Today we talk digital commerce. It’s the focus of every grocery retailer – from one store operations to the largest chains with thousands of stores. Here’ to give us an update and a look into the future is Barry Clogan, Chief Product Officer at Wynshop / Mi9 Retail a retail veteran with 20+ years of experience working internationally in retail, grocery, and extensively in e-commerce. In his previous role as President at MyWebGrocer, Barry helped the world’s largest grocers launch online grocery services and execute their multichannel strategies. Before joining MyWebGrocer, Barry spent five years at Tesco, where he led the rollout of the world’s largest online grocery business across eight international markets.
Today we talk digital commerce. It’s the focus of every grocery retailer – from one store operations to the largest chains with thousands of stores. Here’ to give us an update and a look into the future is Barry Clogan, Chief Product Officer at Wynshop / Mi9 Retail a retail veteran with 20+ years of experience working internationally in retail, grocery, and extensively in e-commerce. In his previous role as President at MyWebGrocer, Barry helped the world’s largest grocers launch online grocery services and execute their multichannel strategies. Before joining MyWebGrocer, Barry spent five years at Tesco, where he led the rollout of the world’s largest online grocery business across eight international markets.
Welcome to Lost In The Supermarket, I'm your host, Phil Lempert. Today we t alk digital commerce. It's the focus of every grocery retailer from one s tore operations to the largest chains with thousands of stores here to give us an update and a look into the future is Barry Clogan, chief product officer at wynshop MI/9 retail, a retail veteran with 20 plus years of experience o r working internationally in retail, grocery and extensively in eCommerce i n his previous roles. H is president a s mywebgrocer, Barry helped the world's largest grocers launch online grocery services and execute their multi-channel strategies. Before joining my w eb g rocery, he spent five years at TECO. He led the r ole o ut of the world's largest online grocery business, across eight international markets. Barry, welcome to Lost i n the Supermarket.
Barry:A pleasure to be with you. Thank you very much for your time.
Phil:Barry. Let's get started by sharing the top line of what Wynshop is all about.
Barry:Wynshop is an end to end consumer platform for online grocery. It's a designer, a user design led user interface. It's a, a, a business empowerment tooling capability to allow a grocer to trade and merchandise their business. And it's a very profit focused order fulfillment capability. And to allow the grocer to profitably run that online grocery business with an end to end ecosystem, uh, for online grocery specifically bill.
Phil:Well, when I look at the news that I hear, uh, certainly, um, most reports show that the average grocery loses about$10, uh, per delivery order. And also look at all the problems with supply chain from your vantage point, how can wind help them?
Barry:So, first of all, I think it's really important that the groceries are in this space. They're properly invested in this space and they're committed to it. And when we have the capability to, to really help them build a significant a business, build a very healthy basket size, and if they embrace the capability to, to drive revenue on the front end, to, to manically really approach the operational efficiencies, they need to be able to do the back around order picking and, and delivery. Um, I think can really to turn the tile in terms of the profitability that they have. We help them really, by making sure that they've got all of the tools in the front end to be able to build that basket, engage those consumers, find them where they are, inspire them in persuade items, to the basket, all the merchandising capability that they might need and the search management doing they need for, to able to do that. We then provide the, the picking capability, which is the efficiency to be able to really drive costs down. And then we also provide a capability for retailers to be able to send those orders, uh, to any number of last mile delivery providers. So that capability to be able to leverage those different last providers is very important as well as you think about the price wars that are going to be in, in place in, in that last mile, uh, part of the area of this industry at this point in time.
Phil:So I'd like to go back to your first statement that they've gotta be committed. Can a retailer today, a grocery retailer today not be committed to econ?
Barry:I don't, I don't believe so. Phil, I think that, you know, this at this point in time, um, what, what COVID in the last 20 months, I guess have now thought is that absolutely this is the way that consumers want to shop become more habitual. It's become more familiar. Um, it, its created and new propositions online that consumers engage with. Um, and, and that, that dispersion of basket to all of these other players and these other pure pay providers is a real risk. So I, I, I think the absolutely need to be committed to online grocery being a significant part of their business over the next few decades, but also a significant driver of their life for like, and same store sales growth every year. So as you know, it's very challenging in a, in a grocery business to drive that, uh, year on year growth, an online grocery, because it's such a fast growing, uh, space. And at this time this is becoming more incremental and more important to that overall, uh, year on year growth.
