Retail CEOs faced a parade of problems in 2020’s first six months, but some executives look ready to set off plenty of fireworks in the year’s back half.
Who will come up with revolutionary solutions to the COVID-19 slowdown and other challenges? Here’s a July 4th look at some top executives in retail who seem ready to declare their independence from business as usual in 2020’s final six months.
Katrina Lake, CEO, Stitch Fix
Lake made one of the gutsier decisions of the year – and the short history of subscription eCommerce – when she opened up Stitch Fix to a new model in hopes of driving more traffic, conversions and revenue. She and her team basically created a business model in which consumers can shop without committing to a subscription.
This does three things. First, it opens Stitch Fix up to a new conversion model, because once people get into the company’s ecosystem, they’re ripe for acquisition. Acquisition costs can therefore drop precipitously.
Second, the new model puts pressure on its competitors to follow suit (pun intended). Third, it creates a business model in which eCommerce companies can become hybrids – part subscription, part open-access shopping.
Now all Lake needs to do is to create a marketing campaign that communicates all of this to the different customer segments.
John Donahoe, CEO, Nike
Imagine if Procter & Gamble used its next earnings call to announce that it was creating a direct-to-consumer (DTC) business. It would open retail stores, launch exclusive portal apps and switch its product categorization from specific items (toothpaste, detergent, etc.) to three segments: men, women and kids.
When it comes to that plan, Nike decided to just do it (pun intended). But because the shoe giant coupled the announcement with word of a $790 million loss, it was pilloried in the press and on Wall Street.
Donahoe is putting one of the world’s leading brands on a completely new, completely digital track. Despite the criticism the idea has received, the CEO and his team have read the market perfectly.
And unlike Stitch Fix, marketing the new plan isn’t the issue for Nike. After all, the firm already has an unparalleled marketing effort. Instead, Donahoe’s biggest challenge might be to keep the digital momentum going after the COVID-19 pandemic has ended.
Vineet Mehra, Chief Marketing Officer, Walgreens Boots Alliance
Walgreens and its U.K. brand, Boots, are finally playing hardball. The company’s customer data capabilities have always lagged behind those of CVS, and so has Walgreens’ eCommerce effort – but Mehra is moving to fix that.
Like Donahoe, Mehra has put a truly global retailer on a digital platform that complements its brick-and-mortar effort. Its partners are Microsoft and Adobe (both good choices), and the final phase in what the company has called its “digital transformation” is off to an aggressive start.
Mehra may have been pressured toward these moves by the pandemic, but the stakes are huge – and he deserves credit for matching his efforts with consumer dynamics. Still, his biggest challenge will be speed: Every week that Walgreens doesn’t match CVS in the online world is bad news for the company.
Linda Findley Kozlowski, CEO, Blue Apron
Meal-kit giant Blue Apron has made some genius moves, but hasn’t really capitalized on any of them so far.
Consider the fact that the company has Chrissy Teigen as a partner – along with Oprah Winfrey and WW (Weight Watchers). Heck, there was even a pandemic that has kept people home for the past several months, which presumably would have given Blue Apron a sales bump.
But even COVID-19 has so far been just another opportunity lost. Blue Apron only showed an 8 percent revenue increase in its fiscal fourth quarter, although that period admittedly only ran through March (early in the pandemic).
Kozlowski hasn’t made a dramatic move yet to capitalize on Blue Apron’s high-profile partners or modest jump in business from the pandemic, but she should. Blue Apron will have a chance in the second half of the year to acquire new customers while keeping old ones. Kozlowski might want to consider the business model put up by Stitch Fix, in which it’s easier for consumers to sample a company’s wares or get short-term subscriptions.
Mary Barra, CEO, General Motors
Barra has seen tremendous long-term challenges at GM, not the least of which is the industry’s likely move to electric cars and more fuel-efficient vehicles in general.
She also holds the keys to the “connected car” concept. If automakers are going to turn cars into moving eCommerce platforms, Barra can use her product lines to gain a competitive advantage – and huge amounts of data about her customers.
Barra has also recently stuck a toe into the DTC space with the creation of Cadillac Live, a new “virtual showroom” for GM’s premium brand. It will be fascinating to see whether other GM lines try to forge direct relationships with dealers in the coming months.
Tim Cook, CEO, Apple
Cook is probably a good poker player, as he didn’t say a word about 5G on Apple’s last earnings call. It’s true that he doesn’t hold the future of 5G technology in his hands, but Cook might hold the future of 5G’s consumer adoption.
The latest rumors say that Apple will have an iPhone update before Christmas that includes 5G. However, Cook can decide how much of a marketing push 5G receives, as well as what place it gets in the Apple pantheon of products.
We can expect Cook to only use 5G as a “plan B” as he tries to restart the Apple ecosystem in a post-COVID world by pushing watches and more affordable iPhones. Unless he needs it, 5G will be a 2021 item.