Co-Op's calm oasis

A “calm oasis” is not a description most people would use to characterize a grocery store. But that is exactly the kind of environment Calgary Co-op’s CEO Ken Keelor is striving to create for shoppers as they enter the co-operative’s newest concept store.

Instead of bombarding customers with product displays and special offers as soon as they enter, this newest shopping iteration aims to offer a bit of breathing room: a panoramic sightline that shows off the grab-and-go station (complete with hot curry bar), the large cheese island, the deli, the entire produce section and the bakery—and all the way back to the meat counter (with its 28-day aged beef locker). “We are not trying to sell you something right as you come in,” Keelor says. “Customers can plan their journey across the store; they can see where our team members are, and they can ask for help.”

It’s very tempting for retailers to raise shelf heights to fit in more products, says Keelor, but Co-op found it was worth lowering displays to give shoppers the ability to more easily situate themselves in the store. Four skylights, bright LED lighting and coloured floor sections for each department (for example, red for produce, black and white for meats, and blue for pharmacy) also make it easier to shop. Calgary Co-op implemented these design changes after hiring Toronto-based Level5 Strategy Group to conduct market research. “We did 6,000 interviews and 15 focus groups,” says Keelor, who joined Co-op as CEO in November 2014. “I really believe the data speaks. It’s not what we think the customer wants, it’s what the customer says they want. So we ask them.”

Co-op then hired another Toronto firm, design agency Shikatani Lacroix, to come up with a new store concept based on the market research findings. Keelor wanted to bring the new ideas to market as soon as possible and since Co-op’s newest store, Auburn Bay, was already under construction, things that could be changed were changed; skylights were added, for example, but existing ceiling heights and the original pharmacy location had to remain. “We didn’t get all the changes we wanted, but we got some,” he says of the store that had its grand opening in November 2016.

This May, the Shikatani Lacroix redesign of the Calgary Co-op store was awarded an induction into the Retail Design Institute’s “Class of 2016,” but that doesn’t mean the concept will remain static. Co-op is continuing to tweak the design and incorporate the ideas into its 24 food stores, 28 gas bars, 24 liquor stores and three home health care stores in Calgary, Airdrie, Cochrane and Strathmore. (Calgary Co-op itself is one of 190 independent members of Western Canada’s Federated Co-operatives Limited.) Calgary Co-op’s Monterey store has already been retrofitted with the new design, and two more locations, Deer Valley and MacLeod Trail, are expected to be complete by mid-November. “New stores over the next three years will reflect this design, but in a year or two we will go back to the table and see how we are doing,” says Keelor. “Not all the stores will ever look the same—we’ll keep evolving. We can’t redesign all our stores at once, it just doesn’t pay out. That is not in our DNA.”

Still, the market research was used for much more than just design tweaks. A key finding from the research was that Co-op needed to do a better job communicating with its younger customers—especially explaining how a co-operative works and making it easier for them to get a Co-op number. “You used to have to go to the customer service desk at the store to buy your $1 co-op membership,” says Keelor. “Now you can sign up online.” And the organization is making a bigger effort to explain that all profits are invested directly back into maintaining the business and are returned to its 460,000 members. “Last year we handed back $31 million to members who get a rebate every year. The cheque comes in the mail. This covers food, liquor, gas, home health care and pharmacy purchases—members get different levels of rebates on all of those things, depending on how the business does every year,” says Keelor. New in-store signage also clearly shows how and where Co-op invests back into the community—last year’s contribution was $4.1 million.

For Auburn Bay Co-op manager Doug Scott, the best part of membership is that shoppers can feel a real ownership. “Customers say, ‘It’s my store,’” he says. He recently got a “Doug, you gotta read this” note from a customer who saw another Auburn Bay customer’s post on Facebook. In the forwarded post, the woman told of how she had asked several other grocery stores to create a birthday cake with an orange dinosaur for her two-year-old son, but she was only able to find places that would decorate with dinosaur toys. In her post, she raved about the “amazing” Auburn Bay cake decorator. “She custom drew an orange dino on a cake to make sure my little guy got exactly what he wanted ... I have never been more impressed with the amazing customer service,” she wrote beside a picture of the cake.

“That’s where it starts,” says Scott, who has been with Co-op for 42 years. “Customers think this is their store.” The Auburn Bay location, in particular, has made a special effort to cater to families. The Auburn Bay neighbourhood is a relatively new suburb on the southeastern edge of Calgary. It has its own man-made lake and is popular with young families. Scott noticed the younger demographic right away and brought in kid-sized grocery carts (Auburn Bay is the only Co-op location to have these). He’s also organized an in-store kids’ Easter egg hunt and a Halloween candy hunt.

Calgary Co-op has long had an “All kids get a free cookie” program at its bakeries, but it has recently increased signage for this promotion—and Auburn Bay is also adding a new display unit for a free piece of fresh fruit for kids, giving parents the option to let their kids indulge in a cookie or make a healthier choice, explains Scott. “In this industry you’ve got to be nimble,” says Scott, who used that word several times as we chatted. Being nimble is how Auburn Bay Co-op quickly responded to customer requests and added a gluten-free section. It’s why the store works closely with local producers such as Nanton, Alta.’s Paradise Hill Farm to keep in-demand local tomatoes and basil in stock. It’s also why the new store revamped its signature cut fruit and veggie program numerous times before getting it just right.

“We are not a massive company compared to our competitors, so we can’t afford to fail big,” says Keelor. “We have a culture of constantly testing and failing quickly—and continuously improving. We don’t experiment at huge cost. We are very confident in what we are doing.”

This article originally appeared in the December issue of Canadian Grocer