BrainTrust Query: Living at Wegmans

Discussion
Jul 14, 2010
Bill Hanifin

By Bill Hanifin

Through a special arrangement, presented here for discussion
is a summary of a current article from the Hanifin Loyalty blog.

Josh Stevens is the Groupawn, striving to live off Groupons for one year.
If he’s successful, Groupon gains additional publicity in extreme fashion,
all for the cost of $100,000 — the carrot in front of Josh until May 2011.

I’m
neither a “WegPawn” or eligible for any incentive from Wegmans, but I am considering
moving in for the summer.

Having just toured the East Coast of the U.S., I’ve had the opportunity
to experience the merchandising approach of several grocery chains including
Publix, Trader Joe’s, Whole Foods, Harris Teeter, and a few other smaller
players. In my opinion, Wegmans sits above them all in creating grocery loyalty,
with beautifully organized stores, reasonable prices, a fantastic array of
prepared foods, and a comfortable coffee shop and dining loft where customers
can relax over a meal or pound away on their laptops using the free wireless
internet.

The Western New York grocery chain is not treating customer loyalty
as a fad and begins with staffing. It has landed on the “Best Companies
to Work For” list every year since it began in 1998. The company’s
mission statement outlines three beliefs that define their viewpoint on what
it takes to build customer loyalty and increase intrinsic business value over
time. Some excerpts:


  • “We believe that good people, working toward a common goal, can accomplish
    anything they set out to do.”
  • “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.’ “

One significant difference from other general supermarkets is that rewards
programs don’t drive customer loyalty.

Wegmans discontinued a punch-card style
Coffee Club in 2007 (but still offers refills for $.50) and has de-emphasized
its Shoppers Club, at least in practice. Jo Natale, director of media relations,
shared that Shoppers Club “is still
very much active,” but “since we moved to consistent, low prices
several years ago (in place of short-term sales), there are fewer discounts
overall, because our prices don’t fluctuate as they once did.”

Am
I a Wegman family member? No.

Is Wegmans perfect? No.

Could Wegmans be more creative in collecting and using
customer data to go beyond two-tier customer clubs? Yes.

Despite areas of potential
improvement, is Wegmans the best example I have seen of a grocery chain delivering
on its brand promise and creating grocery
loyalty through merchandising and store design? Yes!

Am I really moving in this
summer? No, I really like my family and will save Wegmans visits for those
on-the-fly email check ups and when I want some really great food!

Discussion Questions: What do you think of Wegmans’ efforts to create customer
loyalty through an enterprise approach that values its customers and employees,
but downplays an explicit rewards offer? What’s the cost of missing any customer
data coming from a more aggressive rewards program?

Please practice The RetailWire Golden Rule when submitting your comments.

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13 Comments on "BrainTrust Query: Living at Wegmans"


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Justin Time
Guest
10 years 10 months ago
The path to success in today’s grocery battlefield is loyalty. While Wegmans’ outlets are fine examples of foodie palaces, similar to the Giant Eagle’s Market District store in Robinson, PA, outside of Pittsburgh, does a customer really need a baby section as large as their local Rite Aid or Walgreens or an incubator growing Boston bib lettuce? Would I choose to live in such a large food store environment? Probably not.  I might get lost finding the rest room, let alone the water fountain. I would prefer a store that has exclusive quality private label brands priced lower and of better quality than national brands and other store brands. A store where I can smell the coffee bean grinds of my favorite Eight O’Clock coffee, a cheese bar that features domestic award winning cheeses, a place where I can savor the smells and sights of authentic Italian food products just like my Dad and Grandpop created from scratch. If you are lucky to have fond memories of such a retail food environment, then chances are,… Read more »
Mel Kleiman
Guest
10 years 10 months ago

We keep hearing and seeing the message over and over again and I have not found anyone who does not agree and put it into action.

“Treat your employees the way you want your employees to treat your customers.”

Wegmens treats their employees with respect, recognition, and loyalty. These employees treat their customers the same way.

Others treat their employees as a disposable resource and their customers treat them the same way.

Richard J. George, Ph.D.
Guest
10 years 10 months ago

It makes no sense to discuss customer loyalty when considering any retailer.  One can be loyal to his family, church, country, and alma mater.  However, the concept of loyalty does not extend to supermarkets.  Instead, companies need to be loyal to their customers.  How? By delivering on the promises made to their customers.

Also, let’s refrain from calling the continuity of purchase cards “loyalty cards.”  Most consumers carry multiple loyalty cards for the same shopping channel.  

I believe Wegmans, through its goal of being …” the very best at serving the needs of our customers. Every action we take should be made with this in mind,” clearly lives up to its loyalty commitment to its customers.  What happens when companies are loyal to customers?  Customers reciprocate by buying more often and more products from such organizations. 

Camille P. Schuster, PhD.
Guest
10 years 10 months ago

This is a great example of a retailer doing what we talk about on this site: valuing its customers and employees. If you understand them and provide what they want in an atmosphere that they like for reasonable prices, you will differentiate yourself and be successful. Kudos.

Ryan Mathews
Guest
10 years 10 months ago

You can’t — or at least you shouldn’t — argue with success. There’s no question the company’s policy of putting human beings first — customers and employees — has paid big dividends.

