PROFILE

Mark Heckman

Principal, Mark Heckman Consulting
Mark is a supermarket industry veteran with broad experience based in a mix of retail marketing, brand partnerships, category management practices and consumer research. Over his career, Mark has worked with noted organizations in the supermarket industry to include positions of Director of Marketing Research at Marsh Supermarkets, VP of Marketing for Randalls Foods, MARC Advertising, and Valassis Relationship Marketing Systems. In 1993, Mark led the analysis team at Marsh that composed and presented the Marsh Super Study, which was published by Progressive Grocer Magazine and later became a case study at the Harvard School of Business. In 2006 to 2011, Mark returned to Marsh Supermarkets to lead the marketing efforts at the Midwestern chain as Vice President of Marketing, following Sun Capital's purchase of the company. Upon completion of his duties at Marsh, Mark returned to his consulting practice where he currently works with retailers, marketing services and technology companies to develop sucessful programs and partnerships. Mark is a past member and chairman of the Food Marketing Institute's Consumer Research Committee as well participating in the recent Retail Shopper Marketing Commission founded by Coca Cola and the In-store Marketing Institute.  Mark is a graduate of the Indiana University Kelley School of Business with a BS in Marketing and was honor graduate of the Defense Language Institute, at the Presidio of Monterey, CA. Mark currently resides in Bradenton, FL with his wife Karyn. Visit the Mark Heckman Consulting website and blog...
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  • Posted on: 04/29/2019

    Why can’t Amazon convert Prime shoppers into Whole Foods shoppers?

    I think we might be getting ahead of ourselves by wondering if Whole Foods (WF) and Amazon are misaligned entities. I think it more appropriate to first ponder what constitutes the IDEAL bricks and mortar partner for Amazon and then grade WF as to whether they fit that bill. To be fair to WF, my sense is that the Amazon Go stores are not the ultimate answer either. In my view, a hybrid of "traditional" supermarket is a likely candidate for the ideal, compatible physical outlet for Amazon. Unlike WF, I see this store being no larger than 20,000 square feet to accommodate shopper convenience and containing more traditional supermarket compatible items and prices. This store would smartly limit its assortment and SKU count and offer one that focuses on top selling categories that do not lend themselves to be delivered to the home on a predetermined schedule. The cashier-less checkout would remain a key optional feature. This store would also be equipped with pervasive interactive technology to provide Prime shoppers opportunities to order items for pickup and delivery beyond those found on the shelves. Perishable departments would be of high quality, competitively priced with traditional supermarkets, but occupying much less attention and share of the floor space that a WF stores allocates to them. The perishable offering would be complimented with moderately priced meal solutions. As I and other panelists have maintained in previous RT discussions, WF is really not a "mainstream" supermarket and therefore creating compatibility with Amazon, which is becoming more "mainstream" everyday, will continue to be a frustrating and even painful process. Maybe it's time to stop trying to put a square peg in a round "Whole."
  • Posted on: 04/11/2019

    What does it take to produce promos that pop?

    Certainly when a store is littered with sale tags on hundreds of items every week the impact of each of these deals is diminished over time. Those chains that practice hi-lo promotion and pricing are more likely to see improved lift from their efforts if they have fewer, but deeper discounts and as Jim Hertel suggests, couple those promotions with more targeted, digital overlays. Coming from the supermarket channel, my experience is that there are actually very few, highly repeated items that comprise the list of "key features" or front page items. The other discounted items are pass-throughs from manufacturers who are looking for more volume. Simply reprising these promotions year after year will undoubtedly produce diminished impact given that most competitors are pushing the same items. I call this promotion inertia. As long as everyday pricing is competitive, reducing the amount of deal tags your store personnel must change each week in favor of fewer, but better deals along with more targeted digital discounts is at least one strategy to lower store labor costs and shake up the stagnation that is grocery promotion.
  • Posted on: 04/08/2019

    Should uniform pricing be the norm for large chains?

