Marketer of the Year Is Consumer Centric

If Diane Dietz could have her way, she would be having face-to-face conversations with all of Safeway’s customers in all of its supermarkets every day, trying to learn how to make their lives easier.

Obviously, Dietz, executive vice president and chief marketing officer at the Pleasanton, Calif.-based company, can’t physically be in all 1,650 locations, but through the use of technology, she is getting closer to approximating that experience. And she is succeeding in making shopping easier for the chain’s customers in myriad ways.

In recognition of her work on the rollout of Just for U, Safeway’s customizable marketing program, and her efforts promoting value and boosting the chain’s image as a health-and-wellness solutions provider, SN has named Dietz the winner of its 2013 Marketer of the Year award.

Diane Dietz, EVP and CMO, Safeway

The award, sponsored by Acosta Sales & Marketing, Jacksonville, Fla., is scheduled to be presented this week at the Food Marketing Institute Midwinter Executive Conference in Scottsdale, Ariz. The award is presented annually to a supermarket marketing executive who has demonstrated innovation and success.

In an interview with SN, Dietz said Just for U was a logical innovation that stemmed from a basic need shoppers have to facilitate their shopping trips, their bargain-hunting and their coupon use, coinciding with the ubiquity of digital media.

“It was an idea that started several years ago as a cross-section of the rise in digital media, and people being very connected through the use of their cell phones and computers, and then this whole idea of personalizing and developing one-on-one relationships with our customers.

“It started with our loyalty program, and it grew from there.”

In presentations to investors last year, Steve Burd, Safeway’s chairman and chief executive officer, described Just for U as a “game changer” that drives incremental sales and provides the backbone for multiple marketing opportunities.

Safeway has exceeded its goal of having 5 million customers register for the program, and in recent presentations with analysts, Safeway has said it has well over 1 million customers who regularly use the Just for U platform.

To use the program, customers can register on the company’s website, where they can access digital coupons and offers tailored to their specific shopping behaviors.

Read more: Dietz Receives Award at FMI Midwinter

Just for U began rolling out in 2010, and Dietz explained that the company took a very deliberate approach, constantly monitoring feedback and making tweaks as needed.

“We looked at it as being in a test-and-learn mode, where we can learn as we go, instead of a national rollout,” she said.

The company enrolled as many of its store-level employees as it could before introducing Just for U to customers, so that workers could provide feedback and help the company make modifications before the program was introduced to the public in each market. Having the employees use it first also armed them with the knowledge needed to assist customers in registering and using Just for U, like restaurant waiters and waitresses who meet with the chef to sample new menu items.

Read more: Safeway Is Counting on U

“We feel that our in-store personnel are the biggest ambassadors for what we do,” Dietz explained. “So hearing from them what worked and what didn’t work was integral to the rollout of this program. We wanted them to experience it just like a customer would experience it.

“The best way to get an advocate is to create a raving fan of your own employees, because they are the ones who are one-on-one with our shoppers every day, they are the ones getting the questions, and they are the ones getting complaints if it doesn’t work. They are very important parts of the whole equation.”

In addition to holding face-to-face meetings and phone conferences with employees to gather feedback, Safeway also monitored calls to its call center to further understand how customers were responding to the program.

Employees were also actively engaged in registering new users for Just for U. Rather than have a sign-up desk in each store where customers would be forced to take the initiative, Safeway took a proactive approach.

Leveraging an idea that actually came from store-level employees, Safeway provided store workers with iPads so they could roam the aisles and checkout lanes, looking for people who had coupons, or who otherwise were interested in the program.

More Personal

Dietz said Just for U takes loyalty marketing to a whole new level, because of the degree of personalization involved for the customers.

“We want to have loyal customers, who have a one-on-one relationship with Safeway,” Dietz explained.

Customers who have the highest affinity for shopping at Safeway often refer to the store as “my Safeway,” and say things like “my store manager,” she noted, so those customers already feel a personal connection to the banners.

