Provigo, the Quebec grocery banner, was indeed a retail star in the ’70s and ’80s.

But for most of the past decade we haven’t heard much new from Provigo. When we did, it was usually news items such as the one back in 2006 when owner Loblaw Companies announced that it was closing a slew of underperforming Provigos.

But now, Provigo is making a comeback. It could even become Loblaw’s primary conventional grocery weapon in La Belle Province.

According to an article in the Montreal Gazette, Loblaw intends to convert its stores in the province to Provigo.

That assertion came from an unnamed “knowledgeable” source, according to the article.

I doubt Loblaw is planning to convert all its Quebec stores to Provigo. But it would make some sense to switch the approximately 38 Loblaws bannered stores to Provigo.

Why? Loblaw is investing a nice chunk of money to re-energize the Provigo brand. The banner has a new sponsorship deal with Quebec’s beloved Montreal Canadiens, in addition to other marketing initiatives.

READ: Provigo hopes to score with Habs

There are 78 Provigo stores in Quebec at the moment so why not go with one banner and throw all the marketing dollars behind it, rather than split branding efforts between two conventional store brands? Provigo may be the better choice because it is a Quebec institution. Loblaws, historically, was an Ontario brand.

One reason Provigo didn’t get much attention in the last few years is Loblaw was focused on getting its discount Maxi and Maxi & Cie banners ready to compete against Walmart, which was gearing up to introduce its full-grocery Supercentre format to Quebec.

With Walmart now in the province for two years, Loblaw is turning its attention to Provigo. Not only are the stores being upgraded, but many Provigos are being turned over to franchisees as well.

READ: Loblaw to spend $100 million in Quebec

Meanwhile, the first new Provigo store in years is set to open in Sherbrooke this summer.

If all works out, Loblaw could have a hit on its hands–one sung by a familiar star.

Comparatively, Loblaw, Sobeys, and Metro each recorded a CAGR of less than 3% during that period.

This solid growth is expected to continue over the next five years. Kantar Retail forecasts Costco Canada’s sales will reach $21 billion by the end of 2017. This is supported by club expansion, as the retailer is expanding its base by 3.7% to reach 85 locations this year. Looking ahead, they have indicated plans to reach up to 110 clubs nationwide.

Despite this pipeline, its shopper reach is already impressive at more than nine million Canadian members. Moreover, a national survey by TNS Canada found that 27% of Canadians reported that they “regularly shop” at Costco for groceries and consumables.

This club is clearly popular.

To better understand what’s driving Costco’s appeal, both in Canada and abroad, I interviewed Kantar Retail’s clubs channel expert, Sara AlTukhaim. She explained that the club’s position is driven by much more than simply the value proposition of its big packs, though that certainly helps. To abridge what could easily turn into a deep conversation, below outlines some key points of Costco’s unique position:

Edited brands, strong private label: Offering a limited assortment of roughly 3,500 SKUs, the retailer’s assortment simplifies the experience while promising quality national and control brands.

Localized offering: Costco’s regional buying structure helps its merchants select the right items for the area, adding its ability to curate the assortment for its members.

Rotational, treasure-hunt mindset: Frequently changing the offering, while encouraging a sense of discovery via unique general merchandise and a lack of navigational signage, creates a distinct sense of excitement while shopping the box. This also creates the impression that the club has more items.

Quality fresh proposition: Costco is recognized as having a strong fresh grocery proposition, particularly in meats. For instance, an April 2013 TNS Canada survey found that 81% of Costco’s shoppers were satisfied with the quality of fresh items at Costco, whereas only 70% of Superstore’s shoppers felt satisfied with the Superstore’s fresh offering.

Favourable word of mouth: Instead of depending on traditional marketing techniques, Costco’s avid members are renowned for sharing their experiences and finds with their networks, furthering a sense of “in-the-know” exclusiveness around those connected to the club. This reach has only grown stronger with the proliferation of social media platforms.

For suppliers looking to grow with Costco, AlTukhaim also stressed the importance of understanding its distinct operational model to really align with its leadership’s motives.

Despite the simplicity of its model, its uniqueness poses one of the biggest hurdles to selling Costco: The internal sell.

Is your company a good match for goods to person automation?

Historically, distribution automation technology has focused on automating the movement of full and partial pallet unit loads.

Today we have proven solutions that can automate full case distribution centres, as well as partially automated split case distribution operations.  To my knowledge we still do not have solutions that fully automate the process of order selecting split case merchandise but I know that they are diligently working on this.

Most goods to person systems are designed to semi-automate the distribution of split case merchandise, meaning that the customer is ordering less than a full case.

