In this episode:
Wendy Liebmann talks with Chris Skyers, Vice President of Own Brands for the Wakefern Food Corporation (which includes ShopRite), about the social imperative and commercial opportunity to support under-served communities.
- The importance of access to affordable and healthier options; it’s not just about lower prices
- How important it is to see the whole shopper and their life and not assume lower-income households only look to buy the cheapest product; that premium brands and products need to be part of the offer
- The commercial opportunity – the size of the prize – serving these communities is significant.
- Being a store of the community with services and products the community needs is the real opportunity
- In the end, serving lower-income communities is not just about putting cheaper products on the shelf. It’s about access and choice and inspiration.
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Hello, my name is Wendy Liebmann. I’m the CEO and chief shopper at WSL Strategic Retail and this is Future Shop. This is where I talk to innovators, disruptors and truth tellers about the future of retail. Today, we’re going to talk about the importance of supporting underserved communities, and how retailers and brands can do just that, in fact, must do just that. This is both a social and economic imperative. And it’s also a commercial opportunity. If I may be so blunt. My guest today is Chris Skyers. He is the vice president of own brands for the Wakefern Food Corporation, the largest retailer owned cooperative in the US, he is responsible for overseeing all of Wakefern’s private label brands. I’ve known him from his days of running health and beauty and merchandising. And I think he began in HR. So he has a really unique perspective on this subject, and actually a very personal story to tell us in all of this, which I think is really going to focus our minds when we all get a bit precious and privileged in this space. So welcome, Chris,
thank you so much, Wendy so happy to be here to share my story.
We’ve got half the US population with household incomes under $50,000 a year. And that means there are a lot of people who need affordable access to everything every day, but especially these days, when inflation is running at record highs. You bring a unique personal story to all of this. And I think it gets us off our high horses and into seeing people and understanding what people need from us. Can you talk a bit about that?
Sure Wendy you set it right, all right. So it’s not only the income level, it’s really access as well. So it has to be affordable, and you have to have access. And, you know, I think about the role I play today as leading the Own Brand journey. I think it just lines up perfectly with how I feel I can contribute to society and how I can give back to the communities in which we serve. Because I grew up as you know, very poor, I grew up in Brooklyn, my sisters in the, hey and you know, six people in a two bedroom apartment in Brooklyn, New York, and we did not have great access to food in our communities. When I think about private label back then, it was very generic looking. And you felt that you were buying something that was inferior to the national brands, and it just didn’t resonate as a good feeling when you were eating those products. So I think about my role today and building the brands that we built that at ShopRite. It was with that in mind, it was how do I create something that all communities would be proud of to have on their kitchen table when guests come over? Or their or their feeding their families. And I think we did just that, you know, the beautiful brands Bowl & Basket and Paper Bird. But more important when I think about a shopper that only has $50 to spend what I truly think about is how do I provide them a very high quality portfolio at the best possible costs so that if normally, they would have $50 to spend, how do I allow them to fulfill their needs by spending $40 on the Own Brand portfolio, and then having $10 more of disposable income to either spend throughout the rest of the store to buy more product or to buy clothing, if that’s what they need to clothe their family or other things pay a utility bill. And it’s really with that in mind when I think about the Own Brand portfolio, specifically with my community and thought,
yeah, it struck me too, when you were just saying that I do remember a lot of work we’ve done over the years with value retailers and the dollar formats and that respect that sometimes I think we seem to forget about sorry, me and my high horse, that when somebody walks into the store, whether they’ve got $50 or $500, how do we respect them for the money they have, and treat them with that appropriate respect and value their business in that? That feels to me like it’s the other piece to what you were just saying
