Industry leaders to independents: Innovate
As retail competition grows fiercer and customers maintain a tight grip on their wallets, independent grocers must find new ways to distinguish themselves from the crowd. That was the message from industry leaders and analysts on the final day of the Grocery Innovations Canada show at the Metro Convention Centre in downtown Toronto.
Presenters were full of suggestions at the morning conference sessions. Frank Coleman of Colemans Food Centres said his company has identified employee development and satisfaction as the best way to stand out from the competition. Carman Allison of Nielsen recommended catering to high-end consumers, while Ken Schley of Quality Foods recounted his company’s successful use of technology, including iPhone apps. And Loblaw's Vicente Trius discussed trends and how his company's distribution arm helps independents.
First up was a breakfast panel on payments, moderated by Canadian Federation of Independent Grocers’ vice-president of government relations, Gary Sands. Representatives from Interac and Visa agreed the Code of Conduct for the Credit and Debit Industry, which came into effect in August 2010, was a positive move by the government. But, Interac’s Kevin Rieschi quickly noted, “these important wins, these powers that you
Visa’s Paul Rogers, for his part, acknowledged the code of conduct contained “a bit of tough medicine for us.” Before it was implemented, Visa had hoped to enter the debit market in Canada. Its initial plan was to introduce a card that allowed consumers to chose whether they wanted to use debit or credit at point of sale. But the code prohibited this from happening.
Both speakers discussed the value of contactless payments for grocers. Rogers told audience members to “look seriously” at no-pin, no-touch payment methods using Visa. He said the technology speeds up the checkout process and, in the longer term, will help prepare retailers for the next big innovation – mobile wallets.
Rieschi, on the other hand, promoted Interac Flash, “the first contactless debit solution in Canada.” He said the product helps retailers who are looking to reduce costs associated with handling cash and coin transactions, and appeals to customers who are looking for a quicker checkout experience. Another Interac rep added the new payment method targets “smaller transactions where cash is king.”
Sands concluded the session by urging grocers to carefully read the code of conduct, saying he was disappointed at how few retailers were familiar with their own rights.
Coleman, head of Newfoundland’s Colemans Food Centres began his speech by singing the praises of his home province. “We have the most pubs per square foot in Canada, eat more potato chips per capita than any other jurisdiction, and Maclean's magazine says we are the sexiest people in Canada,” he said to roars of laughter.
How does this relate to his grocery business? Coleman explained that as a proud Newfoundlander, he feels a duty to look after his workers.
“We do not place our customer first, which may sound like retail heresy,” he said. “Our focus is different. We’re interested in creating a tribal culture.”
Coleman said his main priority is to ensure that when his workers “do something, they do it with pride.” The company’s fair wages, community involvement and focus on employee development means employees feel “fidelity” to the store and to the customer. “If you want to create something extraordinary, you have to first create it in your workplace.”
Nielsen’s Allison didn’t advocate a departure from the “customer first” mentality, but he did argue that grocers need to find ways to “think differently.”
“The voice of the consumer is getting louder,” Allison said. “The question is ‘are you listening to what the customer is saying?’” Allison laid out a series of statistics, researched by his company, which confirmed that Canadians remain cautious about spending money and are focused on value. The economy, he said, has polarized consumers – the rich are getting richer while the poor are getting poorer. Because high-income families drive about 50 per cent of grocery sales, Allison recommended independents put special focus on this segment. To attract these customers, he suggested expanding premium private labels, focusing on quality and service, and creating unique retail experiences.
Loblaw president Vicente Trius also addressed independents in a morning session that was closed to media. Attendees interviewed later by Canadian Grocer said Trius told the audience that Loblaw wants to work with more strong affiliated independents.
He pointed to four trends that Loblaw is focused on: aging and health; technology; multicultural; and urbanization. He said seniors are wealthier than in the past and concerned about health and aging. Meanwhile, ethnic products are going mainstream and shoppers are seeking authenticity in food products.
On technology, Trius said he does not think e-commerce will overtake retail distribution of food. However, with the advent of smartphones, he did wonder whether retailers will one day no longer need paper flyers.
Trius said Loblaw is helping independent retailers through its brand offering (including President’s Choice), expertise within the organization and its supply chain. He added the retailer will invest in its supply chain over the next two years and aims to ensure fill rates are above 99 per cent.
Ken Schley of B.C.-based Quality Foods ended the morning conference sessions with a presentation on how his company competes with industry giants. Like the other speakers, Schley had a slightly unusual solution: less people, more technology.
He conceded his company can’t buy better (“We’re not as big as Loblaw!” he said to a giggling crowd), nor can it secure the best locations. But it can compete by doing more with less people, or perhaps more accurately, by having the “right people in the right spots,” and by adopting innovative technologies.
Schley explained that QF’s card system, which gives holders special discounts on their products, and its use of iPhone apps are critical to customer satisfaction. He described the app as a “powerful tool, even for us,” and argued its success was a result of giving customers the feeling that “this is valuable information.”
The luncheon, which bookended the morning, honoured the CFIG’s past chairs and welcomed their newest chair, Mark Vickars of Choices Markets in B.C.