Takeaway from the NRF Series on Leadership
The ability to share screen time with industry leaders for candid conversation about corporate decision-making is as easy as a click on a Zoom link. For example, National Retail Federation (NRF) president and CEO Matthew Shay is hosting weekly online sit- downs with top execs at major corporations focused on the topic of leadership during COVID-19.
Footwear Insight caught four recent episodes of the ongoing NRF series that featured Marvin Ellison, Lowe’s; Brian Cornell, Target; Hal Lawton, Tractor Supply; and Chris Nassetta, Hilton. Here’s an edited version of what they had to say about challenges faced in the early days of the pandemic, customer trends and changes made with an eye on the future.
Hal Lawton, president & CEO, Tractor Supply Co.
37,000 employees with stores in 49 states generating $9B in revenue.
On Consumer Behavior adopted during COVID that will stick:
“Radical adoption of technology; expectation of wider fulfillment options; leveled-up customer service and contactless payment methods are becoming the norm.”
On Investments: Gave appreciation bonuses, raised minimum wage, hired new employees, and made a $50M investment in Q2 to stay ahead of the curve with services designed for COVID landscape. Also created an ad campaign with national reach to attract new customers.
On the “out here” lifestyle trend: Lawton describes 2020 as the “year of the backyard” based on a flourishing “out here” consumer lifestyle trend. This translates to individuals in rural communities living on 10 acres of land and a couple horses, as well as suburbanites building chicken coops and raised bed sustainable gardens, who collectively now want to be “active while staying in the neighborhood.”
“That’s were America is right now, and that’s going to stay in the absence of a vaccine,” said Lawton.
Brian Cornell, board chairman & CEO, Target: 1900 stores
35,000 employees and $80B in sales.
On Performance: The pandemic has been like “a stress test for digital demand, with decades of change condensed into four months,” said Cornell. “Q1 digital business was up 141 percent and digital business has continued to surge. Same-day fulfillment grew by 300 percent.”
On Consumer Behavior that will stick: “Millions of consumers have learned how to shop online and are now hooked on the convenience of placing an order and picking it up. Greater focus on safety; continued focus on value and trust in the vendor.”
On Looking Ahead: “In a recent Deloitte survey of CEOs, half of respondents said business would be back on track by Jan 2021, while the other half believed it would take until June 2021 to be back to pre-pandemic levels.”
Chris Nassetta, president and CEO, Hilton
M hotel rooms globally and 6100 properties, celebrated its centennial in 2019.
On Recovery: “Q2 revenue declined 80 to 90 percent. Even in the Great Recession, it only declined 20 percent. Business is slowly ticking up. The early stage recovery is in leisure travel. People are going nuts staying home; they’re saying ‘let me out of the basement.’ Business travel will take longer to return, likely taking three years to get back to pre-pandemic levels.” Nassetta expects there will be a “snap back” to business in the fall and a slow dig out from there.
On Investment: Hilton made significant investment in “Clean Stay” — a partnership with the Mayo Clinic and Lysol to establish hospital cleanliness standards at Hilton properties. Tech investments also focus on cleanliness and built upon Hilton’s current “contactless entry” feature using an iPhone. Excess room clutter (pens, pads, etc.) is being eliminated with future tech developed to be “touchless” in nature.
On the Future of Business Gatherings: “It will be a hybrid. You need face-to-face, but these in-person events will be smaller gatherings, and as a result you’ll have gatherings that are part physical and part digital. There will be investment in technology to meet both needs.”
Marvin Ellison, CEO and president, Lowe’s
2000+ locations in the U.S. and Canada representing 207.8 million square feet of retail selling space and $72B in sales.
On Employee Support: Made a $450M commitment that included a chunk dedicated to special paid bonuses in March and May with another round of bonuses upcoming; increased hourly wages, mandated free tele-health medical benefits to hourly wage associates.
On Talking Less, Doing More: “That has been part of my policy since I stepped into my current post,” said Ellison. In just two years under Ellison’s watch, Lowe’s has undergone a “cultural transformation,” creating a significantly more diversified upper management team. “The talent is out there,” stated Ellison. “I would direct leaders to have conversations about racial injustice, force tough conversations, listen and learn. Sometimes you have to talk less and do more.”
On e-commerce: Overhauled a decades-old online platform, and accelerated 2021 strategies to achieve new level of “seamless and friendly” customer experience with features including curbside pick up, same-day and next-day service, in-store lockers and an updated mobile app, resulting in 80 percent growth in e-commerce, which previously accounted for less than 10 percent of sales.”