Having said this, there are some GTP solutions that also have the flexibility to handle both split and full case merchandise within the size limitations that the system can support. Due to the fact that GTP technology requires a relatively high up-front capital investment, we believe that the following operational characteristics need to be in place in order to consider this technology:

1)     A minimum of 5,000 order lines per shift to be processed from the GTP system.

2)     A minimum of two outbound shipping shifts per day

3)     Split-case merchandise that can fit within a standard tote/tray (i.e. product dimensions need to be within reason).

4)     Merchandise weight per tote/tray needs to be reasonable such that the entity being handled does not exceed specified system weight constraints (typically in the range 80 to 100 pounds)

5)     The system ROI is improved as fully loaded warehouse wage rates increase hence companies that have high cost warehouse labour are ideal candidates.

6)     Again, the system ROI is improved where there are serious warehouse space constraints and/or the cost of warehouse space is high.

A look at Swisslog AutoStore

This solution was originally developed in Norway in the 1990s.  It has since been implemented in Europe at about 20 companies and has recently arrived in North America.

I believe that this technology is ideally suited for companies that need to distribute a high number of slow moving split case SKUs that are small enough to fit into a 15.75″W x 23.6″D x 12.2″H tote.

Companies that have invested in this solution include manufacturers and distributors of electronics, components, fasteners, industrial supplies, apparel, and medical supplies.  Within the grocery industry, Asda (owned by Walmart) acquired a massive system in 2012 for their Leicester, U.K., depot.  This system consists of 70,000 storage bins, 12 goods-to-man picking ports and 160 robots.

The system is basically one big dense cube of storage made up of adjacent vertical stacks that are columns of 16 bins high. Each bin can store one or multiple SKUs subdivided within the bin.

The size and shape of the grid can be adapted to any existing facility and can work around existing building columns. To store and retrieve the bins, a set of battery-powered robots move horizontally along a rail grid that resides on the top surface of the self-supporting storage system. Each robot is equipped with 8 wheels so that four are used when traveling along the X-axis and the other four are used when traveling along the Y-axis.

The mobile robots themselves are not that big–they have similar dimensions to the bins being stored. Each robot is equipped with an extended hoist apparatus that vertically lifts bins from within each vertical stack to the top of the grid. The robot itself stays on the aluminum grid rails at the top of the modular storage cube. The robot’s hoist has a set of four steel bands that descend into the vertical stack to “grab” the topmost bin within the stack.

The robots essentially dig into the columns to get the tote that is needed for a picking assignment.  Once the tote is retrieved, it is lowered down a vertical shaft to the picking work station.

Order selectors work at an ergonomically designed pick station that can be designed to support the picking of one or multiple orders concurrently.  Bins can be presented to the operators at varying rates of between 250 to 1,200 per hour. The selector picks from the bin and then puts to the set of orders being picked which is governed by put to light technology.  Completed orders are usually pushed off to a conveyor for transference to packing/staging/loading.

Key benefits:

1)     High storage density up to 16′ in height

2)     Eliminates travel time for storage, replenishment and picking functions

3)     Highest levels of  efficiency and accuracy

4)     Flexibility to expand system to handle higher throughput volume

5)     Ability to deploy in existing buildings

6)     No single point of failure–easy to deploy spare robots.

For a highly detailed and unbiased overview of this application you can click here for more information.

To better understand how Canadians feel about small businesses, American Express Canada recently conducted a national survey, the American Express Shop Small Monitor. The survey found that 94% of Canadians believe that it is important to support small retailers, restaurants or businesses.

The survey also revealed 88% of Canadians admit to feeling good when they choose to shop at a small business.

Here are a few reasons why consumers choose to purchase their food locally:

Personal relationships with store owners. When we shop for local foods, we get the satisfaction of knowing that we are contributing to our local communities and economies. Eighty per cent of respondents said that they like to establish relationships with local store owners.

Contribution to local neighbourhood.  Deciding where to live is a tough choice for many Canadians taking the leap into homeownership. They indicate that an active neighbourhood shopping district is a primary factor for where they choose to live. In fact, 81% of respondents feel they owe it to their community to support the independent small business on their local main street, and 92% of respondents agree that their local small businesses contribute to their neighborhood’s culture.

Unique products and services. Having quality products are essential for customer service and will have them returning to your shop with their business time and time again.  The Shop Small Monitor found that 68% of Canadians agree that they shop small for unique products and services.

Taking these consumer sentiments into consideration will be helpful when looking for ways to build and expand your customer base in your store’s neighbourhood.

The way consumers view and rely on their local establishments is an important insight to harnessing long-term loyalty.

