STORES Convention Daily - 2019 Big Show Day 3 - 1
Solve Store WORK Challenges BOOTH 4001 TUESDAY, JANUARY 15 940949_Reflexis.indd 3 Top of the World I Crowd Pic Target Corp. Chairman and CEO Brian Cornell shares company strategies with a packed house Monday morning. Target Stores Up Successes B rian Cornell, chairman and CEO of Target Corp, has just four simple keys for success in future retail. But as he well knows, they aren't easy. Speaking Monday morning to a packed house during "More in Store: Target Invests in its Guests and Its Future," Cornell said whether in an up market or down market, whether a big or small company, these truths remain. "You must always start with the consumer, in every decision that you make," he said. "You have got to be willing to invest in both the present business and for tomorrow. Importantly, you have to be willing to reinvest in stores, in digital, in technology, in fulfillment and in your teams. And you have to be willing to disrupt yourselves." In recent years, Target has done all of that - and then some. It's not just that the 2018 holiday season was a good year for retail as a whole; at Target, the company had its best sales in more than a decade. "So go back 10 years," Cornell said to the crowd. "What's changed? I think the The last day of NRF 2019: Retail's Big Show closes with lessons on brand building from entrepreneurs Chip and Joanna Gaines. The co-founders of home and lifestyle brand Magnolia, Chip and Joanna will discuss their unexpected launch into reality TV prominence and their strategies for connecting with today's shoppers. Don't miss Chip and Joanna in the Qualtrics Theatre today at 4:15 p.m.! 12/20/18 11:48 PM short answer is, everything." Digital, back then, was more a "rounding error" than an essential part of the customer expectation. The millennial consumer was a big mystery. iPhones were just being introduced. "And I can tell you, nobody - nobody - ever shopped from their Blackberry." In the period following, stores set their sights on digital, hoping to keep up. Many questioned whether physical retail would make it. Today, however, the conversation is more "and" than "either/or." And Target is helping lead the way. "We quickly realized that we were never going to win if we played someone else's game," Cornell said. In those days, the company was running Target.com as a separate business, with different buyers and different inventories. "We knew we couldn't build distribution centers fast enough to go head-to-head with Amazon." But then the light bulb went off: Target already had more than 1,800 potential distribution points in its physical locations across the country. "Until that moment, we only thought about them as stores," he said. "It turns out, they had a lot more potential." In February 2017, Target promised to invest $7 billion in capital not only in enhancing the digital experience, but also in reimagining its stores and opening smallformat locations. There was also $1 billion of operating income earmarked for investing in the company's people. Target has been exploring new technologies, from AI to VR. "But we're also realizing there's still See "Target" on page 6 an McGarrigle, chair of the World Retail Congress, moderated a pair of back-to-back interviews yesterday morning in "On Top Of The World: Commanding Today's International Retail Markets." Speaking with him were J. Michael Evans, president of Alibaba Group, and Alex Gourlay, co-COO of Walgreens Boots Alliance. McGarrigle began by observing that Alibaba is frequently described as the "Amazon of China" and asked Evans if that description is accurate. No, said Evans, it is not, and noted some key differences between the two organizations. "We are a marketplace, not a retailer," he said: Alibaba doesn't compete with brands, small- to medium-sized enterprises and retailers who use the site. "In fact, we share data with them." A second differentiator, Evans explained, is the scale of Alibaba Group. "There are 600 million consumers on the platform," he said, "and we're at about $780 billion in sales. We deliver 70 million packages a day. We have more than 10 million SMEs on our platform, and more than 200,000 brands - over 10,000 of them from the U.S. Singles Day is something we hold on November 11 each year. Last year, a couple of months ago, we sold $31 billion in products and delivered over 1 billion packages." The age of Alibaba's consumer base is another factor. Of those 600 million consumers, more than 85 percent are younger than 35; 40 percent are 28 or younger. "So, this is a young group of consumers, and nearly everything they do - more than 90 percent - is done over a mobile phone," Evans said. "Lastly, when I listened to Kara Swisher this morning, she talked about the moats that Amazon had built. We're not building moats, we're building bridges. Specifically, we're building bridges between our online business and the offline See "Top" on page 24 THIS ISSUE IMPACT AT SCALE........................... 8 ROBOTS IN STORE.........................10 CUSTOMER-CENTRIC MERCHANDISING...................... 22