In this episode:
Helena Foulkes, former CEO of Hudson’s Bay Co (Saks Fifth Avenue), president of CVS Pharmacy and current Home Depot board member talks frankly to Wendy Liebmann about the future of retail, winners and losers, silver linings and how to lead in a crisis.
What’s the Future Shop Podcast with WSL all about?
Our podcast focuses on how shoppers are transforming retail and what you need to do about it.
Retail strategist and shopping futurist Wendy Liebmann shares her passionate, unvarnished shopper-centric view of where retail is headed. She interviews experts in retail, marketing, insights, design, education, and more. And she and the WSL team regularly share excerpts from WSL’s latest proprietary shopper research about what’s coming next.
The Future Shop Podcast is a no-holes barred view of what shoppers want, what you need to deliver, who’s getting it right, and who’s getting it wrong. And why. In this fast and furious view you will begin to understand how to anticipate the future that’s emerging right under your nose.
WSL Strategic Retail is a leader in shopper insights and retail strategy. It helps clients around the world anticipate change in order to grow in the near and longer term. It is recognized for its ground-breaking How America Shops® and How the World Shops research.
Wendy: Hello I’m Wendy Leibman I’m the CEO and chief shopper at WSL strategic retail and this is Future Shop. If there’s ever been a time that we need to think about the future and shopping it is now and that’s what we’re gonna do in a few minutes but first, all of those of you listening I hope you’re well I hope your families are well I hope you’re fortunate enough to be working if you’re not our hearts my heart goes out to you as does that all that team it is a challenging time. What I know is in the best of circumstances you are juggling life and school and families at home and feeding and cooking and washing and all of those things. So, if it is not an easy time. So, that makes it even better for us to be so distracting ourselves for a minute and try to make sense of some of this and that’s what we’re going to do over the next half hour or so.
Here we are in a global health pandemic, a global financial pandemic were about to come out of sort of that coma of shutting down economies to open up gradually, we’re doing it little by little in states and this is very uncharted territory. There’s a lot of information out there, there’s a lot of data and webinars galore. We’ve been responsible for several of them.
There’s a lot of content but I have to tell you I think what’s missing here is the realization that it’s not about the answers it’s actually about what questions do we have to ask ourselves as we move into and through this new life, world, business, health crisis that we are living through every day today.
It’s not about the answers, it’s about creating a framework it’s about thinking about the questions we need to ask. And it’s about how do we lead through all of this? How do we come out of it at the other end and what does that end look like.
So I am really thrilled today I have absolutely the right person here today to ponder these questions with me. Helena Foulkes is not only a dear friend, but has the experience we need to help us think about all of this. No pressure Helena, let me do the drum roll first and give people your background those who don’t know you. Helena was most recently the CEO and board member of the Hudson‘s Bay Company, a luxury retail company, based out of Canada. Owner of Saks Fifth Avenue Hudson’s Bay in Canada, Off Fifth. A global business that she spent several years of transforming to the point where they were able to take this business from a public company to a private company just recently. She remains on the board of Home Depot, and when I first met Helena she was at CVS health then called CVS drugstore‘s pharmacy and in her most recent gig, she was president of CVS pharmacy which was the 8,000 or so physical stores and .com stores that is CVS.
Helena has an extraordinary experience when you think about the channels the retailers she worked in the category she’s worked in and her passion for both all aspects of retail for the very customer centric lens which is where she and I can verge customer shop so after that long introduction, hello.
Helena: Hello Wendy it’s so good to be with you and I’m sorry I’m not physically with you the last time we were together was a few months ago now but this is a brightening my day to see you and be with everyone.
W: Yeah, no, it’s it’s wonderful I really feel quite weepy I must say because I remember we had breakfast downstairs and rockfill place and you know the world is quite different that we were talking about health symposiums and all those amazing things. So, anyway, this too shall emerge. I found myself weepy on lots of occasions lately so this will be an inspiring one I know.
My question to you is how are you, how’s your family, how’s Rhode Island?
