Video exclusive: Retail Leaders discuss digital future
Innovation, disruption, personalization and transparency were dominant themes among the more than 1,000 senior executives from top retail and consumer goods companies who gathered at the FMI Midwinter Executive Conference in Scottsdale, Ariz., on Jan. 27-30. These themes were echoed frequently during the three-day event as attendees pondered and strategized about a future in which digital forces are changing consumer behaviors and the competitive landscape. Several executives stopped by the Retail Leader/Progressive Grocer video studio to share their thoughts.
Bernard Goor, VP of Retail and Consumer Goods at Oracle, spoke of massive change and the immediacy of information that is enabling shoppers to optimize decisions. He also cautioned that amid a buzzword-filled landscape of chat bots, beacons and artificial intelligence, it is important to have a strategy focused on knowing, egaging, converting and growing the lifetime value of customers.
Kristin Howell, Global Vice President, Retail Solution Management, described how data is the new differentiator, to be leveraged as an asset against numerous challenges and competitive entrants. With digital influences pressuring grocers and consumer goods companies, she espoused the philosophy of running the business with a digital core.
Mark Baum, FMI’s Senior Vice President of Industry Relations, quantified some of the challenges facing retailers and suppliers face in the rapidly evolving world. FMI in partnership with Nielsen shared research that shows about 23 percent of food and consumable shoppers are doing some of their shopping online, but that number is forecast to grow to 70 percent and will represent $100 billion by 2025. That means there is time for companies to develop the frameworks, methodologies and tools to prepare themselves strategically operationally and culturally.
Chris Morley, President Nielsen USA, FMI’s partner on the landmark research project, noted that the $100 billion forecast represents about a quarter of the current $400 billion market and will represent a real step change for the industry. He envisions some of the greatest impacts occurring in the center store and with categories migrating online it creates the potential to redeploy space and labor to perimeter deparments.
Thom Blischok, Chairman and CEO of the Dialogic Group and an executive strategic advisor with the Nielsen, also shared his thoughts on digital disruption. His view is that entire operating models will need to be transformed with the industry moving toward a pay for performance model and away from the pay for play approach. The fundamental challenge facing the industry is to define what digital collaboration looks like.
Randolph Burt, Partner with A.T. Kearney, described how other consumer trends have been enabled by digital and create new opportunities for food retailers and CPG companies. The “localvore” phenomenon continues to gain momentum and extend beyond produce to all product types creating new supply chain challenges for companies. The transparency aspect of local is hugely important and also plays a role in the other mega-trend of health and wellness, a space he contends food retailers have an opportunity to own.
Glenn Hartman, SVP Channel Business Development, Starbucks Coffee Company, spoke to transparency and sustainability as well. Starbucks views itself as having a role and responsibility beyond profit and described new initiatives to bring the Starbucks experience into aisles of retail stores.
Alexander Gillett, CEO and co-founder of HowGood, a company with the largest database of sustainable food products, noted that the environmental and social impact of products is a key driver of shopper behavior. The 10-year-old company’s database of 200,000 products uses a three-tier system to rank products and is able to demonstrate a sales lift when sustainability attributes are called out on product labels.
Michael Sansolo with the Coca-Cola Retailing Research Council described several major research projects undertaken by the 40-year-old organization. One report, “Surviving the Brave New World of Food Retailing,” focuses on the broad topic of challenge facing retailers in a world where location is becoming increasingly less important. The report is available at www.ccrrc.org.