Grocery Store Marketing Insights From Dr. Tom Haggai

Grocery Store Marketing Insights From Dr. Tom Haggai

I had the pleasure of interviewing Dr. Tom Haggai, chairman of IGA, INC. and brand ambassador for IGA in China, at the Pace Communications offices this week about the grocery industry and grocery marketing.

Dr. Haggai is truly an inspirational person who has been a friend of Pace for many years. In fact, he was one of our first clients and oversaw the production of IGA Grocergram magazine.

Dr. Haggai’s career as a lecturer, author, motivational speaker and CEO has taken him far and wide, and his leadership skills have earned him several prestigious awards including The National Grocers Association's “The Great American Award.”

During our conversation we covered a broad range of topics related to the grocery industry and grocery marketing. Having expanded the international scope of the IGA system, Dr. Haggai knows what it takes to succeed in the grocery retailing industry.

Emily Wright: You’ve always championed independent grocery retailers. What is their most competitive advantage and how can they capitalize on it in today’s market?

Dr. Thomas Haggai: Family business has always been my passion; it is the foundation of our country and has always been the foundation. People don’t buy for price; they buy for the experience, and IGA delivers that experience.

The trend now is to buy from your local store; IGA is a local store that cares about the customer. The key is to emphasize that you care and that shoppers are a part of your life. It is all about adding a personal touch; people who own their own businesses have that personal touch to add to the consumer experience. They understand the pressures aligned to the customer base and are able to meet their needs.

IGA sees less turnover than most of the industry. This is because IGA retailers do it right; they develop a family-to-family relationship.

Wright: What is the independent grocery retailer’s greatest challenge in today’s market?

Haggai: Succession planning is a major challenge for family-owned businesses. They often have to ask the questions if they are looking ahead and are they doing it soon enough. If independent retailers don’t have any children who are interested or willing to take over the family business, they have to see if they have a manager or other employee who is willing to do so and give them the tools to succeed.

Planning for succession is difficult but needs to be done. Store-owners have a responsibility to customers, employees and their communities to plan for succession. You cannot let a store decline. It’s like the saying, “You have to keep a bush growing or otherwise, it dies.”

In the past, small-business owners have built their businesses so that their children could have an easier life or a professional life of a different sort. Now all of a sudden, not just with the crash that we are in, but over the past 10 years we are seeing a shift. Now young people see a career at the store as a stable life, and so our average ownership age is dropping. People are looking at the family business again.

Wright: What can supermarket chains learn from independent grocery retailers?

Haggai: I think that supermarket chains would do well not to try and say they could do the same as a family business, but do it in their own way and get their own identity.

Identity is a constant thing throughout your life. You have to understand who you are and what you are about and be comfortable with that. The personal touch is essential. My advice to supermarket chains is to keep on doing what they are doing best.

Being an independent retailer is all about having good communication with your customers, and that is one thing that I think Pace is doing. Through your custom content programs, you are making the customer feel that they are in constant communication with their partners (supermarkets, banks, airlines, etc.). It’s not unusual for a supermarket chain to do just that in the way of sending out a weekly communication covering their likes, dislikes, sales, promotions and so on.

Wright: What is the biggest challenge facing the overall supermarket industry today?

Haggai: The whole industry needs to realize that we’re fortunate that it is our job to take food and put it in the mouths of others—tell me anything that is more intimate than that!

We talk too much about the low margins. The miracle of the United States is that we can eat at 10 cents on the dollar (if you only buy the food items). What is the retailer’s role? Retailers say that people always have to eat. And I say, well yes, but they don’t always need to eat with us.

Wright: How are the needs and demands of today’s shoppers changing? Do you believe the industry is listening and changing to meet those needs? 

Haggai: The industry is moving away from being afraid of technology. Now we are moving from the fear of it toward how to use it. However, the easier it is to connect, the more challenging it is to communicate.

There is also a shift in perception now with the next generation. My generation was taught to trust the labels on food. I don’t distrust the labels now; in the U.S., we have some of the safest, healthiest food. The next generation is really reading what is on the label; they don’t want to give their kids foods with artificial sweeteners or colorings. The buyer wants to be sure of what the ingredients are and wants to be sure of that and the markets are adjusting to it. The shopper is more knowledgeable now, even with the crunch of time.

We have seen the process of customers rushing in and out of supermarkets slow in the last three or four years. Even with self-checkout, people are using extra time to shop in the store. And that’s what we work on in our IGA stores. We want customers to stay with us, loiter with us a bit. We’re cross-training our people so they can answer questions and lead shoppers to the next counter.

Posted By: Emily Wright