H: Oh thank you I’m good with it we’re all safe and sound and as you said I I left Hudson’s Bay in early March because we went private and plan for me to move on. So it’s really strange for me I have to say because I have never not worked. And in many ways it’s a gift obviously to be able to be with my family but we’re all hunkered down with three of my four grown children and a boyfriend, getting to know each other really well. Having good days and bad days just like everybody else. lt’s OK to really even though I feel very fortunate to know that in acknowledging that there are some really hard days for everyone, especially as you said earlier I have an enormous amount of empathy for people who have lost their jobs and their responsibility for their families so I think about that a lot.
I think that’s the grounding for us this week as we move through this so that keeps us centered I think. So, to step back before we step forward you know, what’s your sense of things now is as we are in this kind of the third months of being locked down and us as the world opens a little bit here and there what’s just your overarching sense of things with retail especially?
It’s funny I come at it with lots of different lenses as you do too I come at it from the lens of being a shopper myself and I’m now even more responsible for my family‘s health and welfare since I’m home. I come at it from the lens of being on the board at Home Depot being on groups so I just was part of the business council yesterday which is a group of CEOs observing what’s going on in their businesses and I would say that you know, the hardest thing for all of us is this uncertainty because we go through other crises and we at least know what the deadline is and for this we just don’t know.
I think that there is also this positive spirit that I’m hearing from a lot of people whether it’s CEOs saying gosh my organizations never moved faster or been so together. Or those of us who are shopping feeling this enormous sense of gratitude for people on the front line who are actually working and serving us in the grocery stores and drugstores and home-improvement stores. I mean who would’ve ever thought it’s safe now her first concern? The world is so upside down.
It’s so interesting you say that, two things strike me and that. In our How America Shops research last December, we saw about 73% of the national population saying they were engaged in some form of libing well and by that I mean you know healthy and healthy pursuit doing things to take care of the health and their family’s health that was mental, physical, financial, all of that.
And then in our most recent, How America Shops, 85% of the national population said they were afraid of catching the virus. So in that period of five months you realize the sort of light switch on or off that said “oh my heavens”. And the other thing that was so fascinating was that that reminds me when you said that about you know how amazing people are in this most recent work, 52% of people said they are proud of how they are managing the crisis. And you go like “oh my heavens, amazing you know that this is who we are” right? So it sort of reflects some of what you were just saying.
I think it’s also an important leadership quality and I’ve been told by so many leaders, this is the reminder of what we’re grateful for as leaders of organizations, that we have people with such great tenacity.
It is interesting that you talk about that because how we establish kind of a lens for the future. What are the questions we should ask here? You know, you’re always so engaged with Extra Care and the customer centricity. But, even when you move to Hudson’s Bay Company or the CRM work you were doing, how do you get people to be so customer focused? So, how are you, your learnings and experience? What do you think about that at this moment in time and will try to make sense of things?
Well, I mean, look, a lot of it is the same as it always was in terms of what I always loved about all that work and still do. It requires us to combine our huge sense of empathy and listening with data and that’s what you’re so good at Wendy. But, it’s marrying both sides and not being held hostage to either one but I think the thing that has struck me that really has changed so much in the last two months that we need to tap into more than ever is the power of trust. Because we’re living in a world where we don’t feel safe. We’re not trusting our federal government. We are worried about who we listen to and I think that businesses in particular have this massive opportunity to build that trust in this moment of hardship and to me, that’s the ultimate way you have a relationship with consumers. And so forget all the targeting in the data. You know, I think the first question customers have is, is it a company that’s taking care of its workers? A, because they want companies to have a heart but B, because that actually helps them feel safe. So, there are lots of ways that we build trust as organizations and I’m really impressed by what many companies are doing to put their employees first. We hear about all the bad things on the news at night, there are a lot of great examples of companies really going the extra mile to make sure their employees feel as safe as possible. And I think that pays massive dividends over the next couple of quarters.
Can you share any examples of those that you have been observing as shopper, mother, not CEO or CEO Board Member?
