Two approaches to tackling growth challenges and reimagining core customer strategies
January 14, 2020
Helena Foulkes, CEO of Hudson’s Bay Company, has been busy of late.
It’s not just that the company is in the middle of a go-private transaction. It’s also that when Foulkes came on board two years ago, there were eight different business units and “dissynergies from all of them,” she admitted in a conversation with Matthew Shay, National Retail Federation president and CEO. The task, then, was to make the complicated company “radically more simple,” setting a series of transactions in motion, including selling its European operations. The result is a clearer focus on the customer — and on the “crown jewels:” Hudson’s Bay in Canada and Saks Fifth Avenue and Saks OFF 5TH in the United States.
As Hudson’s Bay has simplified for strength, Ocado has expanded.
Foulkes and Shay shared the story during a Monday keynote at NRF 2020 Vision: Retail’s Big Show. The session also included a conversation between Shay and Tim Steiner, CEO of Ocado Group.
Ocado, founded in 2000 and launched in 2002, is a dedicated online grocery retailer. But it’s equally a technology company, developing and incorporating AI, machine learning and the Internet of Things applications into its operations. And as Hudson’s Bay has simplified for strength, Ocado has expanded.
Foulkes spoke of returning to the basics and concentrating on company culture through the transitions. She loves leading teams of people, she said, and “helping great teams of people figure out how to go after something that’s big and different, and really helps the customer.”
She talked about a philosophy she put in place close to 15 years ago called “interactive leadership,” one she has incorporated into a variety of assignments. It includes, for example, focusing on what delivers pride and purpose; encouraging conversations about things that are exciting, but also things that bring worry; the ability to “return authority” by being clear about what decisions she’ll make and which ones others will need to make; solid processes to manage and measure work; and the importance of showing up authentically.
At Ocado, meanwhile, there’s been a focus on creating a bit of a “back to the future” market, returning to the levels of service and customization in days gone by, lost as counter service became aggregated into stores, supermarkets and hypermarkets.
But from the start, when it came to the systems needed to make it happen, what was available wasn’t good enough, Steiner said. Grocery has complexities simply not seen in other parts of retail, from chilled and frozen products to the frequency of purchases and number of items in a typical cart.
“Anything we needed to make our business work, if it wasn’t available, we’d go and create it,” he said. “And here we are, 20 years later, with 2,000 software engineers and hundreds of robotic engineers, spending approaching £200 million every year in R&D, and still inventing.”
That business now does 350,000 orders a week of 45-50 items per customer. Ocado also has partnered with Morrisons, taking the grocer on as its first U.K. platform customer, and now has numerous customers in its new global solutions business.
At the core, however, Ocado is still a food business, Steiner said. It’s not a tech house that simply thinks it can solve the challenges of its customers; it shares those challenges, too.
“We understand the nature of this business in the way a technology company wouldn’t and couldn’t,” he said. “Because they don’t live it and breathe it.”