MARIA: JACKIE, THANK YOU.
WE ARE WATCHING WALMART THIS
MORNING AND A ITS ANSWER TO
AMAZON PRIME, IT IS WALMART PLUS
ROLLING OUT TODAY FOR $12.95 A
MONTH, SHOPPERS CAN GET SAME DAY
DELIVERY ON A MINIMUM $35 ORDER
WHICH INCLUDES GROCERIES.
JOINING ME NOW IS THE FORMER
PRESIDENT AND CEO OF WALMART,
WSS VENTURE HOLDINGS PRESIDENT
AND KKR SENIOR ADDS ADD VISOR, B
SIMON.
THANK YOU FOR JOINING US.
>> GOOD MORNING, MARIA.
HOW ARE YOU?
MARIA: THIS NEW PROGRAM FOR
WALMART FITS RIGHT INTO WHAT
WE’VE BEEN SEEING IN TERMS OF
THOSE INDUSTRIES AND CUSTOMERS
THAT CAN ACTUALLY ADAPT TO THIS
CHANGING ENVIRONMENT.
TELL US THE SIGNIFICANCE OF WHAT
WALMART IS DOING AS YOU SEE IT.
>> WALMART HAS LONG COVETED A
SUBSCRIPTION SERVICE TO GO HEAD
TO HEAD WITH AMAZON AND THEY’VE
TRIED THREE OR FOUR TIMES.
THIS ONE’S DIFFERENT.
THIS ONE ALLOWS GROCERY AND
COMBINES GROCERY AND THEIR GM
STRENGTH WHICH IS TRYING TO
RECREATE THE SUPER CENTER ONLINE
THROUGH A SUBSCRIPTION SERVICE.
IF THEY CAN USE THE FOOD, THE
FREQUENCY OF THEIR FOOD BUSINESS
TO ALSO HELP SELL THEIR GENERAL
MERCHANDISE LINE, THEY CAN MIX
IT OUT BETTER AND HOPEFULLY GET
TO PROFITABILITY MORE QUICKLY.
MARIA: YEAH, I MEAN, YOU KNOW,
SINCE THIS PANDEMIC STARTED,
WE’VE BEEN SEEING THE WINNERS
AND THE LOSERS WITHIN RETAIL AND
IF YOU DIDN’T HAVE A DELIVERY
STRATEGY, IF YOU DIDN’T HAVE AN
OPPORTUNITY TO ADAPT TO A
SHUTDOWN, YOU WERE IN BIG
TROUBLE.
IT’S SAD TO SEE SOME OF THESE
LONG-TIME RETAILERS ACTUALLY
CLOSING DOORS.
WHAT ARE YOUR EXPECTATIONS OF
THE IMPACT ON RETAIL?
HOW IS THIS GOING TO PLAY OUT?
WE’RE GOING TO GET AUGUST RETAIL
SALES TOMORROW.
WE’RE EXPECTING 1, 1.5%.
AS FALL ROLLS AROUND, HOLIDAY
DAY SHOPPING EXPECTATIONS ARE
UNCERTAIN, WHAT’S YOUR TAKE?
>> RETAIL HAS ACTUALLY BEEN
BETTER THAN I THINK MOST PEOPLE
HAD EXPECTED.
IT’S NOT BEEN EVEN.
I THINK THERE HAVE BEEN
CATEGORIES AND RETAILERS WHO
STRUGGLED.
BUT BY AND LARGE, IT’S HELD UP
PRETTY WELL.
I THINK THE PANDEMIC ACCELERATED
DIGITAL E-COMMERCE DEVELOPMENT,
PROBABLY BY FIVE TO 10 YEARS AND
IF YOU WERE NOT UP-TO-SPEED ON
THAT OR OF GOT UP-TO-SPEED VERY
QUICKLY, YOU WOULD BE BEHIND.
AS WE HEAD INTO THE FALL, IT’S
BEEN REALLY INTERESTING TO SEE
TYPICALLY BLACK FRIDAY, CYBER
MONDAY, THAT WEEKEND HAS BEEN
REALLY CRITICAL TO THE SELLING
SEASON AND IF YOU MISSED THAT,
IT HAS BEEN VERY DIFFICULT TO
HAVE A GOOD HOLIDAY SELLING
SEASON.
WITH THE DELAYED OPEN OFFINGS
NOW AND -- OPEN OFFINGS OPENINGS
THANKSGIVING NOT ON THE LINE,
LEADS ME TO THINK THAT THE FOCUS
IS GOING TO BE ONLINE AND THERE
WON’T BE AS MANY IN-PERSON BLACK
FRIDAY DEALS AND IT WILL BE
DIFFICULT FOR THEM TO MAKE UP
THAT VOLUME ONLINE SO THE
HOLIDAY SELLING SEASON I THINK
IS GOING TO BE A BIT UNCERTAIN
AS WE GET INTO THAT DIRECTION.
MARIA: YEAH.
IT’S INTERESTING THAT YOU
BELIEVE THIS SHUTDOWN PANDEMIC
HAS ACTUALLY ACCELERATED THE
DIGITAL ECONOMY BY UP TO FIVE TO
10 YEARS.
I KNOW IT’S ACCELERATED IT BUT
THAT’S PRETTY SIGNIFICANT, FIVE
TO 10 YEARS.
HOW DO YOU INVEST TODAY?
TELL US WHERE THE GROWTH IS IN
RETAIL.