I see both! As a board member and observer of companies I look at Home Depot, Target, Starbucks, CVS great examples of organizations that are adding benefits and they’re not perfect no one is perfect. But, they’re really thinking about how do we, for example, give even more paid time off for everyone but in particular for our employees who are over the age of 65. How do we give people more pay for showing up because these people’s lives are upside down. How do we give them a sense of safety and it’s a little offputting as a customer you know to go into CVS and now have a plastic, plexiglass in front of you. But, I salute the company because I want those employees to feel safe. I think that there’s more work to be done and no one likes to brag about what they’re doing for the sake of doing that but I think that we often think that businesses are only selfish organizations and I’ve seen a lot of very generous things that are happening that consumers really will appreciate the more they know.
It’s interesting you say that because in 2018 I think it was we began to do what we called our caring scores, our caring index. And it was around the well-being and health and well-being had a broader context. And the thing that was most disturbing at that point, and we tracked about 20 retailers, of all of them only two retailers got above the 50th percentile in terms of a place I believe, as a shopper, they cared about me.
The two, interestingly, were Costco and Aldi. And the drugstores, grocery stores, the big boxes especially all sort of went down and so as we move through this and you talk about trust and caring, the opportunity for growth. But, I think you’re absolutely right you know who do we trust and that notion you and I talked about this in times of chaos you know shoppers want to take control of what they can and it’s often a little things and they evaluate everybody so so what you were saying it was so powerful in terms of that whole sense of how do we move forward here. That’s a different kind of metric and that term “loyalty” may be is irrelevant now. What does loyalty mean today?
I think that’s right, I think we’re going to rethink the terms. But that’s somewhat depressing that there were only two. But, I will say, you know developing that sentence starts with employees on the front line feeling cared for. And when they feel cared for they can share that care.
Yeah that’s what we’re starting to see you and I hope that sticks. I think that’s really powerful, you know it is interesting that you know thinking about this, you know when we talk about transformation.
So trust and caring safety things that we never really thought about in a commercial sense, right? So when you think about transformation, you were on the front lines of transforming CVS to be able to say CVS health. With the exit from tobacco and then the move into other healthier things and it at Hudson’s Bay Company when you begin to transform the organization, what are the things we have to think about their safety, caring, are there other principles that we can build out as kind of a framework here?
I think one of the things that is really fascinating that we’re all feeling is the notion that technology is becoming infinitely more important in our lives and you know the question is is this just a moment in time or does it stick? You asked about thinking about what the questions are. I think that’s a really interesting question I don’t know the answer in full, but I am struck by watching my 82-year-old father be a part of zoom and figuring it out home alone. And all of us doing things we never thought we would do before so I think that tech rising is an interesting trend. I also think, as I said before, that there’s this issue of the government failing us. Another thing that I think is going on is this interesting question of populism especially as it relates to health care.
In a world where today we learned 15% American are now unemployed, how do we think about where HealthCare bills do you happen and what’s going to happen in the next 12 to 18 months as people can’t afford all those health care bills? All of those things worry me but you know there are a lot of great things too. So, if I look at transformation back to your question I am struck by companies that are saying to me I just rolled out a new innovation in two weeks and normally would have taken 18 months.
I’ve heard that from several retailers, one of them is the Home Depot and there’s a real sense of pride in that but that is the ultimate in customer satisfaction to do something in the moment and such an agile fashion that will really stick I think and it may look different in 6 to 12 months from now. But, I think that notion of being able to move quickly, being agile what I hear a lot from CEOs is gosh I used to have a very long list of investment opportunities and this crisis has made us singly focused on the things that really really matter to the customer. So, I think you know we’re learning those things along the way about transformation.
It’s interesting, I was listening to one of the many webinars that are around these days, but there was a wonderful quote that somebody said I give him a nod, Dan O’Connor, he said don’t reopen the way you shut down and so I now have that written since I don’t have a whiteboard in office I have it written on a white piece of paper stuck on a bookcase upstairs. And I think about that a lot which sort of says think about everything you were doing and assess it or reassess it.
My bias to shoppers, I was trying to figure out what sort of a true north and I’ve often said that you should follow the shopper to see the future. Just what you said, how do I think about what I need to think about through the lens of how people are living their lives and how people choose to live their lives and the agility and response is so powerful.
