MMR: Mass Market Retailers, June 22, 2020

MASS MARKET RETAILINGS MOST INFLUENTIAL WOMEN help drive the transformation of the Walmart U S business by creating the first seamless omnichannel shopping experience at scale She then moved to a leadership role in the Walmart U S Supply Chain organization in 2016 where she redesigned it to create a digitally connected integrated end to end logistics network for the companys flagship division She assumed leadership of Walmarts nearly 700 Neighborhood Markets in 2018 A native of Australia McLay began her retail career there in 2001 when she joined Woolworths Ltd in the corporate audit BENTONVILLE Ark Kathryn McLay was named president and chief executive officer of Sams Club last fall after her predecessor John Furner took the reins at Walmart U S McLay was executive vice president of Neighborhood Markets within Walmart U S at the time of her appointment but she had also led a succession of major initiatives since joining Walmart in 2015 as vice president of U S finance and strategy Her first major assignment was overseeing a set of strategic crossfunctional initiatives dubbed Legacy that were designed to Consumables are a big frequency driver for Target department After rising to leadership of audit reporting McLay advanced through a series of executive leadership roles These days Sams Clubs performance is benefiting from a number of operational and merchandising initiatives as well as a focus unique in its trade class on developing and leveraging leading edge digital technology for use by both members and associates For example associates can now use a number of digital tools designed to make their jobs easier Ask Sam for instance is an app that associates can easily access from their handheld devices to instantly obtain needed information by simply talking to their device Ask Sam has recently been supplemented by Sams Garage an app developed specifically for use by associates in the clubs tire and battery departments The app has McKenna We will continue to be successful by thinking like a multi local business dramatically reduced the time and paper work required to complete transactions Perhaps the most exciting recent development still in test is Item Vision an evolutionary development of the Scan Go app that allows members to bypass the checkout Item Vision will allow members to simply point their smartphones at a product to add it to their digital shopping cart without searching for barcodes to scan The retailers investment in technology allowed Sams Club to quickly respond with contactless checkout through Scan Go when the COVID 19 outbreak occurred in the United States One of the most important things our members wanted was a contactless shopping experience McLay says We were well positioned to respond to shifts in member demand because of our Scan Go platform which enables our members to scan their own purchases with their smartphones and exit the club without checking out We saw a huge surge in Scan Go usage in the early months of the pandemic The chains progress in offering omnichannel shopping also picked up momentum from the pandemic Both club pickup and direct to home options saw substantial growth as members shopping habits changed McLay says Club pickup received a further boost from the rollout of another tech driven service Concierge Using the framework of Scan Go we were able to launch the app that powers our Concierge experience in just six days McLay notes Concierge was a service we launched specifically in response to COVID 19 so our seniors and most at risk members can shop with us without leaving their vehicles That strategy is working Despite the global disruptions caused by the COVID 19 pandemic Walmart International posted a 78 increase in net sales in constant currency during the first quarter of fiscal 2021 with nine of its 10 markets achieving positive same store sales Impressively operating income growth outpaced that of sales rising 15 excluding currency fluctuations Those figures were accomplished despite closure of about 25 of its stores in Africa and restriction of the Flipkart business in India to essential deliveries Central America was also BENTONVILLE Ark Under Judith McKennas leadership Walmart International is pursuing a well defined and consistent strategy that emphasizes fostering strong local businesses supported by the vast strength of Walmart We will not be successful by thinking like a multinational business she told analysts at Walmarts annual Investment Community Meeting in February But we will continue to be successful by thinking like a multi local business executing our strategy one country and one business at a time significantly impacted as was China where all stores were open by the end of the quarter The spirit and determination of our teams across our stores our supply chain and in our home office is remarkable McKenna said in February And at times like these our people really do make the difference But in uncertain times being a trusted retailer has never been more important You earn trust by standing tall in difficult circumstances but you also earn it every day by providing customers access to what they want when they want it and however they want it and by innovating to make their lives easier The very scale and diversity of Walmart International make that a challenging proposition With more than 6000 stores in 26 different countries generating annual sales last year of 124 billion the division on its own is one of the five largest global retailers But Walmart is harnessing the potential of these businesses by recognizing the variety of markets and consumers and adapting and deploying its assets to meet their specific needs As Mc Kenna suggested that has meant expanding its omnichannel business which accounted for about 10 of last years International sales Implementing an omnichannel strategy within International has meant adapting to individual markets For example in China where McKenna says land is at a premium Sams Club has deployed mini fulfillment centers dubbed cloud depos Think of these as low cost mini distribution nodes in high density urban areas which extend online access to our members for about 1000 of their most frequently purchased products she explained It allows customers and members to receive their orders in less than one hour today weve got about 60 of them with plans for many more in the future In India Walmarts business is concentrated in Flipkart the countrys largest online retailer in which it acquired a majority stake in 2018 Although Indias ecommerce market totaled a modest 38 billion in 2017 it is projected to hit 200 billion by 2027 the food and beverage business last year Her position was newly created involving oversight of the full spectrum of merchandising and operations for food and beverage including both strategy development and implementation The appointment marked a career shift for Lundquist who had been chief human resources officer since 2016 She joined the retailer in 2005 and has played major operational roles in business integration and program management as well as driving performance building capabilities developing talent and overseeing change management She also played a MINNEAPOLIS In recent years Targets leadership has taken a fresh look at its food and beverage business to assess the role it could and should play That reassessment clarified the importance and potential of the category Our food and beverage business is a big frequency driver for Target says Stephanie Lund quist executive vice president and president of food and beverage We know what a big role it plays in our guests lives 75 of Target guests have shopped food and beverage and when they do their baskets are on average twice as big Lundquist took on leadership of pivotal role in Targets transformation work that was launched in 2015 by chairman and chief executive officer Brian Cornell With that background Lundquist welcomed her new food and beverage role as a natural opportunity Ive never shied away from a challenge and have always tackled new projects and businesses head on she remarks This has created the opportunity for me to lead a wide range of exciting and transformative work that has been a cornerstone of my career at Target By bringing the entire spectrum of food and beverage merchandising and operations together in one team Lundquist says Target has been able to tap into the expertise of each business area more effectively and streamline execution by eliminating the silos that often separate merchandising and operations She adds that guests have responded enthusiastically to a range of recent enhancements that include assortment presentation and expanded fulfillment options such as same day delivery drive up and order pickup The small format stores that Target has been opening are a key part of the retailers food and beverage strategy Assortments are tailored to each individual location to meet the needs of specific customer bases whether college students or young families Through these stores were able to give guests in new markets access to food and beverage options they might not have otherwise had and we often see outsized performance in food and beverage Lundquist notes Additionally last September Lundquists team launched a new flagship owned brand Good Gather Items in the line have all passed rigorous taste tests and are made without artificial flavors sweeteners synthetic colors or high fructose corn syrup The line includes trend forward products such as avocado toast salad kits oat milk and beet hummus as well as everyday staples such as milk eggs and cheese Plans call for the brand to total nearly 2000 items by the end of this year We just added another 600 products to our Good Gather assortment this spring and with another round this fall it will be Targets largest owned brand says Lundquist We anticipate Good Gather will be a billiondollar brand for Target by the end of this year Stephanie Lundquist Executive VP President Food Beverage Target Judith McKenna President CEO Walmart International Kathryn McLay President CEO Sams Club 48 MMR June 22 2020