Safeway went out of its way to make sure Just for U was intuitive and easy for customers to use. It supplied store employees with iPads to sign customers up as they roamed the aisles, and promoted it as offering extra savings.

“They have that one-on-one relationship with us,” Dietz said. “So we really think the whole idea of personalization, and being able to communicate one-on-one in a targeted way, just resonates with each particular customer, vs. the old world of one-size-fits-all marketing. That’s the Genesis of this whole thing.”

She said the trend toward personalized marketing parallels the efforts being made by technology giant Apple, a company for which Dietz said she has “tremendous respect.”

“Their devices are highly personalized,” she noted. They have your apps, your songs, your playlists — and that’s where marketing is headed.”

Just for U, she noted, “looks at what matters to you,” compared with a traditional loyalty card that gives discounts on an impersonal basis.

“Loyalty cards are great, and I think there was a lot of great thinking that went into the loyalty cards in supermarkets, but this takes it to the next level,” she said.

Opportunities for Vendors

Dietz, who spent 19 years at Procter & Gamble before joining Safeway in 2008, said the company’s suppliers have been “very involved” in Just for U from early on, and Safeway has spent a lot of time trying to understand the value of Just for U for vendors.

She outlined four areas in which the program is attractive to the company’s product suppliers:

During the Just for U rollout, store-level employees were enrolled first so they could work out the bugs, then help customers sign up and use the system.

• New product introductions: If a company is introducing a new product, it can promote it to current users of the company’s other products, who might be more inclined to try the latest innovation from that particular brand.

“The CPGs are always focused on innovations and new products,” she noted.

• Lapsed users: Customers who have been buying products from a particular brand, and have stopped, can be re-engaged through Just for U.

“We can help the CPGs by saying, ‘Here is someone who was a big fan of your brand, and they shifted away,” Dietz explained.

• Affinity marketing: For companies that offer products that span across multiple categories, Just for U offers opportunities for cross-promotion.

In her role overseeing oral care at P&G, for example, Dietz sought to market not only toothpaste, but whiteners, floss and other products. Just for U allows companies to specifically target specific users of their products with offers for related product.

Read more: Burd Plans to Retire From Safeway

• Insight-based marketing: “The last big bucket that has been really fun and exciting is theme marketing or insight-based marketing,” Dietz explained.

As an example, she said that Safeway can work with various vendors to assemble a meal package of various ingredients and offer it to customers as a quick dinner solution, at a discounted price.

“Many customers struggle with what to buy for dinner each night,” Dietz explained. “We can, based on what a customer has purchased in the past, say, ‘Here’s a lineup of products, here’s a deal just for you, and dinner is complete for you tonight.’

“We can put things together based on a theme, and that has been really exciting for vendors,” she said. “We are kind of in the infancy stage of what it is possible to do with this.”

Challenges in Rollout

Dietz described “two buckets” of challenges during the rollout — making sure that customers had the “right experience” while using Just for U, and making sure the technology was functioning properly to support the program.

“We really worked on understanding how to make it as simple and intuitive as possible for the customer, and that was one part of what we were trying to learn as we launched the program,” Dietz explained.

“We also worked on the technical support, to make sure that things were working on the back end, to handle surges online, and handle the complexities involved.

“As we got into rolling it out, we really learned in both areas, but those were the two buckets we spent the most time on.”

Value is about more than just price at Safeway, Dietz explained, but price is still very important — especially given recent economic conditions.

While the process has been smoothed out over time to meet those challenges, Dietz noted that the company was still making improvements.

“We always you learn as we go, and we want to continue to refine and improve as we go,” she said. “We are constantly looking for ways to  improve that experience for our customers.”

Overall, Dietz said Safeway has received a “very positive response” from consumers about using Just for U.

“Along the way we had some bumps in the road, and we had some technical issues, and some things that we had to deal with, and that helped us [improve] and make it a very good experience for our shoppers. It’s very simple, and it’s very easy to use.”