It’s really impressive and that’s what I’m reminding myself because it is easy to feel down but there are these incredible stories out there of people innovating on behalf of the customer. Another thing that I worry about and everyone, I will assume, can see this coming is that there will be no winners and losers. The strong are going to get stronger and I think that maybe we were destined for some sort of shake up but it will be harder and faster than any of us would’ve hoped for.
So, that feels very real. But, I agree with you, I don’t think any of us imagine ever shopping the same way again. I was just having a conversation about apparel, a category where women, who are mostly the shoppers, love to touch and feel. And how do apparel retailers come back? Yes, they’ll innovate around things like curbside delivery, but, what elements have to change to bring back that sense of safety?
I heard that about browsing for beauty. Will people feel comfortable in the beauty aisle? Will they feel comfortable at all? Will people race back out to get their hair colored? And excuse my black humor but I had to laugh, oh, are we going to die? But, what about our roots? But those things you’re right. What is the emotional experience people want and how do I deliver it in a way that’s relevant for the time.
I know you’re bold, are you bold enough to tell us which industries you think will not make it?
I just think that within retail, I mean you already see it happening, but bankruptcies. And looking at Leeman market, having only one luxury department store feels right to me. From a shopper’s perspective and looking at the demand from suppliers. I think you’re going to see that happen in the luxury business. I think that a lot of retailers were struggling and you have to wonder, will they have the financial resources to come back from this? Does J. Crew comes back, I don’t know. Being in a mall does not feel like a great place to be. That is a big concern for me when we think about all of the shopping that takes place in malls all across America.
What’s your take on health care retail? On one hand, it’s like the spot but someone said to me this morning, will a drugstore become a sick store and all other products upfront, will they finally go somewhere else? Or, will it be the well store? What’s your thought on the healthcare industry?
I still feel optimistic that consumers, and I think this will be accentuated now, consumers taking care of their health care will continue to be a really important dynamic. We’re all not necessarily trusting each other as we listen to what is the right move for me to make right now? But, I do think that retailers that focus on health care have a huge opportunity. Because they’re trusted members of the community, I trust my pharmacist, I trust other people who are in my local community. So, I think those companies that have built trust during this, that will help them in the future. But, I also think that new technology will emerge that will help us, as consumers to be more in control of our health care. What are all the things that we’ll start doing? Plus, during all of this, I’ve had more time to think about biometrics, so sleep, food, wellness. I think that we’re certainly in survival mode but I think when we have time we are thinking about mental health. All of the things that are going into our whole health and I think that’s an exciting place to be in terms of health care.
It’s interesting that you say that because we started to see this focus on health and wellness coming out of the last recession when people were trying to buy happiness. People started paying attention to financial solidity and taking stress out of lives. It’s a greater sense of happiness for their families and communities. So, that was already there, that 73% I mentioned in the beginning, that was already there. And it feels like, to your point, that this has just ramped all of that up. I think that is really interesting.
It is, and I think how people define healthcare, is evolving and interesting. I was always struck by our research at CVS how women had such a broader definition of healthcare. They saw beauty as an important part of looking and feeling good. I think the broader definition is exciting, and I think this cocooning moment is a great time for marketers to take a step back and think about how do we serve those who want to take that next step . The question is, how can we help them? It can seem very overwhelming but what is the right next move? I think that’s where you can marry the two, technology and face to face to ultimately help people become healthier.
I think it’s interesting that 6 months ago we were all trying to figure out where we came from with our self-testing and now we’re trying to figure out how to get there. So it’s interesting how we’ve shifted from at home pregnancy tests to at home COVID tests, whatever that looks like. Do you think that there are categories that will emerge as new types of businesses?
I don’t know what they are yet but the answer has to be yes. The things that are interesting to me are how many of us just want things to go back to normal, and where are those places that we will? I know we’ve talked about hair salons, it’s top on my list to get back to my hair salon. And many, of course, will be doing more at home things but I do think there are places that we just want to return to. I think there are some things that we just didn’t have the time or energy to think about before. So, I think in this time where we’re all cocooning in our homes is making me think about my home so much differently. So, what emerges in the sense of home care. And what’s interesting to me is that stat where pet shelters are empty now because people wanting animals with them makes a lot of sense because they worry about loneliness. The pet business is doing phenomenally well but what all does that spawn? Is that just a moment in time? Or is that a forever thing? I think that’s an interesting question.
