STORES Convention Daily - 2019 Big Show Day 3 - 1
TUESDAY, JANUARY 15
Top of the
Target Corp. Chairman and CEO Brian Cornell shares company strategies with a packed house Monday morning.
Target Stores Up Successes
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
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
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
IMPACT AT SCALE........................... 8
ROBOTS IN STORE.........................10