>> YEAH, FIVE TO 10 YEARS, AND
I’M REALLY SPEAKING FROM THE
CONSUMER PERSPECTIVE.
IT ACCELERATED.
I THINK PEOPLE HAD TO HEAD IN
THAT DIRECTION.
I THINK THAT’S LIKELY WHERE
RETAIL’S GOING TO HEAD AND IT’S
GOING TO STILL BE A MIX.
I THINK THE VAST MAJORITY OF
RETAIL WILL REMAIN BRICK AND
MORTAR BUT E-COMMERCE WILL TAKE
A LARGER ROLE IN THE
FACILITATION, BUY ONLINE, PICK
UP IN-STORE.
THE OMNI CHANNEL RETAIL
EXPERIENCE I THINK CUSTOMERS ARE
NOW COMPLETELY BLENDING THE TWO
OF THOSE.
I THINK THAT’S LIKELY WHERE IT
WILL HEAD.
IT’S ALSO BEEN REALLY A CHANGE
FROM AN INVESTMENT STANDPOINT,
MARIA.
THIS HAS REALLY BEEN MORE THE
AMAZON EFFECT THAN ANYTHING I
CAN THINK OF AND THAT, YOU KNOW,
FIVE YEARS AGO USED DO BE GROW
YOUR PROFIT FASTER THAN YOUR
SALES AND YOUR SHARE PRICE WOULD
MOVE FORWARD.
NOW, IF YOU’RE NOT GROWING
DIGITAL SALES AT A HYPER ACTIVE
RATE IT’S HARD TO GET A GOOD
VALUATION ON YOUR COMPANY AND WE
SEE RETAILERS -- AND WALMART’S A
GREAT EXAMPLE.
THEY’VE INVESTED A TON OF MONEY
AND ALMOST A THIRD OF THEIR
OPERATING INCOME THEY’VE GIVEN
UP IN ORDER TO BUILD AN
E-COMMERCE BUSINESS AND YET
INVESTORS HAVE REWARDED THEM BY
BUYING THEIR STOCK.
IT’S IN THE NEAR HISTORIC HIGHS.
SO THERE’S BEEN A CHANGE
FUNDAMENTALLY FROM AN INVESTMENT
STANDPOINT AS WELL.
MARIA: TARGET IS PLEDGING MORE
DIVERSITY WITHIN ITS WORKFORCE,
PROMISING TO INCREASE THE NUMBER
OF BLACK EMPLOYEES BY 20% OVER
THE NEXT THREE YEARS.
REACTION THERE?
WHAT ARE THE MAIN ISSUES IN YOUR
VIEW TODAY ASIDE FROM THE
DIGITAL ECONOMY FOR RETAIL?
>> WELL, I MEAN, WITH RESPECT TO
TARGET, BRIAN CORNELL’S DONE A
TERRIFIC JOB THERE SINCE HE GOT
TO THE COMPANY AND I THINK HE
STEPPED INTO A DIFFICULT ROLE,
THEY WERE STUCK IN AN EXPERIMENT
GONE BAD IN CANADA.
HE GOT THEM OUT OF THAT, HEADED
THEM IN THE RIGHT DIRECTION.
THEIR MOVES IN DIVERSITY I THINK
ARE IN THE RIGHT DIRECTION.
YOU REALLY HAVE TO HAVE A
WORKFORCE THAT BALANCES THE
POPULATION IF YOU WANT TO HAVE
THE BEST TALENT AND SERVE YOUR
CUSTOMERS WELL SO I THINK THAT
THAT’S THE RIGHT MOVE FOR THEM,
PARTICULARLY THEY’RE A
MINNEAPOLIS BASED COMPANY AND
WITH ALL THE ISSUES THAT HAVE
BEEN GOING ON THERE THIS SUMMER,
I THINK IT’S A GOOD MOVE FOR
THEM.
MARIA: WE KNOW CONSUMER
SPENDING IS TWO-THIRDS OF
ECONOMIC GROWTH.
LET ME GET YOUR TAKE BEFORE YOU
GO ON THE BACKDROP.
ARE YOU EXPECTING A COMEBACK IN
THIS ECONOMY IN 2020?
WHAT’S YOUR TAKE ON WHERE WE
STAND IN TERMS OF THE ECONOMIC
RECOVERY?
>> YOU KNOW, I’VE BEEN
SURPRISED, I THINK MANY PEOPLE
HAVE, MARIA, AT THE RESILIENCE
OF THE CONSUMER THROUGH ALL
THIS.
YOU KNOW, I THINK THAT AS LONG
AS WE CONTINUE TO SEE JOBS COME
BACK, HOPEFULLY THE TWO SIDES IN
WASHINGTON WILL COME TO SOME
AGREEMENT ON ANOTHER STIMULUS
BILL TO HELP PEOPLE WHO ARE
STILL STRUGGLING.
BUT I WOULDN’T HAVE BET THAT
EMPLOYMENT -- UNEMPLOYMENT WOULD
HAVE BEEN IN THE 8% RANGE AT
THIS STAGE.
SO I THINK WE’RE AHEAD OF WHERE
WE THOUGHT WE WOULD BE.
RETAIL IS AHEAD OF WHERE I
THOUGHT IT WOULD BE WHICH
INDICATES TO ME I THINK THE
CONSUMER IS GOING TO REMAIN
PRETTY STRONG.
MARIA: WE WILL LEAVE IT THERE.