Let’s face it: Grocery shopping is a pain. It takes valuable time that could be used more productively elsewhere. It is such a hassle that by the time you are done doing it, there is often little energy left over to prepare the food that you brought home with you.
A recent AT Kearney study found that only 10 percent of consumers say they enjoy shopping for groceries in store. I suspect that shoppers’ preference for in-store shopping experiences would be higher in any other category of retail.
Recognizing that there is a burgeoning opportunity in the grocery space, Amazon has been working diligently to solve that problem, greatly aided by its acquisition of Whole Foods that appeals to its 100 million Prime member demographics.
Taking an early lead, Amazon has an estimated 18 percent share of the online grocery market at the end of 2017. Most recently Amazon introduced free two-hour grocery delivery from Whole Foods for its Prime members in some trial markets and plans to expand to San Francisco, Atlanta and Los Angeles. In the first quarter 2018, One Click Retail estimates Amazon’s grocery sales grew by $200 million, nearly a 50 percent YoY increase.
Traditional grocers are responding to the online Siren. Target, Kroger, Vons/Safeway, Ahold-Delhaize (Giant and Stop & Shop), Foodtown, Harris Teeter, Trader Joe’s, H-E-B, Costco, Walmart and Sam’s Club are answering the call, as are services like Instacart, Peapod, FreshDirect, Google Express and Yummy.com. The potential for online grocery is tremendous –The Food Marketing Institute estimates online grocery sales will reach some $100 billion by 2025, or about 20 percent of the grocery retail market.
Yet with Kroger, Vons, Ahold Delhaize and the rest working overtime to convert customers to online sales, their efforts might be better spent is learning how to make the in-store grocery store experience better, more rewarding and just plain more fun.
This seems to be the elephant in the room that nobody in the grocery retail business wants to talk about. Maybe because its too hard or just not sexy? However, with less than five percent of industry sales originating online, in-store is where the real money is to be made, now and in the future when 80 percent of sales will still originate there.
Wegmans Is a Different Drummer
Wegmans Food Markets, the Rochester-based regional grocery chain, with a reported $8.3 billion in sales, knows which side its bread is buttered on: in its 90 stores. Wegmans is more than just a good place to shop and work. It is hands down the most beloved supermarket in the country among its customers and employees.
If you’ve never had a Wegmans shopping experience, it is worth the trip. Every time I shop at Wegmans, anywhere I have shopped, the stores are filled with people happy to be shopping there. The excitement is palatable. The fresh vegetable and fruit displays are the best I’ve seen, which is what I personally judge a grocery store by and the first thing you see when entering. The exceptional high-quality and engaging displays extend to its meat and fish counters. And its private label offerings are exceptional quality too.
Prepared foods are also a big part of the Wegmans experience, where customers can pick up dinner from a wide range of choices from sushi, Mexican, Italian or classic American comfort foods. Everything I’ve ever sampled is delish. My millennial daughter-in-law says, “I’d never move anywhere there isn’t a Wegmans.” Apparently, that is a sentiment shared widely. Whenever a new Wegmans store opens, people stand in line to get bragging rights as one of its first local customers.
Wegmans Gets the Love of Customers
The 2018 Harris Poll Reputation Quotient Rankings of the top 100 best-known brands found that #2 rated Wegmans (82.75 points) was edged out by #1 Amazon (83.22 points) by less than 1 point in consumers’ perception of the brand. It scored among the top 5 companies in these five dimensions measured, including products and services, vision and leadership, emotional appeal, financial performance and social responsibility. Plus, it was #1 in the workplace environment.
A recent study by Engagement Labs adds more dimension to consumers passion for the brand. In Engagement Labs study Wegmans ranked second on its list of Most Loved Brands of 2017 among offline brands measuring face-to-face conversations. While online social media engagement is what most brands are chasing, the most powerful word-of-mouth marketing comes from personal, face-to-face conversations and recommendations. Wegmans nails that, as does top-ranked Disney World.
