Narayan Iyengar is only months into his role as Albertsons Cos.’ SVP of digital marketing and e-commerce, but he sounds like a company veteran already.
As he works to fulfill the retailer’s promise to bring e-commerce capabilities throughout its footprint — intending to offer what it calls “click and pick” home delivery service to eight of the country’s 10 largest markets this year — Iyengar said he would do so in the context of making the virtual experience an extension of the physical experience in Albertsons’ stores, betting that the majority of its shoppers are likely to do both. Doing that, he believes, means fast and flexible approaches that value customer interaction with an eye on growing sales — a page out of the Albertsons “playbook.”
Iyengar joined Albertsons in January from the Walt Disney Co., where as VP of e-commerce and digital travel trade, he built e-commerce capabilities across an eco-system spanning 20 websites and apps. Prior to that Iyengar was a leader in McKinsey's Digital and Business Technology group and began his career as a software engineer with IBM.
Following is an edited transcript of SN’s interview with Iyengar which took place Tuesday.
SN: When you take a job like this, what is the attraction for you?
Narayan Iyengar: To me the most exciting part about being in the grocery industry is that we’re at this point where it is going through disruption through digital technologies across the entire customer lifecycle, from the product discovery phase to coupon clipping all the way through to the purchase, home delivery and click and collect. Every single aspect of this is being affected and disrupted by digital technologies.
Grocery for many years has been one industry that has not been as susceptible to technology companies taking share, but in the last few years we’ve started to see that change. So I think the industry itself is going through a phase right now that is absolutely going to be very exciting from a digital perspective. That’s why I’m interested in the grocery industry.
For Albertsons in particular, this also is an exciting company. What I learned about them is the culture, the leadership and the passion to serve customers as well as having the willingness to be bold and big. Those were the things that struck me most about Albertsons as a company. They want to move fast, and think big. And with all the things you see happening in the grocery space I think this is one of the most fun jobs around. I am really excited to be here.
SN: Does Albertsons have a general point of view on how to attack e-commerce?
Iyengar: The way we think about it is, people want groceries in different ways. Convenience is important, price is important, the freshness of the produce is important, and the experience while buying is important. And different customers want different ways of buying. Some want to come into the store, some others want it in the trunk of their car, others want it delivered to their homes. These customer trends will keep on changing, and they will be different in urban markets vs. suburban markets vs. rural markets, and it will be different for different types of trips, the top-off trip, vs. the stock-up trip, for example.
So we believe customers more often than not will be omnichannel customers.
They’ll come to the store some of the time and go online other times. And we are trying to be what the customer wants us to be. We have a very robust e-commerce delivery program, which will be in eight of the top 10 MSAs by the end of the year.
We’ve been doing home delivery for a long time and we see it as an extension of store. The worker who delivers is our employee. And customers like the fact that they usually see the same two or three people coming to their homes. And that employee often goes inside the home and will leave your things for you on the kitchen counter. So you have this relationship with customers in the store, and in the homes.
We’ve also experimented with click-and-collect in our United division in Texas. So we have a number of different models but the philosophy uniting all of this is how you get the best produce, the best price and the most convenient way to the customer while also building relationships with customers and the communities in which we do this. So digital technology has changed the manifestation of this thing, but the core underlying philosophies are the same.
SN: Have you considered partnering with the Instacarts and Shipts out there?
Iyengar: We continue to talk to many partners but for us, we want to be able to solve for what the customer wants, and be sure they get the level of customer service they’ve come to expect from our stores. So if some of the other partners are able to do that at a price point that makes sense, we are open to having discussions. But for us the customer comes first.
SN: Can you provide some examples of things you’re working on that could provide the solutions you feel customers want?
Iyengar: One thing that has been very popular is the idea of how you go into the store and you build a shopping list and if you go online a month later and want to order those things, you can import your offline shopping list to an online order. That is one of our most popular features because now you’ve linked what they’ve touched and saw in a grocery store and can allow them to order the exact same thing from the comfort of their home. The ideas we have link the online world and the offline world to enhance our customer experience.
We are also at work on things that will link our couponing apps like Just for U with our home delivery capabilities. We want to make the coupon clipping and home delivery much more seamless.
Our philosophy on this is to reduce the friction on our customers and make it easier to order and get the experience of buying groceries in the store.
SN: How are you addressing the cost of the last mile?
Iyengar: We charge for certain basket sizes with a delivery fee. And we continue to look at thresholds for those fees. We are continuing to seek partnerships that can address costs, and look at alternate models. Click and collect could reduce some of those costs. We fully appreciate that groceries are a big expense and a large part of people’s paychecks and we want to make sure we offer the best value.
SN: With so many retailers investing in e-commerce today how important is it to Albertsons to be able to offer something now? Is there a sense of urgency to your work?
Iyengar: I think there is. The e-commerce customer tends to be a lot more ‘sticky.’ So it’s important for us to make sure we have an offering sooner rather than later. And in general, you want to get there fast because customers are asking for it. People would love to shop with us online and if you’re not there for it, then we might lose a customer, and we don’t want to see that happen.
SN: Can digital shopping still be a customer acquisition vehicle?
Iyengar: There are some existing customers that migrate online for some of their trips then there are others we might get who might not come to the store for whatever reason, and we think we can serve them. So there are a number of scenarios where we see customers moving some trips online and we have seen several scenarios where we can also get new customers.
SN: Can you discuss what you’ve learned in markets where you’ve had e-commerce for a long time that you might apply to places like Philadelphia where you currently don’t have it?
Iyengar: We’ve been in legacy Safeway markets — NorCal, Seattle, and SoCal — for a fairly long time and that’s where we’ve tested a lot of our features — “Shop By History’ and the model where employees go into homes to deliver. They have been honed over many years.
SN: How significant a part of the business can e-commerce be?
Iyengar: At this point I’m not sure anyone has a strong perspective on that. I think it will be significant. I think many of our competitors also think it can be significant, just judging by the investments we’re seeing in the space. But how big can it be? Big enough for us all to move aggressively toward it.
SN: What else should we expect to see from Albertsons e-commerce?
Iyengar: We will continue to do what it takes to do what’s right by our customers — offer the right products, at the right price and in the most convenient way they prefer. Technology has raised the bar on what those expectations are but the core principal of what we’re doing hasn’t changed. The mechanism by which we’re doing it is what’s changed.
We are also continuing to work on how digital and social media can work on the customer relationship and can be closely tied to purchase. We have a strong social presence on a number of popular platforms and we continue to see how we can optimize that. We have deep partnerships with CPG firms and we’re exploring ways that we can work with them using digital technologies.
For us it’s comprehensive, end-to-end; it’s not a tactical point solution. We’re taking this very seriously.
