Iain Beaton – New World Greenmeadows – CEO Business Marketing Interview 21

Iain Beaton shares the importance of customer service to New World, the flexibility of supporting local growers through a NZ brand, tips on how to getting products on New World shelves, product packaging and using data mining to determine product selection and category range.

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Ryan: This is the Ryan Marketing show and you’re listening to episode 21 of 100. Today, I’m joined by Iain Beaton from New World in Greenmeadows and we’re going to be talking all about how supermarkets do their marketing in 2016 and what business is like in the current economy. So, kind of over to you Iain, first question I would ask is, what are some of the core fundamentals to running a supermarket? Cause we’ve all been in supermarkets but rarely do we get to see behind the scenes of what makes a supermarket tick. So what are some of the things that you’re doing day to day to make sure that there’s always food on the shelves?

Iain: Well I think the important thing to remember is how the different brands are out there, Pak’N’Sav, Countdown, New Worlds, Four Squares so I think from our perspective with New World, we’ve got to put out a really good value proposition. Our customers expect more from our displays and fruit and produce and meat and quality, and customer service is really the thing we have to do better than everybody else, because we have a bigger offer on range and quality, people want to get the perception that they are being treated a little bit better. So customer service is really the excellent thing that we need to work on and focus on.

Ryan: And so for a customer coming into Greenmeadows New World, what are all those customer touch points that your internal team are looking out for to make sure they’re on top of their game?

Iain: Well I think when we designed the store we’re quite a deliberate attempt at making the whole foyer and entrance way customer friendly, if you looked at some other foyers they were very busy and cluttered. When we designed Greenmeadows or when we had a ability to help design the store with Foodstuffs, we deliberately put a cafe in there. You’ve got customer service right at the front door which is not always the case in a lot of supermarkets and lotto and the florist, so all of a sudden you have a buzzy area with cafe, you have your, you could call them people greeters on lotto and florist so, as soon as you walk in it’s like the entrance way of your house you want a nice friendly welcoming space so I think that was a very deliberate attempt which I believe has worked extremely well for us.

Ryan: So you’ve really got a shop within a shop there, so if someone wants to just duck in and out for a coffee in the cafe they can.

Iain: Look we’re seeing that, the cafe has gone exceptionally well over the years and you see it on a Saturday morning, parents drive their kids down to sport. You see the parents shooting in for coffee, we’ve got a great bunch of cyclists wearing lycra which we’re more than welcome to have within our store. Those guys are in every Sunday, huge crew of them. We’ve got the gym ladies across the road , they’re there two or three times a week. It is a great buzzy space to have at the front of your supermarket.

[00:03:35]

Ryan: So for those then going through that supermarket, how – what’s the reasoning behind the placement of products throughout the store? I notice on most supermarkets you start with the fruit and veggies, and then as you go around you kind of end up with the beverages at the end. Is there a reason for all of that? Is it as technological and psychological as some, you know you hear these stories?

Iain: Yes, I mean produce at the front I mean is pretty much what happens in every store and I think one  of the main reasons that it’s colour, it changes, there’s seasonal changes. It has the ability to have something different and exciting happening every week, if it was just your dry grocery shelves it could look a bit dull and uninteresting, and some stores may do that with their isle of values may start first and then it goes into produce, but typically a lot of the fresh food departments are sort of on the perimeter I guess that’s because you can service them from the back cause’ they’re getting their produce in, their meat in. Exception to us is where the deli is an island. I guess you do need to try and spread people through your store and that’s why usually milk’s in the back corner and I don’t think much has changed anywhere over the years, but same thing applies though because the bulk deliveries of milk, they come in through the back door and are back fed into a fridge so it’s not always about putting it in the most furtherest point. So there is a general, your fresh foods are on the perimeter and your dry goods are in the centre hub of the store and I think there’s not a lot of change when you go through anyone’s brands of stores.

[00:05:18]

Ryan: Now New World is part of a co-operative around New Zealand, what’s the balance like between what you do locally to service the local needs of Greenmeadows, Taradale’s, Hawke’s Bay versus what are some of the things that are national standard that must remain the same regardless of store?

Iain: Our brand standards with New World are, we’re Foodstuffs North Island, we’re part of Foodstuffs North Island. We have brand standards we absolutely have to adhere to, I guess where we have our local input could be on product, local producers and in Hawke’s bay we’re really lucky to have producers, we’ve got a fantastic blueberry supplier and a lot of our fruit and veggies, apples that we can get locally which is probably not part of the national supply chain but we have that ability to deal with locals because we as owners are local and we need to be seen to be supporting local, well local schools, local organisations and local growers. So that gives us the benefit of us being local owner operators.

