Habits can be hard to break. When I began working at Pace Communications, I had to shift my thinking from old-school journalism and learn how to think like my client—an ability critical to success in custom publishing. But you can’t stop there. Even clients can get stuck seeing things from only one perspective, and sometimes it helps to have someone from the outside ask: “What do your customers or donors really want to know?” That’s custom content at its best.

Similar questions are asked of the supermarket industry in Shopper Marketing: How to Increase Purchase Decisions at the Point of Sale, edited by Markus Stahlberg and Ville Maila of Phenomena Group. Their book presents more than 30 articles from retailing and marketing experts worldwide who propose a new strategy for approaching shoppers. Given Pace’s interest in exploring how custom content can be integrated into grocery store marketing strategies, I spoke with Markus Stahlberg about his insights into helping the supermarket industry break a few habits of its own.

Stahlberg is the group managing director for Phenomena Group, in charge of the company’s global operations. Phenomena was the first shopper marketing company founded in Europe and specializes in shopper marketing campaigns and promotions in more than 40 countries.

Wes Isley: Tell me a little about your inspiration for Shopper Marketing.

Markus Stahlberg: At Phenomena, we recognized a clear need for defining what shopper marketing really consisted of. We saw that there were specialist companies emerging that represented an extensive spectrum of marketing- and sales-related services, from packaging design to shelf-space optimization. We began contacting people we knew around the world and also approached previously unknown companies about their interest in contributing to the book. 

Isley: Perhaps the main takeaway point is that there is a difference between “shoppers” and “consumers.” Are grocery retailers embracing this distinction? 

Stahlberg: Categorically speaking, retailers are much more interested in shoppers, not in consumers. Shopper marketing is actually a built-in ideology to retailing; retailers have always practiced shopper marketing. I think a better question would be, should the retailers pay more attention to consumers as well? 

Your question applies much better for manufacturers, who generally haven’t seen a difference between the shopper and consumer. When the manufacturers [held] power in the ’90s, the consumer ruled the scene; once retailers took over, suddenly shoppers became important. 

Isley: Your book stresses that shopper marketing is different from traditional grocery store advertising and marketing. It seems to aim for understanding shopper behavior and responding accordingly, rather than directly attempting to change behavior. Is this correct? 

Stahlberg: From a shopper behavior point of view, the key benefit of shopper marketing is to make it easier [for the shopper] to make purchase decisions. A key insight about shopper marketing is that shoppers are somewhat [unaware of their purchasing choices] in the store, and so if the brand [manufacturers] did not try to change their behavior, shoppers would always buy the same products.

Isley: Are supermarket retailers and manufacturers adopting or resisting this approach?

Stahlberg: On a general level, I don’t think retailers object to shopper marketing as such. After all, it means that manufacturers are investing in shoppers in the [physical] store instead of [in a] target group outside the store, and they’re [helping] to increase purchase decisions instead of building [their] brand. The only reason for retailers to object is, of course, one of the main drivers of shopper marketing [at] the manufacturer end, [which is the push to] gain more space and attention in the store for their [own] products.  

Isley: As a shopper, I like the emphasis on improving the supermarket environment because it seems that the basic design never changes. Why are grocery retailers and manufacturers slow to make these kinds of changes?

Stahlberg: Logistics rule in fast-moving consumer goods (“Every Day Low Price” is the most efficient method of gaining shopper loyalty). You can ask yourself: If there was a supermarket chain with 30% higher prices because of fancy, logistically inefficient store design, would you shop there? It’s all about getting the stuff in and out as efficiently as possible. I would not foresee drastic changes to supermarket layouts in the near future. 

Isley: But I like the idea of breaking out of the traditional category approach to grocery store design. Currently, I must travel the entire supermarket to get ingredients for just one meal. So you don’t think we’ll ever see a “breakfast solutions” section, for example, that includes milk, cereal, bacon and eggs, all together in one spot?

Stahlberg: This is a nice idea, but what if somebody wants eggs for baking? Where should she go? Would there be eggs in multiple locations within the store? It would be a logistical problem and [shelf usage] would not be very efficient. I doubt whether a person wanting do her baking would really see why she has to visit the breakfast section to find eggs. There could be some niche store concept that supports this kind of ideology, but I don’t think it is in sync with logistics-driven mass retailing.

