From Consultant To CEO: Neil Stern's Journey At Good Food Holdings
Neil Stern, CEO of Good Food Holdings, shares insights on the evolution of the connected store and his journey from consultant to CEO during the COVID-19 pandemic. He discusses how the company's e-commerce sales skyrocketed by 450% under his leadership, largely driven by consumer demand for technology like self-checkouts. Neil Stern emphasizes the importance of adapting to consumer needs and the challenges of integrating disparate technologies within the retail space. He explains the ongoing trials in different banners, including the implementation of innovative solutions like Caper carts and scan-and-go systems. The conversation highlights the necessity of experimenting and failing fast in order to stay competitive and meet the evolving expectations of customers in the grocery industry.
Takeaways:
- Neil Stern discusses his unconventional journey from consultant to CEO during COVID-19, highlighting the challenges faced.
- The importance of adapting to technology was emphasized as Good Food Holdings introduced self-checkouts to meet consumer demand.
- Stern notes that understanding customer needs is crucial for retailers to stay relevant in a rapidly changing landscape.
- The podcast underscores the significance of having a connected store to bridge the gap between online and in-store experiences.
- Stern acknowledges that trial and error are essential in implementing new technologies for retail success.
- Finally, he emphasizes that flexibility and adaptability in technology choices can enhance customer experiences significantly.
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Transcript
Hello, everyone.
Ann Mazingo:Welcome back.
Ann Mazingo:This is Omnitalk Retail.
Ann Mazingo:I'm Chris Walton.
Neal Stern:And I'm Ann Mazingo.
Ann Mazingo:And we are coming to you live for the final time from grocery shop today from the fusion group's booth.
Ann Mazingo:Booth a 210.
Ann Mazingo:And standing between us, Ann, is Neal Stern, the CEO of Good Food Holdings.
Ann Mazingo:Neil, welcome to Omnitalk.
Chris Walton:Thank you.
Neal Stern:Neil, we gotta start with your background, because you maybe have one of the most interesting backgrounds of anybody that we've interviewed so far here.
Neal Stern:You were a longtime consultant, and then for some reason, now you've decided back.
Chris Walton: In, what,: Neal Stern:Middle of COVID That's a hint.
Chris Walton:That's a hint.
Neal Stern:You're like, this is a good time for me to go and become CEO of Good Food holdings.
Neal Stern:Tell us a little bit about that journey.
Chris Walton:So, first of all, I did it exactly backwards.
Chris Walton:So you're supposed to have a real job that is being a retailer, and then you can become a cult consultant in your golden years.
Chris Walton:Dispense advice.
Chris Walton:I did it completely the opposite.
Chris Walton: It's: Chris Walton: It's: Chris Walton:I'm sitting in my daughter's bedroom making zoom calls because it's the middle of COVID And the.
Chris Walton:The parent company of good food holdings.
Neal Stern:Yeah.
Chris Walton:Is a large korean conglomerate called Emart.
Chris Walton:And they were my biggest client.
Chris Walton:And I was, you know, I was flying 250,000 miles a year, going around the world doing my thing, and they're like, hey, do you want to run this company?
Chris Walton:And I'm like, huh?
Chris Walton:And they're, no, no, we want you to run the company.
Chris Walton:And I was sitting there in my daughter's bedroom and saying, you know what?
Chris Walton:I don't know.
Chris Walton:That I want to get on a plane again.
Neal Stern:Yeah.
Chris Walton:You know, after Covid doing what I was doing, and I said, sure, yeah.
Neal Stern:Did you ask the Taylor Swift poster behind you in your daughter's room?
Neal Stern:Like, what do you think?
Neal Stern:Taylor?
Chris Walton:She was out of the Taylor phase by then, but.
Chris Walton:Yes, but we invested heavily in Taylor until.
Ann Mazingo:You were long on Taylor.
Chris Walton:Yeah, we're very long on Taylor.
Chris Walton:Yeah.
