Leaders from Chewy and Sonic Drive-In on rising to meet the challenges of the past year

NRF 2021 – Chapter 1: CEOs Sumit Singh and Claudia San Pedro on meeting customers’ desire for comfort

Among the things that bring consumers comfort during these days of mandated social distancing and “bubble life” are the companionship of their pets and the delights of good food — like, for instance, a great burger and a smooth shake. In a pair of fireside chats at NRF 2021 – Chapter 1, the CEOs of leading online pet retailer Chewy and iconic eatery Sonic Drive-In shared stories of recent successes and the challenges they have seen along the way.

For Chewy CEO Sumit Singh, who was interviewed by Bob Safrin of The Flux Group, the pandemic year has been a wild ride. First its stock dropped. Subsequently it doubled and then doubled again, driven by the pandemic-driven increases in pet adoption and online shopping. The company now has 18 million customers, over 20,000 employees and a lot of experience in thinking on its feet.

“We saw in early 2020 that there was no pattern recognition — we were in unknown territory,” said Singh. “In a situation like that, you lead from the front. Two things we did right were to communicate often and honestly, and to empower the teams to do the right thing by each other and by the customer.”

Consumer trends

Check out other ways retailers are changing to meet customers' needs here.

Throughput versus innovation

In a situation like the pandemic, Safrin suggested, a company needs to have the agility of a sprinter and the endurance of a marathon runner. How much of what Chewy has done over the past year, he asked, was “throughput” — do what you know, only a lot more of it — and how much was innovation?

“We’ve had to flex all our muscles,” Singh said, noting that for Chewy, 2020 represented some three or four years of normal growth compressed into one year. The company’s initial response to the pandemic, he said, was to make sure the office staff could transition to working from home. (Having 20,000 customer service reps working from home, he said, was an eye-opening first.)

Just as important was to make the fulfillment centers safe: spacing people out, installing infrared thermometers, updating health and benefits packages.

Looking out into 2021 and beyond, Singh noted that anticipating change is an essential part of a leader’s tool kit. General plans for the next three to five years, he said, are based on four factors. One is the (universally shared) assumption that last year’s widespread move to ecommerce is largely permanent. Another is continuing to leverage technology to offer better products and services to customers.

“We’re making the best decision today, based on the information available today. Tomorrow may be different.”

Sumit Singh, CEO of Chewy

Another — to be figured out when the pandemic eases its grip — is people: Where’s everybody going to work? Singh and his colleagues believe that a permanent out-of-the-office workforce will be undesirable from an innovation and teamwork point of view. “But we’ve proved we can do it,” he said. “We’ll create a hybrid model.” And the fourth key plank in Chewy’s future? “Even more focus on the customers.”

Planning versus reality

Given the health issues surrounding its business, the pandemic has been in certain ways even more of a challenge for Sonic Drive-In. “What are the implications for the workers? The guests? We’ve been learning as we go along,” said Sonic’s President Claudia San Pedro in a conversation with Heather Haddon of the Wall Street Journal.

“Before all this hit, last March, we at Sonic — and practically everyone else I know of — were all focused on our plans for growth in 2020 and how to execute against them,” San Pedro said. “We were focused on our longer-term, five-year plans and how we were preparing for them.”

And then the pandemic arrived. “There was so much we didn’t know about this virus,” she said. “We literally had to reframe our mindset and redefine what success looked like. Every day we had leadership team meetings with our food safety people and risk people that centered around, ‘What does the CDC say today?’”

Which, particularly in the early stages, has tended to change. “So, we have franchisees and employees saying, ‘You keep changing your minds about things.’ We’ve had to explain that we’re making the best decision today, based on the information available today. Tomorrow may be different.”

One lesson about Sonic’s business that has been reinforced by the events of the past year, said San Pedro, is that people do love a burger and a creamy shake, and they like to share these things. Just before the pandemic broke, Sonic had launched some new creative around the drive-in experience, and the pleasure of sharing it with your friends in the car.

“We’re entering 2021 with a great deal of optimism,” San Pedro said. “We’re particularly optimistic about the new vaccine and what that means for employees and customers alike. Though there will be changes, we believe it will enable us to go back to the lifestyle that many of us miss.”

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