Isley: I confess that when I shop, I’m on a mission to get in and get out, so I’m unlikely to watch TV screens or otherwise linger at the point of purchase. How can shopper marketing successfully address that kind of behavior?

Stahlberg: We have been [taught] to follow the ideology of efficient logistics. This varies between different markets, however. For instance, in China and in Asia in general, shopping is considered to be entertainment, which of course has a drastic effect on which concepts succeed. 

Regarding shopper media, I do think it has huge potential in helping shoppers make their purchase decisions. When considering shopper marketing, it is all about volumes (actually it’s very similar to other media). The idea isn’t that 50% of shoppers will buy the product because of an ad; it could be considered very efficient if only 1% responded (e.g. from 30,000 shoppers, 300 would buy). 

As a remark, it is important to understand that there are very few SKUs that are purchased by more than 15% of all shoppers. I recently saw an analysis of one major retailer’s customer data, which showed that out of their 15,000 bar codes, there were only 50 products that were bought by more than 15% of shoppers and, of these, many were unbranded products, such as [produce]. 

The key elements of success, in my opinion, for shopper media, are that (1) it be considered a sales-building tool instead of a brand-building tool, and (2) that it be optimized for the purchase-decision process, which takes five seconds. 

Isley: You stress gathering accurate research data and using it effectively to be successful at shopper marketing. What would you say to the argument that “times are tough, and we can’t afford it right now”?

Stahlberg: I would ask, what can you afford? Shopper marketing aims for increasing purchase decisions and, as such, is a sales-building tool producing immediate results. So I would ask, where do you put your money? 

Isley: In the case of some other grocery marketing strategies, sharing personal shopping habits with retailers and manufacturers has not translated into tangible benefits for the shopper. How will a shopper marketing approach differ? 

Stahlberg: Shopper marketing aims to understand shopper behavior and to make it easier to make purchase decisions. This will be beneficial for shoppers only if the shopper’s purchase decisions result in consumer satisfaction. So it is all about giving [shoppers] the correct reason to buy a product that [they] will potentially like. In the end, successful shopper marketing should result in repeated purchases, or loyalty towards the product and brand. 

Isley: Another key to shopper marketing success is getting support between all stakeholders: retail, manufacturing, marketing, sales. What advice would you give to someone who sees the potential of shopper marketing but who needs to persuade skeptical team members?

Stahlberg: I don’t think retailers or the sales team [need much convincing]. For the marketing department, however, it definitely requires the biggest change in mindset. Marketers should understand that they must focus on two completely different worlds, that of consumers (of which they are already masters) and that of shoppers. Succeeding in both requires mastering two arts instead of one. The biggest and most common mistake is to apply the rules of consumer marketing to shopper marketing. 

For manufacturers, shopper marketing means bigger volumes, which is hardly a problem. However, the most efficient medium for shoppers is the package; it reaches 100% of the target group. Using packaging as a medium involves manufacturing as well [as] tricky and costly design changes. For manufacturers, the best guideline is to compare the investment (through labor and direct costs) to buying media. Media is expensive, and [manufacturers] pay a high premium to an external media owner. [However,] packages are owned and controlled by [the manufacturer] and they only pay the direct costs associated with the work and materials, with no premium at all. Therefore, efficient use of packaging as a medium should usually be a better investment than traditional media.

Isley: Markus, thanks for sharing your insights about the supermarket industry and shopper marketing. 

So what do you readers think? If you’re a grocery retailer, manufacturer, marketer or sales person, let us know your thoughts on influencing shopper behavior or the future of in-store media. Have you heard all of this before? What grocery marketing strategies are working for you?

Eight of the Top 10 circulating magazines in the U.K. are now “customer magazines.” This means that in the country that brought us William Caxton and the first commercial printing press, 80% of the most popular magazine titles are being published by consumer brands—not traditional magazine publishers.
 
Is this trend apparent over here? Well, of the Top 25 audited titles in the U.S., #1 and #2 are published by AARP—and there are also three AAA titles in that list.

And while it’s interesting that membership magazines are so prominent on this list, the reason that these titles are audited (and therefore appear within this “official” BPA list) is to be able to gain a share of the ever-decreasing print advertising dollars that are around. The real eye-opening fact is that there are a number of higher circulating titles—whose health does not depend on advertising revenue—that do not appear in The Top 25, and they represent a growing trend as well as the future of magazine publishing.

