Sylvain Perrier: Ladies and gentlemen, welcome to the Mercatus podcast, Digital Grocer, live from NRF day one. I think this is, Mark, episode 25?
Mark Fairhurst: 25.
Sylvain Perrier: 25.
Mark Fairhurst: That’s right.
Sylvain Perrier: Season three.
Mark Fairhurst: Season three.
Sylvain Perrier: I can’t believe.
Mark Fairhurst: Yeah, this has been going well.
Sylvain Perrier: Yeah, it’s going great. And this is your host Sylvain Perrier President and CEO of Mercatus Technologies and sitting to my left, and not to my right as he normally is because apparently it’s different here in New York, is a Mercatus’ very own Senior Director of Marketing, Mark Fairhurst.
Mark Fairhurst: Hello everyone.
Sylvain Perrier: And so Mark, it’s more than halfway through day one, we’ve had a lot of traction at our booth, we’ve had a lot of European retailers come through, some North American retailers, some of them are customers. I mean anything strike you?
Mark Fairhurst: I think the traffic has been pretty steady. I’m anticipating tomorrow will be even more busy, if history is any indication. And I think a lot of retailers, they know what they’re looking for. I mean, it’s such a huge show, the planned out their trip ahead of time. So to get that kind of traffic on day one is pretty rewarding.
Sylvain Perrier: But it’s also a lot to take in. We’re downstairs, booth 1418. I know I went upstairs really quickly to see it, and it’s insane.
Mark Fairhurst: Oh, some of these booths and experiences are overwhelming.
Sylvain Perrier: Yeah. I think it’s tough when you go in, if you’re a retailer, everyone goes into sales pitch mode right away and there’s this, no one’s trying to solve problems and they’re not asking questions and solving. I think that’s what makes going to a trade show so tiring, I would expect, if you’re a retailer. And I think a trend that’s a little bit different now in our podcast, you know, we’ve made this about the industry, not so much about us. We’ve interviewed a competitor, ShopHero. ShopHero, I think we’ve got an upcoming podcast with Grocerkey. Jeremy Neren is going to be coming into our booth. We’ve had the folks, Zack from Raley’s on our show.
Sylvain Perrier: And to kind of bring wisdom and knowledge to our listeners, we decided to bring an expert on to our show and he’s actually sitting here at the booth with us. And so joining us today on the podcast is Mr. Ron Bonacci, who is the Vice President of Advertising and Marketing at Weis Markets. Ron has had an amazing career. Before joining Weis Market, he was actually Director of Marketing at… In beautiful Lubbock, Texas, the home of Buddy Holly, at the United Supermarkets. And over the course of his career, I mean he was part of that, he was over at Food City, S&H Solutions, and he was also part of an important team over at Kroger. I remember I met Ron years ago when I drove out to meet the team over at K-VA-T, Food City. Ron, thank you so much for joining us.
Ron Bonacci: Thank you very much for allowing me to be here and to speak with you.
Sylvain Perrier: Oh, no problem. So Ron, you and I have had a lot of late night sessions talking about so many different things and pontificating about the future and so on. And I know you were at ground zero at Kroger in the day when they went out and built out their loyalty program and they decided to bring on Dunnhumby. Can you share with our listeners what was that like in those days and those decisions that were being made?
Ron Bonacci: You know, it was an amazing experience and so rewarding because I got to be on the starting edge of what became the Kroger Plus card, launching it and then propelling that to bring in the Dunnhumby from an analytical platform and to really see what the possibilities were. I don’t want to share with you the success of that in the sense of the total dollars. Let me tell you, it was very, very significant in terms of sales growth. And when you looked at Kroger’s over this period of time from starting back then when we did this, they had 53 quarters, same store, South growth year over year over year. So the phenomenal success of analyzing data, understanding customer insights, and then using that through the Kroger Plus platform just became a success factor that was the core pillar of the Kroger company.
Ron Bonacci: Back then we discussed, Kroger’s had to go with four different platforms we really had to own. We realized that gas had the same correlation with the grocery industry, so we had to get into gas and in it in a big way. Loyalty marketing obviously had to be that anchor pillar for both of those. And then we had to get into the pharmacy business because of the aging population and everything. And private label had to grow because we knew that if they got custom to purchasing our private label that it was going to be the core value of why they would shop with us.
Sylvain Perrier: And so what you guys did at Kroger, do you feel that’s become a template for the industry that you’re in today?
