Online-obsessed investors are still wary about retailers — and so when top executives meet with Wall Street, they’re careful to talk up their e-commerce progress while steadily beating the drum on the continuing importance of brick-and-mortar.
The latest making the rounds were Brett Biggs, chief financial officer and executive vice president at Walmart Inc., and Jeff Gennette, chairman and chief executive officer of Macy’s Inc., who both turned out in New York Tuesday for the Bank of America Merrill Lynch Consumer & Retail Technology Conference.
Walmart — the world’s largest retailer with more than $500 billion in sales — has made remarkable strides to meet the challenge of Amazon and up its online game, but is still very much looking over its shoulder.
Biggs, who joined Walmart in 2000, said the landscape has always been seen as competitive.
“When I came to the company, I viewed this as almost paranoid,” the cfo said. “When I would sit in meetings, I would hear us talk about competition like we were going out of business and that paranoia — that healthy paranoia — is still there today.”
That paranoia no doubt played a part in the company’s buying spree, which saw it snatch up Jet.com, Bonobos, Modcloth and others to build its online operations — a continuing effort.
“You saw us go from under, I want to say under 10 million [stockkeeping units online] to around 75 million sku’s,” Biggs said. “You’ll see that continue to grow. I do think there’s an optimal number of skews somewhere out there. It’s not 75 million; it’s more than that. I don’t know if it’s 500 million.”
The discount giant’s stores are being used in new ways — as pickup centers for online orders — and financial services and, potentially, health care.
Macy’s Gennette was asked directly about the “whole death of the mall narrative” — which has proven to be overblown. He said the department store has been proactive, but didn’t want to go too far.
“We were in front of this,” he said. “In August of 2016, we made the decision to close 100 stores and were at the tail end of that. We’ve got about another 10 to go.”
The ceo, though, said the retailer won’t win with retreat.
“I don’t want to fire any more customers,” he said. “When you think about our entire customer franchise, we’re going to win by making sure that the ones that are with us are spending more and that we are a destination for new customers to come into the brand. And the store’s brick-and-mortar fleet is a big part of that.”
The Herald Square flagship is also still very much in the mix, but Gennette danced around the specifics of the topic, which also came up in the company’s fourth-quarter earnings.
“My comments are going to be pretty opaque because we’re in the middle of doing all our due diligence on this,” Gennette said. “We went through the last year and a half going through all permutations about what we would do in Herald Square and we have landed on the plan that we think will return the most value.”
The building has long been seen as one of the company’s biggest assets — chock full of value that could be unlocked — but clearly the space has value to Macy’s as a retail space.
“We’ve worked through all the details with it,” Gennette said. “We’re now bringing in all of our partners to get their feedback…hope to have something that would be certainly by the end of this year to announce and what we’re going to codevelop at that point.”
Macy’s is also starting a big push to boost its mobile business.
Gennette talked about “enhancing the Macy’s app with new features to improve payment, in-store shopping, and in-store style advice.”
“Mobile is our fastest-growing channel and our app customer is by far [our] most loyal and highest-value customer,” he said.