The Future of Retail in Quotes by Top CEOs
What will be the key to success in the retail industry? Fortunately for us CEOs of leading retailers are not shy about sharing their strategic priorities for this year and beyond. As you will see the store remains central to meeting customer needs, whether that’s for picking up items or for making sure the right purchase is made. Diversity and inclusion and sustainability are also among the key issues retailers are focused on. Take a look at what some of the top CEOs in the retail industry have to say about the future of retail.
1. Corie Barry – CEO of Best Buy
On Best Buy’s third quarter 2020 earnings call Barry discusses the importance of stores to Best Buy’s strategy.
“Our stores provide customers the opportunity to see and touch products, ask questions, get advice and receive support. As we have discussed many times, they also serve an important role in the fulfillment of online sales. We have created what we believe to be an industry-leading store pickup experience that our customers value and now expect from us,” says Barry.
“So our stores will look different over time in terms of function, size and possibly even quantity, but they remain incredibly valuable and a cornerstone of our strategy. As we mentioned last quarter, we have started to evolve the way we use our stores for fulfillment. We are pleased with the progress of our 250 ship-from-store hub locations that we first piloted in September. In fact, we are adding about 90 locations for the holiday period.”
“We are also testing new store formats to test our hypothesis of stores as more primary fulfillment hubs. In four Minneapolis locations, we reduced the shoppable square footage to approximately 15,000 square feet from an average of 27,000. The product assortment on the sales floor will still include the primary categories these locations had before the remodel, but the merchandised SKU count will be reduced, focusing on the most popular items.”
2. Jean-André Rougeot – CEO of Sephora Americas
In a statement Rougeot spoke about the importance of diversity and inclusion to Sephora’s future.
"At Sephora, diversity, equality, and inclusion have been our core values since we launched a new kind of beauty retail destination in the U.S. over 20 years ago – but the reality is that shoppers at Sephora, and in U.S. retail more broadly, are not always treated fairly and consistently," says Rougeot.
"We know that we're in a strong position to influence positive changes in the retail industry and society at large and it's our responsibility to step up. We're committed to doing all we can to make our U.S. retail experience more welcoming for everyone."
3. Brian Cornell - CEO of Target
In an interview with CNBC and on an earnings call, Cornell talks about how one stop shopping is propelling sales growth at Target. He also comments on the importance of stores to the retailer’s success.
“We’re seeing many families coming to us to pick up a new Barbie or something for their kids — a Lego item,” says Cornell. “But while they’re there, they’re shopping for Microsoft items or Apple. Even during the pandemic, children are outgrowing their clothes, so guests are coming to us for Cat & Jack, but while they’re there they’ve discovered that we have Levi’s Red Tab available for them and their families. They’re also visiting food and beverage and discovering our Good & Gather brand.”
“Our stores were the key to this unprecedented growth [in the second quarter of 2020], with in-store comp sales growing 10.9 percent and stores enabling more than three-quarters of Target’s digital sales, which rose nearly 200 percent. We also generated outstanding profitability in the quarter, even as we made significant investments in pay and benefits for our team.”
“We continue to see the most valuable and profitable guests to Target are the guests that use all of our channels.”
4. Julie Wainwright – CEO of the RealReal
In an interview with Vogue Wainwright discusses its partnership with Gucci and the importance of sustainability.
“Gucci is at the forefront of driving the fashion industry to become more sustainable, so having them recognize the role of resale and The RealReal in creating a more sustainable future is really powerful,” Wainwright says. “By encouraging their community to shop resale, Gucci will help us bring more people into the circular economy and show that resale is complementary to brands.”
“We have to get people thinking about the life cycle of what they buy. One garbage truck’s worth of textiles is landfilled or burned every second. Fashion can’t continue being disposable—we have to buy things that are well made and resell [them] when we’re done with them. Partnering and collaborating directly with brands, as we are with Gucci, is a meaningful way for us to harness their influence to increase exposure to the importance of circular fashion.”
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5. Todd Vasos – CEO of Dollar General
In first quarter and third quarter 2020 earnings calls Vasos talks about the power of targeting price conscious consumers.
“Our data suggests an increase in new customers this quarter, as compared to Q3 of 2019. These new customers skew younger, higher income and more ethnically diverse, further underscoring the broadening appeal of our value and convenience proposition,” says Vasos.
