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What’s the ‘next normal’ for retail? CEOs chime in

The news: Executives at some of the largest retailers looked into their crystal balls at the National Retail Federation’s (NRF) Big Show this week:

  • Brian Cornell, chairman and CEO at Target, predicted that Americans will drive less and make fewer shopping trips this year because of expensive gasoline and accelerating inflation.
  • Corie Barry, CEO of Best Buy, suggested retailers need to provide shoppers with choices to meet their needs. For example, she noted that consumers pick up roughly 40% of the items the retailer sells online from a store, even though most of those items are eligible for free next-day delivery, per an NRF blog post.
  • John Furner, president and CEO of Walmart US, said retailers that fail to evolve to suit consumers’ changing needs will be left behind. “Loyalty in retail is the absence of something better,” he said, per an NRF blog post

More on this: Retailers face significant near-term challenges as they combat supply chain disruptions, labor issues, and the ongoing pandemic. 

  • Shoppers have continued to show that retail is an important part of their lives, Cornell said. “We're going to learn a lot about how the consumer reacts in the next 60, 90, 120 days to rising prices,” he noted, per a Bloomberg report
  • Despite the pandemic, consumers have a strong urge to shop and love going to the store, Furner said. He noted that Walmart has reported increased store traffic in recent quarters (though that may be thanks in part to the retailer offering COVID-19 vaccines and testing).
  • In-store traffic over the holidays was down 19.5% in the US compared with 2019, the last pre-pandemic year, according to Sensormatic Solutions.

The takeaway: Health, inflation, and supply chain issues will continue to be top of mind for retailers and shoppers over the coming months. Merchants need to ensure their workplace is safe for employees and shoppers and that they’re offering multiple fulfillment options, such as curbside pickup and click and collect. Consumers vote “with their wallet and their footsteps,” Cornell said. With competition a click away, the pressure is on retailers to meet consumers’ expectations.