Trader Joe's CEO retires, Target alums join Bath & Body, Nordstrom
On the Move has updates from Abercrombie, Nike and more.
On the Move has updates from Abercrombie, Nike and more.
Welcome to On the Move. Every week, The Current is rounding up the comings and goings of leaders at brands and retailers across the ecommerce, retail and CPG landscape.
This week, Trader Joe’s announced a CEO succession plan. Meanwhile, the Target alumni network is spreading its wings throughout retail, as former executives are joining Bath & Body Works and Nordstrom.
Check out the latest moves:
Dan Bane is retiring after a longtime stint as CEO of Trader Joe’s, effective July 2. With the move, Bryan Palbaum will become the grocer’s next CEO, rising from his current role of president and chief operating officer. Jon Basalone will be promoted from president of stores to vice CEO and president.
Bane has worked at Trader Joe’s for 25 years, and served as CEO for the last 22 years. Combined, Palbaum and Basalone have more than 50 years of experience.
"We are thankful for Dan's leadership over the past 22 years. Jon and I look forward to working with all Crew Members to continue to grow Trader Joe's,” said Palbaum. “We remain focused on providing customers with exciting products at great values while being true to the seven Values that will continue to guide Trader Joe's."
Maurice Cooper will join Bath & Body Works as chief customer officer. The newly-created role will oversee growth and retention of customers, and the customer experience.
Cooper joins the retailer from Target, where he served as senior vice president, marketing – guest and brand experience. He also previously served as executive vice president, chief growth and experience officer and senior vice president, chief marketing officer at Wingstop Restaurants, Inc.
“With the new chief customer officer role and Maurice’s hiring, we are doubling down on our commitment to delighting customers and optimizing their experiences,” said Gina Boswell, chief executive officer, Bath & Body Works, in a statement. “Maurice is an accomplished executive who not only brings expertise in bold and inspiring brand storytelling but also a steadfast dedication to finding innovative ways to enhance connections with customers.”
Cathy R. Smith was hired as the chief financial officer of Nordstrom.
Smith joins the department store retailer from Bright Health Group, where she has served as chief financial and administrative officer since 2020. Previously, Smith served as CFO at Target for five years. She has also served as CFO of Express Scripts, Walmart International, Gamestop, Centex, Kennametal, Textron and Raytheon.
"Cathy is a proven and well-respected leader with more than 30 years of financial leadership experience," said Erik Nordstrom, chief executive officer of Nordstrom, Inc., in a statement. "With her impressive record delivering business results at blue chip brands and deep expertise navigating a complex retail environment, we're confident she will be an excellent addition to our team and will help us achieve our growth priorities."
With the move, interim CFO Michael Maher indicated he will be departing Nordstrom, ending a stint with the company that began in 2009.
Scott Lipesky is adding new responsibilities at Abercrombie & Fitch. Lipesky is currently EVP and chief financial officer. He will add the role of chief operating officer, according to an SEC filing. Lipeksy has been with Abercrombie since 2007, save for a brief stint with American Signature.
Former Kimberly-Clark Corporation Chief Financial Officer Maria Henry is joining the board of Nike.
Henry served as CFO of the paper products company from 2015-2022, and senior advisor from April 2022-September 2022. She also brings experience as CFO of The Hillshire Brands Company, and Sara Lee’s North American Retail and Foodservice business.
“Maria’s strong global and financial leadership, as well as her strategic contributions across multiple industries, make her an outstanding addition to our board,” said Mark Parker, executive chairman of Nike, in a statement. “We look forward to working with Maria during an exciting time for Nike where we see unprecedented brand strength and great opportunity for future growth.”
The retailer's marketplace is expanding quickly.
When it comes to ecommerce growth, was the pandemic a blip or a new trendsetter?
As we move further from the height of COVID-related closures, it’s a question that will start to be answered through the lens of history.
