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Metro preps for future of online grocery

Digital marketing could reduce size, availability of grocery flyers, says CEO

The ubiquitous weekly flyer isn't facing imminent death but the rise of digital marketing and loyalty programs could reduce its size and availability, the CEO of Metro said Wednesday.

Eric La Fleche said weekly flyers that are designed to lure customers to stores will likely remain a key marketing tool, especially for discount outlets that compete mainly on price and which have fewer direct marketing programs.

But he told analysts attending an investor day in Toronto that the growing use of the Internet by customers could eventually shrink the number of flyer pages or reduce distribution to some urban areas.

"I don't see the day when it goes away ... but over time I think the number of flyers and the pages per flyer should go down,'' he said.

Like other supermarket chains across Canada, Montreal-based Metro has invested heavily in the past few years in technology.

It linked up with data mining company Dunnhumby about five years ago in a bid to boost customer loyalty. It also developed a loyalty card in Quebec and uses Air Miles in Ontario to track the buying habits of consumers and deliver targeted discounts.

La Fleche said grocery e-commerce is minimal in Canada today, but he added that the company is preparing should it take off in coming years as it has in some countries.

"We're investing to be ready to launch when the time is right but the demand for that offer is not obvious today.''

E-commerce by Canadian grocers has lagged their U.S. counterparts, but some are testing the delivery of orders placed online. Loblaw customers can, for now, collect items ordered online at three locations in Toronto.

Retail analyst Jean Rickli of J.C. Williams Group said e-commerce is a trend that is affecting every facet of retail. But he said companies have to be careful not to abandon customers who rely on flyers to decide where to shop.

"It's all a question of trying to manage those changes as the consumer evolves,'' he said.

Marc Giroux, chief marketing and communications officer for Metro, said today's consumers – millennials and older generations – are empowered by technology not just to shop for great deals but also share their views on brands.

He said retailers have to respond by using technology to deliver more relevance and value to shoppers.

Metro's programs deliver personalized digital flyers to millions of loyalty customers, along with personalized coupons, recipes and grocery lists.

The company said its millions of personalized contacts with customers is increasing the frequency of store visits and helping drive sales in Ontario and Quebec.

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