it’s really value, right? Because that consumer, let’s call them they’re price dependent, right? So they’re really focused on price price conscious consumer, you know, when we look at our volume, that’s about 30% of our shoppers, our volume that wait for it, and that’s, that’s a significant number. So as much as we need each other, right? So we need to make sure that we’re carefully listening to that consumer and making sure that we’re adhering to their needs, because that customer has a significant impact on our financial survival as an organization. So it’s critical that we’re attending to their needs. And that’s why the portfolio that we’re laying out for them, we think addresses that and it’s not just low priced product, but it’s product that’s also inspiring that they can afford at a discount. When you look at it, we think about premium products. So it’s a premium item, but it’s priced in a way that’s affordable for them, even though it’s a premium item. And we think about our portfolios, that is just as important to have a premium grouping of items as well as the everyday basic commodity offerings that we would have. I think that’s what’s critical, because that shopper doesn’t just think about things as I’m looking for the cheapest item. I’m also looking for something that’s going to excite my family excite myself, as I think about how I want to nourish my family. And that’s
the other piece to that, which I’m always struck with is that sometimes we don’t think about the whole shopper, you know, us we always saying is the shopper in the room, are we really focused on people’s lives, not just this category, this product they’re buying, I remember the conversation with some of the oral care people about how and it was Colgate and I think it was their whitening toothpaste that came out. And it was a premium product. And people said, oh, that will never sell at Dollar General, whatever, pick the name of the retailer, right? And yet it did and it was a very successful product. And it was successful, because when people with less income thought about how they were spending it was maybe they didn’t have access to the dentist, maybe they didn’t have good access to health care in any form. So to pay a premium on an toothpaste was more important to them, because it helped them in in a preventative way. When you think about sort of whole shopping, how can you help companies, our listeners think about that differently?
To me, it’s very simple, you have to think about how do you go about taking care of your family, and what’s important to you. And it’s not vastly different. For someone that’s of lower income, they’re looking to have those special moments for their families as well. One that I can think of are greeting cards, right? So you have basic greeting cards, and then you have greeting cards that are you know, in the five to $10 range. And what we found were that we sold in more of our price driven stores, we sold a lot of you know premium greeting cards, because that was a major gift for that community to really spend a lot on a card and to handwrite in one of those. It’s more expensive cards. But it’s really meeting the moments for those families and everyone tends to look at how do they create that great experience for someone else. And like you said, it could be whether it’s a greeting card, or whether it’s I don’t have enough to constantly get my cleaning every six months. So therefore, I’m going to ensure that I have, you know, flossing every day I’m using the most premium toothpaste, most premium toothbrush. To prevent that. I think that’s important to those families. And the key is you don’t want to limit access, what you want to do is to make sure that you have choices of access. So if you’re going to have a premium brush, let’s say it’s Oral-B, you want to make sure that you have an equivalent Own Brand to help them still experience what a premium brush would look like or feel like. So the key is not just to focus on the high volume core items is to give them a wide range to choose from for those special occasions.
That’s really interesting. And I think about when you open the Newark store and I remember walking down the haircare aisle with you because you I think you were doing health and beauty there. And you had an as I recall a nutritionist I think in the store, there was a tremendous amount of fresh food, you created that playground outside, I think with Colgate or somebody were you with Colgate.
And we had diabetic centers that were created with Johnson & Johnson. And again, we think about that store, the thought of that store was it was a part of the community. So how do we bring as much in that store in terms of what the community might need, and have it in a central location. And what a better place to have it than a place where you go to nourish your family. You can also check on your health, you can also make sure that we created a centralized area for all diabetic medication or diabetic products. We had a nutritionist right on hand to help walk you through, we had a beauty advisor in the store. So when you think about Newark, you wouldn’t think about all these things you would think about them in a very high end area. But for these consumers, this was like for them these were the special moments, or how do we help to create those moments for them to have a beauty consultant. I mean, that’s in the area where you go to shop for your haircare and beauty products makes all the sense in the world to have kind of a one stop shop situation for that community and it’s worked out great. That store continues to do amazing for that community. We’d like to see more of that. Not less
that we have to think about that. That I mean, you know, I’m going to use you now as an advocate for retail at large. And I don’t know if the terms under I think I guess it is underserved because these communities whoever they are, that aren’t getting enough of what they need. So as an advocate But for that, what do we need to think about as an industry as retail and consumer packaged goods companies? As we go forward here?
