Not too long ago, Food Lion LLC discovered that business as usual, centered on a one-size-fits-all mentality, simply wouldn’t cut it anymore. The Salisbury, N.C.-based retailer, part of the Brussels-based Delhaize Group, then embarked on a reinvention mission that aimed for survival.
Speaking during the March 25 general session at the Information Resources, Inc. (IRI) Reinventing CPG and Retail Summit: Insights to Impact in Las Vegas, Michael Haaf, Food Lion’s senior vice president and chief marketing officer of sales, marketing and business strategy, said the retailer essentially was squeezed between area newcomer Wal-Mart with its low-price strategy and other retailers known for high-end services.
“We were stuck in the middle,” he said. “Retailers can’t be stuck in the middle and survive.”
Food Lion ultimately chose to reorganize its business around the customer, Haaf said. To do so, the retailer engaged in extensive customer research, ultimately coming up with eight mutually exclusive customer segments.
Although each existing Food Lion store had consumers representing all eight segments, the segment percentage breakdowns varied from store to store, Haaf noted. The retailer then came up with unique clusters of stores to better serve the targeted customers.
The result? Food Lion created the Bottom Dollar Food chain for its customers who are most price-sensitive, Haaf said, and with the Bloom chain concept for its more affluent customers. The Food Lion stores then reflected the remaining customer segments the retailer wanted to target.
Each banner also was given its own “brand personality” that fit in with its customer base, Haaf noted, and a look that differed greatly from its sister banners. Moreover, the Food Lion banner embarked on a major private label initiative.
“The Food Lion private brand is practical and dependable,” Haaf stressed. “We have spent a lot of time on this and worked closely with manufacturers to grow both national brand and private label.”
As a company, Food Lion also created a vigorous test-and-control method to monitor any changes made and their results, Haaf said. So far, so good.
He adds that the journey is continuing: The retailer now is doing work around trip missions, customer needs states, customer relationship management, Web 2.0 and more.