    Most savvy retailers have aggressively deployed multiple "price zones" even within the confines of the smallest of geographic areas in order to "optimize" margin. In other words, be cheap only where you must and take margin wherever else you can as long as you are not impairing sales. In fact, the essence of major investments that retailers have made in price optimization tools is to do just that. Enter the world of online pricing, where every customer can compare every price, not only among competing retailers, but also within the retailer itself. Nothing will alienate a shopper more quickly than paying more for something at one store and then finding out that another store, even within the same retail chain is offering it at a lower price than you paid. Further, in an omni-channel environment, pricing is more transparent and accordingly so are a retailer's pricing inconsistencies. While it may still be possible to differentiate pricing between online and bricks and between brick's pricing zones, retailers now must exercise extreme caution when doing so. It only takes one shopper experience where prices appear to be manipulated for the sake of margin that will result in not only in a lost sale, but a lost shopper.
  • Posted on: 04/02/2019

    Again, Amazon attempts to shed Whole Foods’ high price image

    As President Ronald Reagan once famously said, "well, there you go again." It appears that Amazon is going to take another crack at a remedy for stagnant sales at Whole Foods. Certainly the higher prices found at Whole Foods are a problem with the rank and file grocer shopper. However lowering prices does not change the fact the Whole Foods is not really a grocery store. It is a specialty food store and the differences between the two are significant in that mainstream grocery shoppers will never see Whole Foods as a viable place to go and buy center store groceries, even with lower prices. This matters because Amazon is a mainstream brand and if there is to ever be clear synergy between Amazon users and its grocery brick-and-mortar outlet, their physical grocery stores must be branded and priced as mainstream and their offerings must be aligned with Kroger, Albertsons, Publix, etc., not Sprouts, Fresh Thyme, and Fresh Market.
  • Posted on: 04/01/2019

    Are third parties the biggest reason delivery costs keep going up?

    I launched a grocery delivery program for a supermarket retailer back in the mid-'90s and the same problem of high delivery costs plagued us then as it appears to be doing now. Whether you use a third party or source internally, the key to bringing incremental costs down is volume. Everything becomes more efficient when you are doing it repeatedly and in large quantities. Vans carrying multiple orders will always be more efficient than the back seat of a car with a single order. While there are logistical elements with delivery that can be tweaked, critical to getting (at least) to a break-even point with delivery is doing more of it.
  • Posted on: 03/15/2019

    Will 5G bring the tech benefits that consumers and marketers expect?

    My guess is that the enhanced speed will translate into more streaming services and more content being directed towards mobile devices and a corresponding shift away from advertising on more expensive, less targeted venues like cable TV. None of this will happen overnight, but those technologists that I have talked to about 5G believe the changes it will bring to both business and personal communications will be dramatic.
  • Posted on: 03/11/2019

    Will Costco’s new $15 minimum wage hurt or benefit the chain?

    Costco, unlike Whole Foods, who felt the need to slash shifts after giving their associates a $15 minimum wage, stands a much better chance of allowing their associates to keep their hours, given their business model. Given their limited number of SKUs and their high average transaction sizes, Costco is clearly banking on keeping the best available associates on board, while continuing to hone in on additional efficiencies to keep SG&A expenses from skyrocketing. With retailers, whose labor productivity is not nearly as high as Costco, (Whole Foods, et al) raising wages too dramatically, too quickly will almost assuredly lead to layoffs, hour cuts, and even higher prices to offset the expense.
  • Posted on: 03/08/2019

    Will new Scan & Go tech turbocharge Sam’s checkouts?

    Sam's and Walmart are both actively reducing the number of cashiers on duty, thus creating an environment for automated Scan & Go or self-checkout to be a welcomed alternative to standing in a lengthy line. Subtle manipulation aside, I agree with the other panelist who believe this is an inevitable step in the right direction, if the technology proves to be accurate and shopper-centric. It should also serve as a harbinger for further change as given the negative impact in the short term on cashiers, who will be well served to expanded their skill sets beyond checking out shoppers.
  • Posted on: 03/07/2019

    Where are grocers failing on in-store experience?

    At the risk of being a bit of a contrarian among the comments of my colleagues, I don't see the contemporary shopper seeking "experiences" from their local supermarket as much as they are seeking efficiency. After spending much of my 30 years in the supermarket channel devising ways to engage, woo and entice shoppers, I eventually learned that most supermarket transactions are small basket mission trips, with the primary goal of the shopper being to get in and get out as quickly as possible. If this were not the case, BOPIS and home delivery would not be gaining ground as viable options. If this were not the case, smaller more efficient formats like Aldi and Lidl would not be gaining market share. While it is an admirable goal to be innovative and engaging, supermarket merchants need to give up on the idea that shoppers have a burning desire to spend more time with them. Merchandise the best selling items to where shoppers can get them quickly. Design stores so that they are more intuitive and shopper ergonomic. Use technology that helps the shopper hasten their trip, as opposed to assigning another task to them while they are on their mission. My experience, bolstered by overwhelming data tells me it's time to change our mindsets as retailers. We should first strive to accommodate shoppers before we give them more reasons to go elsewhere.
  • Posted on: 02/19/2019

    Are disappointing holiday sales numbers a harbinger of things to come?

