Independent grocers need to make dramatic upgrades in marketing tech

Discussion
Source: NGA
Feb 26, 2020
Ron Margulis

Marketing technology, such as promotion optimization and personalization, has long been a nice-to-have for independent supermarket operators instead of a must-have, like product, operational and sales systems. These marketing systems are expensive and take dedicated teams to implement and run, and even most 50-store operators don’t have the resources required to make the effort deliver a positive ROI.

This is changing very rapidly as community-based retailers face ever more sophisticated challenges from larger competitors and online adversaries, but also as the costs of these systems has come down drastically.

Presenter after presenter at the National Grocers Association Annual Convention in San Diego this week read attendees the riot act, warning the gathered independent supermarket operators of what many consider an existential threat for the sector.

Good examples of marketing technology being applied at nearly the same levels as big chains can be seen at Coburn’s and Harmon City, two mid-sized operators in the Upper Midwest and Greater Utah, respectively. Both retailers have loyalty programs running with either owned or affiliated fuel stations that enable them to create personalized promotions for their best customers.

Coburn’s, for instance, has more than 600,000 loyalty members that represent 20 percent of shoppers and account for more than half of all sales. Emily Coborn, vice president of Operations East at Coborn’s, stressed that this makes it critically important to target this segment with valuable marketing outreach.

Ron Bonacci, vice president of marketing and advertising at Weis Markets, explained that success with marketing technology efforts is based on the collection and analysis of data. “Now it’s so cost effective that there’s no reason not to be collecting and analyzing it for retailers of any size,” he said. “AI tools support both your back-of-store decisions to have the right products on the shelf, without the hurtful shrink and the ability to use shopper data to keep them coming into the store and going to the website.”

Mr. Bonacci also suggested that basic digital engagement campaigns, including social media and digital promotion through text and email, can be up and running in weeks rather than months.

DISCUSSION QUESTIONS: What marketing technology solutions are most critical for independent supermarket operators to deploy in 2020?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Getting to know your customers to better serve them should always be the goal. Today that means understanding their behavior and preferences through data."
"As someone who has been to 30 NGA conventions, I say that the changes in retail have made life very difficult for independent grocers and especially for rural single stores."
"Customer Experience (CX) capabilities are key for identifying gaps in the shopping journey."

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9 Comments on "Independent grocers need to make dramatic upgrades in marketing tech"


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Ralph Jacobson
BrainTrust

Customer Experience (CX) capabilities are key for identifying gaps in the shopping journey. Where is the shopper getting frustrated? Where are you losing upsell opportunities? And where are you losing shoppers completely? There are many elements of the CX and you may want to take a look at each step of the path to determine where you are weak.

Michael La Kier
BrainTrust

Getting to know your customers to better serve them should always be the goal. Today that means understanding their behavior and preferences through data. A high-performing CRM program is table stakes at this point (note: this does not need to be a rewards program). Data is the fuel for expansion and growth; a lack of data leads to stagnation and decline.

Jeff Weidauer
BrainTrust

Any technology implementation for small grocers has to begin with the collection and mining of shopper data. The use of AI tools to improve promotional effectiveness and identify best shoppers has become table stakes for retailers of any size in order to compete and provide the personalization consumers demand.

Michael Terpkosh
BrainTrust

For any retailer, the critical marketing technologies are: customer internet shopping/ordering, some type of rewards/loyalty program, mobile technology marketing and promotion analytics. I agree with the insight that independent retailers have been falling behind with these marketing technologies because of cost. But these marketing technologies are now table stakes to retail success. A smaller independent retailer struggling with cost and associate expertise needs to turn to their wholesaler for help and expect their wholesaler’s support in these areas.

Gene Detroyer
BrainTrust

Without an online and delivery component, the independent retailer will eventually be out of business as a traditional grocery store.

Ken Wyker
Guest

The challenge for many independent operators is that so much of what is being hyped these days doesn’t even suggest a near term payout. It is crucial that the retailer’s technology efforts are focused on tangible, customer-facing improvements or promotional efforts that can deliver positive sales gains.

Ron Bonacci mentioned the low hanging fruit for independent operators when he talked about how quickly personalized promotional programs can be implemented. Done properly, that’s an area where retailers can see an immediate profit impact and create a competitive advantage.

Tony Orlando
BrainTrust
As someone who has been to 30 NGA conventions, I can say that the changes in retail have made life very difficult for independent grocers and especially for rural single stores, which are struggling big time. I have read with great interest the comments above. Implementing all of these technologies is not going to save many of these stores. The second- or third-generation owners, for the most part, are trained almost exclusively in center-store, which at one time was the golden goose for the bottom line, with a mix of 75 percent to 80 percent of store sales. As time passed, many owners relied on the knowledge of their meat and deli managers to make their departments grow and prosper, without actually getting involved with hands-on skills — as they they did not have it themselves. Those days are gone, and anyone who is a single store operator today must have expertise in perishables, as a 50 percent to 60 percent mix is needed to pay the bills. I wouldn’t be here if I didn’t… Read more »
Paco Underhill
BrainTrust

The challenge isn’t the tech – it’s using the tech to meet the challenge. How do you get local? How do you connect with your customers and service them (and educate them) better?

Sterling Hawkins
BrainTrust

Gathering, understanding and using customer data is #1 on the list. Operating without it is running blind to half of your business; the equivalent of not having product scan data. How that data gets used (and the value prop with the customer to get it) can vary by retailer and what their strategic positioning is: EDLP, best customer focus, etc. The strategy should drive what marketing technologies sit on top of that customer data to make use of it appropriately.

wpDiscuz
Braintrust
"Getting to know your customers to better serve them should always be the goal. Today that means understanding their behavior and preferences through data."
"As someone who has been to 30 NGA conventions, I say that the changes in retail have made life very difficult for independent grocers and especially for rural single stores."
"Customer Experience (CX) capabilities are key for identifying gaps in the shopping journey."

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