DETROIT — Meijer Inc. largely functions as a brick-and-mortar operation, but the supercenter retailer increasingly is taking cues from tech companies as it implements new ways of serving customers.
That was the key message that Brian Pugh, Meijer’s director of digital user experience (UX), delivered during a panel discussion in Detroit as part of the annual CEO Summit put on by Business Leaders for Michigan (BLM), the state’s business roundtable.
Increasingly, Meijer customers buying groceries and other goods view the convenience factor and on-demand services offered by Amazon.com Inc., Google LLC and Netflix Inc. as benchmarks. In turn, Meijer must use its website, mobile applications and digital services offered by partners as new methods to leverage customer loyalty, he said.
“What customers have come to realize is that they’ve seen great experiences in other areas,” Pugh said during the conference. “And when customers have those experiences, they then look at companies like Meijer and the companies in this room and they expect that same type of seamless, easy experience. So we have to match those expectations along the way.”
Online sales of grocery items still stand as just a fraction of Meijer’s overall sales, about 2 percent, according to Pugh’s estimates.
Still, research from earlier this year suggests online sales could grow rapidly. A January report from Nielsen Holdings PLC and the Food Marketing Institute projects that 70 percent of consumers will be buying groceries online by 2024, leading to a $100 billion market.
“The grocery industry is currently in the age of digital experimentation, where the roadmap on how to navigate and achieve real and profitable growth continues to evolve,” Chris Morley, Nielsen’s U.S. president for fast-moving consumer goods and retail, said in a statement. “While analytics will continue to be critical for retailers and manufacturers to understand the digitally engaged food shopper on a deeper level, a collaborative approach to balancing physical and digital sales strategies is the key to unlocking omnichannel success.”
The “digital experimentation” extends far beyond the grocery retailing industry, as well.
Chris Granger, group president for sports and entertainment at Illitch Holdings Inc., the umbrella company that built the Little Caesars Arena in Detroit, tries to use a “digital first” mindset for everything from ticketing to marketing and how it presents its corporate partners at the arena during sporting events and concerts.
“We really try to bang home what is the digital answer to this challenge,” Granger said during the CEO Summit. “Let’s start there, because that’s where people are.”
To that end, Pugh says Meijer has been focused on ramping up its technology adoption and updating its mobile and other digital platforms almost constantly. Just a few years ago, the company made updates only a few times per year, he said.
“We’ve been focused on digital first. What we’ve realized is that we need to move faster. The pace of innovation and technology in the industry is changing rapidly,” Pugh said. “Right now, we’re going through the process of trying to unify everything on to a single technology platform that not only serves our needs today, but serves our needs in the future and allows us to keep moving ahead.”
While a focus on digital innovations and user experience remains top of mind for retailers like Meijer and entertainment companies like Illitch Holdings and its various subsidiaries, researchers also point out that maintaining the human element of any business remains crucial.
According to a report from global consulting firm PricewaterhouseCoopers, “making technology feel more human and giving employees what they need to create better customer experiences” remains a key element for companies.
“People are increasingly loyal to the retailers, products, brands and devices that consistently provide exceptional value with minimum friction or stress. The challenge: use new technology with purpose to make the experience feel more human — without creating frustrations for customers and while empowering employees,” according to the report.
Pugh said the human element remains critical to fine-tuning Meijer’s various digital platforms.
“The good news is customers aren’t shy,” he said. “They’re willing to tell us when we get it right and when we get it wrong. But if you invite customers into the conversation and focus on that relationship, we find that customers will tell us what their true needs are.”