Ann Mazingo:Who is it?
Ann Mazingo:Actually, you gotta support Taylor.
Ann Mazingo:Yes.
Chris Walton:Yeah.
Chris Walton:So great change.
Chris Walton:It took me out to California.
Chris Walton:My wife and I, our plans have always been, we're going to retire to California.
Chris Walton:So I just made the pilgrimage a little bit earlier to go there.
Chris Walton:And good food holdings, I was on the board.
Chris Walton:I helped do the two acquisitions to put the company together.
Neal Stern:Okay.
Chris Walton:So I knew the team, and it was like a great opportunity to, you know, change the real.
Chris Walton:Yeah.
Neal Stern:Yeah, man.
Neal Stern:Amazing.
Ann Mazingo:So, Neil, so one of the reasons we were interested in talking to you today is we were talking about this a little bit beforehand, too.
Ann Mazingo:Even before we started hitting record, you were one of the first people to jump feet first into the water on this idea of the connected store.
Chris Walton:Yes.
Ann Mazingo:Why did you feel that was such an important thing to embark upon, particularly as a new CEO?
Chris Walton:Yeah, I would say, first of all, I give credit to myself.
Chris Walton:When I took over, our e commerce sales shot up 450% upon me taking over the company.
Neal Stern:Just solely nothing to do with anything.
Chris Walton:No external what was going on at that time.
Ann Mazingo:I forgot.
Ann Mazingo:We just talked about it, but I can't remember.
Chris Walton:There might have been a little Covid, but, you know, but seriously, we went from being, I would say we were technology luddites at good food holdings.
Chris Walton:We had no self checkouts.
Chris Walton:We had very little technology.
Chris Walton:And I don't think I did it.
Chris Walton:I think our customers did it for us.
Chris Walton:So we went in.
Chris Walton:You know, it sounds.
Chris Walton:It sounds.
Ann Mazingo:Pushed it.
Chris Walton:They pushed it, but it sounds boring.
Chris Walton:But an 18 months period of time, we went from zero self checkouts to having self checkout across the chain.
Chris Walton:Why?
Chris Walton:Because our customers wanted it.
Chris Walton:As soon as we put it in, you know, 40% of our transactions went self checkout.
Chris Walton:Thankfully, other retailers trained them right.
Chris Walton:And then we're saying, okay, this is great.
Chris Walton:Now what can we do?
Chris Walton:That's, you know, I don't think we're going to do a whole segment on, you know, trailing self checkout by 30 years.
Chris Walton:So then it was like, all right, you know, what can, what can we do?
Ann Mazingo:We're game if you are.
Chris Walton:Yeah, I would speak for yourself, Chris, but, you know, yeah, let's take this and figure out, all right, what is the consumer going to look for us in the future?
Chris Walton:And, you know, we had been playing around with different technologies here and there, and Instacart came with a vision of connected store, and we said, yeah, that's it.
Chris Walton:Because we have a lot of disparate pieces of technology that don't talk to each other.
Chris Walton:What if we were able to connect it for the consumer?
Chris Walton:Right?
Chris Walton:So right now, I'd say there's a huge disconnect between what happens online, what happens in store.
Chris Walton:How do you start to bring those pieces together?
Chris Walton:And that vision kind of captivated us.
Chris Walton:And we said, yeah, let's do it.
Chris Walton:And of course, Instacart wanted to go somewhere sunny and warm.
Chris Walton:So here we are at Bristol Farms, and they're like, yeah, travel south.
Chris Walton:We'll come to Santa Monica and put some stuff in, and that's what we've been doing.
Neal Stern:Right.
Ann Mazingo:And how do you think you have a lot of banners too, that you manage as well.
Ann Mazingo:So how do you think about that?
Ann Mazingo:Because the data component of that's got to be interesting.
Ann Mazingo:And the back office, to get a connected store off the ground has got to be difficult, too.
Chris Walton:Yeah.