So far, the narrative of ecommerce growth in the U.S. from 2019-2022 has gone like this: Ecommerce’s share of overall retail saw a huge spike at the height of the pandemic in 2020-21, when goods in general were in demand and online shopping was necessary to preserve health and safety. Experts looked out and saw a permanent exponential change in the penetration of ecommerce as a share of retail that would last beyond the pandemic. Then, in 2022, everyone went back to stores and the trendline came back to 2019 levels. Growth was no longer exponential. There was still growth, but it was not happening as fast as during the pandemic period.
With this in mind, it’s worth pointing out that 2023 is the first year that there likely won’t be a pandemic-influenced swing to influence ecommerce growth. It is also a year where demand has suffered challenges amid inflation and interest rate hikes.
So as we seek to determine the importance of ecommerce to overall retail, it’s worth it to continue taking a close look at what growth trends retailers are seeing now, whether ecommerce is remaining resilient amid consumer pullback and how retailers are preparing for the future.
The latest example arrived this week from Macy’s. It’s a fitting one for the times. Overall, Macy’s is seeing a slowdown as consumers pull back on discretionary purchases, with sales declining 7% in the first quarter versus the same quarter of 2022. Digital sales were down 8%.
Macy’s is particularly susceptible to the macroeconomic headwinds that many brands and retailers are facing, as spending among the middle-income consumers it counts as a primary customer base is particularly softening, said GlobalData Managing Director Neil Saunders.
But while ecommerce is slowing overall, the importance it gained to Macy’s business during the pandemic is remaining in place.
In 2019, ecommerce made up 25% of Macy’s revenue, CEO Jeff Gennette told analysts on the company’s earnings call. That jumped to a high of 44% in 2020. By 2022, digital reached 33% of sales after the pandemic boom. In the first quarter of 2023, it remained at 33%. So, while the trend line dipped after shoppers returned to stores, ecommerce share still settled in at a higher post-lockdown point than it was before the pandemic.
This came in a quarter in which traffic was “relatively good” across both online and in-store, Macy’s CEO Jeff Gennette said. It was “flattish” online, and slightly up in stores.
“We do expect that this is the reset year with the penetration between them,” Gennette said. “But we do expect more aggressive growth in digital in the future versus stores as we think about '24 and beyond. And that's going to be foisted by a lot of ideas and strategies.
Over the last year, the retailer has made investments in boosting ecommerce, even as shoppers returned to stores. In a bid to boost the assortment of goods available online, Macy’s launched a marketplace in September 2022 that welcomes goods from third-party sellers.
The marketplace had an “outstanding” first quarter, said Macy’s President Tony Spring, who is poised to succeed Gennette as CEO next year. Gross merchandise value increased over 50% when compared to the fourth quarter of 2022, while the average order value and units per order for marketplace customers was 50% above those not shopping at the marketplace.
Macy’s is continuing to build the marketplace even as it racks up sales. The retailer added 450 brands, ending the quarter with 950 brands.
This is helping to draw in new customers, as well as younger existing customers who are buying more items, resulting in increased basket size.
“We're very excited as to how marketplace is really attracting the Gen Z customer, particularly in categories where it was not economically feasible for us to carry in the past,” Gennette said.
In the end, Gennette said a strong digital and social presence is key to attracting younger consumers. That's a different type of shopper than other age groups.
“We know the younger customer starts first online,” Gennette said. That behavior will still be in place as the generation gets older, and gains more buying power in the process.
Going forward, Macy’s is seeking to expand the model to other retail banners in its portfolio. Bloomingdale’s will open a marketplace in the early fall.
The Macy’s ecommerce trajectory isn’t that different from the wider U.S. ecommerce narrative detailed above. With one quarter of 2023 data, there is evidence that ecommerce share settled out at a higher point after the pandemic than where it started before COVID arrived. There is flattening now, but the retailer is taking it not as a sign of a slowdown, or a signal to change course. Rather, it sees changing consumer behavior as a reason to build for the future.