Impact Seminar: Bill Newlands On The Changing Marketplace, Ted Schlein On Cyber-SecurityMarch 13, 2019
Speaking at last week’s Impact Seminar in New York, Constellation Brands president and CEO Bill Newlands took on the topic, “Facing the Challenges of a Changing Consumer Marketplace.” In the wide-ranging talk, Newlands touched on a variety of changes in consumer expectation and behavior that have occurred over the past 20 years, including huge gains in support for legalizing recreational cannabis, industry-wide premiumization, and consumers who frequently drink across the wine, spirits, and beer categories.
Newlands took particular note of the move toward e-commerce, which represents a growing segment of purchases. “Total e-commerce sales in the U.S. were more than $500 billion in 2018, accounting for about 14% of total retail sales,” Newlands said. “This is a significant increase from 10 years ago, when e-commerce was only around 5%. Although food and alcohol sales have lagged behind overall e-commerce sales, more and more consumers are beginning to purchase beverage alcohol online and through delivery services like Drizly. And, more importantly, online ordering is much more popular with younger generations that are increasingly fueling the growth of the beverage alcohol space.”
Newlands then detailed the ways companies across the industry can anticipate and meet the expectations of millennials. He recommended building immersive brand experiences to “provide a break from the monotony and an escape from day-to-day stresses,” creating a high-quality online shopping experience, innovative premium offerings, and making sure customers have a connection to the brand. “We’ve come to understand that consumers are looking for brands that know them,” he said. “They want to feel understood.”
Transitioning to the topic of cyber-security amid all the e-commerce activity, Ted Schlein, managing partner at Kleiner Perkins, addressed the audience on “The Growing Importance of Cyber-Security.” Schlein stressed that while beverage alcohol companies may not think of themselves as digital technology companies, that conviction is either obsolete or on its way to becoming so. “Your companies are interconnected with other companies, you’re connected with your customers,” he said. “Either digitize or get out of the way. Everybody in your industry—everybody in every industry—is going to be a digital company in some form or fashion in the future.”
He went on to explain the numerous risks of the interconnected world, one of which is data breaches. “Why does it matter when credentials get stolen?” he asked hypothetically, using the industry term for logins and passwords. “When someone steals credentials, they feed them into bot armies and they shoot them all over the Internet. Something I stole from, say, Equifax, I might shoot over to American Airlines, just to see if I can go steal somebody’s advantage miles. And if I get a hit, that’s valuable information I can sell on the black market. About 90% of the login information to any consumer facing website is generated not by a human but a bot.”
Schlein outlined how to protect against attacks and data breaches. He explained that the foremost way credentials are stolen is through phishing attacks, in which hackers impersonate legitimate login portals and trick people into entering their information. He advised every organization to conduct anti-phishing exercises to test employees. “It always comes down to someone making a mistake,” he said.
Schlein also suggested prioritizing the company’s most important information and assembling teams that are ready to respond when—not if—a breach occurs. “I know one thing for sure,” Schlein warned. “There are only two kinds of organizations in this world: those that have been breached and know it, and those that have been breached and don’t know it.”—Danny SullivanSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.