“We operate in one of the most attractive sectors in retail and with our unique combination of value and convenience, further enhanced through our initiatives, we believe we are well positioned to successfully navigate the current environment and emerge even stronger than before.”
“We feel that we're very well positioned. The sweet spot, I would tell you, we do very good in good times and we do fabulous in bad times.”
6. Ernie Herrman – CEO of TJX
On TJX’s third quarter 2020 earnings call, Herrman talks about the importance of the in-store experience as well as how TJX will capture share amidst a sea of store closures.
“We are convinced that our great brands at great values concept is an enduring retail formula that we will continue to be a major draw for consumers. Our surveys tell us that our customers love our differentiated treasure hunt shopping experience and we are convinced that this will continue to service extremely well when more consumers are comfortable shopping our stores. We believe our value proposition gives consumers a compelling reason to shop us in this environment and will continue to attract shoppers over the long-term,” says Herrman.
“We see a significant opportunity to continue our global store growth over the long-term. We are in an excellent position to take advantage of real estate availability to open new stores and relocate existing stores.”
“Again we've talked about this before that when things normalize, we should get the increased market share because of all the store closures that have happened with brick and mortar. I believe we're going to capture a lot of that coming out of this.”
7. Erik Nordstrom, CEO of Nordstrom
In an interview with Bloomberg Erik Nordstrom, CEO of Nordstrom talks about the future of retail and what matters.
“Are we over-stored? Oh, sure, we’re over-stored. It’s not a big news flash that America has too many malls, too many stores. And people are online more. Now, are there going to be no stores? Well, of course not. There’s times where, especially what we sell, people like to touch, feel the sizes. I think it’s interesting that our online returns, the vast majority of customers choose to come in a store to do it. We have free shipping on our online returns. But they’d rather come to a store; it’s just easier than putting it in a box. So customers are going to do what they want to do. Our job is not to try to coerce them into a channel or a certain experience that we prefer. Our challenge is to give them options and let them do what they want to do,” says Nordstrom.
8. John Donahoe, CEO of Nike
In an interview with CNBC John Donahoe, CEO of Nike talks about Nike’s sustainability efforts and why it’s important to look at customers through a single lens.
“Climate change is impacting sport. In fact, Tokyo is likely to be the warmest Olympics on record. And so, our athletes care about this topic. And so, Nike is investing heavily in sustainability, says Donahoe.” “So, for instance, all the Olympic U.S. athletes that will be on the medal stand will be wearing a Nike jacket and Nike pants that are made of 100% recycled materials. And so, Nike, as I think you know, is the largest recycler of polyester in the world, over a billion plastic bottles are recycled each year into NBA jerseys or the jerseys that the U.S. women’s soccer team wore last year in the World Cup. So, the investment and commitment to innovating in a sustainable way is something that matters to our athletes and to Nike.”
“I’ve said this several times in the first couple of weeks. We can’t be using words like physical and digital. Because that’s not how the consumer thinks. In many ways, every company is a digital company these days. We have the blessing of incredibly innovative products. And the simple question is: how do we allow consumers to get what they want, when they want it, how they want it? Whether it’s digital, whether it’s physical or any blend of the two. And the assets we have and the brand recognition we have, I think give us enormous opportunity to be one of the real leaders in doing that.”
“I think consumers are looking for experiences that get them, as I say it -- I’ll say it one more time, what they want, when they want it and how they want it.”
9. Mary Dillon, CEO of Ulta Beauty
In an interview with Fortune Mary Dillon talks about the importance of diversity.
“From day one, I was insistent that every single shoot that we did, every single piece of content and social media really reflected the beautiful diversity of our country. Whether it’s age or race or gender identity, male, female, everybody participates in beauty,” says Dillon. “As an industry, if we can’t be inclusive and diverse, I don’t know who can be.”
10. Doug McMillon, CEO of Walmart
In an interview with CNBC Doug McMillion talks about social commerce and the power of TikTok.
“If you’re watching a TikTok video and somebody’s got a piece of apparel or an item on it that you really like, what if you could just quickly purchase that item,” McMillon said. “That’s what we’re seeing happen in countries around the world. And it’s intriguing to us, and we would like to be part of it.”
“If you click on that garment that you want to buy and it takes two weeks to get there, that’s not a very good experience,” he said. “So how could we help with a supply chain, a back-end that makes the whole experience terrific, not just the moment that you buy the item.”