Dietz was quick to credit her whole team — which spans several departments and disciplines — with the success the company has had.

Safeway recruited help in promoting Just for U by introducing it to local bloggers in various markets as the program rolled out. The bloggers, she noted, were particularly responsive to the rollout of the app for using Just for U on a mobile device.

“We went out there and looked for the people who were trying to save shoppers money,” Dietz explained. “Many shoppers look at these folks as experts in that area, so we brought them in to see how they used it, and we did shop-alongs to make sure everything was loaded and working correctly.”

In some markets, the local bloggers — identified by Safeway’s social media team — were invited to hotels to learn how the program worked so they could make the best use of it in the stores and better explain it to their readers.

“They have been a big help to us as we’ve rolled this out,” Dietz explained. “They had a lot of good things to say about it.”

Safeway has also supported the rollout with traditional media and in-store signs. It recently launched a TV campaign promoting Just for U as an opportunity to “move out of a paper world.”

“That’s the insight behind the TV marketing that’s running right now,” Dietz explained. “We would like to continue with that because it is simpler for consumers, and it is on the vector of sustainability.”

The reduction of paper coupons has been one of the primary drivers behind Just for U, Dietz explained.

“We knew going into this that cutting and counting coupons is not the ideal consumer experience,” she said. “Just for U changes that entire experience.

“Innovations are possible when you know what the current dissatisfiers are, and you focus on how to improve that experience. That’s one of the things we are focused on.”

Analysts report that Just for U appears to be driving sales and market share growth — noting that it has gained an increasing share of followers as it has rolled out to various markets during the last two years.

“Based on the encouraging results of our proprietary survey of about 700 Safeway customers, we believe both positive tonnage and operating profit growth could be within reach,” said Karen Short, a New York-based analyst with BMO Capital Markets, in a report issued in September.

She said the survey, which polled Just for U users in 10 major markets, found that almost half of Safeway customers were using Just for U.

“Early skepticism that customers would be reluctant to change their behavior  — e.g., select coupons online that are relevant to the customer before the shop vs. previously having all discounts available at the store — is proved incorrect in our survey,” she noted. “The high penetration of customers using the program is impressive given the relatively short time frame that the company has promoted the program in the more recently rolled-out markets.”

Short’s survey found penetration rates ranging from 17% in Houston to 67% in Washington, D.C., with a total of 48% of Safeway customers registered.

About a third of those surveyed said they used Just for U before each of their last five visits.

Additionally, Short found that about 86% of survey participants found Just for U “easy” or “very easy” to use and 80% said they believe it saves them money.

“Lastly, 86% of the respondents would recommend Just for U to a family member or friend, a clear indication that Just for U is gaining traction,” Short concluded.

Andrew Wolf, a Richmond, Va.-based analyst with BB&T Capital Markets, said Just for U “should continue to boost market share” for Safeway, following the company’s third-quarter earnings report in October when it pointed out improving trends in identical-store sales growth.

“We anticipate that ID sales trends should improve as Just for U continues to mature,” Wolf said.

He noted after a meeting with company management that the Just for U plan was to boost sales per transaction by $8 to $11, and it has achieved double that for regular users.

Offering Value

Dietz also is very involved in Safeway’s extensive private-label program.

“One of the launches we have had during the last couple of years is Open Nature, which I have been very involved with, and that is very exciting, because it starts with where consumers’ needs are, and what can we do to meet those needs,” Dietz said. “There are more and more consumers who want organic, who want all natural, and we thought that was a big opportunity.”

The line was launched in early 2011, and has been promoted with several innovative events, including a “world’s largest picnic table” event and a custom recreational vehicle that toured the country offering samples.

Dietz’s background in CPG helps with the promotion of Safeway’s private brands, which include O organics and Open Nature.

“As marketers we had a lot of fun with it,” Dietz  explained.

Brian Dowling, a Safeway spokesman, noted that one of the aspects Dietz has brought to Safeway is a flair for bringing “buzz” to Safeway’s private labels.