Ron Bonacci: Well, as you look back at that time when we did that, we didn’t know where we would take that evolution. But Kroger’s then became the core initiative that everybody looked at and how they would evaluate themselves. And has Dunnhumby exploded across the Kroger enterprise, everybody looked at us as best in class. And I believe we truly were best in class at the time, even though they talked about other smaller groceries doing loyalty marketing.
Sylvain Perrier: If you think back then, you take that chunk of time when you started over at Kroger to where you are today, what are some of the most, I wouldn’t say amazing innovations, but the innovations that have really shifted your industry that really stand out to you?
Ron Bonacci: You know, technology keeps advancing and it’s changing in it’s evolution and what we think about today, it’s accelerating at the speed that is unthinkable when you really get down to it because consumer and that mobile device today in their hands, this mobile phone that they have, it has got more power than what they sent to the moon with the astronauts when you think about that. So that is going to be the key of which we need to know, master and understand those consumers, their purchase history, their cycle, their likes, their dislikes, everything we need to know about that consumer and how to manage that. That was one thing that really became core and mount that we need to make sure we have.
Ron Bonacci: Then this explosion of eCommerce because of the Amazon and then of course Walmart’s and Kroger’s with their ClickList behind that. So we had to make sure that the rest of this industry’s got to grow up in that world. And we’ve got to make sure that we meet those consumers in an eCommerce platform, obviously which what we did with you, as well as making sure that we understand that consumer from a BI standpoint analytically wise, what they like, their shopping behavior, their cycles, and then meeting that need, whether it’s curbside pickup, delivery and those aspects of what they want.
Sylvain Perrier: So when people call me and Mark, I get, I get retailers asking me tons of questions, and some of them are customers, some of them are not, right? And I always say, “Hey, if you have a question and you’re not sure, maybe reach out to Ron.”
Ron Bonacci: Well, thank you.
Sylvain Perrier: Ron, how many years have you been playing in the eCommerce space?
Ron Bonacci: Three times I’ve launched an eCommerce platform. Obviously there was one here at Weis markets, but we took it to a different level thanks to people on my staff. They are outstanding, like Amanda that’s sitting to my left. But the idea of that was make sure that it was going to be the core platform, so we’re up to 153 stores, 155 stores curbside pickup, 177 delivery. So with your platform and making sure that we’re meeting that needs. Then stepping back, I had to launch an eCommerce platform inside Albertsons’ platform and where I came from in Texas and then before that with Food City where we made that industrialization launch, understanding that. So I’ve done it three times, now you learn each time you do it. Sometimes you make mistakes along the way, but then you keep getting better because you have to evolve with the consumer and the devices and the technology that’s presenting itself.
Sylvain Perrier: No, absolutely. That’s the biggest challenge. We even find as a business when we get great ideas that are coming in from, our customers, you guys are Weis Markets, or it could be at Smart and Final and so on, it’s not so much executing on the idea of their solution, but how do you truly commercialize something that is not only servicing the needs of the marketing folks that are involved, but operations or information technology. That’s not easy because you’re having to bring a lot of people in the room and alignment-
Mark Fairhurst: And educating your shoppers, too.
Sylvain Perrier: While educating the shopper. If you look the most simple of features that we have on our platform that people think you just can’t live without. So I’ll give an example, emailing a shopping list. It stable stakes. You have to have it. But here’s the reality, less than maybe 0.3% of shoppers actually use that feature. But it’s not necessarily those micro elements of functionality that are really important. That’s why I like working with Ron, it’s like what is fundamentally the big picture of what we’re trying to achieve here?
Sylvain Perrier: We just launched AI in the platform I think just before Christmas of 2019 and so far it’s going really well. I mean we have… AI is effecting search, it’s affecting everything that’s being displayed on the website. But prior to that we had a major launch of the integration of Shipt, which is a Mercatus platform and I think there’s going to be tons of other stuff. Ron with this collective experience that you have in this space, if you were sitting across from another retailer that was considering getting into eCommerce, whether it’s Mercatus or someone else, it doesn’t matter. What advice would you give them?
Ron Bonacci: Well, first and foremost, you’ve got to make sure that all levels of the company from the top executives down understand it and get it, because the reality is in the grocery industry, if you’re not in eCommerce, as they say, I call it, the shot across the bow way back when Supermarket News wrote about it, was that if you’re not in eCommerce, you may perish. And that may well be the case in the smaller and midsize chains in America because of the Amazons and the growth of the Walmart’s and everyone else in the eCommerce space. You’ve got to survive and you can’t afford to lose 3, 5, 10, 12, 15% of your business in sales and give that away to your competition and then think that you’re going to still survive in this space.
