Constant change is the norm in retail and expectations for customer service, technology enhancements and value pricing have never been higher, according to executives from some of the largest U.S. retailers who took part in a panel discussion at the 2016 Emerging Trends in Retail Conference sponsored by the University of Arkansas Center for Retail Excellence.
When asked how they thought retail would look in five more years all said somewhat the same, but different. The conference was held June 14 in Rogers.
John Furner, chief merchandising officer for Sam’s Club, said there are some formats from today that will still be relevant in the years to come, like Sam’s Club. He said the club format will continue to work because of its value proposition.
“There will be several new startups, that none of us have anticipated,” Furner said.
J.K. Symancyk, CEO of Academy Sports & Outdoors, said every year in the past there’s been some technology or format that everyone thought would dominate retail. That hasn’t happened.
“The world doesn’t need another retailer it just needs better retailers. Customers don’t say they choose to shop this channel, they choose to do business with brands they trust and the same is true from a supplier and retailer standpoint,” Symancyk said. “We will continue to innovate and serve customers differently as they dictate. There will be long time businesses that innovate and survive, new ones too, but there will those who don’t. The consumers will win because they will have better choices.”
Michelle Gloeckler, executive vice president of consumables at Walmart U.S., has no doubt consumers will be in the driver’s seat. She said they will continue to be more educated and tech savvy and want great service along with value pricing. In terms of health care, she expects to see more emphasis placed on home care and thinks Walmart is uniquely positioned to benefit from this trend.
“I love the U.S. business because consumers have a loyalty toward brands that they like and will continue to seek them out,” Gloeckler said.
Paul Gainer, executive vice president of Disney Retail, agreed with Furner that value or quality would be more important to consumers in the future. He said there has been a lot of negative press in the media regarding shopping malls and decreased traffic. Gainer said just like the retailer who invests in experience, mall owners who invest in redevelopment and improving customer entertainment and experience values will be the ones who survive.
Chris Johnson, principal financial officer for Little Rock-based Dillard’s, said customer experience is high on the priority list. He said the old mall real estate plan would have called for a majority of the space allocation to go to retailers with small allocations for movie theater and a food court. Now that has flipped. Johnson said the new plans call for bowling alleys, restaurants, fitness centers and other entertainment venues that promote higher traffic counts over retailers.
He said Dillard’s benefits from being in malls where there is active entertainment and exercise facilities. Johnson predicted smaller mall parking lots in the future as Uber and Lyft will transport more shoppers to malls.
BARRIERS TO GROWTH
The executives also talked about barriers to growth they see in their respective businesses. Gloeckler said Walmart’s size and the demand and competition for capital in a large company can be a barrier. She said a retailer 54 years old has a lot of old stores that always need updating. That can be a drain on capital. She said each department and category competes for capital every year.
“This year we might get a new cooler for the stores and that’s it. We are told that it’s needed and it’s good for the entire box. We have to go back and relay that to our teams. So we dig in, do more research and test some more and take another shot next year,” said Gloeckler.
Symancyk said there are always challenges and capital restraints. He was the president of the Michigan-based retailer Meijer Hypermarket before taking over as CEO of Academy in October 2015. He shared a quote from the late Fred Meijer that summed up the feelings of everyone on stage: “Reality hit when I realized I am amass retailer in an increasingly less mass world.”
Symancyk added that retail today is a collection of minorities, shoppers have more choices than ever before, and staying relevant is harder than ever.
The executives were also asked to talk about how technology is used in their operations and who is directing that application in the retail business.
Gainer said technology is in the DNA at Disney, and said there is no longer a breakout of technology spending on the financial statement. He said it’s imbedded into every single division of the company and is being directed from the CEO downward. He said the push to use technology to its full extent is expected throughout the company.
He said a few years ago his kids were going into high school and he noticed it was a paperless system. At the same time he was getting ready for the seasonal hiring and training and all of those materials were in paper form. He said it took almost two years to automate the paperwork into digital only format.
Gloeckler said Walmart’s investment in technology continues to be priority with more than $2 billion spent over two years. She said Walmart has become more agile in testing many types of technology applications at once and then retooling some of them and launching those with the most potential – like Walmart Pay.
Furner said Sam’s Club is more connected than ever with mobile check-in for pickup, mobile pay in pilot mode now, electronic orders to the cafe and endless aisle kiosks throughout the club to enhance the product selection in clubs.
Johnson said a few years ago Dillard’s gave its sales clerk access to the company’s product inventory listing online and across its store fleet. This meant if there was a size or color of product someone wants but it’s not in the store they shop, the clerk can have it shipped from another store or order online. He said having access to the entire inventory is benefit to clerks and a way they can better serve their customers.