Focusing on customer first: Vicente Trius of Loblaw

Loblaw president Vicente Trius kicked off the CIBC Retail and Consumer Conference on Wednesday and talked about his plans for the business.

A big part of his plan is focusing on the customer. Over the last eight months he’s been on the job, Trius said he’s met with customers, along with vendors and shareholders.

He discovered through his chats with customers–sometimes in their own homes–that they really love Loblaw’s brands, but they desire more consistency.

He said that sometimes there have been too many changes and not enough focusing on the customer.

“In my mind, a good retail business needs to have a good efficient supply chain …to guarantee product on shelf,” he said.

When it comes to its conventional stores, Trius said it’s about focusing on service, and theatre.

He’s looking to take the innovative and best practices from the Maple Leaf Gardens store in Toronto and implementing them at other locations.

The key to consistency is through colleague engagement, believes Trius. “We have a strong team of colleagues with engagement above 70 performance zone,” he said.

Another area for improvement Trius pointed to was expense coverage from supply chain, to administration and productivity.

He pointed to building a culture that thinks customer first; listing to them, understanding challenges, and having processes and capabilities across banners and divisions.

“Last year, we established the discount and conventional divisions, which allowed us to focus on customers,” said Trius.

There are several pillars Trius said Loblaw is focusing on:

1)Being the best in food (its core business)

2)Relentless efficiencies

3)Leveraging its brands (food and no-food)

But again, none of the above however, will be achievable without engaging colleagues, said Trius.

In food, it’s about localizing assortment to the local customer, said Trius.

Instead of field to fork, Trius said it’s more about field to stomach as customers are loyal when they get a consistently good product eaten at home.

You build loyalty beyond quality and brand… it also has to be about taste, said Trius.

In terms of ethnic offerings, Trius relayed a story about talking to a Caucasian middle-upper class family that never travelled.

When he asked them what could Loblaw do better, they said better Asian assortment.

Similarly a Caucasian customer in Calgary said she wanted better Middle Eastern (Egyptian) products.

Trius said this all pointed to ethnic products becoming more mainstream and the need to manage the category better.

In health and wellness, Trius said 68 per cent of Canadians polled said they will improve health habits in 2011-2012.

“The trend is here to stay, and needs to be part of category management process,” said Trius.

In-store medical clinics and pharmacies are part of the strategy. Loblaw recently purchased Zellers’ prescription files for $35 million.

“This will bring more customers into our stores,” said Trius. Loblaw is also trialing the Guiding Stars nutritional rating system in stores.

One of the biggest “enablers” to get all his goals completed is SAP.

Trius said SAP is a journey and in store rollout should be completed in 2013/2014. “SAP will be an enabler once it’s done,” he said.

He added SAP will help leverage labour, improve shrink, reduce administration costs, and inventory reduction.

This year, some 100 President’s Choice Black Label products will be rolled out, while 2013 will see the launch of a loyalty card with an e-commerce platform.

There will also be more Joe Fresh stand alones on the horizon. On Thursday Loblaw will open its Fifth Avenue Joe Fresh store in New York.

Trius added that he sees opportunity in smaller, urban formats “beyond the banners we have.”

While he said that he’s happy with what he sees in store remodels.

“Across banners and divisions …. Customers like our remodels,” he said.

In a few years, Trius is hoping to get in a cycle of remodels every seven years.