The US retail industry – what’s been going on?
With a pledge to ‘Make America great Again’ and place manufacturing and infrastructure jobs back into the US, rather than outsourcing, the past focus on the retail sector has been placed on the back burner. However, since the end of last year, the US retail industry has been in decline, and companies have had to place significant investment in transforming their traditional business models in order to attract and retain customers long-term.
According to the Bureau of Labour Statistics, the number of employees within retail are decreasing each year. With a number of stores closing their doors (5,000 this year alone), companies are up against an ever-competitive online presence versus the creeping growth of automation which will become a disruptive force in the market.
Sears are shutting stores all across America
There are a number of reasons as to why Sears is currently struggling, such as substantial profit losses, to the extent that the company is now closing a large number of its stores. From 355,000 employees in 2006, to solely 140,000 currently standing, the company has not made a profit since 2010, creating increased concerns with current investors, with conflicts with suppliers and a reduced inventory thrown into the mix.
Sears has recently sued vendor One World Technologies for not abiding to their contractual agreement. Eddie Lampert, Chairman and Chief Executive Officer at Sears Holdings has said in a statement that “One World has threatened to refuse to perform under their Supply Agreement unless Sears agree to what we believe are unreasonable demands.”
“One World has informed us of their intention to take the very aggressive step of filing a lawsuit against us as they seek to embarrass us in the media to force us to let them out of their contract.”
With an inventory that could be reduced even further, Sears will be unable to remain competitive and retain positive business relations suppliers, with the continual negative press against them, let alone make profit.
Michael Kors are also seeing a slump in sales.
Michael Kors has recently announced that it is to close up to 125 stores due to a nosedive in sales, with customers falling out of love with the business, and indeed, the products and services on offer. With stock falling around eight percent, the company has stated that they acknowledge that they
"need to take further steps to elevate the level of fashion innovation in our accessories assortments and enhance our store experience in order to deepen consumer desire and demand for our products."
Not all retail companies are struggling to remain profitable
With a huge consumer demand, Amazon’s shares have now amassed $1000 per share, highlighting the fact that placing significant investment in technological applications, such as drone delivery and Amazon Prime, against a rising consumer ‘on-the-go’ demand. However, with many focusing on how the retail industry is not quite cutting it for consumers, many have used Walmart as a comparison, claiming Amazon is now worth double of Walmart.
However, Walmart is also seeing steady growth throughout its operations. With a rich history and substantial budget for placing significant investment in technological operations, Walmart is able to see trends within the retail industry and respond to customer demands more efficiently.
To this effect, Walmart has announced it has invested in Virtual Reality headsets in order to support store workers in providing first-class customer service and management training, according to Techcrunch. The training program will be increasingly interactive and engage workers more effectively, rather than dry, text book methods and PowerPoint presentations, which to many seem outdated and no longer fit for purpose.
Furthermore, the company has been trialling home delivery, with store workers delivering goods that day, in an attempt to compete with Amazon in price and delivery of products. With this in mind, Niklas Hedin, CEO of Centiro has said, “This might seem like a low-tech solution, but it is a great example of American retailers seizing control of deliveries. Retailers across America are seeing greater pressures on their delivery capabilities than ever before and if customers’ expectations aren’t met, they will simply shop elsewhere in the future. By reclaiming some responsibility from carriers, retailers can ensure they do not lose control of the last mile; this will allow them to create a robust full-circle brand customer experience, moving forward confident that they are in control of their own destiny.”
With an ever-changing customer demand and rise in automaton, the retail industry’s ability to keep on top of these changes is surely a work in progress, in addition to providing key support to suppliers. It will be interesting to see how the sector and several struggling retail companies will make significant comebacks through new technologies and investments in times to come.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.