Telco-turned-foodie CEO Chris Quin on what it takes to be a digital grocer

  • News
  • March 8, 2016
  • Elly Strang
Telco-turned-foodie CEO Chris Quin on what it takes to be a digital grocer

Quin took the role of North Island CEO of the grocery giant in May last year.

At the time of his appointment, Foodstuffs North Island chairman Peter Anderson said Quin’s experience in the IT and communications sector would give him an advantage in understanding how technology could shape the future of supermarkets. 

“Chris understands the Kiwi consumer and the role of technology in serving them – these are essential ingredients in the changing landscape of grocery,” Anderson said.

Speaking at Retail NZ’s event last month, Quin outlined what it takes for Foodstuffs to become a digital grocer.

He said Foodstuffs’ brands were hardly in the online ecommerce space yet, with New World online stores being trialed in Thorndon, Wellington and in Levin.  

However, he alluded to the roll out of online stores elsewhere in the country, saying Foodstuffs “will be online in 2016”.

“As we grow it out, mobile and tablet first is the absolute focus. The pilots [Thorndon and Levin] have been great because we’ve learnt a lot about what works and what doesn’t and scalability is going to be a fantastic challenge,” Quin says.

From phones to food

Going from the telco industry to the supermarket industry has been quite the change for Quin.

For one, he said Foodstuffs’ food brands (New World, Pak’n Save, Four Square, LiquorLand, Gilmours and recent addition The Mill) tend to be more warmly received in the market.

“I’m not standing up here apologising for your mobile coverage or your broadband speed, and no one yet has visited my house, knocked on my door and threatened my family, which did happen in telco. It’s an amazingly different emotion we have with food retail,” he says.

Another difference is strategic changes don’t come around very often in the supermarket industry.

Though his previous company underwent a major rebrand in 2014, going from Telecom to Spark, he reckons that potentially, the last strategic change Foodstuffs made was the creation of Pak’n Save.

Pak’n Save was founded in 1985 and celebrated its 30th birthday last year.

However, he said there are similarities between the two industries, too.

Both have an issue where management thinks that they’re like their customers – they’re not, he says.

He says it happens in most big consumer brands, when the reality is, 70 percent of New Zealanders earn less than $20 an hour.

Brands need to think about what they’re doing and the way they’re positioning themselves around this value mindset, he says.

Processing customer feedback

Quin mentioned the consequences of not stocking just one product a consumer is after and talked about the time a supermarket owner in a blue-chip suburb was given a low rating on a customer feedback form.

When he rang the person and asked why, the customer said it was because the store didn’t stock couscous, and they had seen it on a cooking show and wanted to buy it immediately.

Quin says the owner was a “country lad” and had to research the term couscous to find out what it was, but he then immediately ordered it and stocked it.

This customer feedback is crucial to Foodstuffs, as Quin says the company’s focus is to become as customer-insight driven as possible.

Any time a customer shops at one of the stores and spends over $20, their receipt asks if they’d like to rate the store from one to five.

When there’s a bad rating (a one or a two) the owner of the store will call the customer and ask what the issue is, and how it can be fixed.

“Where we go with all of this is about true business intelligence. This is a 93-year-old organisation that has done successful business a certain way for a really long time,” Quin says.

He says offering loyalty cards at New World and soon in October, Pak’n Save, is so customers can be rewarded, but also to pool together a database and start personalising offers.

“The vision you create is an understanding of where a customer leaves home in the morning, perhaps drops kids to school or goes to work, and then goes shopping at certain brands before coming to our brand. We compare what they buy to where they have been and start being able to market very directly to a customer based on what they want.”

As for its digital orders, Quin says so far the split has been 60 percent home delivery and 40 percent click-and-collect. His personal view is that click-and-collect is going to grow and grow.

He says Foodstuffs’ stores are placed where traffic is, and people are driving past and picking up their groceries almost as much as getting them delivered.

“I think as that grows, there could be some really interesting formats like drive-throughs.”

He says the digital grocers that win in the future will be the ones that know their customers best. 

“Those winners will go on to meet the needs of their individual customers best.”

Other insights about customers from Quin:

  • The average online basket size is four to five times bigger than a physical shop.
  • The days of the whole family being home at 6pm for dinner five nights a week are gone, Quin says. “We’re buying differently and behaving differently as a result.”
  • The ethnicity of customers is becoming a focus for the company, considering 60 percent of Auckland by 2020 won’t be of European descent. Christchurch’s population is also changing, and Foodstuffs is changing as a result.
  • Plenty of Pak’n Save’s customers are from “blue-chip suburbs” but shop there because they appreciate value.
  • A former Warriors captain, Steve Price, is the owner-operator of a Four Square store in Waipu and the local community “loves him to death” because he’s engaged with them and has a unique story.
  • Half the potatoes sold at Pak’n Save Silverdale are sold loose, as people prefer to handpick them rather than buy bulk bags. This fascinates Quin. “I could not tell you a good or bad potato.”
  • In the weeks leading up to Christmas, Pak’n Save sold 50 tonnes of salmon fillets.
  • Customers may not be discussing your company on your site, but they will be talking about it on community and conversation sites, like social media. Quin says is where the real chat goes on about your brand.
  • While others will debate how much responsibility food retailers have for their customers’ health and issues like obesity, Quin says you can’t treat customers like children. “In the end, the right balance will be somewhere in between where you show leadership and make sure all healthy choices are available, but respect that people are individuals that make their own choices.”

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