Ron Bonacci: So you’ve got to find somebody like Mercatus with an eCommerce platform and all the tool sets to keep looking forward in order to meet that customer’s needs of tomorrow, and at least be on par with your competition. Hopefully you’ve outgrown them because of your personalization. Remember that in-store execution is critical in this, so don’t ever walk away from that because that personal shopper makes an experience that is lasting for that customer. So if you can train your people well in the store, utilizing the technology that’s given through us, and then making sure that connection is there with the customer, with all the other eCommerce platform, it really makes a true, wonderful experience for that customer who’s going to come back again and again. And you’ll be successful longterm.
Sylvain Perrier: Absolutely. So the one thing, one point we brought one of our retailers, existing customers who was wanting to expand into click and collect and so on, we brought them over to Weis to visit one of their stores. And I remember Ron talking about one thing you really, really need to focus on is good quality product data. Right? Can you talk a little bit about that?
Ron Bonacci: Yeah. It’s something I laugh about because it’s painful. Realize that the grocery industry was never designed to have an eCommerce platform. So every item in the store was designed in descriptive-wise that was the register receipt was just 32 characters long. So they truncated chicken and boneless and anything else you can think of. So all of a sudden when you launch a platform, you have got bad data immediately and now you have to rethink your entire thought process because when you add a new item, not only are you adding it for the register receipt, you’ve got to add it for common language for the consumer, for eCommerce as well as descriptive enough so the customer understands what they’re buying and then making sure that picture association is right with that product. So when I’m looking for boneless chicken or whatever those products are, it makes sense to the common consumer that it’s invested.
Ron Bonacci: Then your SEO, your search engine, has got to really mirror all those consumer thought processes because it’s not just mathematicals, but it’s personalization from that customer, how they think and how they look at their product. So you got to make sure that from an eCommerce platform that you’re taking the needs, from a search engine to product description, is more common, focused to that consumer base.
Sylvain Perrier: Yeah, and that’s so true. And the one thing we’ve realized working with our pool of retailers is at the end of the day, if you don’t have good product data, it has a detrimental effect first and foremost on the product categories that the products show up in. It affects the search engine. It completely affects the discoverability of anything. And consumers are… Actually, this is an interesting statistic, I can’t quote the number because I can’t remember it, but consumers are less apt to buy a product if they can’t visually identify with a picture. And that’s an issue.
Ron Bonacci: Without a doubt.
Sylvain Perrier: Without a doubt. And one thing that we’re realizing now at Mercatus and in our integrated search technology in the AisleOne integration, we’re actually saving copies of the search terms people are looking for. And that gives us the benefit of generating spelling mistakes and so on. But what we’re starting to see in certain parts of the United States where you would have a Spanish speaking consumer or a different ethnic group, they may search for products differently by reversing the words.
Mark Fairhurst: Yeah, the syntax of the search.
Sylvain Perrier: And if you’re not geared for that, that’s a bit of a challenge we’re having to invest in to actually take the technology to the next level.
Mark Fairhurst: But that’s the advantage of AI. So it takes the laborious component out of it.
Sylvain Perrier: Yeah. Well it’s like when we regionalized our product to support French language for Canada. Right? Being Canadian, we wouldn’t do that at the start. We had to tweak the search engine to support French. And that’s, different, right? So along the same lines, Ron, if you were advising a retailer on strategy and longterm vision, and I know you have a longterm vision where you want to take eCommerce, what would you advise the buyer?
Ron Bonacci: Well, I would advise them to do their exploration with eCommerce platforms such as what Mercatus presents, but then go back and make sure that you’re grounded in your planograms, your category management, because that’s the fundamentals of which it starts with. So you’ve got to have image base that you spoke about, you’ve got to have description base. And then you’ve got to make sure that it’s unique to each store, so you can’t just have a generic one and then that consumer shopping and the product’s not in that store because it’s a much smaller platform.
Ron Bonacci: So you’ve got to start with the fundamentals first. Once you have that, then you can go out and get a platform that you have and make sure that from an evolution standpoint that AI is in that thought process, communications is in that process, whether that’s an email or text message. And then building those shopping lists from past history, as well as the recommendation engines that you’re going to put in from an AI platform so that you can continually grow that customer’s experience with you. Know that you’re on that journey with them because it’s personalization at that point. Truly comes down to their likes, their dislikes and how you can grow that.