These titles are the branded magazine titles that are being used as customer-engagement and branded-content vehicles by some of the leading marketing organizations in the country. P&G, Kraft, General Motors and Costco are all publishers of magazines that would be sitting within the Top 10 circulating magazines if the list were truly representative. And these “publishers” measure their success not in subscriptions (although Kraft’s Food & Family has recently moved to a subscription model), but in retention, loyalty and product sales. In the marketer’s firmament of programs that deliver ROI, the custom magazine has a five star rating.

And while the megabrand with an extensive customer database may have found efficiency and effectiveness in producing a magazine (these self-proclaimed "original communities of interest"), the reason for their success is not based on some outdated perception of the printed word having great resonance and lasting effect—it’s that these corporations and organizations have found the magazine to be a useful tool in their growing arsenal of custom content that is proving a significant Brand differentiator, Search Engine Marketing driver, CRM piece and Social Media component.

If these organizations are using print magazines, believe me, it’s not because they are following. It’s because they are leading.

What about the future of consumer magazines?

The future of print titles clearly does not depend on magazine publishers. If the Unique Selling Proposition is a database of folks who like to read about travel (or horses or left-footed motorcyclists), and the magazine guys have not built a value or a brand around their unique community of interest, then they should not be surprised if the leading travel brand or horse feed manufacturer or motorcycle manufacturer stakes out the high ground and produces content that delivers sales of their products, perception of their brand or retention of their customers (and preferably all three) as a result of producing engaging, high-quality and thoughtful editorial content.

Let’s just think about the most successful magazine launches of recent years: ESPN Magazine, O: The Oprah Magazine, Everyday with Rachel Ray, Food Network Magazine, Martha Stewart Living. Brand extensions have taken over successful magazine publishing and the “own brand” magazine publishers have been left behind.

In Part 2 of this blog post series, I’ll examine the custom content companies that are providing the specialist skills to these branded content producers and look closely at what they are doing in the digital environment.

And, just for fun, I’ll look at the consumer magazine publishers who "get it." Lastly, to round up, I’ll also take a look at whether the iPad and e-reader will, as the traditional magazine publishers hope, save the day—or whether this development merely accelerates the adoption of custom content publishing by brands.

To borrow from the ‘60s and ‘70s theme of Sex, Drugs and Rock ‘n' Roll, I'd say the theme for Men's Health magazine would be Sex, Vitamins and Grooming.

I'm reviewing the Men's Health website for the final review in our blog series on the websites of top magazines. What a contrast between my first review, of Parent & Child, and Men's Health. The Men's Health site's top navigation tells you all you need to know of this audience's cultural concerns: Fitness, Sex & Women, Health, Nutrition, Weight Loss, Grooming and Video.

Strength of Content: 7
With article titles like "Keep Her Interested in You—and Sex," "7 Ways to Rev Up Your Relationship," and "How to Last Longer in Bed," I pretty much knew what to expect. As it turned out, most of these titles led to tips and best-of lists.

Men's Health is definitely a young man's magazine. But articles like "Hunting the Female Libido" may resonate with a fairly broad audience. Part of the article is about people in long-term relationships and married couples. As many of us know, being married with children and working full-time doesn't give you a lot of time to spend on being a couple.

However, most of the site's content is about health and fitness. I really enjoyed "The Rock is Cookin'," about Dwayne Johnson. Yes, the article is about celebrity, but it's also about how the Rock's career has had as much to do with his success in the gym as with his success on film. The topic is health, but the story is about a man's journey.

Social Media Sophistication: 5
RSS, comments, Twitter, blogging, YouTube: Certainly all of the social media fundamentals are covered at Men's Health. But being there is not the same as being present. Of the articles I read, I did not see any engagement between readers and writers. I also did not see references to other blogs within blog posts. Social media is as much about actual engagement as it is about setting the stage for conversation. You may write a great article, but do you also take the time to converse with your readers?

Ease of Use and Navigation: 10
This aspect of the site is really very good. I enjoyed the navigation design, and I thought it was easy to move around the site.