I think you just have to take the human side of it and not looking at not looking at consumers as numbers, right? But looking at them as consumers, humans, and what do they need to provide for their families, it’s no different than, you know, a household income of 250,000. There’s no different you’re looking to provide for your family. But you might have other options. Depending on your income, the lower your income, more narrow your options become. So as a supporter of a community, as a retail anchor in that community, how do you help to consolidate all of those options that may not be in the rest of the community into your area? Because you’re a central point that the community must go to? Right? So the source of food in a community is extremely important. So how do you tailor your box your building to make sure you can accommodate as much as possible for that consumer to not have them have to travel because sometimes it’s they may not have the transportation to go elsewhere. So it’s very important.
So hold that thought. Before I continue my conversation with Chris, I just wanted to remind you that we have lots of data and insights about lower income shoppers, in all our How America Shops® reports, including our most recent surveys on how they and in fact, all shoppers are dealing with rising prices. We also have lots of examples of how retailers around the world are creating innovative solutions for underserved communities. It’s all just a click away on our website WSLSTRATEGICRETAIL.COM. Now let’s get back to my conversation with Chris. A few weeks ago, I was at a healthcare conference. And I, I was really concerned because there were several CEOs of leading health care companies, were talking about what they were doing around wellness, and it felt a very rarefied view they had about what they were doing. And so of course, I put my hand up and said,” Isn’t that a bit precious”, but when you think about access today, particularly in terms of wellness, and care, what you’ve just described about having this retail space as the hub of some of that, or there’s some other things we both the manufacturing community and the retail community should be doing in this area?
Well, when I think about how we lay out stores, and you know, our role as a provider of nourishment in the community, and I go back to that nourishment, because what you don’t want to do is limit, you don’t want to tell consumers what they should eat, right? So we want to provide access, we want to say, Look, you have choices. But I think oftentimes, we tend to gravitate towards the easy choices, it’s easy to say we’re going to have high sugar cereals, it’s easy to say we’re going to provide soda, it’s the harder choice to say, how do I give my community choices because there’s not access as much access to fresh foods. So it’s important to have a beautiful display of produce and a store, especially in those communities in need. Because that is the one thing that that community may lack the most, you will find soda probably on every in every corner store and a community. But finding great quality produce is something that you will not find. So it’s those harder decisions to say, how do I help to provide a holistic view of nourishment for the community. And that’s going to be our role as the anchor retailer in that community to make sure that we’re consistently providing that even though the community may not gravitate to that right away, it’s the ability to still offer them those options, because they will, over time have a need for those options. The first thing that you’re told when you’re diagnosed with diabetes is you have to change your diet, you have to eat healthier, well, the first thing you’re going to need to do is start to eat healthier foods, which is starts with produce and to not have access will immediately trigger you to go back to eating unhealthy. It’s really making those hard decisions to keep a holistic view of nourishment in those stores and not to narrow it to the higher volume trendy or products that are just the fastest movers. It’s really a different view.
And you know, you have a unique view because of the company that you work with to about local and individual owners as part of a cooperative. I do think a lot about bigger retailers who had it. We talk a lot about localization. This also talks to some of that, how do I understand the individual communities and not just my place as a national retailer or a brand that wants to be 100,000 points of distribution? How can I be more targeted in terms of what I’m delivering again to you when you talk about nourishment for the committee I think about as the physical mental building that sense of community which to me the Newark store did it was people were so excited to come and see it as it was a reflection that they were worth it in that community, which I thought was really powerful at the time,
right? If you remember the video and what the community was just so happy to have it was the fresh food, it was the prepared foods it was the produce, it was the fresh fish in the seafood department, the center stores are given the food area, the dry goods, to given that we’re going to provide those things, you’ll likely find those in other areas in the same community. But what we really brought to that community was the fresh area to help give them choices. And I also
thought, I mean to your point, and you’ve said it before, the additional services, I mean, walking their hair care, I was pretty stunning all by itself. And then to have the beauty advisor and the nutritionist and all of that. And then when you moved into Cedar Knolls, which different community, but you added yoga and all of these other thing yoga studios and things I mean, it was like, Okay, this is a reflection of different community needs. But again, nourishing the body, soul, mind, all of those things as well.
