Customization is key, say industry experts

One message was clear during the conference portion of the first day of Grocery Innovations Canada: Know your customer

Canada’s food industry came to Toronto this week to talk grocery trends and to highlight innovations.

The morning conference began with keynote speaker Bonnie Brooks, vice chairman of the Hudson’s Bay Company. Brooks told attendees how she was able to turn around the iconic retailer – a brand she says “has the kind of heritage other companies will try to invent.”

Brooks spoke at length about the key to The Bay’s success. She says it required finding their audience, and editing their product to perfectly fit the appeal of that audience. She referenced applying specialty store behaviour to a department store model, which required eliminating brands. This left only items that were the best fit for the customer.

In the grocery space, Brooks said her favourite grocers follow a very similar model. They will edit the food assortment she shops in much the same way Brooks will edit the clothing options for her customer. In doing so, they leave only high quality options, that Brooks is confident will impress her family and guests. “ make me a hero in my own family,” she said.

Brooks also noted she felt the first grocery retailer who can figure out how to dramatically shorten the number of times a customer handles a product from the time it leave the grocery shelf to when it’s placed in a pantry at home will have a distinct advantage.

Next up, Marion Chan of Trendspotter Consulting dissected three kinds of consumers: the modern boomers, the millennial family, and the ethnic Canadians.

Chan said it was important to note modern boomers were still the ones driving eating trends, and will continue to do so for the next few years. Many consider themselves to be technologically savvy. In fact, 28% believe themselves to be tech gurus. But while a digital strategy can be just as effective to a baby boomer a millennial, boomers are less likely to be entranced by flash or celebrity. They also tend to make more shopping trips, and are less interested in extra bells and whistles a retailer might promote.

Millennial families seemed to be the most price-conscious of the three groups – at least 56% will look for the cheapest brands when shopping. Friend or family recommendations will often sway a millennial to try a new product, and they are in constant pursuit of “something better.” This is perhaps why millennials are considered so disloyal when it comes to brands.

“It’s not about what’s cheapest,” explained Chan. “It’s about what has the best value.” Millennials were 15% more likely to shop at Walmart, often looking for “more than just a grocery store.”

One of the red flags Chan felt inclined to point out was the large number of Chinese Canadians who’ve spent up to 25% of grocery spend online. These consumers may be looking online for traditional ethnic products they’re not able to find in mainstream stores.

The highlight of the morning was an all-star retail panel featuring Darrell Jones, president of Overwaitea; Jeff York, CEO of Farm Boy; Alexei Tsvetkov, CEO of Yummy Market; Shelley Martin, president of Nestle Canada and Terry Wong, director of marketing, authentic ethnic at Tree of Life.

The panel, moderated by CFIG’s Tom Barlow, covered the gamut in terms of grocery trends.

All panelists referenced customization when it comes to their compelling advantage. One store does not fit all, said Jones, who noted Overtwaitea’s made a concerted effort to veer away from any cookie-cutter molds and has customized their stores to fit each community.

Addressing the ethnic consumer was also a high priority for the retailers. Wong pointed out the increase in ethnic consumers has not happened over night – it’s a process that has taken place over many years. He noted while there’s been a focus on other ethnic groups, he expects Latin America to become an increasingly important group.

When it comes to trends, while gluten-free and organic are still important to consumers, York said he’s seeing more shoppers ask for unprocessed products.

HMR continued to be an area where the retailers were striving to expand. Customers, the said, are expecting fresh food that is of restaurant quality, if not better. The category can be as big as you want it to be, and has a lot of potential should you be willing to make the investment.

Barlow thanked the panelists for their advice and critiques, acknowledging how appreciative he was that they share their insights and experiences despite sometimes being in direct competition with each other. “The healthier the grocery business, the better we all do,” he concluded.