Latest / Leaders in Customer Loyalty, Powered by Loyalty360 / #392: Harps Food Stores: Being “Live” in POS Transactions and Driving Increased Customer Engagement

Transcript

#392: Harps Food Stores: Being “Live” in POS Transactions and Driving Increased Customer Engagement · Leaders in Customer Loyalty, Powered by Loyalty360

• 0:02
  Speaker 1: Good morning, good afternoon and welcome to another episode of the Loyalty360 Leaders in Customer Loyalty series.
• 0:09
  Speaker 1: I'm Ryan Massey, director of Client Relations at Loyalty360.
• 0:13
  Speaker 1: Today we have the pleasure of speaking with David Gunung, senior Vice President and Chief Marketing Officer at Harps Food Stores.
• 0:21
  Speaker 1: David offers some great insight into the grocery market and Harps' recent venture into a loyalty program, with topics ranging from the effects of the pandemic to e-commerce.
• 0:32
  Speaker 1: We're excited to hear about Harps' vision and perspective and glad to have David with us today.
• 0:38
  Speaker 1: How are you today, david?
• 0:39
  Speaker 1: I'm good.
• 0:40
  Speaker 1: Thank you.
• 0:41
  Speaker 1: How are you?
• 0:41
  Speaker 1: I'm great.
• 0:42
  Speaker 1: Thank you very much.
• 0:43
  Speaker 1: Tell us a little bit more about your experience and customer loyalty and what you do in your role at Harps Food Stores.
• 0:51
  Speaker 2: Yeah, I'll give you a quick overview Harps you know 147 stores, six states offering conventional to cost plus formats and you know, as far as my role as chief marketing officer is, I don't know pretty much if it's on the sales floor have some kind of contact with it.
• 1:11
  Speaker 2: Loyalty we're new to loyalty.
• 1:14
  Speaker 2: We've been with Bird's Eye for a couple of years and continuing to develop that program and excited about the potential it has to offer us that program and excited about the potential it has to offer us Terrific.
• 1:29
  Speaker 1: Can you briefly tell us a little more about the my Hometown Rewards program?
• 1:35
  Speaker 1: How does it work, what are some of the benefits and how are consumers engaged in joining?
• 1:41
  Speaker 2: Yeah, you know.
• 1:42
  Speaker 2: So that program continues to grow for us.
• 1:45
  Speaker 2: As far as for the consumer, I guess the thought process is you've got 15 seconds.
• 1:56
  Speaker 2: The attention span is so narrow anymore that you have to have that content that's engaging to them.
• 2:00
  Speaker 2: So part of within our mobile app is that when they open it up, we're going to drive that customer loyalty information to drive our content so it's pertinent to them.
• 2:10
  Speaker 2: So, as the consumer shops, we have different promotions that are in our ad that are just a general broadcasted message to try to engage new consumers.
• 2:21
  Speaker 2: So we'll have anywhere from $20, $30 a week in our ad for that new consumer, for existing customers.
• 2:29
  Speaker 2: Once you're in it, golly, it's got as far as it's got maps in the store that if you need to find something, you can search that way.
• 2:37
  Speaker 2: It's got digital coupons.
• 2:39
  Speaker 2: Everyone's looking for value today, so with the digital coupons it then sorts those, so it's going to bring the ones that are most pertinent to you.
• 2:48
  Speaker 2: There's 200 coupons on there.
• 2:49
  Speaker 2: You don't want to have to scroll through 200.
• 2:51
  Speaker 2: We want them to be able to where they're accessible.
• 2:54
  Speaker 2: One of the ones that's exciting that we've been doing probably for about the last year is we have Visper promotions and that's where our loyalty information drives the content of that promotional activity.
• 3:08
  Speaker 2: So you, as a consumer, we're going to send you three different promotions.
• 3:13
  Speaker 2: One is going to be a basket driver.
• 3:16
  Speaker 2: We're going to see items that we see.
• 3:20
  Speaker 2: I'm going to use Tide as an example.
• 3:21
  Speaker 2: Every two weeks you buy a Tide.
• 3:24
  Speaker 2: Well, all of a sudden, you skipped a cycle.
• 3:27
  Speaker 2: Well, where did you go?
• 3:27
  Speaker 2: You went to Dollar General or Big Blue or whoever.
• 3:32
  Speaker 2: Well, we want to send you a coupon to make sure that we're grabbing that shopping, you know, to drive that basket.