Chris Walton:Which is why we're trialing in banners.
Chris Walton:So one of the wonderful benefits we have of being.
Ann Mazingo:That's interesting.
Ann Mazingo:Yeah.
Chris Walton:So I'll give the plug.
Chris Walton:Right.
Chris Walton:We have stores from San Diego to Seattle.
Chris Walton:Metropolitan markets in Seattle, new seasons in Portland, new Leaf in Santa Cruz, Bristol Farms, Lazy Acres, southern California.
Chris Walton:One of the things that we had to do was as our business grew 450%, we had zero way to scale it efficiently.
Chris Walton:It just happened by happenstance.
Chris Walton:So we've had to go backwards, really, in our data journey, put in master data management, put in clean data files, things that are not very sexy to talk about, but we needed that to enable how you move forward.
Chris Walton:But the beauty of what we have is we can, we can have caper carts in southern California.
Chris Walton: an have ESL infusion booth, a: Neal Stern:It's a good thing you're not in charge of directions.
Chris Walton:They have cupcakes, by the way.
Chris Walton:Sprinkles.
Chris Walton:Yeah.
Ann Mazingo:You're at geolocation.
Chris Walton:Walking to those cupcakes.
Chris Walton:So what enables us to do is test pretty quickly and be able to test different things.
Chris Walton:So I can test something different in Seattle, I can test something different in Portland.
Chris Walton:And La sort of became the place for connected store.
Chris Walton:Now if we want to roll that.
Chris Walton:Right.
Chris Walton:That's all the work we've been doing with a lot of vendors around this room.
Chris Walton:Right.
Chris Walton:You know, our mantra sort of is we're going to have centralized technology, we're going to pick the best in class tool and then have localized execution of that.
Ann Mazingo:Okay.
Chris Walton:Right.
Chris Walton:So the example would be where we're all on storefront pro as our e commerce platform.
Chris Walton:But if you went on our website today, if you went to new seasons, you're going to see them talking about local and something about Oregon.
Chris Walton:If you go to Bristol Farm, they may be talking about me.
Chris Walton:Right.
Chris Walton:So we have the ability to have that central tool, but then have the local people execute to what's right for the market.
Neal Stern:Well, Neil, I want to talk for a little bit.
Neal Stern: en doing since you started in: Neal Stern:What is paying off and where do you think I.
Neal Stern:Technology that you've invested in or tested still has a little ways to go.
Chris Walton:Yeah.
Chris Walton:I think what's paying off are things that are tangible and immediate for consumers.
Chris Walton:So boring things like self checkout.
Chris Walton:Absolutely paying off because the consumer can see it.
Chris Walton:We've redone our, we've redone our websites, we've redone our social platforms.
Chris Walton:We can see immediate, tangible benefits of it.
Neal Stern:So tangible benefits from the consumer perspective instead of an ROI from consumer benefit.
Chris Walton:N ROI for us too.
Chris Walton:Like ultimately both of those have to work.
Chris Walton:Right?
Chris Walton:I have to get something the consumer cares about and I have to eventually get our OI on it for us.
Chris Walton:The things that are taking longer to play out, I said on my talk this morning, we're in the second inning.
Chris Walton:In our baseball analogy, it's early days, right.
Chris Walton:So when you talk to David McIntosh and you talk about the vision of what caper carts can become, it's fantastic, right.
Chris Walton:Because it's going to be the vehicle to say, I'm going to be able to have personalized customized offers companion going through my store.
Chris Walton:I can gamify it, I can do all these cool things.
Chris Walton:But we're early days on doing that.
Chris Walton:And our customers have been shopping us for a very long time.
Chris Walton:They know how to use a shopping cart.
Chris Walton:They don't know how to use a capercart.
Chris Walton:So now it's like, okay, we have ambassadors in the store.
Chris Walton:We've got to start training them to use it.
Chris Walton:They have to repeat use it.
Neal Stern:Yeah.
