'Our mission is simple — we need to delight our customers'
BOISE, Idaho — Albertsons Cos. has had a remarkable story over the past 11 years, growing from a group of 661 mostly unloved grocery stores into one of the nation’s leading food retailers, with more than 2,300 supermarkets operating under 20 banners and across 35 states and the District of Columbia.
As executive vice president and chief marketing and merchandising officer at Albertsons Cos., Shane Sampson and his team are responsible for seeing to it that the customers who shop with them — regardless of the banner or where they are located — find the products they want.
That job has become more challenging for food retailers, and for retailers in general, due to consumers’ rapidly evolving needs and expectations.
Sampson notes that shoppers today want more options, regarding both the actual products they buy to when and how they buy them. Consumers want convenience, which means expanded offerings of prepared food and heat-and-eat options. But it also means allowing consumers to order their groceries online and either pick them up at their local store or have them delivered to their homes. They also want healthier choices, including natural and organic products. The country is also becoming more diverse, and consumers of all stripes are developing more sophisticated and eclectic tastes. And food preferences still vary significantly by region, which adds another layer of complexity for many national retailers.
“Our mission is simple — we need to delight our customers,” Sampson says. “That means offering them the products they want, when they want them, delivered to them in a convenient way and at a good value.”
In recognition of his team’s success in helping Albertsons Cos. and its banners address those varied and rapidly evolving customer needs, the editors of Mass Market Retailers have named Sampson the publication’s Merchant of the Year for 2017.
Sampson says that Albertsons Cos. has a great team devoted to helping its customers answer the eternal and endlessly recurring question: What’s for dinner?
“We’re expanding our prepared food offerings in our new and remodeled stores,” he says. “And we’re going beyond that in our food service areas, which feature a whole range of take-home and ready-to-eat food options.”
Sampson notes that Albertsons Cos. is focusing more of their meal efforts on hot food items today, including whole roasted rotisserie chickens and fried chicken, as well as in sushi and Chinese food. Other convenience options, including cut fruit and vegetables — prepared in-house in the company’s stores — have also gained traction with customers.
In its bid to boost its share of stomach with its customers, Albertsons in September acquired the meal kit company Plated.
“We’re very excited about Plated,” Sampson says. “We now have a national presence with a meal kit company that has a product that can be delivered directly to your home. And we’re going to start putting these products into our stores as well. So our customers are going to be able to order them online, or pick them up in the store.”
Sampson adds that Albertsons Cos.’ decentralized culture appeals to companies like Plated, which will continue to operate as a distinct brand with its own management team. The approach works in other ways as well, he says.
“If you look at how we’ve built our model, anything that’s behind the scenes, our team at the corporate level helps our divisions handle that, and we leverage our size and scale to be more efficient and keep our costs low,” he says. “That applies to areas where efficiency matters, including packaging, big data and e-commerce. Where we can help our divisions from a size and scale perspective, the corporate team does that so our divisions can be more successful. For things that are customer facing we think that it’s a competitive advantage to have local assortment, and cater to the needs of our local customers.”
Instead of taking a cookie cutter approach to merchandising its more than 2,300 stores, Albertsons Cos. allows its chains and divisions to make their own decisions. That goes all the way down to store level.
“If we treated all of those stores the same, we wouldn’t appeal to all the customers. So we think that part of what we call our secret sauce is our ability to local-assort, all the way down to a particular store.”
One of the assets that helps Albertsons Cos. manage its “think local” approach to merchandising and operations is the company’s innovation center in Boise, Idaho, which allows it to build and test layouts that are store specific — not corporate specific or division specific.
“We want each one of these stores to stand in their own community on their own, meeting the customer’s expectations,” Sampson says.
Albertsons Cos. also has a culinary kitchen in Dublin, Calif., that allows it to develop products at a rapid pace.
“Our culinary team is aggressive in conducting research and development on new products so we can create great in-store options quickly,” Sampson says. “They work with not only our national merchants but our divisional merchants to deliver on regional taste and preferences. They also work with our Own Brands team to develop private label items. It’s a complete culinary kitchen that develops products and ensures proper labeling standards, which are both very important to today’s consumers. They want to know all about the ingredients that are in their products.”
Sampson says the company’s national and local merchandising teams give its suppliers two ways to collaborate with the company.
“Suppliers can go to the Chicagoland area, for example, and they can work with Jewel-Osco to offer chain-specific promotions on local items,” he says. “And at the same time they can go to our Vons and Pavilions chains down in Southern California and offer a completely different competitive set. And if they want a national program, we run several national programs a year. One is the Monopoly program that we run in the first part of the year across all banners nationwide. We believe it’s one of the biggest events in the country, and it offers our customers the chance to win prizes, cash or get in-store coupons for instant product promotions.”
Albertsons Cos. also has an extensive private label program, with what Sampson describes as a talented and dedicated team that handles those brands as if they were being marketed by a large consumer brands company.
“We have the brand architecture and brand strategies, and the sense of where the brands sit in their categories and where they sit in the stores,” Sampson says. “We communicate with our customers through in-store, and through omnichannel media, running the gamut from newspapers to digital influencers.”
Meanwhile, Albertsons Cos.’ dedication to addressing its customers’ interest in what the company describes as NOSHE (natural, organic, specialty healthy and ethnic) products goes beyond its food offerings.
Sampson notes, for example, that Albertsons Cos. has 1,779 pharmacies, and adds that the retailer’s pharmacy patients are among its most loyal customers. So it’s only natural that the retailer would invest in ensuring shopping trips meet their needs.
Albertsons Cos. is investing in the health care space in a number of ways. The company has added wellness clinics in more than 200 of its stores, partnering with local health care providers associated with hospital-preferred networks. The company has also bolstered its dietitian staff and is working to expand the role of its pharmacists. Last May Albertsons Cos. acquired MedCart Specialty Pharmacy in order to strengthen and extend its pharmacy specialty services and participate more in the dispensing of limited distribution drugs.
MedCart is an industry-leading, URAC accredited, pharmaceutical and health care provider of customized specialty care services and medication management for patients and physicians addressing complex diseases. It now operates as a business unit under the Albertsons Cos. pharmacy team structure.
Sampson says that Albertsons Cos.’ various moves, whether in health care or the digital space, exemplify the company’s operating philosophy.
“This company was built on a foundation of and entrepreneurial spirit,” he explains. “We get great ideas and best practices from our internal share group, and our culture, starting with our chairman and chief executive officer, Bob Miller, is to share these ideas and best practices with the attitude that nothing is ever off the table.
“I think that sharing culture is incredibly important today, when the behavior of our customers is changing so fast. The only thing that’s certain is that what was successful in the past decade is not going to win in the future. That’s why you see our company innovating at a very fast pace. Our structure allows us to be nimble and fast, while leveraging our size and scale as a big company. And I think that will allow us to remain a successful and really great company for years to come.”