Again, one of the great things about us being a co-op is you can spend time individually as a member in that community. And what I’ve always counseled the members even in the Brooklyn store that we opened, it’s really get engaged with the community, go to the churches, talk to the local governmental support folks and get to really learn what that community needs. And what I would say is because we’re a co-op, our members do that, and they do a great job at it.
The other thing I was thinking about, I’ve heard this conversation a lot recently as some events I’ve been out and speaking out about, oh, in this day and age as a CPG company or whatever, we are premiumization premiumization, we need to improve our profitability, we need to deal with all the supply chain issues. premiumization. On the one hand, that worries me a lot, because I think, wait a minute, what about half the country? On the other? To your point how do I have to sort of balance that special with affordable? Well, I
think it’s balance, and I can only look at it from my view, right. So I lead the Own Brand journey for the organization across all our banners. There are other merchant leaders that lead the total journey for not just on brand, but also national brand. And it’s very important, because national brand is still, you know, 75 to 80% of our volume, right. So they’re very important, the success of our national brand partners are very important. I think what we’re learning is that the ability to offer consumers a choice, you can still have national brands that have tears, but also create very inspiring, and I would say that’s something that national brands have lacked over the years, it’s really creating meaningful innovation versus just another flavor of the same thing. So true innovation, I think is something that our national brand partners could really focus on. But I think having a retailer that has a balance of an own brand portfolio, that helps to give the consumer choices to say, this week, my electric bill came in a little higher, I may need to adjust my food shopping this week. And if they walk into a retailer, it’s great to know that I could walk through the shelf and have choices that I if I true choices I can make and take buying an own brand at a very similar quality. But I can save 20% there, and I might go back to the national brand, or I might enjoy the own brand. Or I might treat the national brand as a special occasion for my family. But it’s that balance. And when you are out of balance, I think what happens is when you’re you’re not able to offer a consumer both choices or consumers both options. I think that’s when you run the risk as a retailer.
So looking to the future, what’s the one or two big hopes from a personal point of view here, I mean, I’m gonna throw something in that they found so distressing on so many levels. In the last couple of weeks at the Tops market massacre (Buffalo, NY), one of the underlying things under that was listening to the local community talk about this was the only place they had to go grocery shopping. And so to have somebody killed people in their community, in that one place seem to fracture so many senses of what’s appropriate or value or what how we think about our communities, but then have people talk about how afraid they were now to go back into that place. And I’m thinking they only had this one place. And to your point, it was considered part of the community. So I mean, I’m asking you to solve the problems of the world here. How do I need to think about that moving forward?
