We’re only days into 2020 but it feels like 2019 all over again, according to Mastercard CEO Ajay Banga.
Sitting down for a far-reaching fireside chat with NRF president and CEO Matthew Shay to close out day two of the retail trade group’s annual Big Show in New York City, Banga hedged his off-handed assertion with the caveat: “famous last words.” Consumer confidence feels like it’s in the same place as it was last year, Banga said, noting the “interesting paradox” that arises from the business community’s pessimistic future outlook relative to the people buying their goods and services.
From tech and innovation to preparing for the future workforce and upholding data privacy, Banga offered candid insights on the retail and consumer landscape as the curtain rises on 2020.
Retail has its laggards and its leaders and every company is inevitably going to fall into one of those two buckets. There’s no shame in being a fast follower in retail innovation, according to Banga, who says that observing and learning from first movers could very well enhance second-wave rollouts.
“Let the first guy go to the moon,” Banga said, adding, “what do you to exploit that opportunity later is what will determine who’s more successful in the longer term.” What really matters, he continued, is “having the right mentality about that in your innovation DNA.”
Already, the overwhelming majority of U.S. residents, not to mention First World inhabitants globally, are carrying cutting-edge smartphones with more digital firepower “than the computing power that sent Apollo 11 to the moon,” Banga noted.
The successor to 4G cellular technology, just starting to switch on in select cities and regions worldwide, is poised to send consumer connectivity into overdrive. “The pace of innovation is only going to increase as 5G gets properly embedded and rolled out in the system,” Banga said.
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A day when smart refrigerators connected by Internet of Things will talk to the rest of the kitchen’s gadgets isn’t too far off into the future—but the powers that be must ensure that all of this tech is working for the end user’s good, Banga warned. “None of this was built for safety, security or privacy in the form that you as a citizen are entitled to demand,” he said.
Still, consumers have gotten a taste for the good life, so to speak, and there’s little chance they’ll accept a standard lower than what the most innovative, tech-forward retailers—and others—have shown them. Just look at the contactless entry systems rolling out across the New York City subway, proof that the convenience of tap-and-go payments are metastasizing from traditional retail settings into other areas of daily life—and fueling an addiction to time-saving tech.
But with great connectivity comes great responsibility, Banga warned.
“I think we’re all going to be very careful about our responsibility towards the consumer and towards each other about data and security and privacy,” he added.
As retail leans into the innovation imperative—and they’ll have to, if the digital natives of Generation YouTube have their way—competition over the brightest minds will be fierce. And that means the federal government will have to engineer an immigration pipeline that remains open and welcoming to the thinkers and creatives who will become the lifeblood of the new retail economy.
“There’s no logic that says the best ideas will be found here,” Banga, himself an immigrant, said, referring to America’s talent pool. “The best ideas are found wherever you can get them.”
Plus, there’s a “total mismatch” between employment vacancies and job seekers, Shay added, referencing the latest labor data showing roughly 7 million openings and just 5.5 million unemployed people.
Banga, for one, is looking forward to the long-awaited signing of the phase one trade agreement between the U.S. and China—if it truly comes to fruition—which is expected to diffuse some, but by no means all, of the tensions between the grappling duo.
“I think there’s a continuing dialogue that needs to happen between these two economies to settle into a pattern of what’s considered to be fair trade between them,” Banga said. Both China and the U.S. should be prepared to offer some concessions in order to turn the page on this acrimonious chapter in their history, Banga added, noting that the year-and-a-half-long conflict “won’t be resolved in such a hurry.
“That’s a little longer term,” he said.