:23Carol Massar:All right. So it sounds like you're going to be pretty busy going ahead. Hey, Dan, thank you so much. Dan O 'Connell, he is the CEO of Front. Stay with us. More from Bloomberg Businessweek Daily coming up after this. What if data didn't sit still? What if intelligence moved with us? Not buried in reports, but activated in real time. Where lives are being shaped. Where decisions are being made. It all starts with a question. Where is the potential? Cotality turns data into clarity. Intelligence into insight. Insight into action. Because when intelligence moves, we all move forward.

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11:20Carol Massar:With consumer sentiment overall this month falling the most since the month of April, there are questions about how holiday shopping and retailers' full-year earnings will be impacted. So there's a lot going on this holiday season and expectations, too, around it. We're joined now by Natalie Cutler. She's BDO's National Retail and Consumer Products Industry Leader, and she joins us on this Black Friday. Hey, Natalie, great to have you here with Vani and myself. What are your expectations around this holiday shopping season? Well, great to be here. Thank you. You know what, I think this holiday season is going to be challenging, yet I do think it's going to ultimately be okay.

11:59I think there's going to be winners and losers on the retail side, just like we would expect to see in any year. Those retailers that really understand what their consumer is looking for, whether it's value, convenience, or experience, those are the retailers that are going to be successful.

12:18Carol Massar:Natalie, one thing that caught my attention this week, Citi coming out and saying that Black Friday performance is overblown as a metric for retailers. Going on to say the Thanksgiving weekend shopping event is given too much attention as the season is, quote, typically won or lost in the weeks leading up to Christmas, with the post-Christmas week becoming more important to most retailers. That's Citi's view. Does Citi have a point, though? So I do think that the weeks leading up to Black Friday certainly are an indication of what will happen on Black Friday the entire weekend and then certainly for the rest of the month in December.

12:54Black Friday used to be the turning point and the key day for most retailers. And we know now that it is so much more than that. It is now beginning November and even Amazon as early as October. So the holiday season has really stretched out more so than it has been in years past. So it's kind of difficult just to nail down a particular day. Having said all that, I do think that Black Friday or this entire weekend and including Cyber Monday are still critical days for retailers because that is the day that the consumer's mindset is, oh, I have to go out there and get my shopping done. Natalie, are there any new approaches when it comes to marketing?

13:34I picked up my phone a little while ago and there must have been about 50 emails offering me things. And obviously, these are people I've given my email to already and they think of me as a loyal customer. But for many of them, I'm not. So let's dig deeper a little bit on that whole concept of loyalty. So loyalty programs are super important and retailers are doubling down on the loyalty programs. So in the past, probably as you did and so many others, as did I, you wanted a 5%, 10 % sign-on discount. Lots of consumers signed in, got their initial 10%, and that was the end of that. And then we're all continuously getting these emails.

14:13But good retailers are doubling down on the retail, on the loyalty programs, and they're offering either tier discounts. Buy X, get a discount of 10%. Buy Y, get a discount of 20%. Some loyalty programs are offering exclusive promotions. They're offering those promotions early. And then they're also offering exclusive drops or exclusive products. So I do think that the old loyalty program that we've seen for many years, where you just get that initial discount, are no longer the case. And retailers are not only providing those discounts. What they're really doing is actually getting information and they're gathering data about us as consumers, what we're buying, when we're buying it, and utilizing AI as to how they can offer us better and more targeted and personalized promotions.

15:10And I imagine they're turning some shoppers away with a volume of these emails. I want to ask you about Omnichannel because it used to be that that was sort of in person or online somehow. But that's expanded as well now, given that we can all shop through our social media apps, should we want to. Absolutely. So it used to be, just as you said, used to be either in store, you used to have online. Now we have mobile commerce and we have social commerce. And retailers really need to have a very strong Omnichannel to capture all of those different channels. So, A, not to lose the consumer, you know, if you have a promotion in the store, but you don't have the promotion available online or vice versa or in social commerce.

15:51And I think social commerce actually opens up a whole nother area of opportunity for retailers. And that's through the two influencers. You know, buying through influencers is someone that you can relate to, someone with your interest, perhaps in your age bracket, someone you can really connect to. I think influencers are certainly driving the sales and the interaction on social commerce.

16:19Carol Massar:Hey, Natalie, just to wrap up, because, you know, we've talked a lot about the consumer, but you obviously work with a lot of companies and businesses that sell stuff to the consumer. Just got about 30 seconds left here or so. what are they saying about the environment right now? Are they optimistic? Are they more conservative about the outlook? Just quickly, if you could. I think you're really seeing a mix of all of that. Some retailers are optimistic, the ones that have a very strong front and back end in terms of how they view the consumer, whereas some retailers that are not as comfortable or do not have all their processes in place, They didn't buy the inventory at the right time or at the right price.