There’s a lot in what you just said, we could sit here for another two hours in chat, right. But I always like what’s core at what that community was saying. And I think it was the core was access. And if you were to ask what keeps me up at night, it’s the consistency of supply chain in this new inflationary global. Do you have are a lot of more rich or companies of countries and those countries are able to import quite a bit more, when you look out and I think about food and offerings, you know, in the years to come, I think that’s going to be tight. And our ability to continue to provide the nourishment that’s necessary in our 45 to 50,000 SKUs consistently to our consumer is going to be extremely important to me, I think about something as simple as, but important as formula, no one thought a year ago how critical access to formula was. And we saw what just recently happened. So my fear is that we will continue to see these gaps in access to our communities. And that is our role as the retail anchor as the provider for our communities, it’s important for us to partner with strategic supplier partners that can ensure that consistency of access, when the it’s one of those things where you can have the most beautiful brand in an own brand. But if you can’t actually get the product on the shelf, it’s all for naught. I think about that greatly,
as I said, tend to get on my high horse and think about these huge social, political, economic issues that define communities and countries. But you know, just being pragmatic, it’s also there’s a commercial opportunity here. If we think as an industry of retailers and manufacturers, about how do we do things differently for all our communities, but especially for communities that don’t have the kind of access you’re talking about,
look at what Neil did in the Newark store. And I talked to Neil because he and I are very close. He’s the owner of the Newark store, by the way, you know, that was essentially a mini food desert. And he went in there and the community has rallied around that store, he created a store as if it was the best shop, right. Ever, he wasn’t thinking I’m going to create a store, because I’m going into a community that has lower household income. And I’m going to create a store based on that fact, only, he went in thinking I’m going to provide the best possible store for that community so that they’re inspired to shop with me. And that’s exactly what he did. And I think we have to rethink how we think about these communities. Because when you harness all the dollars in those communities, just from a financial standpoint, there’s a lot there. As I just said, 30% of our current volume is being driven by consumers that are price sensitive. That’s a huge number, and a very, very important customer to us.
And the truth of the matter is, even as we move into these inflationary times, and increasingly strange, “Stranger Things” times, there are more and more we see in all our current How America Shops® research about inflation and the impact of higher income people who are now having to trade down, cut back, look at all of these other things said this becomes an even more a bigger imperative.
And I’ll just share a little financials with you. And I could share this, just because we are on an Own Brand journey to transition transform our portfolio. But never in my wildest dreams where I think we’d be up 35% last week, as an example, that’s driven by a few things, the inflation that’s taking place, but also the consumer acceptance of the brand, you know, the brand Bowl & Basket, and the thought that I said that they would feel delighted to have that brand represented on their kitchen counter to feed their family at a value. And I think they’re starting to see that. And I think that’s a lesson learned is to say, you can create inspiring brand, you don’t have to go cheap when you’re looking at design and or quality
that is both hopeful, disturbing and inspirational in terms of thinking about, you know, the ability to understand who your consumer shopper community is and what you can bring. And I do remember meeting Neil and I was so incredibly impressed with all the work you did together, including the playground, was that with Colgate tubes of toothpaste or something?
Yeah, it was with Colgate and TerraCycle. Tom from TerraCycle was great and the the gang at Colgate. And essentially, we built it from recycled toothpaste tubes, and we had kids, essentially the plan was, we would have a elementary school contest to win a park. And then for every park, we would win, we would give away one to a community in need. And Newark was actually our first giveaway of a park. I think Colgate has taken that program globally since and it’s one of those programs that I’m so proud to be a part of that journey of that program.
We realized right when we do those sorts of good creative things, we get as much out of it as the community.
That’s my little secret I get more joy than most people would even realize from seeing those things come to life.
Chris, thank you so much for this. I really appreciate it. I know you’ve got many things on your plate these days, including how to get product on the shelves. So thank you for that. Always good to see you and look forward to seeing you again soon very soon. I hope well thank
you so much worthiness great catching up with you and anytime I’m here for you.
She is thank you. What Chris made abundantly clear is that serving lower income communities is not just about putting cheaper product on the shelf. It’s about access and choice and inspiration. And it’s providing what a community needs and aspires to, including innovative products from national brands. In fact, it’s about being part of the community. Companies today so often talk about localization and personalization, and how all their massive data now enables them to do just that. But the truth is, that is not always or ever a replacement for feet on the ground for understanding the emotional as well as the physical needs of a community when much of the US population now struggles to care for and nourish their families. This is really an urgent call to action and you know, truly being purely blunt. It’s also a commercial opportunity for the future of retail. So thanks for joining me. See you in the future.