NEW YORK— Both the retail and payments industries have been undergoing a good deal of disruption with new channels thanks to new technology. They also share a similar set of challenges, which were discussed during the opening keynote on Tuesday at NRF's BIG Show.
"The greatest disruption in payments is the same as in retail—convergences of online and offline and the inability to adapt to the rapid change," said Kenneth Chenault, CEO, American Express. "You have to have the willingness to cannibalize yourself."
Macy's (NYSE:M) CEO Terry Lundgren agreed, noting that Macy's early e-commerce efforts were considered to carry that very risk. Now, building digital capabilities is a priority. Today, Macy's does roughly 10 percent of its business online, up from 7.5 percent at the beginning of 2015.
It's a difficult change for the retailer, but Lundgren noted, "You can't forget how customers are shopping today."
More often than not, that means using a mobile device, either to transact or inform the shopping trip in some way. "Mobile is a small percentage of transactions, but multiplying at a rapid rate," said Lundgren. "It's going quickly from just being used as a search tool to being transaction oriented."
At American Express, mobile is increasingly important as well. When the card company moved member benefits to mobile, usage and interaction increased dramatically, according to Chenault.
Personalization is another trend that crosses categories. All consumer-facing businesses are struggling to provide better offers, product suggestions and services based on the individual.
And then of course there is the challenge of data—collecting and using it. Both Macy's and American Express executives emphasized the critical nature of using data strategically. It's the key to keeping up with the customer, no matter how or where they choose to interact with a brand.
"I really don't care if plastic goes away, [what's important is] what the American Express brand stands for," Chenault said.
It's a more difficult proposition for retailers, who do care if stores are going away. While Macy's and others are closing stores as sales move online, the bulk of purchases are still being made in stores. The challenge continues to be in creating more compelling shopping environments.
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