At Metro, taking care of customers is a process that involves the entire organization.
Leading that orchestrated effort is Marc Giroux, VP and chief marketing and communications officer of the Montreal-based company, which operates more than 600 food stores across Eastern Canada and another 250 drugstores. Giroux oversees the company’s joint venture with Dunnhumby, and leverages the insights of that consulting and marketing services firm to influence everything from product selection and custom-tailored marketing offers to in-store operations.
ABOUT THE AWARD
SN’s Marketer of the Year Award is presented annually to a supermarket executive who has demonstrated innovation and success. Marc Giroux of Metro is this year’s recipient, based on his work with Metro’s loyalty programs and its overall efforts around customer-centricity.
“This is more than personalizing coupons and offers,” Giroux told SN. “This is a new strategic imperative identified by our CEO, Eric LaFleche, when he was named CEO in 2008. In the competitive context of Canada, and in all of North America, really, he identified that we would have to re-energize our customers around a customer-centricity strategy.”
Because of his role in implementing that customer-centric approach at Metro, SN has named Giroux the 2014 Marketer of the Year. The award, sponsored by Acosta Sales & Marketing, Jacksonville, Fla., is being presented at Food Marketing Institute’s Midwinter Executive Conference in Scottsdale, Ariz., this week.
Giroux joined Metro in 2009, the same year Metro signed its joint-venture with London-based Dunnhumby, forming Dunnhumby Canada. The joint venture gives Metro an exclusive partnership for Eastern Canada, and is similar to the Dunnhumby joint venture that Cincinnati-based Kroger Co. has in the U.S., which has helped that chain defend its market share as part of its Customer 1st strategy.
In the U.K., Dunnhumby, which is owned by Tesco, is known for its partnership there with that company.
Giroux, working with Dunnhumby, has been able to implement a unique loyalty program that delivers rebates in the form of checks mailed every three months to customers based on their purchasing behavior. That program is at the heart of the company’s overall communication efforts with its customers that have expanded into what the company calls a “digital ecosystem.”
That system seeks to seamlessly blend the company’s website, sales flyer, loyalty program and mobile app to give each shopper a personalized, and customizable, shopping experience.
To Giroux, that effort is really just an extension of Metro’s long-standing strength as an operator with close ties to the communities where it operates and the people in them.
“The brand is really anchored by proximity,” Giroux explained. “Metro leverages nearly 65 years of service to the community in which it lives, works and serves.”
The use of customer data and insights gleaned through the loyalty program — dubbed Metro & Moi (Metro & Me) — “really makes the brand come to life every day” for customers, he said.
That happens not only through the personalized rebates mailed as part of the loyalty program, but also through merchandising and pricing initiatives that are based on those insights, Giroux explained.
About three years ago Metro also adopted a set of five broad “customer operational promises,” with the goal of using customer behavioral data to improve operations. The company developed a program that would provide a framework for employees to deploy more customer-centric behavior in their work, based on customer insights.
The program encompasses all areas of the business, from HR and finance to operations, merchandising and distribution. It is built around key goals that Metro seeks to deliver for consumers, which are measured monthly through an online survey.
“All of that is rolling up by store, district manager, by vice president, and we review that data on a monthly basis so we can continue with our action plan and deliver it to the consumer,” Giroux explained.
“Those five key promises are pretty simple, but they are the fundamentals of our business,” he said.
The promises are:
• Stores carry high-quality and fresh products.
• Great people, because they activate the promises in the store every day.
• Stores are easy to shop — Metro seeks to provide an easy customer experience in its stores — clean stores, with uncluttered aisles, and ease of getting out of the store at the cash register.
• Customers get what they want — Metro seeks to ensure that it has the right products in the store, and that they are in stock.
• Good prices — meaning that Metro offers fair prices in relation to the customer experience.
Having those “customer promises” in place proves a roadmap for what Giroux described as Metro’s customer-centric journey.
Every three weeks, Giroux meets with executives from operations and merchandising, armed with Dunnhumby’s data analysis to make sure the company is adhering to its customer-centric strategies throughout the enterprise.
“From there we launched and re-energized our loyalty program, and our commercial strategy, and launched customer promises across the enterprise to mobilize our teams on delivering on customer expectations,” he explained. “That began our journey.”
Around those key pillars, Metro elected at the time to review its whole brand strategy and how it has communicated to customers in the market. The revamped marketing strategy was deployed to promote that brand through multichannel communications with customers.