• 3:38
  Speaker 2: We're going to send another promotion that is 100% just a reward.
• 3:43
  Speaker 2: We're recognizing an item that's beneficial to you and send a discount.
• 3:49
  Speaker 2: And then the other one gets back into driving sales.
• 3:55
  Speaker 2: In that want to identify, here's something I see in your basket.
• 3:59
  Speaker 2: If I get it in your basket, I can get incremental items.
• 4:02
  Speaker 2: And the primary example there is you get, like, a ground beef.
• 4:07
  Speaker 2: Can I get spaghetti noodles and spaghetti sauce and French bread, or do I get taco shells, you know?
• 4:12
  Speaker 2: So, from a loyalty standpoint, the Visper promotions are going to identify you as a consumer.
• 4:20
  Speaker 2: Specifically you, every consumer, is going to get a different blend of coupons.
• 4:24
  Speaker 2: A consumer, specifically you, every consumer is going to get a different blend of coupons and then hopefully we want to get to the point where that customer, when they're opening up their app, they know they're going to have coupons that are targeted to them and then that's their motivation to open it on a weekly basis.
• 4:37
  Speaker 2: Excellent.
• 4:39
  Speaker 1: Very interesting.
• 4:40
  Speaker 1: Now Harps is leveraging a new point of sale POS solution to enhance the customer experience and deliver more personalized discounts and promotional offers.
• 4:52
  Speaker 1: What issues do you believe the new ECRM system will address?
• 4:57
  Speaker 1: Yeah, so.
• 5:01
  Speaker 2: We were, ncr was our front-end POS system and so we're in the process.
• 5:07
  Speaker 2: That is like a three-year process to convert 140 stores.
• 5:11
  Speaker 2: But we're moving to.
• 5:12
  Speaker 2: Ecrs is our new front-end supplier.
• 5:15
  Speaker 2: One of the benefits that we talked about.
• 5:19
  Speaker 2: We're new in the loyalty and our engagement has been slow.
• 5:22
  Speaker 2: With our previous front-end systems we didn't have the ability to be live in the transaction.
• 5:27
  Speaker 2: So as you as a consumer, you would shop, you would earn your discounts.
• 5:32
  Speaker 2: Well then we would send the T-log data overnight and then it would come back and load the discounts into your digital wallet the next day and you don't have that instant gratification of seeing that discount in the transaction.
• 5:46
  Speaker 2: So, as we've been doing the front end conversion to ECRS, what we're seeing is that consumer the engagement by that individual store is growing because, in part, our own associates see those discounts live in the transaction and then that's your best way of communicating that message is if you have the buy-in from your associates.
• 6:10
  Speaker 2: But we're excited, we're targeting that the 1st of January we'll have 100% of our stores that will be converted and then we'll be live in the transaction at that point.
• 6:22
  Speaker 1: Oh, terrific.
• 6:22
  Speaker 1: Can you speak to Harp's vision for personalization and expand on the role it plays as part of your overall loyalty and engagement efforts?
• 6:46
  Speaker 2: engagement numbers.
• 6:46
  Speaker 2: You have to have to go to the CPG manufacturers and show them that, hey, my program drives incremental lift and where's that return on investment for that spend with them?
• 6:52
  Speaker 2: So right now a majority of what we're doing is self-funded.
• 6:56
  Speaker 2: So once we get we're 70 stores are live in the transaction today.
• 7:02
  Speaker 2: You know, we get to that 100% live in the transaction.
• 7:05
  Speaker 2: Stores are live in the transaction today.
• 7:07
  Speaker 2: When we get to that 100% live in the transaction, the main driver for us is to get to the point where we have enough consumer engagement that then we can start trying to pull in some of that additional funding.
• 7:17
  Speaker 1: Awesome.
• 7:17
  Speaker 1: Now, at Loyalty360's 2024 Loyalty Expo and in conversations with Loyalty360 members, brands continue to express how emotional loyalty is top of mind as marketers seek to inspire brand affinity and devotion.
• 7:35
  Speaker 1: Do you define, or rather, how do you define, emotional loyalty, and how does Harps foster emotional loyalty with its customers?
• 7:55
  Speaker 2: You know, one of the things that's a challenge for us as a retailer is that we're 20 miles, right up the road, from 20 minutes it's, you know, 10 miles from Walmart, the big blue.
