What do the challenges of the brick meets click space look like to independent grocers? They look a lot like the challenges the big chains face, according to BMC Black Belt Mike Spindler. Mike attended the NGA convention in Las Vegas last week, and we asked him to share his perspective on key takeaways related to the digital side of grocery shopping for these food retailers.
What did you learn at NGA that BMC readers would want to know about?
Mike: Let me set the stage first. The National Grocers Association is made up of medium-size and smaller retail grocers and some one-store independents. These are survivors. They are universally good at the food business, after all, in the face of competition from the corporate giants, they are succeeding or at least surviving. They spend a lot of time focusing on their stores, which means they don’t have a lot to time to spend thinking about digital issues. They are also a tough-minded crew that brings a degree of skepticism to anything new. They’re always being sold by some very good sales people, so they tend to be wary.
All that said, when it comes to what’s happening in the brick meets click space, I think they have the same issues as the big guys. In this situation, size doesn’t matter. The competitive challenge is the same whether the organization is small or big.
Was there any theme that ran across what you saw and heard at the meeting?
Mike: Yes and it’s one that I heard expressed several different ways. It goes something like this:
There’s no shortage of information out there – but the only information I want is the information I need to make decisions. Where do I go to find this information?
So, part of the problem is finding the right information about what to do, and getting it from a source you can trust and someone who understands your situation. The other part is recognizing what to do with the information you’ve got. I talked to one grocer who got 400 hits on his U-tube video and another who does 5,000 emails a week – these are impressive accomplishments – but neither one knew how to evaluate the results he was achieving or leverage that information into next steps.
Another theme was closely related: “We need to understand and accept that we don’t know all of the answers, but we need to begin to find them.”
Were the people you talked with concerned about the cost of moving into more digital communications with shoppers?
Mike: Yes, but after several conversations, it became clear to me that two issues were being mixed together.
The first involved the cost of the tools and resources needed to execute digital communication – software, ad agencies, etc. There are clear limits on what small and medium-size retailers can spend in this area, but these limits weren’t nearly as complicated as the second issue – developing a clear idea of what you’re trying to do.
Deciding what to do to support the business is a big challenge, given the resources available. It doesn’t take a lot of money to set a digital strategy, but it does take focused effort, and there are a lot of other demands on these people. Some companies are definitely a lot better than others at this, but no grocery retailer has figured it all out yet, not even the biggest ones. Also, the target is always moving.
What does this mean about the ability of medium-size and smaller retailers to compete successfully in the expanding digital component of the marketplace?
Mike: There is good news here. If you know what you’re trying to do, and it supports your overall business objectives, you can be pretty competitive regardless of your size. And you may even have an advantage over bigger organizations in terms of how fast you can adjust to the changing situation in your local market.
It’s a little like the story about the two hunters who are being chased by a bear. One of the hunters figures out that he doesn’t have to outrun the bear, he just has to stay ahead of the other guy.
Food retailing is still a local business, and the trick is to be sure to consider all of your competition, not just the usual suspects, and not let any of them get ahead of you in terms of serving your target customers. All retailers are facing the same challenge, regardless of their size: A long-term and permanent change is under way that’s affecting the way people shop for food, and we all have to accept the need to “learn through doing.” Size doesn’t matter in this situation; big or little, we’re all working it out.