17:00And now, therefore, we'll be offering significant discounts in Q4 and beyond. All right, Natalie, thank you so much for joining us. That is Natalie Cutler from BDO's Retail and Consumer Products Industry Group.

17:14Carol Massar:Stay with us. More from Bloomberg Businessweek Daily coming up after this. You're listening to the Bloomberg Businessweek Daily podcast. Catch us live weekday afternoons from 2 to 5 p.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app. Or watch us live on YouTube. Keeping up with that holiday theme, holiday travel, you know, is often stressful. Another place may be gummies and cannabis may come in handy, some might say. Hey, this year, travel may be a little bit different, though, as many Americans made changes to their plans during or because of the U.S. government shutdown.

17:52Carol Massar:Even so, it is expected to be one of the busiest travel seasons in years. Let's get more on what to expect with Clint Henderson. He's Travel Insider, Managing Editor of the travel media platform, The Point Sky. Always knows so much about what's going on and where the deals are. First of all, Clint, just look back. How much do you think or how much are you hearing that the government shutdown may have impacted holiday travel this year? Yeah, so we did a poll with YouGov at The Point Sky, And we found that 40 percent of those planning to travel for Thanksgiving or Christmas were reconsidering their plans, changing their plans or canceling their plans.

18:27So in the end, because the government shutdown ended when it did, I don't think anywhere near that number ended up canceling. I do think some people chose to drive instead. And maybe some people were scared off of traveling for the Thanksgiving holiday. That said, there's still record crowds. So it didn't it didn't really dent the numbers as much as it could have. But I definitely think the air traffic controller shortage thing got a lot of publicity. That's an ongoing problem that I think a lot of people hadn't heard about before. So, you know, we did see an impact to pricing for Christmas flights.

18:59So we did an analysis with PointsPath and we found prices dropped around 6 % year over year for Christmas, which is really unusual this time of year. Usually it's only up, up, up for Christmas. Yeah, I've noticed some great deals to some European destinations that I definitely, definitely didn't notice when I was speaking with you last year because I remember well. Give us the skinny. Where are the best destinations? Where are the best discounts when it comes to Black Friday shopping? Yeah, so pretty much every single airline has a Black Friday sale on right now or is planning one for Travel Tuesday, Cyber Monday next week.

19:32It's a great time to shop for travel, especially if you have some spring break trips that you're going to plan because that can be really expensive. but round trip under$500 is common this week from everyone from Singapore Airlines, Aer Lingus, American Airlines launched a huge sale today. So lots of good deals to Europe, for example, out there. Also, American Airlines has flights under$100 one way all over the country, including trans cons between San Francisco or LA and New York. So really good deals out there. Alaska Airlines, 30 % off. And then all the hotels are 25 to 30 % off today. So take a look around.

20:08We have a whole write-up at the Point Sky that I've been updating frequently. And so there's lots of good deals out there. So much so that I think travel has replaced sort of merchandise as the best deal during these Black Friday holidays. It's pretty remarkable because when I started out in this business, it was really a gimmick. Travel Tuesday was not really a thing. And now it really is. I agree. I definitely have had good luck on this particular weekend, actually, booking travel. Talk to us about some of the domestic and international places that people are booking most. Yeah, Europe is good.

20:40It remains hot. And it's always the case. Florida, Las Vegas is still hot. New York City, crazy demand in New York City. If you've been out in the city, you know what it's like out there. I just can't believe hotel rates,$800 to$1 ,000 a night into city. It's just crazy to me. But Europe is hot. And then, of course, Japan. The US dollar remains strong. So places like Japan are a relative bargain for Americans. And that's really where everyone wants to go. I don't know if it's Instagram. That seems to be the hot spot.

21:12Carol Massar:Really fascinating. One of the things I want to go back to, though, Clint, is in terms of deals. You talked about 30 percent off or this percentage off. What about for people who use miles? Yeah, I'm not seeing as many mileage deals, though they are out there. I think you just have to be really flexible and you have to be nimble with booking mileage deals right now. Now, you know, last year, that's what we were seeing more was mileage deals. This year, it seems to be cash deals. So very interesting trend to watch. I use tools like seats.aero to find cheap business class flights. And, you know, there's explanations of all this stuff at the points guide.

21:47But you have to be a little tricky these days to get a really good deal on points.

21:51Carol Massar:That is so true. Hey, listen, the other thing I want to ask you about is cruise lines, because I've seen a lot of commercials for the cruise companies. and they do seem to be saying sign up now and a big percentage off. How much of that is kind of amping up to bring in consumers? Yeah, it's really interesting. The cruise industry was the last to recover coming out of COVID and we saw some extraordinary deals. I just am not seeing a lot of deals in the cruise space these days. So if you see something in an ad that looks really good, jump on it because cruises are selling out. It's remarkable to come back in the cruise industry.