• 8:00
  Speaker 2: Everyone recognizes that what they are doing in the digital world is leading you know everybody.
• 8:06
  Speaker 2: So you know, I guess our thought process is I need that consumer If you're in a day-to-day shopping experience, our store versus theirs.
• 8:17
  Speaker 2: They've got the big monster store they have, you know.
• 8:20
  Speaker 2: Basically, they're not known for customer service.
• 8:23
  Speaker 2: Sometimes their product assortment isn't, you know, as all the SKUs isn't so good.
• 8:28
  Speaker 2: Harps, we want to offer quality, convenience, friendly service and along those, we need our digital promotional activity to match that same standard.
• 8:41
  Speaker 2: And so it's just got to be.
• 8:44
  Speaker 2: You would like to be in a situation where that customer, when they decide they want to go shopping, they recognize I need to open my HARPS app to see what my savings are today.
• 8:58
  Speaker 1: Absolutely, Absolutely Now.
• 9:01
  Speaker 1: Can you share insights as to the trajectory of grocery retailing going into COVID and then how it evolved following the pandemic?
• 9:11
  Speaker 2: Yeah, you know, obviously, during COVID, nobody was going to the stores, and so what's happened is, is the e-commerce really spiked and grew and then it started to level back off, grew and then it started to level back off, you know.
• 9:27
  Speaker 2: So the scary part of that is Walmart is still starting to see, you know, increases in their e-commerce side of it, the shopping experience.
• 9:34
  Speaker 2: One of the things that we're seeing now is the economy's tightened up.
• 9:37
  Speaker 2: The consumer is not making as many trips, but they also, when they're doing their shopping, they're more likely to go hit multiple locations to get the best value or that savings.
• 9:49
  Speaker 2: So there again, our goal is is we've got to get them.
• 9:53
  Speaker 2: We have value.
• 9:56
  Speaker 2: Here's targeted promotions for you warrants.
• 9:59
  Speaker 2: You come into our store excellent.
• 10:02
  Speaker 1: Are there any other ways that the competitive landscape has changed?
• 10:07
  Speaker 2: Oh, I see the competitive landscape, you know.
• 10:13
  Speaker 2: I think it still just goes back to the consumer that they've got options.
• 10:18
  Speaker 2: It's easier for them to research what the options are, and we just want to make sure we're in that mix.
• 10:25
  Speaker 1: Absolutely.
• 10:26
  Speaker 1: And so, along those lines, how is the customer changing and choosing different products?
• 10:32
  Speaker 1: Is shopping frequency changed?
• 10:34
  Speaker 1: Yeah, yeah.
• 10:35
  Speaker 2: Has shopping frequency changed?
• 10:36
  Speaker 2: Yeah, yeah, like one of the ones that just the challenge.
• 10:39
  Speaker 2: Outside of Walmart, the Dollar Generals are opening on every corner.
• 10:44
  Speaker 2: They're almost like banks anymore.
• 10:46
  Speaker 2: They're everywhere so that consumer with their options.
• 10:50
  Speaker 2: But it comes back to in today's environment.
• 10:55
  Speaker 2: Now we're pretty lucky.
• 10:55
  Speaker 2: Here in Northwest Arkansas We've been recession proof as far as you've got Walmart and Tyson's and JB Hunt, you know.
• 11:02
  Speaker 2: But a lot of the rural communities that we operate rural Arkansas, missouri, oklahoma, kansas, we're in Louisiana, mississippi those rural communities they're watching their pennies and so the transition from the national CPG brand down to the private label is definitely happening.
• 11:21
  Speaker 2: Again we talked about a minute ago the number of trips isn't there, so when you got them in the door you got to get as much in their basket as you can.
• 11:32
  Speaker 1: Right.
• 11:32
  Speaker 1: So briefly, what is the biggest opportunity for grocery retailing going forward?
• 11:43
  Speaker 2: The biggest opportunity and the one that I guess, if you use an opportunity for me, another way of looking at it, what's the challenge that you have out there, that you have out there?
• 11:55
  Speaker 2: One of the ones that I think that makes me nervous is what Walmart has done with their e-commerce.
• 12:04
  Speaker 2: I think, as far as you stop and you look at Amazon, and they just made it so easy the consumer, if they just think of I need an item, I just open it up and I know they've got everything that's available, that's out there and it's all in one trip and it's delivered to the house.