But all of this convenience has led to a Canadian diet filled with processed, high-sodium foods with lengthy ingredient lists most people cannot pronounce. Chronic disease and obesity are skyrocketing and these processed foods are the No. 1 culprit.

Canadians are now re-thinking these convenience foods and are demanding healthier options—but that doesn’t mean they have more time to cook.

Instead consumers are searching for simple ingredients that can be quickly turned into a healthy meal.

Fresh cut produce is the best example of this. The fastest growing sector of the produce industry, pre-washed and fresh cut vegetables and fruit allow consumers to pick a healthy ingredient and turn it into a meal without having to spend the time washing, peeling and chopping. They just toss it in a bowl or a pan and a meal is on its way.

Consumers are willing to pay more to save time, especially if they feel confident they are purchasing a healthy food. And retailers should feel proud about providing this service to their customers—cabbage is still a fibre and nutrient-rich vegetable even if it’s pre-washed and shredded.

Another growing category is pre-marinated meats, poultry and fish. These value-added items provide a convenient way for someone to ‘cook’ at home and get a meal on the table in 20 minutes.

It is key to consider the ingredients in the marinades though—consumers are looking for simple ingredient lists of foods they could have in their own kitchen and are also conscious about the amount of sodium in products like these.

With this category of convenience foods changing so rapidly, retailers need to meet the needs of consumers and provide healthy, ready to cook ingredients that can make a meal quickly.

What does this have to do with engaging the consumer you ask?

A large part of the educational process is on the package but the retailers can help with that educational process by encouraging more in-store activities that are interactive and engage the consumer.

Engaging the consumer, may it be brand or retailer, is very important in attracting, building and maintaining a loyal consumer.  In other words, if the consumer is engaged, meaning if they are interacting with the products, this will create a more educational if not more enjoyable experience and they will come back.

The most common engagement is through in-store demonstrations which are nearly always in the form of sampling – the “try before you buy”.  What about those products that are not about how great they taste or that are not foods or beverages?

If we look at this activity from a more educational perspective it should be viewed more as simply getting the product in the mouth or hands of the consumer.  Providing more information, or other visuals will help to make the demonstration more effective and ultimately more educational.

Have you ever been to a fair where a new kitchen gizmo is being demonstrated –“it slices, it dices…”, or a new floor cleaner or detergent?  Crowds often gather to “ooh” and “ah” at the wonders of the demonstration and inevitably people will buy these gizmos that will end up sitting in the closet unused.  This was all because they were dazzled by the demonstration.  How is a grocery store any different from these fairs?

It is not realistic to think that the in-store demonstrators will be as well trained as those at a fair, but providing supporting signage or displays will supplement the product interaction.

Let’s use the in-store sampling of a new whole grain cracker as the example.  Sampling the cracker on its own might not be very memorable nor interesting, and sampling with something might divert attention away from the cracker and highlight the topping more.  The key is to have the consumers focus on the cracker but engaging them more than just feeding a hungry customer with a product that they will neither remember nor buy.

Provide more information with a sign highlighting key selling points, or a display of types of grains that to drive home the point about real whole grains.

Can you point out that the grains are grown in Canada?  What are the benefits of that ingredient?  Are there any other features of the product you want to highlight?

Both the retailer and the brand win because they have provided an additional service but more importantly they have engaged the consumer in a conversation.

Not every demonstration will be a hit but by consistently providing this type of education consumers will look to the retailer as a source of information and not just the place where they buy their groceries.

If not, the image (at right) is their cover photo highlighting their Canadian DEWmocracy campaign.  In short, DEWmocracy is Mountain Dew’s social media campaign that leverages their fan base to help choose a new flavour to complement their current assortment. The fans and other engaged consumers vote to decide the fate of the four pre-determined flavours.

These four alternatives are: Code Red, White Out, Voltage, and Super Nova.  The winning flavour becomes a limited time or a regular offering depending on feedback and sales.

While product launch campaigns of this type have usually ended miserably, Mountain Dew product launches have traditionally performed well.  The DEWmocracy campaigns have been done before south of the border – twice – and both have ended successfully with a new popular flavour hitting store shelves.  Whether it has become a mainstay flavour or a limited time offering, it has succeeded in creating excitement for the beverage brand among consumers.

But that was the U.S., and this is Canada.  Will it meet the American success levels, or will it fall short of expectations?

A consumer uploaded image from the Mountain Dew Canada facebook page.

The Canadian DEWmocracy campaign is decidedly different from the American version, and therefore will translate very different results.  However, the fact that it has history to leverage and examples of best-in-class marketing execution should definitely bolster its chances of success.