Phil:So I understand that what you've done is you're working with incisive. You've just had a study, uh, state of the digital grocery growth at the cost of profitability that was across 260 us based grocery retailers. What were the, some of the highlights, some of the wows that you found that frankly you didn't see coming at you?
Barry:I think the key, the key challenge is that I think in 2020, we potentially, and understandably lost site, a small bit of the profit, uh, the focus and the need to drive an efficient operation. It was really probably market share and consumer need in the over profit. I think as we, you know, as what the, the report and the incisive study really highlighted is that the importance of driving profitability in that, in that channel, in that customer mission and in that basket is really important. And that's, you know, that well, that was probably very welcoming to us in some ways, because that's where a lot of our DNA is in terms of really trying to build products and a solution set and an ecosystem of extensions and offerings to be able to really help a, a retailer drive that blueprint PNL. So whether it's the ability to drive the, the ability to control your delivery or your, your picking costs to leverage your last mile, uh, costs to be able to drive incremental revenue below the line revenue, whether it's around, uh, service charge or media revenue, that's the ecosystem and the capability that we provide to be able to allow grocers to, to focus on that profitability. So I think for me, it really, you know, brought back to the forests small bit, the need to focus on the discipline in this particular channel. And I, and I don't, I think that the industry is still, you know, quite immature. So there is no, no panacea, no silver bullet for what is the right model. I think that continually is going to evolve, but I think that the focus back on that profitability, um, is, is, is very health and very sustainable or, or will at least improve the sustainability of this channel and the sustainability of these grocery businesses into the long term.
Phil:Another finding of the study was that certainly 2020, uh, there was a rapid growth, uh, revenue was up 9.5% according to the study, but also it found that there were losses for online orders of minus 70%. What does that mean for the industry,
Barry:Phil? I think it starts with the consumer, um, like, and this is not new to how grocery, uh, businesses have operated in the past, understanding the customer shopping. There is no single channel that a customer exclusively uses customers lives are changing. They're evolving their very dynamic. You know, people have time, time under time pressure, uh, whether it's budget pressure, there's always a changing dynamic. So what we need to be able to do, and what online allows us to be able to do is to be able to make sure that we're, we're there for the customer, you know, the usual narrative of whenever, wherever, however, they want to be able to shop, but getting the customer proposition, right? Whether it's a con conven, a big basket of top up shop, whether it's a monthly shop, whether it's a convenience, a convenience orientated or impulse buy, these are the different customer pro there that we really need to be able to fulfill, establishing the baseline capability. It's getting the capability, the talent in your business that maybe understands how you acquire these customers, how you merchandise and trade your sites in an way to be able to optimize and how you make sure you've got the underlying or the foundational capability, operational capability, that to pick pack and distribute effectively. That is fundamental to how we're going to solve for all types of customer propositions over the next number of years. So there's no, there's no, there's no, uh, shortcut to being, making sure that we invest in those areas. And we're maniacal about the continuous improvement in cost optimization that we need to put into our business to be able to ultimately achieve that foundation. What I thought was really interesting in, in, you know, during COVID was the retailers who had that foundation in place and were able to pivot, you know, to turn some stores into dark stores and make them exclusively, uh, service online orders, but they had the capability in their business to be able to do that and satisfy customers in that scenario, without that foundational capability, they wouldn't have been able to solve for those, those customer shopping missions.
Phil:So when I talked to the CEOs of grocers, uh, Bob line is the first thing that comes up is they're really concerned about losing touch with their shoppers. Um, as they're using more third party fulfillment platforms, um, they really feel the urge. And for example, if you look at Albertson's, when you go to their website, uh, the first thing that they do is they try to push you, nudge you towards ordering online and doing pickup. Um, how much of a threat is it, uh, to have these third party fulfillment platforms to the retailer and what should retailers be doing about it?