• 12:20
  Speaker 2: For the retailer, the hard part is, is any type of e-commerce there is a cost to it which just comes straight out of profit margins.
• 12:28
  Speaker 2: You know, as an independent, we still have to hit a bottom line to drive.
• 12:33
  Speaker 2: You know our internal stock prices and the thing that just drives you.
• 12:38
  Speaker 2: You can get a Walmart and they can have sales increases, green and market share.
• 12:42
  Speaker 2: They're going back to pre-COVID numbers and market share, but their profitability can go down and yet they can still see their stock price go up.
• 12:54
  Speaker 2: Most retailers can't operate off of those same kind of guidelines and so that is definitely the challenge.
• 13:02
  Speaker 2: At some point you would think that the big guys are going to have to start charging for the e-commerce options and then, with that level of the playing field a little bit, Sure, absolutely, it'd be interesting to see what happens.
• 13:19
  Speaker 1: Sure, absolutely, it'd be interesting to see what happens.
• 13:21
  Speaker 1: You know, are there other brands or programs that you admire or are loyal to?
• 13:23
  Speaker 1: From a customer loyalty perspective?
• 13:27
  Speaker 2: oh, um, you know, in our household uh, there again, proximity to the big blue.
• 13:33
  Speaker 2: Uh, we don't shop at the Big Blue.
• 13:36
  Speaker 2: So I would tell you, as far as the other option is a target for my wife, you know as far as in looking at their app and how you can build the loyalty, and you know, and even for her as a consumer, that is, you know over the last couple of years and some of the steps that they've taken.
• 13:57
  Speaker 2: You know it's so easy to lose that consumer.
• 14:00
  Speaker 2: So you know every action you take you got to be sensitive to how it impacts and what your perception is to that consumer.
• 14:08
  Speaker 1: And so what do you like about their offerings?
• 14:12
  Speaker 2: Oh well, I mean, this is just going to be feedback from her as a consumer.
• 14:16
  Speaker 2: It is, you know, the same thing as far as they know the categories she's shopping and she can build you know the savings off of those kind of categories.
• 14:28
  Speaker 2: It's easy, it's engaging, those are all things that we're targeting.
• 14:33
  Speaker 2: It still just gets down to the basics things that we're targeting.
• 14:37
  Speaker 2: It still just gets down to the basics when they think of grocery.
• 14:40
  Speaker 2: I need them to.
• 14:43
  Speaker 1: Harps is my store and I need that to be the app that's opened first.
• 14:46
  Speaker 1: Certainly, Absolutely, and are those the elements that you would like to see implemented in my hometown rewards program, or are there any other elements that you'd like to see implemented?
• 14:56
  Speaker 2: Yeah, you know we've had conversations.
• 14:58
  Speaker 2: We just launched a baby club.
• 15:00
  Speaker 2: A lot of our customers are typically the demographic that hits our stores and is older, and so we're launching the baby club, somewhat similar to what you might see in a target program.
• 15:14
  Speaker 2: We're in the process, we're evaluating, to you know, potentially doing a pet club.
• 15:19
  Speaker 2: As far as you know, how do you find those niche markets that there again, there's a lot of customers out there, but you're finding something that resonates with them.
• 15:30
  Speaker 2: So constantly, you know if you're standing still you're losing ground.
• 15:35
  Speaker 2: So we've got to constantly be looking for different options to how we improve our shopping experience.
• 15:41
  Speaker 1: That's a good point.
• 15:42
  Speaker 1: Now, what can Loyalty360 do to help you and Harps with your customer loyalty efforts?
• 15:49
  Speaker 1: What resources do you seek?
• 15:52
  Speaker 2: You know, the only thing I would say is potentially from industry, what you're seeing the consumer doing, and if there was any kind of insights that you guys could supply to us to help us make sure we're staying up with the current information, that would definitely be great.
• 16:12
  Speaker 1: Terrific Well, thank you for taking the time to speak with us today.
• 16:17
  Speaker 1: We appreciate it and look forward to hearing more in 2024.
• 16:21
  Speaker 1: All right, thank you, appreciate it.
• 16:24
  Speaker 1: Well.
• 16:24
  Speaker 1: Thank you, everyone else, for listening and make sure to check back for additional episodes of our Leaders in Customer Loyalty series.
• 16:31
  Speaker 1: Thank you,