Design and Layout: 8
The site's design is OK. There's a good mix of pictures and text. I was slightly confused when linking to an article that had a different name than the link. But what the headline promises, the content always produces. The pop-up menus for each of the main navigation sections are good—filled with tips, expert advice and more.

Use of New Technology: 6
I loved this web infographic from the grooming parlor. I thought the site's search function could have been a little heavier in substance. Overall I didn't see a lot of new technology to excite me. And there are lots of pop-up ads that have to batted down with a mouse, which is enough to annoy anyone. I was actually really sold, though, on some of the ads within the pop-up menus on the main navigation.

Overall Rating: 36 of 50
I discovered through my site review that Men's Health is probably not a magazine for me, given that I spend my free time singing songs to my 4-year-old rather than pumping iron. But I can say that the magazine is hiring good writers to put together good stories, not just tips on sex and fitness. And in the articles I did read about fitness routines, I enjoyed the use of video to illustrate and bring the text to life.

The Ryder Cup Matches is a golf competition between the United States and Europe. In the world of grocery store marketing, the U.K. has often beaten the States in using data and custom content marketing to retain and grow per-customer sales.

One of Napoleon's most famous quotes in English is, "England is a nation of shopkeepers."

While the Kingdom of England and the U.K. overall might match up handedly when it comes to using database marketing for grocery store marketing, when it comes to social media followers the U.S. easily beats U.K. grocery chains.

In publishing this August, the UK grocery chain number of social media followers we see that similar to the status of the distribution of social media followers for U.S. grocery chains, U.K. supermarkets have lots of followers in Facebook, while Twitter comes in second for the number of U.K. social media followers.

For once, in the field of grocery store marketing the U.S. beats the U.K. in the area of custom content marketing via social media.

I'm delighted to publish Pace's second bar chart featuring the number of social media followers of U.S. Grocery Chains. This update focuses on Facebook, Twitter and YouTube. We dropped the numbers for Flickr because so few companies had that social media channel, and we also show the number of stores for each chain and publish the name of the company.

The new results for the U.S. Grocery Chains number of social media followers reveal a titanic battle between Walmart and Target for the mantle of top supermarket chain with most social media followers. Each has added over 500,000 followers to Facebook in the last four months. While the primary focus of both companies' business is not grocery, both are important competitors in the industry and have a national presence. While many customers may follow each company's social networking sites for a variety of reasons, each grocery business gains from being able to reach over one million Facebook followers for both companies.

Only Whole Foods beats Walmart and Target—but not on Facebook—rather on Twitter, with over 1.7 million followers. Interestingly the growth rate for Whole Foods for Twitter followers has been smaller over the last four months, with only 40,000 or so followers gained.

We have more research here at Pace on how content marketing is being used by supermarkets for grocery store marketing, and these numbers about social media followers give a fascinating picture of the changing nature of media and custom media, where companies can leverage online tools to reach customers directly. The chart also illustrates the differences between regional and national brands in the use of content marketing. If there's one broad statement I can make about custom content grocery marketing, it's that for national companies like Target, Whole Foods, Trader Joe's and Walmart, there's an understanding of the value of creating content on the Web and in social networks both for their search engine rankings and customer engagement across the Web.

The question we hear from many regional supermarkets has been: Is content marketing worth the investment given a focus on regional markets? I think many grocery stores understand the importance of content marketing, but have not seen as much value from their efforts as national brands. If you run a national brand, the importance of content marketing and social media is clearer because all of your competitors have presence. Regionally, the grocery store marketing using content marketing is not as obvious, but I believe it is possible to gain benefits for a regional grocery store even if content reaches a national audience. In fact I'd even argue that you want content to have a national reach because sometimes your Web advocates may not even be able to shop at your store. But if everyone today is a media creator, any advocacy can bring regional supermarket referrals, if not direct sales.

Overall the chart gives us a snapshot of how grocery chains are developing their content grocery marketing efforts during 2010. National chains committed; they see the value and marketing ROI. Regional chains are still testing the waters. Specialty national chains like Trader Joe's and Whole Foods are using national custom content publishing to expand their reach and build a stronger brand.