Barry:I do believe it is a threat and I do believe it is something that we need to be very cognizant of aware of. This is how consumers shop and they're continually and always shopping. They're looking for new experiences. They're looking for new propositions, they're willing to try things. There's a, a huge amount of investment in acquiring customers from third party marketplaces that are in private equity or venture capital back, which have digitally native capability to maybe go and do that where we necessarily don't in, in our standard grocery businesses. I think that the dispersion of our basket, the dispersion of that consumer spend across all of these other multiple propositions is something we need to be really, really aware of. And again, that kind of brings this back to why should grocers invest in this channel? What are the foundations that need to have in place? What are the customer shopping missions that they want to be able to solve for? I do think that that is a, a foundational capability that we need to have so that we make sure we are there to be able to serve those consumers with the proper that they're expecting. Uh, and we're meeting them where they're spending their time and we're able to acquire them efficiently into our business and to ultimately drive loyalty and drive incremental spend for our business, that dispersion of wallet to multiple different marketplaces or pure pay providers or rapid quick commerce solutions. For me, that is, is a concern. It's a continuing, uh, eating away at the, the, the share of wallet that, uh, that we have in, in our grocery business. And we have the capability in grocery businesses to be able to solve and meet those customer propositions.
Phil:So if you have to look at the typical grocery user experience online for e-commerce, what has to change in your mind, what needs to be improved?
Barry:I think the most important piece is a really around a user experience. It's, it's making sure that that is as convenient and relevant, you know, and again, I don't want to overuse some of the buzz words around personalization, but ultimately what digital does allow us to do is to be able to make the store more relevant to me as a consumer, more unique to me as a consumer, whether it's my basket, my preferences, my past purchases, my recommendations that can be very tailored to me that is ultimately a far more enjoyable, far more sticky and far more convenient experience for the consumer. So I think it comes back to really focusing on what is that user experience, what is that engagement and, and ultimate be the ease of, of in and ease of that shopping trip and solving for that shopping trip in the, in the easiest way possible.
Phil:So when you're talking to retailers and you want them to come to win shop to help them, um, you're dealing with a bunch of retailers who have typically been at the, their retail job for 20, 30, 40, sometimes even 50 years. Um, the whole e-commerce, um, phenomenon has taken them by storm. They know they've gotta do something, they're throwing a lot of money at it. Um, do you think that they've embraced it or they're just going through the motions?
Barry:I, I being very impressed by the change in the industry within the last two to three years, uh, when I first came to the us, I felt like there was a lot of, you know, trying to explain maybe why you should be in this or justifying why it channel for consumers. There was definitely a bit of a, um, you know, whether it was a, or Kroger's partnership with OCA, whether it was Amazon's acquisition of whole foods, these were catalyst for change and some evolution definitely, but there's nothing like the injection of talent and the injection investment that we've seen in the last two years. And I've been very impressed and it's, it's, it's incredible when you think of, you know, even a large multi-billion dollar grocery, those, and, you know, injects some additional capability are talented to their business with a different perspective. You know, what we're really doing is you're harnessing the existing, you know, DNA within the grocery business of really understanding what it takes to run a low margin business, to satisfy consumers, to get them the product they want in the right place at the right time for those consumers, that core DNA within the grocery business and marry that with some, with digital capability. I think there's a, a huge amount of positives and, and strengths in, in that cohesion and that synergy of skills and experience if we can apply it properly. So I always go back to, if you, if you take the, the, what I see is the core assets of, of a grocery business as being the proximity to customers, we fought long and hard to have the right location on the corner, on the, on the corner. So that proximity to customers is incredibly important. The frequency of, of visit that you think is unrivaled with any other retail vertical, and then the very rich data that that groceries have. And you marry that, those capabilities, you marry that with a digital capability and a digitally native capability. I think there's an incredibly powerful mix of skills that can help grocers really continue to, to innovate, to bring new propositions, new brands, new consumer experiences, and really satisfy a need for consumers over the next number of years.