[00:06:38]

Ryan: And just on that Iain, for a producer to get their goods into a New World, it’s a big deal usually. What tips do you have for producers out there who are looking to take that next leap and supply a supermarket, what are some of the tick box things that they should be looking for way in advance of approaching a New World owner?

Iain: Well I guess first thing is I guess it’s never that easy to get your product in their but it’s probably easier than in a co-operative like we are then trying to get it into a chain store. However they have to abide by certain food safety standards and certification and the rest of it, but I guess they need to have decent supply, I think we’re not interested in someone growing a few bags of lemons or fejoias, you know it’s actually having a bit of scale that you can supply for more than a few weeks. It’s got to be sort of beneficial for us and them, but it’s really good to talk to the stores and different owners and see what their market is demanding.

Ryan: Is there, do you have input or how important it is for the product packaging and the look on the shelves for those suppliers, does that come into it as well as what’s inside the ingredients itself?

Iain: Absolutely, I mean packagings critical to the whole package I suppose, I’m trying to think of some that do it particularly well but certainly, there is the danger of over packaging as well. Things that have got too much packaging or may have gone too far in the design scale at the end of the day you want to present your product in a very clear and marketable way and it’s got to be backed up by the product inside as well.

[00:08:28]

Ryan: Moving on to the virtual side of what would happen at New World, I guess you get to see a lot about what people are purchasing, what are trends or what’s popular as well as what’s seasonal. How important is data collection to the business, both on products and the customer side?

Iain: Yeah it’s pretty critical and with Fly Buys at the moment we can gather quite a lot of data on that but recent examples of where the data has suggested we need to improve our offer, and this is for all New Worlds which we’ve already instigated was we need to do better in baby, we need to do better in pets, those two categories there are proven to be opportunities in it and that was all from data collection on peoples spending habits. Health and beauty, there’s lots of – so that data is critical in how we lay out our shops or how many bays we give to particular areas.

Ryan: So you can then use that data to drive decisions on product selection or diverse of how many products you have-

Iain: Yes it’s product selection and category management, how many bays do we have for handy towels versus tissues or anything like that. And range category management, I mean it’s nice at New World’s we have large range than our opposition but sometimes how much is too much range? You know, what’s cluttering your shelves? How does that impact on stock in your back store, so there’s a lot of data to be mined on all that information which is critical.

[00:10:11]

Ryan: On the customer side of things, I think for every business it’s, the holy grail is to enable your customers to create a habit that includes your product. So that they’re continually going back almost without thinking, that you become a default choice. What are some of the loyalty schemes or things either known to a consumer or unknown that helps create Greenmeadows New World as a habit with your customers?

Iain: Well Fly Buys is the biggest one we are a part of and there will be, in the South Island, the New World Foodstuffs South Island have launched a club card which has been very successful. It does approve Fly Buys points but its sort of linked directly with the New World crew. So that’s something that will be launched sometime in the future for Foodstuffs North Island or New Worlds North Island and that has been very successful but the Fly Buys component of gathering points has been very beneficial. Other loyalty things we have, I mean we have like most cafes you crew ten coffees you get a free one but I guess the biggest thing we want for loyalty is our customer service, making people feel good about coming back and wanting to come back.

Ryan: So if the experience is great here that creates the loyalty in itself regardless of the point side.

Iain: Yes it’s the experience, and you’d like to think that we do support a lot of local organisations, schools and charities, that that also has some sort of loyalty factor for the benefit of us. Being local owner operators, supporting the local community.

Ryan: Now this is a pretty great site you’ve got here in Greenmeadows, how important is it for, is site selection when, going back seven and a half years we were talking before the interview of when you started here, how important was it to choose this? Were there other sites that you were looking at or was this always going to the number on site?

Iain: On the site in Taradale we had been trading on it since my grandfather in 1936 so by the time we got to the, about 1989, 1990 we doubled the size of the supermarket but our car parking didn’t get any bigger so we were substantially over trading or congesting that whole site so there wasn’t a lot of opportunities for land, we looked quite a bit around Taradale but Foodstuffs managed to aggregate the site down here which used to be the Greenmeadows pub. Amongst other business’, but it’s just so liberating to have going from 70 carparks to nearly 200 and having shop that’s purpose built with the space and capacity that allows you to grow your business because it was not going to – we wouldn’t be operating how we are now if we were still stuck on that site.