“Ninety percent of the conversations about Wegmans is positive, compared to only 6 percent that are negative,” says Ed Keller, CEO of Engagement Labs. “The offline sentiment for Wegmans has always been substantially higher than the Supermarket/Grocery Store category in general.” It leaves its peers on that list in the dust, such as Trader Joe’s, H-E-B, Publix and Shoprite which follow in order.
That Wegmans’ customer love translates into customer loyalty. A recent survey conducted by Market Force Information among 12,700 shoppers found that Wegmans is American’s favorite grocery retailers, scoring 77 percent on its customer loyalty index. On that list Wegmans ties with Publix for the top honor. In the Market Force survey, Wegmans further gets special mention for its specialty department service.
Wegmans Gets the Love by Giving Love to Its Employees
With so much customer love and loyalty, I reached out to Wegmans to discover its secret. Jo Natale, Wegmans’ vice president of media relations (who says the company rarely grants interviews) was willing to share. “It is our employees, and the incredible service they provide our customers that sets us apart. We hire the best, and we invest in training and development,” she says.
To be first with customers, Wegmans believes it must put its employees first. “In order to be a great place to shop, we must first be a great place to work,” Natale affirms. In that measure Wegmans gets kudos. Fortune just named Wegmans the nation’s second-best company to work for, after Salesforce. There is a noticeable lack of other retailers on that best employer list, which should be a wake-up call to retailers seeking to gain customer trust and loyalty.
Customer relationships start with the people employed in the store and who serve the customers. Wegmans is a family-owned company, now in its 102nd year of operation under the leadership of the third and fourth generations of the Wegman family. The spirit of family extends to its customers, employees and into the community. It is stated in the company’s philosophy that was codified in the late 70s and early 80s:
At Wegmans, we believe that good people, working toward a common goal, can accomplish anything they set out to do. In this spirit, we set our goal to be the very best at serving the needs of our customers. Every action we take should be made with this in mind. We also believe that we can achieve our goal only if we fulfill the needs of our own people. To our customers and our people, we pledge continuous improvement, and we make the commitment: ‘EVERY DAY YOU GET OUR BEST.’
Acting on its commitment to staff, Wegmans devoted $50 million last year to employee development, according to Fortune, including structured programs to help employees grow into management positions and develop culinary skills. Wegmans sets aside $5 million for scholarships. The company says, “More than half of our store managers have worked with Wegmans since high school or college, starting as part-time cashiers, and many completed their education with help from our Scholarship Program.”
Its mission of “helping people live healthier, better lives through food,” is something that its nearly 50,000 employees can believe in. In addition, Wegmans offers a workplace that welcomes diversity, recognizing that by employing people from all different backgrounds it gains different perspectives and credibility with a diverse customer base. “We believe that diversity inspires new ways of thinking and innovation,” the company states. Its proactive stance in attracting different types of employees with diverse points of view, experiences and backgrounds puts at No. 8 on Forbes list of America’s Best Employers for Diversity.
Wegmans Spreads the Love
The company also touches people beyond its stores in the communities it serves. It donates food to the hungry, upwards of 15 million pounds of healthy food last year. It also donated $7.4m to local community-based non-profits and engages with the United Way through company, employee and customer donations to the tune of $6.4m in 2016.
That level of community outreach and support is something everyone affiliated with the company can feel proud of. The company states, “We’re committed to improving the lives of our customers and employees in every way we can.”
“And in the end, the love you take is equal to the love you make” – The Beatles
By putting people first, starting with its employees who personally deliver the products and services to the customers, Wegmans has garnered love and loyalty from both. Wegmans understands that in this age of Amazon, physical retailing now is a people, not a product business. That means retail success is less about what you sell and more about how you sell it. The secret is to put people first.
Wegmans’ customer loyalty is built upon a foundation of employee loyalty. The love people feel for Wegmans, both from its customers and employees, results from the love that the Wegman family feels for the people it serves (customers) and the people who serve (employees). And that love extends out into the communities it serves. There is no higher compliment than to have people say, “I love shopping at Wegmans” and so many, many people do.