The popularity of Metro’s loyalty program is built around its unique rebate program. The chain mails a check every three months to customers — rebates based on their past purchases at Metro.
Rather than marking products down at the cash register, as most loyalty program do, the Metro & Moi loyalty system uses a formula in which customers accumulate points to earn rebate checks based on their spending. They earn one “m” point for each dollar spent, plus bonus points for buying certain products. They receive a discount for each 500 points earned, which is mailed to them each quarter in the form of a paper check.
“It’s pretty great to receive a check at home from a grocer,” Giroux noted. “Customers have responded with a lot of passion, and given us a great response.”
Nearly 90% of customers who receive an envelope at home open it, Giroux explained.
“The big driver of that is that there’s a check in the envelope that customers want to use to reduce their grocery bill,” he said.
Metro deployed the new loyalty program in September of 2010, and since then has given consumers more than $80 million in rewards, Giroux said. (As a share of the Canadian market, that would be the equivalent of about $800 million in the U.S., he noted.)
Metro does not share data about the specific number of checks that the company mails out each quarter, but Giroux noted that 40% of Quebec households are members of the loyalty program, and most of those are active customers who are cashing their quarterly rebate checks.
The rebate program provides an opportunity to engage with customers and send them relevant product offers, Giroux explained. He noted that 98% of all offers that Metro mails to its customers are unique to those individual shoppers.
“The offers in that envelope are tailored to the purchasing of products that people do regularly in our stores,” he said.
Stewart Samuel, program director at IGD Services Canada, Vancouver, said Metro uses its Dunnhumby partnership and its loyalty program very effectively.
“The partnership with Dunnhumby has enabled Metro to take a much more personalized approach to its loyalty program and marketing effort, generating very specific promotional offers for its customers,” he explained. “With over a million members, it has achieved a high adoption rate in a very short period of time, demonstrating the strength of the program overall.”
One of the key strengths of the program is its simplicity, Samuel said.
“There are a number of ways in which customers can accumulate points which can be converted to money-off vouchers. It’s a simple approach which resonates with its shoppers.”
Read more: Metro CEO Receives Association Award
At the same time that Metro launched the rebate program, it also launched its Facebook page in Canada, which quickly rose to become the most popular supermarket Facebook page in the country, even though Metro is the third-largest Canadian supermarket chain, behind Loblaw and Sobeys.
Giroux noted that Facebook fans were quick to express their appreciation for the rebate program.
“On that Facebook page, customers who received $5 or received $62 expressed the same passion and the same appreciation of Metro,” he said. “So, it’s not the size of the check, it’s the act of sending a check to the home, and saying, ‘Thank you for shopping at Metro, and by the way here are eight to 12 offers on products that you love and use regularly that will allow you to earn even more points and save even more at Metro.’”
Metro extended that strategy with the leveraging of digital technologies this past September.
“The core of that strategy was to say, ‘How can we use digital technologies to simplify the lives of our customers and give them an even more rewarding experience at Metro because they will save even more and they will have even more access to personalized offers,’” Giroux explained.
The digital platform was designed with Metro’s core customers in mind. In 64% of Canadian households, women are responsible for grocery shopping, he noted, and about 73% of women in Canada are in the workplace.
“They have to perform at work, and they still have to make sure that everyone has the things they need at home in terms of groceries, so it’s a lot of pressure,” Giroux said. “What they are telling us is that they are craving ways to help them save time, and that’s what we are trying to do with the new digital ecosystem tools.”
In Metro’s digital ecosystem, the website and the shopping app are thoroughly synchronized. As customers use the tool to plan their weekly shop, they are prompted with deal offers and coupons based on their past purchasing behavior.
Metro conducted extensive focus groups and trials with consumers before launching the program. One of the insights gleaned from those groups led to a simplification of the list-making tool that is a key part of the digital ecosystem. Rather than scrolling through hundreds of varieties of products when they create a list online, shoppers using Metro’s digital list-creation service simply select “yogurt,” for example. The shopper is then notified if there is a deal on a particular brand, and if there’s a coupon available.
“When they prepare their shopping list and write it down on a piece of paper, they don’t write down the brand, and the size, and percentage of fat – they just put ‘yogurt,’ because they know when they are in the store what they want and brands they love,” Giroux explained. “It seems so simple, but it’s an insight that is core to making shoppers’ lives simpler and easier.”