Mountain Dew wins here because some of these flavours were part of the American DEWmocracy (ie. Super Nova and Voltage) that were previously voted on, and even a past winner (Voltage won the first DEWmocracy).  That said, there is a certain level of expected success for these flavours for the Canadian DEWmocracy contest.

What helps is that there already exists strong social engagement on Facebook and Twitter backing some of these existing flavours, so there promises to be even stronger engagement as the contest progresses.

The end result is a lower percentage of product launch failure.  This would likely represent one of the safest product launches in recent history, since whatever flavour wins DEWmocracy will experience its steady flow of sales from its voters, while also capturing some of the other voters’ dollars in the process.

Retailers that stock these flavours will see a measurable level of success as well.  Given the media support that Mountain Dew puts behind this product introduction and the existing interest among Dew drinkers, the retailer can also expect to see stronger sales than other product introductions.

Consumers definitely win here because they put their money where their votes are.  The winning product will be the most preferred Mountain Dew line extension among the Canadian Dew drinkers.

Some cult followers may even breathe a sigh of relief since they no longer have to drive across the border to purchase this extension (if it’s also the winning flavour that won the American Dewmocracies).

Using social engagement efforts to drive a product launch can be a hit or miss, more often misses.

The misses have been chronicled and Mountain Dew was one of these misses as well from their “Dub the Dew” campaign.  However, Mountain Dew’s DEWmocracy has been successful the last two times so there is no reason to believe that it won’t be seeing some level of success when it explores launching a line extension in Canada.

When we started talking to people around the country, we found that they didn’t need us to tell them that fruits and veggies are good for them, what they really needed were easy ways to incorporate them into their meals and snacks.

Along came Fruits and Veggies – Mix it up!, a campaign aimed at helping Canadians of all ages eat more fruits and veggies, as part of a healthy lifestyle.

The campaign focuses on simple and practical ways to add a variety of fruits and veggies to every meal and snack – whether at home, at work, at school or on the go.

The message is delivered to Canadians through a variety of channels: online, Education Materials – including the Freggie Children’s Program–television, radio and POS materials for retail.

Consumers are more educated than ever before and are looking for information on how they can improve their diets and health.

An obvious starting point for many consumers is their local grocery store.

A well-stocked, inviting produce department featuring a variety of choices encourages shoppers to include more fruis and veggies in their baskets.

Shoppers frequently comment that sampling produce before buying has a large influence on their purchase decisions and their willingness to try new products.

Knowledgeable produce department employees and value added products that provide consumers with healthy options and convenience will provide growth opportunities for the produce industry.

The healthy eating trend is also being seen across the foodservice industry as chefs include more produce on their menus.

More than ever before shoppers will be looking for these new varieties to be offered by their local grocer as well as at their favourite restaurants.

With so many fresh produce choices available to Canadians it is easier than ever to make healthy food choices if they Mix it up!

I was fortunate enough to be among the panel of judges from around the world that The Grocer’s editors asked to provide input. Considering all the superb grocers around the world, recommending one over another was not easy.

As you might imagine, the Top 50 included a who’s who of supermarket and convenience chains. Many are well known to anyone who travels frequently or who has worked in the food business for a while. For example: German discounters Aldi and Lidl, American grocers Publix, Wegmans, Whole Foods and Trader Joe’s, and big British chains Sainsbury’s, Mark’s & Spencer and Waitrose.

In case you’re wondering, one Canadian grocer did cracked the Top 50: Loblaw Companies, largely on the strength and innovation of its President’s Choice private-label brand and the enduring popularity of its No Frills discount format.

But the list also included a number of companies you may not be that familiar with. Here are a few I think we should all pay attention to–and perhaps visit next time we drop by their countries:

Oxxo: This Mexican and Columbian convenience chain, owned by a Latin American Coca-Cola distributor, is opening a new store every 12.5 hours. Wow! Oxxo is known for private-label innovation and prepared foods. At the end of last year it had some 10,600 stores.

Dia: Spain’s economy may have imploded but that hasn’t stopped this discount chain from growing. Profits rose 55 per cent last year. Dia is known for its sophisticated loyalty program and was among the first grocery retailers anywhere to do a good job mining loyalty data. As well as operating in its home country of Spain, Dia has expanded to Portugal as well South American countries Argentina and Brazil.

Alfamart: Convenience stores are all about immediate need. So what to make of Indonesia’s Alfamart, which launched an online shopping program earlier this year? Customers can have goods delivered to their home or pick them up at their local Alfamart.

Fairway Market: Up until recently the stock prices of many American grocery chains haven’t been all that stellar. So why would a small grocer in New York City (just 12 stores) want to go public? Because Fairway Market figures its mix of conventional grocery products with a heavy dose of gourmet and organic offerings is just what shoppers want. The company went public this week and figures it can open up to 300 outlets across America.

