Retailing in the Age of Disruption

If you’re not one step ahead, you’re two steps back.

More specifically, retailers should continue to expect one disruption after another, as the rules of doing business keep changing, faster now than ever.

That’s one of the overarching messages to come out of this week’s Category Management and Shopper Insights Conference, hosted by the Category Management Association at Caesars Palace in Las Vegas.

Whether it’s Aldi versus Lidl, Walmart versus traditional grocers or Amazon versus everybody, the pace of change and the fervor of competition continue at a fever pitch.

“Everything is changing and it’s not slowing down,” declared Art Sebastian, head of digital shopping and ecommerce at Midwestern superstore retailer Meijer, which is investing heavily it what it aims to be a truly seamless omnichannel experience, encompassing online shopping, click and collect, and home delivery as well as brick and mortar.

With three-quarters of all sales, physical or otherwise, starting with online searches, Sebastian deems Meijer’s web portals to be the “digital door to our physical store,” with more than 230 stores approaching 200,000 square feet each across six states feeding shoppers’ hunger for fresh food, groceries and general merchandise.

It appears to be a winning formula; Meijer is opening new stores while many retailers of all types are shutting locations, along with two Midwestern grocery operators filing Chapter 11 in recent weeks, succumbing to competitive and deflationary pressures.

Here’s some of Sebastian’s advice:

- “Connect with customers more frequently and sell them more”: Meijer is achieving this through its home delivery partnership with Shipt, which is generating greater trip frequency in early testing.
- “Invest a ton” in social media to promote events and partnerships with CPG companies.
- Leverage category management to bridge the gap between physical and digital.

Yet retailers should be sure to launch initiatives true to their brand and mission, not just because a particular app or service is trendy.

Wayne Duan, director of digital commerce at Walgreens, cautioned retailers to abandon “FOMO” – the fear of missing out – and instead embrace “JOMO,” or the joy of missing out on strategies that don’t fit your company’s identity.

Duan advised retailers to consider:

- Does this technology actually solve an actual problem?
- Will it be different and better than the status quo?
- Is it strategic for our brand?

And he advised embracing partnerships to properly execute appropriate strategies: “Going it alone in this digital age is fraught with peril.”

There was no shortage of companies exhibiting at the conference ready, willing and able to help retailers and CPG companies harness Big Data about shopper insights, basket rings and other buying behavior to develop customized solutions to better serve customers.

It’s all the driving force behind CatMan 2.0, the revamped category management guidelines being rolled out by CMA that compel retailers to focus on shopper solutions, the “why behind the buy,” and how to engage consumers on their terms. This new age of category management will be a key focus of Progressive Grocer moving forward, and will certainly influence how we look at nominees in our annual Category Captains contest (with nominations opening this summer), who should be partnering closely with retailers to develop profitable solutions that look beyond the constraints of aisle and brand.

The old adage “customer is king” is truer now than ever before. As Andrew Nadin, chief marketing officer of Schnuck Markets, noted during a retailer panel discussion in the closing hour of the conference, "If we don't put customers at the center of what we're doing, we're going to lose them."