What do you think are the most significant forces at play in the market today as it relates to merchandising and marketing?
The fragmentation of the customer. Customers are simply not as loyal as they used to be, and they demand customization. We’re seeing that our number of our most loyal customers is virtually the same. However, what they’re buying has changed and the frequency that they’re shopping with us has dipped. This is because there are so many other choices – competition. That’s why differentiation is so critical. We work on things such as Fresh in our Perishables department. We’ve focused on our loyalty program and we’re seeing some good results from that. Then local suppliers, local product, local destination, local sampling. We’re doing new outreach, for example, where we go to local the expos, so the general public can sample our products. So, it’s no longer about you just coming to the store to experience us.
We’re also using data to differentiate among our customers. That’s really key. Also, localization is becoming very important. We have developed store-specific planograms that meet the needs of the local consumer in that area. You can’t make any generalizations about your customers anymore.
I like that idea of getting out into the community, being more than just a “store.”
Yes, we have a couple of food trucks we use to visit local events. It’s really helped us engage with the community.
How has procurement changed to meet the omnichannel reality of grocery customers today?
It’s now very much about procuring from multiple channels. You can’t look at the US or your local market for procurement now and say that that’s the only assortment you need to consider. You must look globally at what and how you can source and how that plays into omnichannel. Is it something you’re going to sell just via digital? Or is it something that you’re going to carry in your brick and mortar stores? Now, for example, you can procure goods and you don’t even have to hold the product – you’re selling out of someone else’s warehouse. You’re not having to slot it, you’re not having to ship it, you’re not having to stock it. We are looking at these ways to gain efficiencies and to get the customer what they want, when they want on it, whenever they want it. The question now that really matters is How can we most effectively get the products our customers want into their homes?
Tell us a little about your approach to shelf optimization these days as shelf space is shrinking and localization of product is even more critical to address this.
It’s about segmentation based on the customer. To segment in this way, you need good data. This helps bring you close to the customer, to truly get to know them better. Also, within our brick and mortar retail locations, that segmentation must happen store by store.
How does customer insight and preference information factor into a customer-centric approach to category management?
Understanding and applying customer insights is the most important thing you must do. Customers are more fragmented today than they have ever been and are more willing to find alternate options/retailers should a specific store not meet their needs.
Here’s a great example of the power of customer insights! We’ve been looking at ways to grow our sales in the entire snack section. We are using Symphony RetailAI data and found something that blew us away. We were comparing our Giant Eagle snack – Corn Puffs to the national brand, Pirate’s Booty. I share some of details below. It’s very interesting. We see that our product is mostly purchased on Thursdays and Fridays. Pirate’s Booty is mainly purchased on Sunday afternoon. Additional data shows us that we’ve got two very distinct shopper types. If you look at the shopping cart data, you see that we’ve got a “Giant Eagle shopper” and then truly a “National Brand” shopper. We see the average basket size for the Corn Puffs buyer vs. the Pirate’s Booty buyer. We get insight into what else each shopper is buying.
Example of customer insights:
Who is Buying?
Six times more people buy GE Corn Puffs (120,000 households) than Pirate’s Booty (20,000). About 10% of Pirate’s Booty customers have tried GE corn puffs, and 1.5% of GE corn puff customers have tried Pirate’s Booty. GE puffs are usually bought by value customers who don’t buy many baby & kid items and tend to favor private label items. The average basket size with GE puffs is almost half the size of the Pirate’s Booty basket. Pirate Booty customers are greatly over-indexed on the Premium Fresh segment, customers who buy things like wild-caught fresh salmon, imported pasta, and fresh fruit.
So, you can see, we’re doing deep dives into category. Then that goes back to the shelf, looking at how we segment the stores, the cluster of the stores. We’re not into having every store have its own cluster, but there are definitely groups of stores that go along with each other.
As pioneers of modern grocery during the 1950s, how has Giant Eagle remained relevant to the shoppers of today and what innovative strategy will keep your brand resonating with your customers?
Our commitment to quality and innovation is at the core of our success. That really hasn’t changed, that is, it’s still about the quality people we hire, our food quality, our facilities. It’s important to keep this in mind – with all the focus on change and innovation – you just can’t lose sight of the core areas that cannot vary.
What it means to be innovative has changed. Twenty years ago, innovation drove Giant Eagle to launch one of the country’s first loyalty cards. Then, it resulted in the launch of our GetGo and Market District brands. Today, our team members’ innovative spirit has resulted in a thriving Curbside Express service. We now can deliver to office buildings. Lots of innovation and other growing digital evolution.
What are you most looking forward to at Xcelerate?
Well, I’m taking part in the Executive Panel Discussion on Wednesday. There’s an interesting lineup of participants and I think they’ll be some great output from that. It’s always interesting to be part of something like this and to speak, but you learn a lot from these groups as well. Even though there’s a common theme and questions that have been decided in advance, the chemistry of the group and how one person answers a question can lead the group in a different direction. That’s what I like most about panels.
Can you tell our readers something fun/personal about yourself that might surprise them?
I played high school football for Odessa Permian, the school that the movie Friday Night Lights was about way back when. (I wasn’t in the movie)