La Boqueria: Some of the best food stores in the world aren’t stores at all. They’re outdoor markets. Case in point: Barcelona’s La Boqueria, described as “gastronomic temple” of fresh meat, fish and produce. More than just a market, it has its own cooking schools. If you’re in Barcelona you should probably check out the city’s biggest tourist attraction, the Sagrada Familia basilica, first. But put La Boqueria No. 2 on your list.

There is no doubt that grocery retailing is being impacted by mobile-based technologies and innovations. Both retailers and manufacturers continue to take advantage of mobile as a tool for enhancing, and adding to, the in-store shopper experience.

Experimentation underway on a global scale

While its application here in Canada has been relatively limited to date, there continues to be a great deal of experimentation worldwide. Mobile is being used to power initiatives such as scan and go shopping, NFC (Near Field Communications) initiatives, loyalty cards, and to engage with shoppers through time-bound offers which are designed to excite and inspire.

Walmart moving quickly with ‘Scan & Go’

In the U.S., Walmart has recently been making the headlines as it rolls-out its ‘Scan & Go’ initiative to around 200 stores across 12 markets. This had previously been on test in the Atlanta and Arkansas markets, and if this extended test proves to be successful, it could very quickly be scaled up across its U.S. business. And, of course, international markets could then follow on. It has already been innovating with mobile payments in Chile and mobile shopping in the U.K.

NFC gaining traction in France

NFC technology offers an array of possibilities in terms of transforming the way shoppers shop. At a basic level it enables smartphones to scan products into a basket, access extra product information and promotions at shelf, and pay – all contactlessly. While the technology is still in early development stage, we are seeing a growing number of retailers trialling it in-store, particularly in France.

French retailer Casino launched its mCasino NFC shopping app last year and a unique NFC trial store in Paris, as a test to understand how best to use technology to make shopping easier for its customers. Shoppers are able to pay via a dedicated fast checkout, saving them time queuing, which is proving particularly popular. What remains to be seen is whether shoppers really want all the additional information and messages made available when scanning products, while multiple operating platforms for smartphones remains a barrier to wide-scale adoption.

Loyalty usage increasing on mobile platforms

While loyalty programs remain popular with shoppers, forgetting your card remains the main reason for not having it swiped. What’s the chance that you go shopping without your smartphone? It’s exactly this thinking that has seen a number of loyalty programs migrate to, or launch as, mobile based programs, often with the goal of being a card-less solution.

Walgreens recently further enhanced its popular smartphone app by syncing it with its new customer loyalty program, Balance Rewards. Members scan their mobile device at the checkout to earn points and savings, and to redeem rewards. Safeway has also seen big wins with the launch of a mobile app for its Just for U loyalty initiative, with usage rates 50 per cent higher for mobile users compared to desktop based users.

Careful, you’re about to be hijacked!

Mobile has also been used to hijack shoppers, not in the conventional sense of course! GPS technology is being used to encourage shoppers into store and lure them away from competitors with time-bound promotions based on their locations. Meat Pack, a shoe retailer in Guatemala, tracked customers in a shopping centre and were sent a countdown discount to their smartphone when they entered a competitor’s store.

The countdown discount started at 99 per cent, counting down 1 per cent each second until they entered the Meat Pack store. Whatever the percentage on the phone when the customer entered the store was the discount they received on their purchase. Over 600 customers raced to the store, with the highest discount received a massive 86 per cent.

See video here of the Meat Pack hijack:

Time-bound promotions work great on mobile

Offering a free product with a time-bound coupon is a great new way to incentivize product trial, and could be used by both retailers and manufacturers to entice shoppers. In Germany, McDonald’s ran a ‘McSundae Melt’ campaign, using billboards and mobile technology to promote an offer that expired if shoppers didn’t rush to receive it. The billboards featured a QR code that users could scan to download a coupon for free ice cream at their local McDonald’s. The user’s smartphone directed them to their nearest restaurant, which they had to hurry to reach, as the coupon (which appeared as an image of a McSundae on the smartphone) appeared to melt as time ran out!

Mobile payments close the loop

We’re clearly in a phase of trial and experimentation as both retailers and manufacturers make investments in this area. At the moment the focus is very much on understanding what resonates best with shoppers, measuring the return on the investment and understanding both what’s possible and the limitations of the technology.

As mobile payment solutions and mobile wallets develop further, the whole process of mobile shopping, loyalty and promotions will become more integrated. Combined with the added convenience and speed of shop, it is likely to become an attractive proposition for shoppers.

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