Target Chairman and CEO of the corporation Brian Cornell feel more optimistic about the business now than six months ago and have some clear idea of what it will take for retailers to weather the headwinds of 2022.
For Cornell, it’s about being agile, being close to the consumer, not forgetting lessons learned during the pandemic, and sticking to COVID-inspired tactics for easy, convenient, and safe shopping. than against health risks, like contactless pickups, fast and similar- same-day delivery.
“As I think about 2022, with a focus on agility, adaptability and flexibility, it’s going to be more important than ever,” Cornell said Sunday morning at the “Big Show” conference. of the National Retail Federation in a one-on-one, live chat with Matt Shay, President and CEO of NRF.
Cornell also said it spends billions of dollars on modernization TargetTarget’s 1,900-unit store chain – which puts stores at the heart of Target’s omnichannel platform at a time when many are still anticipating the death of tradition – as well as investing in digital, supply chain responsiveness, salary increases and training, all of which started about five years ago, and the company’s format as a multi-category destination incorporates a number of well-known third-party partnerships, such as Ulta and Disney, succeeded during the pandemic.
“I wanted to have a crystal ball and tell you what the first half of the year will look like and the second half, and when the variation starts to fade. But we’re going to have to realize that every day we have to listen to our consumers and make sure we’re flexible and adjust as needed,” said Cornnell.
“The principles we all learn during the pandemic will be as important in the third year as in the first and second years… There will be the continuing importance of ease and reliability as well as reach. importance of safety, whether it’s putting plexiglas on the point of sale, posting social distancing signage or providing masks and other safety features, and offering the option of using a delivery service same day (if you don’t feel comfortable going to the store). Those factors will continue to matter.
“We also know consumers love inspiration, they love novelty. Brand partnerships are important to us – being able to visit Target to buy the things you want and need, and explore Ulta beauty stores inside our store, Apple store or Disney items. Those partnerships offer a level of inspiration but also ease and convenience, because you can shop in one location. Our multi-category model is certainly beneficial in times of pandemic, the fact that you can shop for beauty and home goods, as well as choose clothes and items for your home, buying those electronic items that are so important when working from home, all in one place, the ability to find one location where you can combine all of your shopping will be an important feature for many of us in the future. ”
Cornell, who has led Target since 2014, addressed two of the industry’s biggest concerns: how consumers will respond to the nation’s record inflation and supply chains.
According to Cornell, when gas prices rise, consumers in general drive less. “They consolidate the number of locations where they shop,” he added. “We know that as restaurant and menu prices rise, more consumers will eat at home. When they look at the price increases of their favorite national brands, they may be looking at a store-owned or private brand as an alternative. Some of the historical consumer responses to inflation will recur in 2022.
“I know our branded partners will say, ‘What do we need to do differently to curb demand?’ So we will learn about consumer reaction in the next 60, 90, 120 days to rising prices and some of the challenges they will face. We all have to make sure we understand how to continue to meet consumer needs, provide the right level of value starting with the right availability and level of service, and continue to work through the challenges. towel in front of you. ”
Speaking about the supply chain, Cornell said, “Part of the challenge we faced was unprecedented demand in our system. That demand will change over time but I think there will still be very strong demand next year.”
Among his recommendations for fixing supply chain problems, “There needs to be more transparency in data, information sharing… In the long run, [Biden administration] Infrastructure bills over time will allow us to modernize our ports and improve transportation, bridges and roads. That won’t happen overnight. It’s a multi-year investment that will allow us to have the most modern supply chain in America compared to one that is lagging behind. So in short, the best we can do is share data, provide more transparency, ensure there is more visibility upstream, so that we work as a country and an industry continue to use data and analytics to deal with some of the short-term issues. “
According to Cornell, flexibility and adaptability apply to dealing with supply chain problems. “One thing we have been doing, even before the pandemic, is using different ports around the US. All the headlines talk about is Los Angeles, Long Beach. The ships are out there and by the way, they’ve been out there for years. You may have taken those pictures five or ten years ago. Can we ship more containers to the Pacific Northwest or ship them down to Savannah or to Virginia to ease the stress? “
Unloading containers during off-peak hours “is super important, and we’ve been doing that for quite a while,” Cornell said. “Now many others are realizing you have to work on a 24-hour cycle.”
Cornell also urges Americans to decide to work in the supply chain, be it a distribution center, manufacturing plant or truck driver. “We need more drivers on the road to move all that inventory to key endpoints and destinations,” says Cornell.
Summarizing the 2021 holiday season, Cornell said, “The numbers reported are really encouraging. Consumers went out and shopped all sorts. They shopped early. They shop late. They shopped throughout the season. They used both physical channels and digital channels. Most importantly, consumers say retail is still extremely important to them and it bodes well for the future of the industry.
“Over the past 22 months, we have all faced some headwinds – a pamphlet that none of us had before our eyes. It seems like wherever you go today America is talking about supply chain challenges, inflationary pressures, labor shortages, but what gratifies me is seeing the reaction of consumers. used during the holidays. They go out shopping. It just gives me incredible optimism about the future. America wants to get back to normal a little bit and get out there with friends and family and shop in our stores. “
On April 13, at the NRF “Honor” dinner in New York to raise scholarship funds, Cornell will receive the NRF’s “Vision 2022” Award, for successfully piloting Target through the pandemic and spearhead investments in the business were made years ago and are now paying off. Target’s 2020 revenue grew 19.8% to $92.4 billion. Target’s Q3 2021 revenue grew 13.3% to $25.7 billion, with comparable store sales up 9.7%.
“In early 2017, we talked about a very different approach. Cornell said. “Despite some media reports and analysts saying that physical retail is about to shut down, we said, ‘We’ve been testing and learning and we’re going to invest billions of dollars in stores. remodeling shop’, when people aren’t talking about remodeling. We said we would build new stores in urban centers like New York City, on college campuses, in new towns Target had never been to before. We’ll invest in our brand, activate 1,900 fulfillment hubs across the country, and we’ll make a big investment in our team, increase our starting minimum wage and move on. invest in talent development.
“There was a rather cold response. But the investments we’ve made have certainly given us a boost during the pandemic. I didn’t understand that we were going to face the challenges we’ve faced over the past few years. I really don’t know what shelter in place means in March 2020. We all figured it out together.”
Cornell ended his conversation with Shay with a few words about corporate culture. “Over the past few years, perhaps more than ever in my career, I have come to realize the importance of culture. We’ve always had a unique culture at Target. We’ve actually spent some time in the middle of the pandemic and say we’d better make sure we talk about this consistently. “
He defines Target’s culture as “all about caring, growing, and winning together. I find that during a pandemic, cultural commitment is more important and a big part of our success than ever… Empathy is more important than ever – important cares about our team and guests, investing in personal growth and development. The work environment doesn’t get any easier, so how to use a culture defined by caring, growing and winning together, to attract and retain great talent? , making sure that’s part of our approach to hiring and HR, I think that’s going to be a point of difference. ”
https://wwd.com/business-news/retail/target-brian-cornell-nrf-convention-1235034507/ Target’s Brian Cornell Talks Supply Chain, Economic Headwinds and Holiday 2021 – WWD