Ron Bonacci: And then always bring the opportunity, that as the grocery industry would love to do, is how do I actually help grow that sales with inside our basket? So suggestive selling, or product she might think about, or new to the market. What are those kinds of things that can actually add that extra item in the basket? Because in some sense that’s a Holy Grail for the grocery industry, if I could get an extra item in that basket, I’m actually fortifying the opportunity the sale’s worth.
Sylvain Perrier: I think Weiss, I don’t know Mark if you’d agree, but I think they’re one of the very few regional retailers that actually has an integrated AI engine at this point.
Mark Fairhurst: Yeah, I think you guys are… You’re bleeding edge right now.
Ron Bonacci: Well, thank you.
Mark Fairhurst: I think we talked about this earlier today, last year, AI personalization was… The messaging was everywhere at NRF. Just sitting here at the booth, I can see three booths that have AI on it. They’re talking about it, but Weis actually now has it in place and working, so it’s phenomenal.
Sylvain Perrier: That’s great.
Ron Bonacci: The other thing I would say is you’ve got to have great people you surround with. I’m blessed to have a wonderful team. I’ve got one of those people to my left that’s in charge of my eCommerce platform, Amanda, she’s outstanding. She thinks and cares about our customer. She cares about what their experience is like and when she sees problems or issues, she’s bubbling that up. How do we solve that? How do we make that go forward? She’s presenting that to you guys at Mercatus. And we’re constantly thinking about how that experience is going to grow more positive. and so you just have to look at that from an overall opportunity for future growth.
Sylvain Perrier: Absolutely. The one thing… And I’m glad you mentioned that. I had recently had a conversation with Trent Brookshire who’s the COO over at Brookshire’s in Tyler, Texas. Trent came over, flew into Toronto to our office with John Deanna, CIO. Actually John I think now CSO, Strategy Officer. And Trent was enamored with the Mercatus culture. And so he actually sent in his HR team to spend… I think they spent three days with our HR team to understand the culture.
Sylvain Perrier: And the one thing that… We stayed up late one night, Trent and I, talking about this, is that success in eCommerce is not just about the technology. It’s about the people come together, the culture of those two teams meshing and really focusing. I like to say at the business, “Let’s not just talk about the positives, because the positives will only get us so far. Let’s deal with the negatives.” And you got to do that in partnership with your retailers.
Ron Bonacci: And you know, I’m not afraid to call you and say, “Hey, I need this done or this done.”
Sylvain Perrier: I know.
Ron Bonacci: That’s the great thing about this collaboration, and I call it a true partnership because if I ask you or I look to the future and I want to do things, not only do you listen, we start putting out a roadmap. Is that possible? What’s the timeline? And how fast can we grow if we need to go in that area? And we may need to switch direction sometimes, we just never know, you know, because different things that bubble up. And as you know, from a search engine optimization, we realized we had these holes we had to fill, and all of a sudden you look to the next level of how that can be done, from syntax to synonyms and those kinds of things you have to apply to it. And the next thing you know we’re right back on track with making sure we’re meeting tomorrow’s needs.
Sylvain Perrier: Yeah, I know when Ron’s got an idea because he’ll be in a vendor meeting and I’ll get a text message, “Hey have you integrated with this?” And I’m like, “Okay, what is he thinking about it?” And then that night I’m in the car and we’re talking about, “Okay, how’s that going to work? How’s this going to work?” Then we got to worry about taking it to the next level between both of our teams and how does that work? So it’s kind of interesting. When you think about your vertical as a whole, and I know personalization, you’re very passionate about it. Are there any things that you see aside from that as being, “I think that’s got a possibility to be something big.”
Ron Bonacci: Well, I think I call it hyper kinetic personalization. And that is not just the experience on eCommerce, but how do I take the experience in the store? How do I look at shopping list? How do I meet tomorrow’s needs? You know as well as I do that Samsung and all these other a kitchen appliances are going to be so inundated with technology and when you couple that with Amazon or Google or whatever platforms are out there, they’re going to know what the customers are consuming and how do we integrate with that so that we’re prepared and ready for that next shopping experience so that we have it in the store, we may have already shopped it, we may have already got it prepared? I think that’s the next holy level of which we need to think about because the consumer is going to be ready for that. They’re adopting technology with Amazon and Google. I mean yesterday Amanda’s got Amazon, I got Google at home and you know, they know what we’re doing and why not connect that grocery experience to that?
