To grow stronger, feed upon yourself.
That might be one of the more startling revelations from a wide-ranging conversation that American Express CEO and Chairman Kenneth Chenault had this morning with Macy’s CEO Terry Lundgren at the NRF conference held in New York City.
The theme of the interview was, not surprisingly, how to transform successfully during times of rapid change and innovation and to adapt and adopt digital technologies to serve consumer needs.
That process may seem a daunting one, but change is a constant. Chenault alluded to that fact when he mentioned that his firm was originally formed as a freight forwarding entity, with the evolution decades later into a global payments company with traveler’s checks, concierge services and, now, digital transactions that encompass Big Data, analytics, merchants and consumers.
In order to compete digitally, said the executive, “you need to be focused on customer needs,” while embracing a process that may even include “cannibaliz[ing] yourself.” And Amex’s own experience through its digital foray has been one where the card business (think plastic, where Chenault said that the card division harbored the bulk of profits) has indeed seen a bit of nibbling, though he added the physical card and its use are likely “not going away soon.”
One admission from Chenault: He said he doesn’t really care “if plastic goes away,” even as the payments giant moves toward a stated goal of being available to its customers across every channel. Yet, the question remains constant: How can Amex “integrate mobile into everything we are doing?” At the moment, the key is not just to have a “tap-and-pay” function in place, he said, commenting that the time it takes to do the mobile transaction itself and to pull out a plastic card may not be all that different. Thus, the importance is “where the value lies for the customer.”
He cited the convergence between mobile use and personalized offers across the shopping experience, wherein data across transactions spans “what, where [and] what time” purchases are made and proves valuable to Amex and its merchants alike.
Chenault also pointed to companies Amex has been working with, such as Uber, in efforts to build payment options into apps, where Amex is the default payment option. That type of initiative is key for continued brand prominence for the firm, even as cards may be negatively impacted. The Amex brand needs to play across what Chenault said remains part of the total commerce experience, in stores and offline. Or else, he noted, if Amex is simply a conduit to “facilitate payments, we become a commodity.”
With a nod to the Macy’s experience, and that of retail in general, Chenault noted that, just as if he were to focus energies on plastic cards alone, if retailers were to focus solely on brick-and-mortar transactions and physical payments, “that will be a mistake.”