Delivering the retail keynote at Nielsen’s Consumer 360 conference this afternoon, Sam's Club President and CEO Brian Cornell said that retailing today can be a “daunting task” and understanding what is important to your consumers and what value means to them is key to retailing success in the “new normal.”
Cornell noted that while everything around us is changing, we’re also dealing with the tough realities of the current economy. Consumers’ expectations have changed dramatically and they have recognized the need to change their behavior.
“For the first time in my 20-year CPG career, consumers have aligned their attitudes and actions. They are absolutely harmonized,” he said.
Cornell outlined two major consumer trends important to retailing success today, the first being a shifting consumer landscape, including aging baby boomers and young multicultural families. Understanding today’s consumer requires the realization that dad is just as important as mom in the shopper decision trip, that many consumers are likely thinking about making healthy lifestyle adjustments and that consumers are connected. A big part of today’s consumer’s recreation is tied to a keyboard or smartphone.
The second major consumer trend retailers are thinking about a lot today is the return to basics, or home economics. Cornell noted that today’s consumer is forced to become much more disciplined. Consumers are trying to simplify their lives by decluttering their homes, giving things away, downsizing to smaller spaces and opting to refresh instead of replace.
As part of this trend, Cornell predicts that consumers’ focus on thrifty or smart shopping is here to stay. Consumers are cooking again, some learning to cook at home for the first time in years and entertaining at home -- “home is my castle.”
Cornell stressed the need to learn about the consumer and take advantage of these broader trends to the audience of retailers, manufacturers and media companies in attendance. In the case of Sam’s Club, the retailer understands the world through the eyes of its members and developed its strategy around the insights it has learned from them.
“Value means very different things to the consumer depending on the category,” Cornell said. “We have many categories where our members expect great, everyday value, but we also know that we have members that shop categories looking for a ‘wow’ experience in categories like fresh food. It’s a different definition of value.”
Cornell went on to explain that Sam’s Club members look for newness in entertainment categories, but in other categories, they look for simple solutions, leading brands, and knowledgeable service.
Communication is another key area where it’s important to know your consumer and Cornell described the importance of moving from mass communication to targeted, relevant, individualized communication. Sam’s Club focuses on talking to the right member, delivering a particular message that is interesting to him in a medium they want to receive. Loyalty starts with the needs of that consumer, knowing what drives their demand, what they are looking for and then meeting their needs, he said.