“That’s something we haven’t really done much of as a company, but since she’s been here, we’ve been getting out there and creating buzz beyond the conventional advertising we have done in the past,” he explained.

Dietz also oversaw the Safeway’s Simple Nutrition shelf-tagging system, another way the company is seeking to make shopping easier for the customer, by pointing out products that are gluten-free, have low sodium level, or other attributes.

Dietz also noted that her arrival at Safeway in 2008 coincided with the economic downturn, leading to a massive effort across Safeway to improve its value positioning.

“We have invested a lot of effort to make sure we have great pricing, and we have invested a lot of effort in Just for U, which also provides a lot of value to our shopper,” she said. “The economy is tough, and we want to make sure we are giving great value. Value is more than just price, but price is a big part of it too.”

More Opportunities

Looking ahead, Dietz said she sees a lot of opportunities at Safeway in digital marketing, in clustering assortments for shoppers and in other areas, including ethnic merchandising.

“I think this whole area in terms of Just for U and the digital effort, focusing one-on-one with the shopper — we are in our infancy there, and that will continue to be a big part of our efforts,” she said. “We will continue to try to be as innovative as we can in our space, whether it is with how we reach our shoppers, or how we come out with new private brands.

“With that we are trying to be at the forefront of how media is evolving. There is a role for mass marketing, but there is also a role to start marketing one-on-one with shoppers in a more personalized way.”

The company has enhanced its digital communications team, led by Mir Aamir, who in 2011 was named president of customer loyalty and digital technologies, a newly created position at the time. Like Dietz, Aamir had a background at Procter & Gamble and has been a “fabulous leader” on that team,” she said.

Another big area for Safeway, Dietz said, is in clustering.

“This started several years ago, when I first came to Safeway,” she said. “We want to make sure each store resonates with shoppers in a market.”

She cited wine as an example. While wine offerings have done “very well” in the company’s stores, due in part to the overall customer experience, Dietz also attributes the success to having an offering that is tailored to fit the demographics for individual stores.

“The whole idea of demographic clustering, and making sure we have the right choices for customers, and thinking it through store by store, is another whole area we will continue to focus on,” Dietz said. 

Sidebar: Parallels Between CPG, Retail

Diane Dietz, executive vice president and chief marketing officer, Safeway, and SN’s 2013 Marketer of the Year, said she learned about the importance of having a strong customer focus in her 19 years spent at Procter & Gamble.

“Probably my more formative time there was when A.G. Lafley was CEO, and his mantra really was, ‘The consumer is boss,’” she said. “He really took the focus out from behind the desk and got to know the consumer and what her needs were.”

Dietz said Safeway has a similar consumer-centric focus, whether it involves its Just for U marketing platform or the in-store experience.

P&G is also known for product innovation, and at Safeway she said the company is focused not only on product innovation with private label, but also on technological innovation.

The other significant parallel between Safeway and P&G is the focus on building a team and being a part of a team.

“I have a fabulous team at Safeway, and I had a fantastic team at P&G,” she said.

One key macro-level difference between retail and CPG, she pointed out, is the breadth of the product variety.

“At P&G, I was a mile deep,” she said. “I worked with a small number of categories, but I had to know all the detail there was to know about those categories, looking 10 years into the future, across all retailers in all channels in all countries around the world.

“At Safeway my responsibilities are more a mile wide. I manage the merchandising for all products, I manage the marketing across the company, and even from the private label standpoint, we look at every single category, looking for opportunities where consumers needs aren’t being met, and looking for ways to innovate.”

On the micro-level, she said the speed at which things can be put out into market and tested is much faster at retail.

“In the CPG environment, there are much longer time horizons that you deal with in terms of making new products and developing products,” she said.

“One thing I tell my team [at Safeway] is that it is better to be fast and first than last and perfect. We try out an idea, we get it out there and we learn, and we will have the consumer with us when we learn.”

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