Yeah, I think I think that’s an interesting thing as you say that because I think about home you know, obviously you have the Home Depot experience. But I think about working from home and companies that were very loath to let their employees work virtually, we were for a number of reasons. In our company, we have a lot of virtual working, we have a lot of young families, babies, whatever. So it wasn’t so foreign for us to end up so sort of officially shutting the door and saying work from home, because most of us already did. But I think about that, and that changing dynamic, and if that becomes something that companies decide actually helps productivity or saves on real estate, rent or something, whatever it is. So that seems to me another, to your point about talking about how we think about where we live, but also how we think about how we work.
Yeah, and that’s something I heard loud and clear from this group of CEOs I was with and there were over 100 of them. And one of the questions we were asking each other was, what are some of the silver linings from all of this and one one that we heard loud and clear was working from home, that it had gone more smoothly than anyone expected. It created opportunities to save real estate. But it also created opportunities for employees to feel more whole, because they’re saving on their commute time. And so I don’t think anyone knows yet exactly. But I would find it very hard to imagine that there won’t be a lot more working from home when when all of this comes together when we’re feeling safe again.
Yeah, you made a comment I just want to go back to before I talk to you about leadership, because I know that’s very close to your heart. And you have a great reputation in many places. It used to be as being a wonderful leader, you know, the luxury business, you know, is this an equal opportunity crisis in the sense that there was people still with money and the stock market is weird. I know nothing about it just yet. But that notion you’ve come out of the luxury business versus the essential business, I’m going to call health and is there something else there that we a question we need to be asking about the luxury shopper as it. You talked about apparel you talked about…
I don’t have data on this but gosh, look what we all have done without for two months. The question arises, how much do I really need? How much clothes do I really need in my closet? Yes, I’m excited to get out of my sweatpants eventually and I’ll be doing some guilty shopping but it’s hard to imagine that luxury would come back quickly when the stock market goes back up. When I worked at CVS things like the weather and the flu were big drivers of our business. In luxury, the stock market is the perfect correlator. I do think there will be new fundamental things coming out of this though and that resents opportunity. If Saks emerges as a stronger player and vendors start to think differently about the pride pain and how the whole business model works then I think that they can all do phenomenally well. But, I don’t think this is something that snaps back in a couple of months.
So, leadership you know, boy, if we ever require leadership in these times, right? How do we need to leave now as executives at any level? How do we need to? How do we need to think about leading and what are the questions we need to ask ourselves?
You and I have talked about this before and it’s this way of leading called interactive leadership. I think the times are requiring it now and I’m seeing more examples of it from the companies that I watch more closely. For example one of the qualities of that type of leadership is paradox and complexity. When you hold on to paradox and complexity, that’s really about competing emotions, we can unlock creativity. And I think people are feeling a tremendous amount of paradox and complexity now. And in many cases the frontline, lower-level employees are really feeling worried and stress. Financial strains, home strains are really intense. So, I think as leaders its important to keep in mind both and. What are people worried about and what are they may be excited about or proud of?
Allowing people to have the room but also seeing their leaders express their own sense of feeling. We always think that for some reason you can’t talk about your feelings at work I think that leaders who do talk about their feelings are more effective but now we need that even more. That’s just one example of something that has always been true but is now even more true. I think another element of that is this sense of pride and purpose. And what I hear from companies is wow, their team feels so proud. Yes, it has been very hard with furloughs and lots of other tough things but the very fact that people have been able to just persevere, and that their purpose in many cases is more important than ever is a very empowering notion. The need for communication is so intense. One thing for me for being from home with my 20 something children and seeing the communication they get from their companies. It’s important as we’re stuck in our homes to be hearing from our leaders more regularly and giving a sense again of what they’re confident about, what they’re worried about. I think it’s an incredible time to be a leader of an organization. Because you have a lot of pressure on you when you’re running your company. But there are very important and wonderful things that can happen through all this.
