Published on: January 13, 2004
SCOTTSDALE, Arizona -- There was a simple truth that was expressed somewhere in the middle of the Food Marketing Institute (FMI) Midwinter Executive Conference.
Like so many simple truths, it was self-evident. And like so many simple truths, fidelity to its basic nature is easier said than done.
So here is the simple truth, as revealed at FMI Midwinter 2004:
"It's the customer, stupid."
Okay, that's not exactly how they put it. The speakers and sessions on day one of the two-day conference used language more elegant and refined, if less direct.
"We have to begin collectively thinking about how consumers are really changing," said Tim Hammonds, president/CEO of FMI, noting that the industry has gotten good at cutting costs, employing technology, pursuing efficiency. "But we don't talk anymore about strategic initiatives for the consumer," he said.
Hammonds was leading into a presentation of new research from the Coca-Cola Research Council, looking at consumer lifestyles and how they drive shopping experiences. The conclusion of this research, aid Bill McEwan, president/CEO of Sobey's, is that food retailers generally execute plans that conform to their own needs, "not shopper wants, needs, means, and ways." McEwan said, "Consumers have their own agendas, but more often than not they do not conform with ours."
He added, "We talk about conventional stores, but consumer see mediocrity." And when retailers put in place so-called loyalty programs to tap into what consumers are thinking and doing, they are really just "compensation for fundamentally flawed execution." And for food retailers to succeed in a time of cutthroat competition, they must find a way to truly understand the consumer's actions and motivations…and to develop strategic initiatives that address them.
In other words, it's the customer, stupid.
This was a theme that was woven, more or less, through the presentations and discussions of the day.
In a speech about the mapping of the human genome and how this is a new language that must be understood in order to navigate the modern world, made by Juan Enriquez, senior research fellow and director of the Harvard Business School Life Sciences Project, the emphasis was about customer needs. In a world where the genome is understood, the genetic makeup of things can be adjusted…in order to create foods that offer life-bettering qualities.
A presentation about technology and privacy issues by Jonah Seiger, visiting fellow at the Institute for Politics, Democracy and the Internet, it was all about being attuned to consumer preferences in a world where everybody can know everything about everyone.
A series of presentations about the nation's obesity issue - made by the likes of aerobics guru Dr. Kenneth Cooper, diet expert Dr. Dean Ornish, and Susan Finn, chair of the American council for Fitness and Nutrition - really was all about helping the consumer live a happier, healthier, more fulfilling life.
And a presentation about ethical business behavior by Marianne Jennings, a professor of legal and ethical studies at Arizona State University, essentially was about creating a business environment that embraces truth and honesty - values that would engender customer trust.
It's the customer, stupid.
FMI senior vice president Michael Sansolo told the audience that the Coca-Cola Research Council study is designed to transcend traditional demographic views of consumers, to look at "state of mind occasions for shopping," occasions that can be both overlapping and divergent. These "need states" include:
• The "Keeper," who is responsible for caring for the family.
• The "Banker," who must shop within a budget.
• The "Quartermaster," responsible for efficient replenishment.
• The "Hunter," always is search of a bargain.
• The "Desperate" shopper, looking for food out of some urgent need.
• The "Courier," who needs "grab and go" food.
• The "Reluctant" shopper, just trying to get through the day.
• The "Seeker," looking for discovery.
• The "Hungry" Shopper, seeking immediate gratification and consumption.
it is critical, according to Kevin Davis, president/chairman/CEO of Bristol Farms, for a retailer to choose his or her spots…to accept the notion that you can't be everything to everyone. It can be done through format selection, he said, in the way that Tesco has done in the UK; or it can be done through canny product selection that is focused rather than exhaustive.
These issues must be addressed, said Hammonds, because we are living in a world where more and more, people don't seem to need to visit the supermarket each week. And why? Because, according to the Coke Research Council's research, shoppers increasingly say that supermarket employees are hard to find, that they want new and interesting products, and that the shopping experience simply isn't interesting or rewarding.
It's the customer, stupid. That's the simple truth.
Other notes from FMI Midwinter…
- Jennings' ethics presentation was reminiscent of Abraham Lincoln's comment that "when I do good, I feel good. When I do bad, I feel bad. That's my religion."
The crux of Jennings' thesis was that people need to spend more time asking if they "should" do something, as opposed to whether they "could" do something. "Could," Jennings said, is the question that leads to companies like Enron and Ahold making decisions that ultimately land them in legal and ethical hot water. "Should" leads to the creation of standards, and standards must be absolute and universal, not relative and shifting.
And in many ways, Jennings suggested, it comes down to the age-old concept of "do unto others as you would have others do unto you."
- One of the more arresting moments of the day was when John Banzhaf, III, professor of public interest law at George Washington University Law School, spoke to the group about the obesity-related lawsuits that he and other attorneys have been filing around the country.
Most remarkable - and perhaps most disquieting - about Banzhaf's demeanor was the fact there seemed to be no ambiguity about his position, no room for the moral dilemma. Banzhaf remembered that there were those who questioned the wisdom of the tobacco lawsuits that began being filed a number of years ago, those who called the lawyers who filed those suits crazy; now, he said, there's another word used to describe those lawyers: "multimillionaires." And for this, he wasn't even a bit apologetic.
Essentially, Banzhaf's message was a warning - that he is coming to get companies that don't live up to their responsibility to eliminate products that cause obesity, and label those that do. Studies show, he said, that there is increasing opinion that companies should be held responsible for the nation's obesity crisis, that "sellers may be found liable even if they are not culpable." And if it helps plaintiffs get results, he said, lawyers will think nothing of using children to gain sympathy and courtroom victories.
- Finally, FMI used the first day of the Midwinter Conference to present its annual awards.
• Randy Hutton of Winn-Dixie received the Glen P. Woodward Jr. Public Affairs Award.
•The William H. Albers Award to supplier representatives who made a significant contribution to improving industry relationships went to a class of five retiring executives: Minute Maid's Robert Holbritter, Procter & Gamble's Michael L. Maurer; Unilever's F.A. "Buddy" Miller and Mel Williams; and Philip Morris's Michael Irish.
But perhaps the most remarkable moment of the day came when Danny Wegman accepted the Sidney R. Rabb Award, and spoke to the stresses that competition can put on relationships. He remembered that when competing with Ahold's Tops Markets in western New York, his own sense of competition led him to practically stop speaking to Ahold's Bob Tobin. Wegman was moved to tears when recalling this, and he said that the relationship has been repaired, and his own commitment to industry sharing, even among partners, has been redoubled.