Senior Client Partner
This Week in Leadership (Nov 29 - Dec 5)
Questions—and answers—about the Omicron variant's impact on organizations. Plus, critical year-end moves to boost your career.
Last year more than 7,000 stores closed in the United States, and with the country littered with empty storefronts and malls, it’s not surprising that some were saying that the death of retail was nigh.
Fast forward a year, however, and some of those supposedly struggling retailers are posting their best sales gains in years, including many this week. First, WalMart’s earnings blew away investor expectations last week. Then department store Kohl's and discounter TJX—the operator of TJ Maxx and Marshalls stores—each posted hefty gains in sales this week. And on Wednesday, Target said sales at its stores open at least a year rose 6.6% in the second quarter from a year ago, its best gain in 13 years.
To be sure, a strengthening consumer market is helping. But experts say legacy retailers have demonstrated a remarkable change in mindset, one that only an agile and powerful leadership can create. Instead of keeping the physical store business separate from any e-commerce initiatives, some legacy retailers have been able to marry elements of a store experience with the convenience of e-commerce to create a better customer experience. “It’s a new mentality,” says Denise Kramp, a Korn Ferry senior client partner and leader of the North American Retail Sector practice.
This holistic view of customer shopping recognizes that customers can get introduced to a product in a host of different ways, says Caren Fleit, leader of Korn Ferry’s Chief Marketing Officer practice. These retailers also understand that many customers aren’t committed to shopping online exclusively, they just want to be able to get an item easily when they want it.
This mentality shows up in new roles showing up in the c-suite at retailers. Positions such as Chief Experience Officer or Chief Customer Officer are responsible for ensuring that the companies can deliver on their brand promises both internally and externally.
Brand partnerships, the ability to order from home and pick up at a store (or vice versa), even partnering with online-only retailers, are just a few of the innovative strategies some savvy executives are using to get more people into the store and improve profits. Retail leaders also have now built systems to better use customer data. Many stores have revamped their loyalty programs, making them more rewarding for frequent customers, and ultimately leading to higher sales and more visits to physical stores.
Of course, the strong U.S. economy that is helping won’t last forever. For now, with more people working and wages rising modestly, it’s not surprising that people are spending. Overall, consumption is rising at a 4% annual rate and consumer confidence is close to an 18-year high. Plus, there certainly are legacy retailers that are struggling. Even so, experts say a willingness to look at business differently, and the agility to make essential changes, have helped some stores show that there’s plenty of life left in retail.