Sylvain Perrier: Yeah, I would agree. I mean the interesting thing is I think… I don’t know if Amazon ever released it, it was the microwave with the integrated voice.
Mark Fairhurst: Voice? I don’t think they have.
Sylvain Perrier: And you could take… Certain products were pre-programmed.
Ron Bonacci: It’s coming, though.
Sylvain Perrier: You could scan it, put it in and it would know the time to prep it. At home we are an Amazon Echo device home. I have now some in the bedrooms, that’s how we turn on the lights. I didn’t do it because I’m lazy, it’s just convenience. Well, I’m a bit of a geek, that way.
Mark Fairhurst: You are an early adopter.
Sylvain Perrier: But when wifi goes down, oh Lord, help me.
Mark Fairhurst: It’s back to the dark ages.
Sylvain Perrier: The dark ages-
Mark Fairhurst: That’s when Michelle gets up to turn on the lights.
Sylvain Perrier: Well, that’s how I start a fire in the middle of the living room to heat the house, you know? What are you looking forward to in 2020, Ron?
Mark Fairhurst: Well, we’re going to grow out our eCommerce platform a little bit further, especially on a curbside pickup. We look from a consumer perspective, making sure we have every store that we can, has that opportunity. The other thing is I’m going beyond just the consumer shopping experience. What I mean by that is I want to know that we care about the customer and I want the customer to know we care about them. So I’m looking at health and wellness as an initiative.
Mark Fairhurst: So if we have indication or they want to tell us, because we’re building out our new Campaign Manager and our new profile platform. So if they identify themselves and say, “Hey, we have need to know about diabetes.” Or, “We have need to know about Celiac’s disease.” Or any of these other disease statements and/or health wellness statements, I want to make sure that we have the shopping platform that’s going to be there for them. Because that is a need, that’s a necessity in their family, they can’t get away from that. And so we got to be prepared and ready from that perspective that we can help them grow out of that disease or at least longevity of life is important. So we’re talking to hospitals, we’re talking to medical centers, we’re talking to a different medical platforms that are out there on how do we make sure that that’s there? Inside our store we use a health attribute color code bar code system, but we’ve got to go beyond that. So you know, consumer can look and say, “Oh yeah, that’s got no sugar.” But how do we help them be healthy?
Sylvain Perrier: You know, I was recently diagnosed with IBS, irritable bowel syndrome. And the pain is excruciating, it last for 20 minutes. At the very least the challenge I have is not having IBS, is educating myself. My doctor will give me some stuff, but you know, where do we normally go when we’re diagnosed with something? We go to Google. And we go to WebMD, and I’m not knocking WebMD, I think the service they provide is great, but when I go into a grocery store, at the very least I know I can’t have dairy, I’ve got to really minimize my caffeine intake, but there are other foods I don’t know. There is systematically no technology, no platform in Canada, no grocer, retailer that can help me. I’m not looking to solve my problem, but ease the burden of the issue. So I commend you for wanting to take that on.
Mark Fairhurst: And taking the mystery out of the product and the product ingredients.
Ron Bonacci: Well, the food that goes.. I’m blessed to have a daughter that’s a pharmacist and we’re blessed to have our grocery store that’s got dieticians. And a combination of those and with AI platforms that are available out there, it really gives us a leg up to how to manage that from a perspective for health and wellness for customers. Because eventually we all have some illnesses or something that’s going to bear upon us and we got to make sure that we’re putting the right foods in our body.
Sylvain Perrier: Absolutely. Ron, I want to say thank you so much for joining us on the show today.
Ron Bonacci: Thank you.
Sylvain Perrier: You’re welcome. And ladies and gentlemen, if you want to get ahold of Ron, I think you just go to his LinkedIn page and connect with him there, or better yet you can try to reach out to him by calling Weis Markets. I know he’s a busy guy, so I’m not sure if he’s going to be able to return all the phone calls or the emails. And Mark, how do people get ahold of us?
Mark Fairhurst: As usual, www.mercatus.com. All of our social handles are listed there.
Sylvain Perrier: Perfect. Ladies and gentlemen, thank you for tuning into this latest episode of Digital Grocer. Keep an eye out for the next episode, which I think we’re going to be recording tomorrow?
Mark Fairhurst: Tomorrow morning.
Sylvain Perrier: Tomorrow morning here at NRF 2020. Thank you so much folks.