Ryan: I think that type of thing makes a big difference because if psychologically, it’s very easy to go somewhere and shop and get in get out, know you’re always going to get a park, it just becomes that little bit easier to shop there.

Iain: Yeah the biggest barrier at the old store was actually getting into the place because it was so busy and congested so yeah liberating your carpark to allow people to get into your door is a definite bonus and easy to find.

[00:13:32]

Ryan: Is there – do you look at what’s happening in the wider population trends, settlements, new building, does that come into the at all or once you’re established, that’s just what happens in the external environment just by the by?

Iain: So what do you mean by that?

Ryan: So population shifts, so in Greenmeadows or Taradale the plans for growth in the next 10 to 20 years, does that factor into your planning?

Iain: Definitely I mean I guess the – I think there’s a perception that trade has an older demographic and in our old store it might have been the case because we may have not been able to service, big shopping experiences for young mothers or families. It’s certainly changed down here, whilst there is an older demographic, I mean we’ve still got plenty of schools in the area and we have outside my window is our mother and baby parks and they are in use all the time, could do with some more actually. Our profile of customers here has certainly included a lot more family shoppers and looking forward there’s no reason why that won’t change.

[00:14:49]

Ryan: Is there any plans for delivery or whats your thoughts on, theres a lot of talk or almost – it’s the thing at the moment, ecommerce, delivery of goods, how does that sit with a supermarket like yours?

Iain: Well ironically before we left Taradale as McDonalds New World we used deliver groceries, one of my first jobs was that in fact, luckily I was the first person to not have to deliver groceries on a bike from the seventies, but so ironically we stopped doing that when we came here but yeah online shopping. It’s fair to say our group have been pretty slow to move on that whereas our opposition have been that space for quite some time but it is fair to say now that that has been escalated quite substantially, there are some trials stores going at the moment, I couldn’t say when it’s going to happen but it’s definitely going to happen now. There’s a lot of work going on that.

Ryan: So watch this space.

Iain: Yeah.

[00:15:55]

Ryan: And in your background, being in supermarkets for some time, what does it take for someone that wants to own a supermarket, that’s their dream or sees that as a path to success, what should they be doing? Whats that career journey look like?

Iain: I mean Foodstuffs New Zealand is a pretty amazing co-operative that persons who have a desire start out wanting to be a grocer have the potential to work through the organisation at different stores, and coming in and just working through stores and following the path through to Four Square, New World, Pak’N’Sav. I mean you’re still owners who have ben approved owners today that have come through that background. I mean I come from a  background of an intergenerational family, I’m third generation, but these days there’s a lot more movement and a lot more work in trying to encourage the right people into the industry and identifying talent going through. And I think it’s from all walks of life, a lot of people have come through other industries whether it’s legal or accounting or the people that just started on the floor going all the way through there’s a multitude of different stories you know that operators can tell but the great thing is that it’s still available for a lot of people to find their way to the top.

Ryan: So with your current team of people at Greenmeadows here, have any self indentified to say ” hey this is where I want to head longterm”?

Iain: No we haven’t at this point but it certainly has happened and I think like I say with our organisation at the moment, the Foodstuffs organisation they’re doing an awful lot at the moment to identify new talent and that’s got to come from the operator selection right through to people putting their hand up saying “hey this a career I want to pursue”.

Ryan: So you’ve really got those two journeys and you could be an expert coming from a different practise like legal or accounting, or you can start on the tills here going experience and working you way up through the organisation.

Iain: And at the end of the day it’s who’s going to have the potential to be the best grocer.

[00:18:14]

Ryan: Now busy time of year for any supermarkets going to be around Christmas, how early in the year do you start thinking about Christmas marketing, Christmas sales, inventory and so on?

Iain: Well a lot of the pre-orders have all been done for Christmas from all the boxed chocolates, biscuits, all that stuff is well and truly done the index are all done for that. But as far as other marketings concerned, we have our marketing department at Foodstuffs New World who have been doing a pretty fantastic job over the last number of years and driving that Christmas train so a lot of this stuff we – what we do we don’t do a lot ourselves it’s what we really have to do is deliver in store. You know, we’ve gotta walk the talk so to speak if there’s a good message on T.V. or Facebook, or the media about what you’re going to expect from New World and what products and delivery we’ve really got to be delivering it on the ground grass roots here.