As to all that “unmined” shopper data, I wouldn’t worry about it. Data is only as good as the systems that it feeds and the use it is given. I have a funny feeling if Wegmans needed more data, they’d figure out a way to gather and process it.

Charles P. Walsh
Guest
Charles P. Walsh
10 years 10 months ago

Wegmans approach towards everyday low prices, employee empowerment, respect, and extreme customer focus should remind us all of another very successful chain that built its business through employee (read associate) and customer loyalty…a little chain we know as Walmart.

Wegmans can’t go wrong, as long as they can “walk the talk.”

Gene Detroyer
Guest
10 years 10 months ago
Yesterday, I wrote, in regard to supermarkets addressing Club competition… “DEAR MR. SUPERMARKET EXECUTIVE, DON’T BE AFRAID TO STUDY THE LIFE CYCLE OF THE SUPERMARKET. Just maybe the supermarket concept is in maturity, or even downturn. After all, the supermarket concept is already 60 years old. That is a very long time for a business concept. Does that suggest that supermarkets, as we know them can’t compete with new formats and concepts? Is the supermarket going to go the way of Five and Dime or even the Department Store? Why shouldn’t it? A consumer who uses the combination of clubs, online and the likes of Whole Foods has very little need for the supermarket concept that so many try to defend. “And, today I can add… DEAR MR. SUPERMARKET EXECUTIVE, GO TO WEGMANS AND SEE HOW THEY HAVE ADDRESSED THE LIFE CYCLE OF THE SUPERMARKET.” My first contact with Wegmans was 40 years ago. They were a leading family run, regional supermarket chain in Rochester New York. Today the same family is running this operation.… Read more »
Kai Clarke
Guest
10 years 10 months ago

Why pay money, incur additional costs, and try to “create” a customer loyalty program when great customer service, offering great products, at great prices will do this for you every day? Combine this with excited and well-trained employees and the keys to a successful business are obvious. Wegmans knows this and continues to drive their success through these basics that every retailer should know, but most continue to ignore. Go Wegmans!

Mark Burr
Guest
10 years 10 months ago
I agree with Mr. Matthews comments, as well as Mr. Clarke’s. In addition, Mr. George is absolutely correct. The sooner we quit calling feeble attempts at managing customers through card activity, the better! Customers manage their own activity and they own loyalty. Should we argue with success? Likely not. Should retailers pay attention and mimic it? Absolutely. Unfortunately, they don’t. They ignore it, argue with it, and worse–attempt to prove it wrong. If you look at several extremely successful retailers, they have a tremendous amount in common. Mostly it has to do with how they train, treat, manage, and reinforce their approach to how they treat their customers. The result is the focus on the customer. Customers know it and reward these retailers with their loyalty. They make that choice each time they visit with all the other choices they have. No card does that, no matter what the savings. One of the things that makes Wegmans’ magic even more admirable is the number of employees per location as compared to most every competitor or… Read more »
Bill Hanifin
Guest
10 years 10 months ago

I find it interesting that 61% of poll question votes wanted grocers to be “somewhat or much more aggressive” collecting rewards program data and leveraging it with CPGs while, at the same time, most of the comments seemed to advocate that grocers can succeed with good customer service and high employee satisfaction. It would be interesting to read a second batch of comments to explain this apparent inconsistency.

The “L” is called into question in the debate and Mr. George should understand that while true customer loyalty can’t be expected compared to love of country and family, the provider industry has debated alternate terms and keeps coming back to “Loyalty.” We know we are talking about data-driven marketing programs, but that term just seems a little dry for ad copy.

Mr. Detroyer, all I can say is “to know Wegmans is to love Wegmans” and you obviously are familiar with their effective marketing approach.

Ed Dennis
Guest
Ed Dennis
10 years 10 months ago

Wegmans is good, much better than the boutique operators you mentioned. But if you want to see loyalty, look a Publix. They too create loyalty without using cards. Their gimmick is they give a damn about everything. They also are very competitive price-wise. Our Local Publix is located 200 yards from a Super Walmart and it was opened 5 years after the Walmart opened.

Ed Rosenbaum
Guest
10 years 10 months ago
I have long expressed strongly how good and effective Wegmans is at being a role model for effective customer service. I first visited a Wegmans location in Maryland maybe two years ago. I was impressed and almost in awe then, and still am today. I happen to be in Maryland today and plan to visit the same location before returning home tomorrow. I am positive the service level I saw then will be there today. Look at the three excerpts from their mission statement. I paraphrase in the hopes of brevity to the readers:Good people working to a common goal can achieve anything they set out to do. Teamwork. Everyone rowing together in the same direction. This spells success. The Container Store, another of my favorites shows their customer world the same commitment. A goal to be the very best at serving the needs of their customers. They walk their talk. They can only achieve their goal by fulfilling the needs of their people. This is an excellent example of paying it forward by helping… Read more »
Odonna Mathews
Guest
Odonna Mathews
10 years 9 months ago

Wegmans creates loyalty by offering a unique shopping experience with wide selection, creative private label products, good values, foods to go, food to dine on in the store, and unmatched customer service and quality. The shopper card is on top of all that so it isn’t their primary strategy, it seems to me.

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