By the end of May 2010, 49.1 million people owned a smartphone. This is according to a recent study conducted by Comcast that took place between February and May of this year. Here’s how that number breaks down:

41.7% own a RIM device (BlackBerry)
24.4% own an Apple device (iPhone)
13.2% own a Microsoft-based device
13% own a Google device (Droid)

BlackBerrys have long dominated the smartphone market, thanks in part to their popularity with the business crowd. And Apple tends to put a sizeable dent in any market they enter, given their built-in hip factor. The most interesting thing about this study, as Jason Patton notes in his article on RCR Unplugged, is the 4% market share increase claimed by Google in just three short months. This is particularly remarkable not only for the small timeframe in which it occurred, but also because during this same time period, every other manufacturer’s points dropped. Patton suggests that Google’s success has largely to do with its Android operating system. In fact, with the exception of Nokia, RIM and Apple, many vendors are either currently using or plan to use Android OS for their smartphone platforms. As Erika Smith from The Indianapolis Star puts it, “Google is doing a lot more than just nibbling on Apple's smartphone business. It is taking big bites.”

Here’s more on the subject:

Android powers ahead with growth in smartphone market share capture. (RCR Unplugged)

Android increases market share of public wifi use against Apple iOS. Ipad jumps in to 3rd place for wireless devices. (MinOnline)

Why the “Smartphone Wars” Seem So Familiar. (PCWorld)

A look at some Android options. (The Indianapolis Star)

—compiled by Jennifer Sanchez

Pace’s (@pacecomm) ongoing Twitter hashtag event, #custcontent, featured an informative discussion this past week with Leslie Poston (@leslie), social media consultant, speaker and author of “Twitter for Dummies.” Leslie gave insights on using social media as part of content strategy, as well as plenty of tips for using Twitter. A few highlights:

@pacecomm: How can people use Twitter for content idea generation?
@leslie: Follow your conversations; what interests you may interest many. Content blossoms organically here.
@leslie: Integrate your comments with Twitter. Posts often generate ideas for new posts in the comments and start convos here.

@pacecomm (): How can people use Twitter as a tool for repurposing content?
@leslie: If you combine Twitter and crowd sourcing, you can use the interactions to make old content updated/new again.
@leslie: Also handy if you see an old post or video make new twitter rounds, can find out why in real time and redo, reuse or make fresh.
@leslie: Now that Twitter is part of social search, it gives you new insight into old content to see how it generates on Google, etc.

@pacecomm: Any other tips for folks who want to use Twitter as part of their content strategy?
@leslie: You have to be more than your content on Twitter. People want to see the YOU behind the things you share, not just links.
@leslie: Give as much help as you receive. If you see something pop up good for someone else's content—share it.
@leslie: Master the art of having a genuine, but focused, conversation. It will hone your content gathering/writing skills for social media.

Join us next week as we welcome Christopher Thomas-Moore and Linh Calhoun of Exclusively Weddings (A Pace Division). We’ll chat with them about content strategy for catalogs, and how EW uses blogs and social media to interact with clients

#custcontent is held every Thursday, 1p.m. EST, on Twitter. To join the discussion, log onto Twitter, and enter #custcontent in the search box.

MORE magazine. In that one simple word it uses as its title, it promises a lot. Does the magazine's website deliver? Let's take a look.

Strength of Content: 10
Regarding content, there is hardly a stone left unturned at MORE.com. As the navigation tabs say, Fashion, Beauty, Health, Sex & Love, Money & Careers, MORE Women, Passions and Community—it's all covered "For Women of Style & Substance."

Within each category are how-tos, trends, reviews, strategies, forums and straight-up articles ranging from "Why Marriages Fall Apart" to "9 Green Social Entrepreneur Start-Ups" to "Life Lesson Learned Too Late." There is a lot here for the woman who's matured out of Glamour and Cosmo and now feels more motivated to make life work for her.

MORE's major theme is reinvention—and the site is full of inspiration. While there's a wide range of articles to guide you in buying the right cosmetics, clothing, libido foods or investment tools, MORE concentrates equally on the larger ideas of reinventing yourself (see: Reinvention Institute), of starting over (see: Second Acts and My First After 40) and of getting in touch with your passions (see: One Amazing Thing).

MORE.com is pleasantly interactive. You can join the MORE community for free, create a profile, network with other women and write stories that are posted on the site.