Phil:So you're talking to that CEO, they get it, they understand it. Um, now it moves out of this. C-suite in to reality of implementation. What are some of the roadblocks that retailers have to deal with in order to, you know, fully, fully create this user experience for eCommerce that's successful and profitable for them?
Barry:Well, I think first of all, there's, there's always a, there's always that change management. I think that is relevant, innate business, its adapts, that's in a, it's always the growing part of that's really to be of the fastest growing part of any business is, is very energizing. It's fun. Um, it's, it's hard work, but groceries are not afraid of hard work and it's, it's really enjoyable. It's energizing. The business is growing. Um, what's important. However, is to make sure that to, in order to kind get that culture, I think to permeate down through the organization, everybody really needs to be aligned behind. What is the, what is the goal? What is the metric that we're trying to move? And there, there are a lot of very positive metrics within online grocery that when you look at incremental spend of multichannel or customers who are using multiple different channels and their year on year spend versus customers who are only shopping in one channel is typically in, in my experience always, uh, significantly higher of narratives that, that I think is, are important for the business to, to cling to that, why are we doing this? What is, what are the metrics that we're trying to measure? What are the customer satisfaction measures that are important to us? And I think that helps drive that multi-channel narrative helps drive cohesion and buy in from everybody to embrace the chain and embrace the, the energizing and exciting part of the visits that it can be.
Phil:So when you look in your crystal ball, short term, 20, 22, not five years out and 10 years out, what do you think groceries have to focus on more and really being able to achieve that wonderful customer experiment that builds the loyalty that builds the baskets.
Barry:I, I think there's gonna be a big focus on subscription, but I don't mean subscription in kinda the most basic terms. So you, uh, you pay a amount. I really think that there's value in trying or added value to those consumers. And again, it's probably comes back to, you know, leveraging some of these assets, right? That proximity to able to create, add added loyalty experiences. There's a lot of innovation happening around, you know, the meal planning, um, the flexibility giving we retail consumers, the flexibility to be able to manage the choices they want to make within your business. So do I want a meal plan this week? Do I want a meal kit? Do I want to be able to curated recipes? Uh, how do I, how can you help make your choices? How can you curate my, my assortment or my typical basket and, and make it more relevant to the, the dietary needs that I have. I think it's trying to find ways to make that experience more value add for consumers. So I think there's a lot around driving that, that loyalty, which I think is a, is a very important thing when we discuss or in the, in the landscape of, of that different dispersion of basket to different providers that I mentioned. So I think there's definitely a big focus on, on subscription, uh, on loyalty and then the added value services that can be wrapped into that loyalty service.
Phil:What's the fine line between technology and reduced the amount of enjoyment that people have for shopping for food.
Barry:And that that's really interesting question. I, I love that question because I think there is an emotional connection that we have with food. Like I'm, I, I think about what, what we do, uh, and the consumer that we're trying to create. All of us, you know, have memories around food, food drives our culture. It broadens our get togethers. If you know, we're, we're looking for inspiration and persuasion, we're shopping in different contexts. I think the emotional connection we have with food and how it's important, and then how it tries, the choices we make as we feed our families that make very important, I think is really important. Um, I think the Providence of food, um, where it comes from, what's included, what's in it. I think the storytelling around that is really important. So I think it's a, it's a very important point you've raised. And I, and I, I do believe that the, the newer consumer and the consumer that we're trying to make cater those propositions to are going to be very aware of the choices we make. And, and that comes back to what is the consumer mission that we're solving for. So I think there's a, a really interesting thread in what you're, what you're asking around. How do we make sure that we're aware of those consumers what's important to them? How do we tell that story? How do we surface these brands or these products, or these, these choices for them and these services for them that help them feel good about the choices they're making, how they're feeding their family and how they're, you know, enjoying these occasions?
Phil:Well, Barry, it looks like you're gonna have a great 20, 22 and beyond, uh, thank you for joining us today on lost in the soup market. Okay. Listen,<inaudible> thank you very much. And if you'd like a copy of the full, a win shop, incisive study, just go to wins. shop.com that's w Y N S H O p.com. Thanks for joining us today on lost in the soup market. Thank you.