Ryan: And that probably makes you unique in comparison to many business owners in Hawke’s Bay is that with under the Foodstuffs brand is you’ve a full marketing team so your job is really delivering on the promises they’re making.

Iain: Yeah, but aside from that as I was explaining a little bit before we used to do a bit of newspaper, haven’t done it for a long time, just sort of promoting our image because we can’t go out as an individual New World and put Coke on special for fifty cents because that confuses the market, the only thing we can really advertise is our image. Of who we are at Greenmeadows and what we do, and that’s fine I absolutely accept that. So radio adverts we used to do until about two years ago because that was a good way to get the personal nature of the store and the owner into the market but in recent years we’ve sort of faded out of all that. What we are probably pushing more now is our digital space with Facebook and our website, doing a lot more there, we’re just trying to enhance some of the messages that have delivered from head office through that medium.

Ryan: So give us a couple of examples of what you’re doing around the Facebook and website then for the local store.

Iain: That’s a good opportunity for us to promote our local sponsorships, if we’re donating to the surf club or the Greenmeadows school or Taradale schools or an opportunity to promote local suppliers, our biggest marketing win last year was when we won the national pie award. I think we spend so much time wondering what our best marketing strategy is, I can tell you, just win a pie. Sounds like just win a pie but that was absolutely sensational, Kiwis obviously have a very firm love affair with pies and I thought the greatest things about it for us was A. we won the pie but our bakery team and our managers, as soon as that hit I was on T.V. in the morning, in Auckland on the radio, we had T.V. cameras in the store but our staff managed it. We were taking calls from all around the country, in fact probably around the world, and we handled it you know, we went from 300 pies to 10,000 in that first week.

Ryan: Wow.

Iain: And we’re nearly 12 months on from that and we’re still selling a stack load of pies, so at the end of the day it must’ve been a good pie, it was great and you know, I didn’t bake it.

Ryan: Now that was a potato top pie?

Iain: Yeah and it’s just been selling as well as it ever has from day one, so from a marketing point of view, I’d encourage everyone to win a pie awards because that..(laughs)..it took care of everything, but you know then you go around your departments, you say “hey what do we want this department to be famous for?” We’re making our own sausages now, let’s get into these sausage awards, let’s make the best sausage, let’s make the best pizza. Let’s make the best coffee, so what do we want to be famous for in all of our departments? We can see what it’s done.

Ryan: Right so you’ve actually used that internally as to gear up all of the departments, okay.

Iain: We’ve seen what this can do, what do you want your department to be famous for? So that’s a lot of our languaging and discussions these days on how to move forward and let’s be creative.

[00:22:36]

Ryan: So what are some examples of, you know we take the potato top pie was the winner for the last 12 months, what are the potential winners that people should be coming down here and trying.

Iain: Well sausages. We do a lot of work with our own sausages, we never used to make our own until about, less than a year ago and they’ve gone gang busters as well. So the butchery guys are looking at all different flavours to, try and excite people’s sort of interest in that sort of thing. I guess a lot of marketing are good be the best, you’ve got your budget ones, you’ve got your good solid range and then your best range, your gourmet range is where they can you know go mad so that’s what we’re encouraging our departments to get involved with.

Ryan: Excellent. Well that’s a really good summary of what you’re doing down here at Greenmeadows New World, and really interesting to see the other side of what everyone’s experienced, which is supermarket shopping and to see and listen to how much effort that actually goes in behind the scenes. What’s your plans over the longer term here, where will the next three to five years take you?

Iain: Well I think, it’s funny you’re in the business for a long time but you know nothing really stays the same or, although a lot of stuff does, we’ve got to be delivering good pricing, good product, good merchandising but you’re always refining things you know, with, trying to declutter the place and make it easier to shop. But I guess it’s got to be online shopping, that’s going to have a massive effect on our business, how we deal with that, and the whole digital space really, you know how people connect with us, whether it’s through our club card loyalty, through Facebook or any other new sort of social media that comes up, and we just got to be on, make sure that we are tapped into it.

Ryan: Well it sounds like you are certainly doing a great job of listening to what’s happening in the market place and making sure that when customers do go through your story they’re getting that super premium experience. Thank you very much for your time Iain.

Iain: Thank you.