Live at CMA: Going Channel-less

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Live at CMA: Going Channel-less

By Jim Dudlicek, EnsembleIQ - 09/14/2016

While most of the retailing world pursues an omnichannel strategy, the folks at Meijer are adopting a different philosophy.

“Our strategy is one store, multiple ways to shop,” said Art Sebastian, head of digital shopping and e-commerce for the Grand Rapids, Mich.-based superstore retailer, explaining the thought behind what Meijer calls its “channel-less” retail strategy.

“The store is the center of our digital ecosystem,” Sebastian told attendees of this week’s Category Management Association conference in Las Vegas at his Tuesday morning keynote session. Meijer offers consumers such services as click-and-collect and home delivery, as well as social media engagement, which he called “digital doors to our physical stores.”

Meijer’s strategy is designed to avoid the “lack of clarity” that exists between some retailers’ physical and digital offerings, Sebastian explained, and aims to keep the shopper experience “as relevant and as seamless as possible.”

Meijer’s goal is to replicate the in-store shopping experience as closely as possible online, and despite the limitlessness of the internet, Meijer’s average 350,000 SKUs per store makes that a daunting task. Besides exploring ways to replicate the at-shelf look digitally, Meijer is experimenting with other traditionally in-store features at curbside pickup, such as impulse purchases, one-price produce boxes and meal kits.

Meanwhile, the retailer is partnering with separate companies to test home delivery in Grand Rapids and Detroit, including “opportunities to engage with consumers at their doorstep,” Sebastian said.

On the Edge

Meijer’s aggressive strategy is just the kind of attitude that Kevin Hartman, Google’s head of analytics, believes is called for. “The shopper has not changed – their world has,” noted Hartman, following Sebastian's presentation.

Digital- and mobile-based services, such as near-instant insurance and mortgage quotes, transportation services, and health and beauty guidance, have heightened consumers’ expectations for retail, according to Hartman. “The bar has been raised – superior has become average,” he said.

By tracking the emotions behind purchasing behavior, retailers can shorten or eliminate the traditional evaluation process behind shopping to expedite purchase and loyalty, Hartman asserted. Further, citing data indicating that only 1 percent of the change that technology will eventually bring to lives and business is realized today, he observed that “we’re at the edge.".

Closer to the Customer

It’s this emerging technology, and the shopper insights it enables retailer to collect en masse, that must be harnessed to drive CatMan 2.0, the bold new initiative rolled out by the Category Management Association (CMA). The update of CMA’s then-groundbreaking category management standards of 25 years ago, focuses heavily on the “why” and “how” of shoppers.

One of the initiative’s greatest strengths is promoting enhanced efficiency between retailers and their trading partners, according to members of a panel discussion led by CMA’s Gordon Wade, a pioneer in the field of category management, and consultant Michael Sansolo, the conference emcee.

“It helps people think differently and be innovative about the future,” said panelist Rana Nall, category management and modular development for Bentonville, Ark.-based Walmart.

To make it work, however, company leadership must buy into the concept industrywide. “They have to be aligned in understanding the ROI this delivers for business,” Nall said. “The customer doesn’t see the value that category management brings.”

To be sure, Wade noted, category managers need to “sensitize top management to the benefits of category management.”

According to the panel, priorities for companies looking to adopt CatMan 2.0 include internal promotion of the plan, benchmarking, and fully understanding what capabilities are needed for retailers and suppliers to collaborate effectively.

“We have to get closer to the customer,” Nall said. “We have to get quicker, be more nimble to make changes to our assortment.”

Added panelist Jimmy Brooks of McKee Foods, “If we don’t get our house in order, e-commerce will blow us away.”

Working Together for All

Keys to success will be proper training and closer collaboration between retailers and manufacturers.

“Collaboration is where the money is for both the manufacturer and the retailer,” said Tom Burkemper, senior director of beverages at Deerfield, Ill.-based Walgreens, in a discussion with DePaul University’s Dan Strunk, SVP of certifications for CMA. Burkemper explained that there have been billions in wasted marketing and promotional dollars, due to poor collaboration “from strategy down to execution.”

Effective partnerships recognize that shopper experience is a key driver, and partners must “really understand what motivates them,” Burkemper said.

Additionally, there must be good communication and trust between collaborating partners, something that historically has often been lacking, as partners have been reluctant to share information viewed as sacred. “Access to information is one of the most valuable currencies we have as partners,” Burkemper asserted.

Retail Leaders

CMA President Blaine Ross and Mike Troy, editor of Retail Leader, a sister publication to PG, presented this year’s Retail Leader/CMA Best Practices Awards during a luncheon ceremony. The gold, silver and bronze honors were awarded to retailers, manufacturers and other partners in five categories, as follows:

Omnichannel

Gold: Mondelez International/HMT Associates

Silver: SmartShelf

Bronze: Lowes Foods/Unata

Collaborative Business Planning

Gold: Dr Pepper Snapple Group/Walmart

Silver: Procter & Gamble

Bronze: Aunt Millie’s/Advantage Solutions

Shopper Insights

Gold: Pinnacle Foods

Silver: McKee Foods/H-E-B

Bronze: Kraft Heinz/HMT

Custom Assortment

Gold: Cloetta/Retail Academics Research Institute

Silver: Dr Pepper Snapple Group

Bronze: Advantage Solutions/Target

Shopper Marketing

Gold: Mondelez/Geometry Global

Silver: Unilever/Sopexa

Bronze: McKee Foods/Ahold

Concurrent breakout sessions included a planogram automation initiative by General Mills and Cantactix; a demonstration of basket-level insights for Coca-Cola by SwiftIQ; and Procter & Gamble’s revamping of its category management capabilities through collaboration with CMA.

Day two’s general sessions came to a heartwarming close with Maj. Dan Rooney, fighter pilot and pro golfer, offering inspirational messages of success, dedication and commitment, and how he came to establish Folds of Honor, a foundation that provides scholarships for the children of fallen or disabled military.

Follow live event coverage at Progressivegrocer.com and on Twitter at @pgrocer and @jimdudlicek