The day kicked off with insights from a trio of powerful female executives. Former vice chair of General Electric, Beth Comstock shared her take on how large organisations can survive and thrive in this new era of constant change.
“Transformation means you’re never done. Volatility is the new normal,” Comstock told MSNBC anchor and business correspondent, Ali Veshi.
She said that while retailers may be tempted to put everything on hold, while they “figure this one thing out”, that’s not an option anymore. Retailers need to become comfortable with many parts of the business changing all at once.
Later, Arianna Huffington, founder of Huffington Post and Thrive Global, spoke about the importance of “switching off” from smartphones, email and social media from time to time.
“We take better care of our smartphones than ourselves. We get so used to running on empty it’s the new normal,” she told Jo Ling Kent, a correspondent for NBC.
Huffington has launched a new app that enables users to recognise how much time they spend on social media and helps wean them off.
Finally, Helena Foulkes, president of CVS Pharmacy, discussed what 2018 holds for the largest pharmacy chain in the US, which recently bought Aetna, one of the nation’s largest insurers, in a $69 billion deal that is yet to be approved.
Foulkes said the pharmacy will roll out a number of new formats this year, including stores focused more on healthy food and beauty, stores focused on value-added products and services and stores catering to Hispanic customers.
She also announced that CVS has committed to stop digitally retouching/altering its marketing material and other imagery in stores. All CVS-owned products will now carry a CVS ‘beauty mark’, indicating that photos have not been altered.
The pharmacy is already asking suppliers to do the same, and by 2020, CVS wants every product to either carry its ‘beauty mark’ or a statement that the imagery has been altered.
Lessons from global retail leaders
David Marcotte, senior vice president of retail insights at Kantar Retail, moderated a panel on international expansion with Juan Carlos Garcia, head of global e-commerce and omnichannel at the Mexico-based Grupo Elektra, and Martin Urrutia Islas, head of global retail at Lego.
Marcotte said international expansion is challenging, with logistical and operational barriers, regulatory and compliance issues, cultural differences and branding mistakes. Most retailers that choose to expand overseas end up failing, so what are the secrets to successful international expansion?
For Garcia, the secret lies in understanding which features will remain constant across borders – for instance, the fact that customers will always want cheaper products, larger assortment and faster delivery than the opposite – and which ones must be localised.
Islas said understanding your customers and your brand are crucial to providing emotional experiences that will resonate around the world. “Make sure you have a consistent plan that relates to your brand personality,” he said.
Economic roundtable: a preview of 2018
In this session, the NRF’s chief economist Jack Kleinhenz, spoke with Gad Levanon, the chief economist for North America at The Conference Board, and Wall Street analyst Brian Nagel from Oppenheimer & Co, about the economic factors influencing retail.
The conversation ranged from the impact of President Trump’s tax plan, to consumer spending behaviour, to the tightening labour market in the US.
“Retailers are already starting to struggle and will continue to have to compromise on the quality of employees [they hire],” Levanon said, adding, “The laws of supply and demand are not disappearing. When you have a tight labour market, wages will accelerate.”
This, he said will put downward pressure on corporate profits in the year ahead. Meanwhile, some major retailers, such as The Home Depot and Costco could save hundreds of million or even billions of dollars in the year ahead, with the corporate tax rate in the US falling from 35 per cent to 21 per cent.
How the tax plan will impact consumer spending, however, is more ambiguous.
“Estimates of the impact of the tax cuts are that 2018 and 2019 will see a positive impact, and from then on, it will be a negative impact moving forward. The longer [term] ramifications are more muted,” Levanon said.
The impact of AI
In one of the final sessions of the day, Kris Miller, chief strategy officer of Ebay Marketplace, Silvia Campello, president and COO of intimates brand Cosabella, Christ McCann, president and CEO of 1-800-Flowers, spoke to Deborah Weinswig, managing director of Fung Global Retail & Technology about artificial intelligence (AI).
“We’ve hit a tipping point in our ability to train AI, along with massive increases in computing power. We can do much more with AI and deep learning…It will impact how consumers become aware of brands, how they browse, how they make decisions, how they transact and how they ship,” Miller said.
For his part, McCann believes that voice is the user interface of the future. “Mass adoption of these capabilities are happening really fast,” he said.
Come back tomorrow for insights from day 3!