It’s so interesting you say that because we did a webinar a few weeks ago and it was really the first time we had done anything from home and I have to tell you I was rather emotional. We were here, sitting in my house, and I realized I was at home and so I entered everyone into my home. Even when I say it now I feel the tears welling up. And I don’t know why I did this at the end, I’m always trying to find the perfect quote to end with and I chose the quote from dickens, a Tale of Two Cities, “It was the best of times, it was the worst of times”. Oh my, I almost had to stop kind of like I do now. I had to stop on the webinar and kind of compose myself, I said “I’m sorry, I’m getting quite weepy. notes to say, thank you for expressing the emotion and I felt kind of sloppy and silly. But it was like, that’s what we’re all feeling and you know, to hear somebody say that. I said, Yeah, I gotta look for a happier quote next time. I don’t know what it is. But you know, whatever. But yeah, that’s an interesting leadership, wasn’t intentional on my part.
It’s powerful. Yeah, it really is. And we’re all human. We’re all worrying about our family. And, you know, and if you can really acknowledge that it frees people up to be with you.
So Helena, as we’ve talked about, you know, communication and the relationship within companies. It also seems incredibly important to think about the way we create appropriate messages to our shoppers to our customers, and the empathy that we show them in our marketing messages and, advertising. What are your thoughts on how we do that?
I think that’s a really great question, I believe that brands have been built by emotions and not hard facts. I’ve had conversations with a few CEOs about this but I think it’s really important to be authentically true to your own brand. So, if you work for a brand that has typically been hard-nosed or low key, whatever it is for you, to suddenly become heart-driven and lovey-dovey would feel really unauthentic. That’s where I’ve had conversations with CEOs about what are other ways to convey the messages about all the great things that you’re doing? That might not feel like you. Maybe it’s not you talking about it, maybe it’s somebody else talking about all the great work that you’re doing. So, for other brands that’s a much easier transition, I see that already as I’m watching TV. Great brands are already talking about their great pride for their front line employees. So, yes, as leaders we need to think about how our employees feel and then how do we translate that to our brand.
And I think it’s interesting in that it’s not that hard sell, it’s about relevance and I do think a lot about the hair color companies that are just going through the roof right now. The hair color companies that had the whimsey to talk about hair color even and say “what are you going to do about your roots?” with the gentle nod to know what do we do? It was more about friends to friends recognizing the situation. It covers the emotion of the moment and they’re saying, it’s okay to worry about your hair color even though we’re worried about our immunities in other ways. It struck me as authentic messaging rather than trying to be something you’re not.
As we wrap up here, so here’s the thing, this yin and yang, this powerful and extraordinary time that we’re living in. You’ve laid out some important questions that we need to think about, ways of thinking about how we can build trust. You talked about, interestingly, technology and will it stick around and where will it stick. Populism, how we think about healthcare around the country, the speed of innovation which you’re right, it’s remarkable what we’re beginning to see. All of those silver linings, if we have the luxury to step back for a minute. Is there anything we haven’t talked about yet?
You know, one thing that happened to me, one month into being CEO of Hudson’s Bay, we had a very big data breach. Obviously, now it seems like a small thing but at the time it was very overwhelming. What I learned in that experience is that [people really rise in a crisis. You can change a culture much faster in a crisis than you ever can in a good time. I came from a company that had a really strong culture that I didn’t appreciate until I left. And I went to the culture at Hudson’s Bay where people were starving for leadership and customer focus. We came out of that crisis much more customer-focused and much more together as a team. As hard as things are right now, I do think great things will emerge from this. It’s hard in the moment, I probably have more perspective now because I am on the sidelines.
Well, we know that you won’t be on the sidelines for very long, the excellence exudes. Well, I’m thrilled that you were able to join us today and I’m so happy to see you. I wish I could hug you right now, or buy you breakfast or you buy me a cocktail or all of the above.
To quote the very famous author, Charles Dickens, “It was the best of times, it was the worst of times. It was the age of wisdom, it was the age of foolishness.”
When I think about that quote I want to weep, and I have. I think about the wisdom and I think about the way the worst of times will bring us to the best of times.
Be well, remember there are best of times to come, and remember that wisdom will always power over foolishness however, it is good to be foolish sometimes.