Bottom line: The site is engaging and has broad-spectrum appeal. And it's fun. Want to look better, feel encouraged and find the latest book, film, TV, travel, food, relationship, fitness, job and style recommendations? Or are you tired of advice and just want to know about the "Juiciest Celebrity Splits" or the "10 Movies Sandra Bullock Should See Before Letting Jesse Come Back"? For any of the above, this is your go-to site.

Ease of Use and Navigation: 7
Call me old-fashioned, but I really do like having a bona fide "Home" button at my disposal. Sadly, there isn't one here for me or for other folks who may become a little confused if they want to go back to the homepage at some point during their journey through MORE's vast library of articles and photos. I did learn fairly quickly to click on the MORE logo at the top left of the page to return to base camp. Other than this, the site navigates well. Another nice feature to help you peruse the content is a list of related stories at the end of each article, or you can choose to read other stories by the same writer.

Use of New Technology: 8
There is a Widgets button at the top right of the homepage that lets you add MORE content to your personal website, blog or social network pages.

Under the Reinvent Yourself tab, click on the pink button to register for the upcoming MORE Reinvention Convention in New York City. Watch an inspirational video about the convention, or choose from a variety of other interview videos or slideshows featuring celebrity speakers.

MORE also provides full access to the Reinvention Institute. Founded by Pamela Mitchell, this is a resource for women who want to change their careers. You can buy her book, enroll in her classes, find career counseling and also purchase reinvention eKits to aid in your transformation (i.e. "Reinvention Brainstorming eKit" or "Reinvention Resume Plus! eKit"). Earlier this year, MORE held a Reinvention Story Contest encouraging women to join the MORE community and possibly have their story become "famous."

For extra fun at MORE.com, check out the makeover apps. Upload your own photo or choose one of many model photos at the site. Click to try Eva Longoria's hairstyle … or Halle Berry's or Gwyneth Paltrow's. Or see how the latest makeup shades look on you. Once you're done playing, create before and after photos, print them out, or e-mail to a friend.

Another app allows MORE members to upload their best personal photos into several different online galleries such as "This Is What 40+, 50+, 60+ Looks Like," "Are You Dressing Your Age?" and "Inspiring Friends."

Design and Layout: 7
MORE.com is put together in a simple, straightforward fashion. The design is not groundbreaking, artistic or edgy. It is, however, easy on the eyes. The white background makes reading a cinch, which is important since this is a reader's website; make no mistake about it. For a site that publishes articles and information on every topic imaginable and encourages you, the reader, to write and contribute your own stories, I think both the form and function should be—um—less. MORE.com achieves that usability goal, with its uncomplicated and understated design.

Level of Social Media Sophistication: 9
MORE.com is all about networking. There are forums galore, and on almost every page you are invited to join one. There are links to Facebook and Twitter and a box called "BackTalk" on the homepage with links for responding to MORE articles. At the end of every article and story is an "I liked it!!!" button. Just click and your vote is counted. There is a consistent right-rail element throughout the site that lists the top five most liked reads. And that in a nutshell is MORE—a place where you are encouraged and empowered to take every opportunity to participate and to reinvent yourself and the community.

Overall Rating: 41 of 50

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.

As predicted, we are continuing to see new players pop up in the eReader market. Sony is expected to release two new eReaders, the PRS-350 and PRS-650, in addition to the rumors that they are working on an Android-based tablet. Plastic Logic also announced that they have ceased production on their Que eReader, which was supposed to launch earlier this year. They plan to rethink their eReader strategy and eventually re-enter the market with a new and improved product. Plastic Logic specializes in plastic electronics, so we should be seeing something interesting coming from these guys in the future.

In other news, Kobo and Random House have partnered up with Fairmont hotels to offer free use of the Kobo eReader to the hotel chain's Gold Members. Currently available at 10 locations, these guests will also receive electronic coupons good for $2 off select Random House titles upon checkout. This promotion is meant to appeal to travelers who don’t wish to carry heavy books with them, and don’t yet have an eReader.  

Here’s more:

Sony to release two new eReaders (CNET)

Sony rumored to be working on new Android tablet (Good E-Reader)

Plastic Logic Cancel’s Que to rethink eReader strategy (Plastic Logic)

Kobo offers free use of its eReader at select Fairmont Hotels (BusinessWeek)

iPad ads more effective than iPhone ads (MacNN)

—compiled by Jennifer Sanchez