In addition, the list is organized in sync with the layout of the store, which helps to further simplify the shopping experience.
Metro’s database of more than 4,500 recipes is also synchronized with the loyalty program, so that customers see the recipes that are most relevant based on their purchasing patterns and lifestyles.
Read more: Metro First to Use Quebec Organic Labels
“When we talk about personalizing the experience, not only are we talking about personalizing the offers, the coupons and the promotions, we are also now personalizing the content around recipes, around weekly menus, which I believe is quite unique in the marketplace,” Giroux said.
The company’s consumer website — Metro.ca — is now the No. 1 website in Canada among grocery banners, he noted.
“We have seen amazing engagement by consumers in the new platform,” he said, noting that traffic has increased between 45% and 55% since the launch in 2013.
In addition, the Metro shopping app has become the most popular app in the food and beverage category in Canada since it was launched, Giroux noted.
Improving the Flyer
Metro is also using customer insights to improve its sales flyer, which in Canada is even more important to planning the shopping trip than it is in the U.S. or Europe, according to Giroux. About 64% of Canadian shoppers read the flyer before they go to the grocery store, he said.
The company has begun to measure how the flyers are meeting the needs of customers.
“Historically the only measure you had for the performance of the flyer was the lift in sales you had for the item, and the total sales of the banner for the week,” he said. “Today, working with Dunnhumby and using consumer insights, we’re able to use different, new metrics.”
One example includes measuring reach — which is the measure of whether the store is reaching the most loyal consumers with the flyer.
Another metric Metro measures is associated basket spend.
The technology behind Metro’s loyalty program and its new “digital ecosystem” have the company well positioned for the future of digital communications.
- Although the company still mails cash rebates using paper checks, it has the ability to switch to electronic rebates when its customers are ready.
- Its online recipe database, with more than 4,500 recipes, allows for rich interaction around meal planning and preparation with its customers, giving Metro the ability to learn about its customers’ cooking preferences and drive product sales accordingly.
- The rollout of its My Healthy Plate product health rating system to the digital ecosystem this month will give the company a head start on deeper and more meaningful interactions around health and wellness as the program evolves.
“When we put an item in the flyer, we are able to measure not only the lift in sales of a particular item, but we are able to evaluate the impact that it has on the entire basket for consumers,” Giroux explained. “So that gives us the opportunity to improve the performance of the flyer around the reach of the overall flyer, and to see if it is answering the needs of a broader set of consumers, and if it is driving the right behavior of offering a full shop for consumers, or are we being cherry picked.”
Those types of customer insights are helping Metro not only with the performance of the flyer in driving sales, but also in evaluating the performance of the business overall from an execution standpoint.
Metro is also using customer insights to improve its overall assortment strategy. Previously, when the company was drawing up a planogram and deciding which products to stock, its decisions were often impacted by supplier relationships, or else strictly on sales performance.
But Giroux noted that by analyzing the baskets of its best customers, it is able to determine which products are important to them and make more informed decisions about assortment.
He cited an example in which a juice product — he declined to identify the product specifically — was not generating strong sales and was going to be delisted from the planogram. In analyzing customer baskets, however, the company found that the product was important to Metro’s most loyal customers.
“If we had delisted that product, we would have incented our loyal customers to shop somewhere else,” Giroux explained. “And if they would have given part of their shop to another store, they probably would have spent a bigger portion of their budget there.”
Samuel of IGD noted that, “Over the longer term, the insights could be used to help drive better store segmentation, and tailoring for local [assortments].”
Another advantage of working with Dunnhumby has been Metro’s ability to coordinate its activities better with suppliers, he explained.
Through a special portal, suppliers can see what other products customers who buy their brands are buying, and see how things like promotions and out-of-stocks affect customer behavior.
“The data should drive deeper and more meaningful collaboration with its suppliers,” Samuel said, “providing better insights to the impact of out-of-stocks [by looking at product substitutions], and improving promotional spend effectiveness through better targeting of offers.”
Among the newest initiatives rolled out at Metro is My Healthy Plate With Metro, a program that seeks to help consumers make healthier choices. The program launched in October with a product-labeling system that uses smile faces to indicate healthy products.
This month, the program is set to be integrated into the digital ecosystem.
“This, too, was done from a consumer-centric point of view,” Giroux explained. “A large percentage of consumers in Canada have the aspiration of eating in a healthier way. This gives customers new tools to make healthy eating choices in the store.”
