DALLAS — Fast changes in the food industry are creating the need for executives to obtain a more diverse range of skills, according to Tim McGuire, director, McKinsey & Co.
“The traditional way to become a retail CEO was to rise through marketing/merchandising or operations,” he said during a presentation last week at the Food Marketing Institute's Future Connect conference here. “But going forward, senior executives need a broader set of experiences. They should do more lateral transfers and learn about the rest of their companies.”
McGuire said the coming years will require broader skill sets that include the following:
Customer loyalty management, including mining data and developing, testing and executing loyalty programs.
Frontline excellence, including identifying and deploying the right people at the frontline, where they meet the customer.
Private-label mindset shift: Changing to a mindset of private label, with unique products, as a source of loyalty. Those managing private label will increasingly be dealing with multiple tiers and price points, organics and natural, and other new elements, he said. They need to keep in mind that “25% of customers who switched for economic reasons will stick to that after the downturn,” he added.
Understanding fresh: “Fresh is the battleground to differentiate, and you need to understand what customers want from fresh.” Moreover, McGuire warned against making the assumption that value players won't catch up on the fresh-food front.
McGuire said that while the economic downturn has changed consumer behavior, the industry's long-term trends are, perhaps surprisingly, not dramatically different than before.
“Nothing has really changed in the fundamentals,” he said.
He cited a number of long-term trends that will help define the industry.
One of those is a “new definition of value, which includes price, but also other things, such as quality and convenience and enjoyment of shopping experience.”
Related to this is the need to “get cost to where it needs to be so you can invest in value.”
Another important trend is format innovation, made more complex by the speed of change. “It's more difficult to have a differentiated format than in the past,” he said. “The amount of copying and catching up means you need to be on top of format innovation. It's not something to do every decade, but every day. Use consumer insights and capitalize on today's real estate market.”