    December was a very shaky month on the financial markets. The Fed was raising interest rates, (again), and consumers were watching their 401ks lose 10 to 15 percent of their value. Couple that with hearing a constant barrage of pundits talking about the economy slowing down or devolving into recession and the negative impact of tariffs -- it is logical that these factors had an effect on holiday retail sales. Since then, retail has posted mixed but mostly positive results and equities have recovered much of their lost value. Not coincidentally, Walmart just posted great numbers for Q4, beating both revenue and profit expectations. I see the coming year as a continuation of mixed retail results. Weakened bricks retailers will close more stores, but with consumer confidence remaining high, unemployment numbers low, and the Fed taking a more cautious approach to raising interest rates, the overall retail picture for the coming year remains very strong.
  • Posted on: 02/14/2019

    America has too many retail stores

    It is not that we simply have too many retail stores, we most certainly do. Exacerbating the problem is that many of the existing store footprints are too large to remain economically viable as the revenues continue to fragment across smaller, more convenient stores and online alternatives. To the point, if I were any of the retailers whose signature footprint is over 100,000 square feet, I would be looking at contingency plans to get smaller, faster. While there will always be a market for smartly-located big box stores, the number will undoubtedly continue to shrink as shoppers evolve to more efficient alternatives.
  • Posted on: 02/13/2019

    Can Whole Foods’ business afford higher prices?

    Before addressing the immediate question of the impact of raising prices, let it be known that the match between Amazon and Whole Foods was flawed from the very outset. At the time of the acquisition, Whole Foods was struggling with growth and profitability but yet had a very compelling customer proposition for the "foodie" niche. Along with their national footprint which I am sure was a prerequisite for Amazon, the acquisition made sense as some levels. However, the Amazon Prime customer is much more mainstream in their shopping tastes than Whole Foods. This disconnect has always been a limiter in growth development and will continue to thwart synergies between the two, irrespective of pricing policies. As far as raising prices is concerned, it will only exacerbate the gap between Amazon Prime customers and Whole Foods. How could it not? By the way, the retailer always has the option of absorbing price increases from suppliers and maintaining more competitive pricing at the shelf at a lower margin. Blaming price increases on suppliers instead of accepting lower margin rates is, in my opinion, yet another move that Amazon will eventually regret.
  • Posted on: 02/04/2019

    Did Trader Joe’s make the right decision to end grocery deliveries?

    Not every retail grocer needs a home delivery offering. Just as not every retailer can be the low price leader, etc, etc. What Trade Joe's offers is a unique in-store experience and they would be better off investing into new, strategic locations than joining costly and the now frenetic fray of unprofitable home delivery.
  • Posted on: 02/01/2019

    Shopper technology opportunities are the focus of FMI Midwinter

    Technology for technology's sake is not the answer. Advertising screens, kiosks and apps that consume precious shopping time can hinder more than help the cause ... (the "cause" being to make the in-store grocery shopping experience a better use of time and money for the customer relative to all the other options they now have). The first step is truly understanding how shoppers are currently using the store. How long do they spend in-store? Where do the crowds go? What areas are dormant? Which items are producing sales? Which items are serving only for promoting variety and/or receiving brand funding for their placement? From there a cogent plan can be executed to make stores more "shoppable" and efficient. Then and only then does technology help in the process of accentuating the new, more shopper-centric approach to customer engagement. The consideration standard should be: Does this technology help the shopper make quicker decisions, find products they want faster, deliver needed content, and get them on their way at a pace consistent with their experiences in other venues, whether they be online or in-store? If yes, measure the ROI and consider the investment. If no, move on, you are wasting your time.
  • Posted on: 01/31/2019

    Can Domino’s gain customers by offering free pizza for pies bought at rival shops?

    The fact that we are discussing this promotion on RetailWire is proof positive of the inventiveness and cleverness of this move. Time and Domino's pizza sales will tell if this works beyond expanding awareness. There is always a risk when rewarding customers for patronizing the competition. Many moons ago, Albertsons ran promotions financially rewarding shoppers to surrender their competitors' frequent shopper cards, failing to realize how easy it would be for those shoppers to get a new one upon return to the competitive store. The fact that I remember this promotion 20 years later tells me that it had advertising value, even though Albertsons never appeared to gain marketshare post promotion, nor did they run the promotion on a consistent basis. Accordingly, my sense is that when the smoke clears, Domino's will see a small bump in sales from the reward redemptions, but will enjoy no long-term benefit from the effort.

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