Sidebars: Giroux shifts from telecom to retail
Marc Giroux, VP and chief marketing and communications officer at Metro Inc., Montreal, didn’t choose a traditional career path to his current role, in which he is responsible for managing customer-centricity at the company and the chain’s relationship with joint-venture partner Dunnhumby Canada.
Giroux spend 20 years in the telecom industry before joining Metro in 2009, after studying finance as an undergraduate and then technology and marketing in graduate school.
“It’s not a traditional career path, certainly, but one that has been very rewarding for me, and hopefully for Metro as well,” he said.
In addition to the fact that “EBITDA is significantly higher than it is in retail,” Giroux said one of the key differences between the telecommunications industry and food retailing is the speed at which innovation occurs.
“It changes your mindset and perspective greatly, and it requires a different approach to how you approach innovation,” Giroux said. “The biggest difference is the speed at which you need to innovate in telecom is significant. The challenge is not innovating, but the challenge is how fast can you innovate and how fast can you integrate new technologies to deliver consumer value.”
In the mature food retailing industry, by contrast, the business involves controlling margins and “delivering on repetitive processes, and to be able to do that with excellence.”
“The challenge is discovering the biggest opportunity for innovation, because you don’t have the resources to deploy multiple innovations.
“The process by which you need to manage risk in a mature industry like food retail is significantly different than the way you manage risk in an industry like telecom, where there’s a lot of growth potential.”
In food retailing, that day-in, day-out execution must be carefully managed while select opportunities for innovation are pursued.
“That’s what we have been successful at doing for several years at Metro, and that’s what we plan to continue doing, and accelerate in the future,” Giroux said.
Paper checks in a digital world
At the heart of Metro Inc.’s loyalty program is the rebate system that rewards customers for their total spending at Metro and for buying certain products.
Unlike other loyalty programs in which customers receive a discount on certain products immediately at the cash register, the Metro & Moi (Metro & Me) loyalty system uses a formula in which customers accumulate points to earn rebate checks based on their spending. They earn one “m” point for each dollar spent, plus bonus points for buying certain products. They receive a discount for each 500 points earned, which is mailed to them each quarter in the form of a paper check.
Despite the company’s creation of a “digital ecosystem” in 2013 that integrates its website, app and loyalty program, Montreal-based Metro remains committed to mailing the paper checks to its customers every three months — at least for now.
“Our view in the way we manage the loyalty program is to stay customer-centric and stay customer-focused,” said Marc Giroux, VP and chief marketing and communications officer. “Many consumers are not engaged in digital platforms, and we will continue to communicate with them with paper and the mail.”
By mailing the checks to customers, Metro is also able to enclose paper coupons in the mailing that are almost sure to be seen, as the envelopes containing the checks are opened by nearly all of those who receive them.
Giroux acknowledged that more and more consumers, particularly younger consumers, are communicating with the company through digital channels, and he said the company is prepared to engage them in that way.
“We will at the appropriate time communicate more and more with them on digital platforms,” he said. “This is such a powerful tool and process for us, that we want to move very carefully as we move ahead with this program.”
Giroux said Metro conducted tests by offering rewards digitally through the loyalty cards when it first rolled out the program, but it was not happy with the results.
“I think what’s important is that when we do that — and we do have the technology to do that — that we make sure that we do it for the consumers that really prefer to engage on digital platforms,” he said.
Wellness in the mix
Metro introduced a labeling system for healthy products last October using smile icons to indicate products that are healthier choices.
This month the program will be incorporated into Metro’s digital ecosystem, in which the website, shopping app and loyalty program are integrated together. Customers who use the site or the app to create a shopping list will see a smile icon next to the more healthful products they select, and healthy alternatives will be suggested for other products.
The “smile” program was launched with 5,000 products in four groups — breakfast, dairy products, beverages and frozen products. The program, in which the products are indicated to be either “good” or “great” using smiles of different sizes, based on ratings from registered dietitians, will be rolled out in every grocery aisle by the spring of 2014.
“It gives the customers new tools to make healthy eating choices in the store,” said Marc Giroux, VP and chief marketing and communications officer, Metro.
The program was created based on feedback from Metro’s customers, 48% of whom said they look at the nutrition facts table when selecting products.
The My Healthy Plate program will include healthy eating tips in the stores, and well as in the chain’s flyer.
“In short, we want to simplify their life and improve their shopping experience,” said Giroux in announcing the program in October.
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