Chris Walton:We have to get rid of the, the bugs.
Neal Stern:Yeah.
Chris Walton:And there, and there are always bugs and things we can't do.
Chris Walton:But that's, that's the journey that we're on.
Chris Walton:When you're trying to change longstanding consumer behavior, it takes some time.
Neal Stern:Right.
Chris Walton:And ultimately for caper as an example, that, that consumer benefit.
Chris Walton:Right.
Chris Walton:You have to start stacking those consumer benefits.
Chris Walton:Right.
Chris Walton:So what are the benefits like, okay, I can save some time on checkout.
Chris Walton:Yep.
Chris Walton:I know what my, I know what my, surprisingly, the biggest thing has been.
Chris Walton:I know how much money I'm spending.
Ann Mazingo:Right.
Neal Stern:Yes.
Ann Mazingo:As you shop.
Chris Walton:Yeah.
Neal Stern:That's been a big awakening.
Chris Walton:Like, wow, it's not so much, yeah, I want to save time, but it's really great that I know how much money I'm spending.
Chris Walton:And by the way, if they know how much money they're spending, they're actually spending more money.
Neal Stern:Right, exactly.
Chris Walton:Because we're like, oh, that's gonna be a bad thing.
Chris Walton:No, no, no.
Chris Walton:The consumers just want to have control of what.
Neal Stern:They just want to make sure they're not going exactly.
Neal Stern:If they don't have that prize at the end.
Chris Walton:So then as we, you know, we start to layer on the benefits.
Chris Walton:But I say those are the things we're early days on.
Chris Walton:And you know, we're saying we're willing to put an alert little bleeding edge to go with the things that we know are gonna be tried and true.
Neal Stern:Yeah.
Neal Stern:Awesome.
Ann Mazingo:Neil, have you done any experimentation on the scan and go side of things?
Ann Mazingo:Cause that's an interesting like dichotomy there.
Ann Mazingo:The scan and go approach versus the capercart approach.
Ann Mazingo:Something I've personally and Ann and I have been talking about a lot at this show, especially given the announcements we saw from Sam's club yesterday.
Ann Mazingo:What have you learned that are the puts and takes in regards to that system?
Chris Walton:Yeah, we have scan and go as well.
Chris Walton:We're testing that.
Chris Walton:Scanago is working incredibly well for us for smaller transaction sizes.
Chris Walton:A lot of, a lot of our food service driven transactions.
Chris Walton:You know, we have customers.
Chris Walton:We put it into Manhattan beach.
Chris Walton:Our Manhattan beach store is almost a cafeteria.
Chris Walton:Right.
Chris Walton:For office workers around there.
Chris Walton:They love scan and go because of, because of the speed on it.
Chris Walton:You know what, now we have, I think the difference between us and Sam's.
Chris Walton:And great for Sam's.
Chris Walton:We have 30,000 items.
Chris Walton: They have: Ann Mazingo:That's a great point.
Chris Walton:We have random weight items.
Chris Walton:They tend not to.
Chris Walton:So they're in bulk as well.
Chris Walton:We have liquor, which right now you can't do in California through scan and pay.
Chris Walton:So that's why I said the more things you put in front of customers, like wow, that's cool.
Chris Walton:But I just gave you four things you can't do with us.
Chris Walton:That's kind of the piece that we're still trying to work through, which is it has to be seamless for the customer.
Chris Walton:But yeah, I think our vision of the future is it is not going to be one thing.
Ann Mazingo:Right.
Chris Walton:We always say what we want to do is eliminate lines for customers, period.
Chris Walton:And you might choose self checkout, you might choose scan and pay.
Chris Walton:You might want to cart.
Chris Walton:We've got a lot of customers who want to go through the register and.
Chris Walton:Right.
Chris Walton:So we don't want to limit their choices.
Chris Walton:We want to give them what they're looking for.
Ann Mazingo:Right, right.
Ann Mazingo:Yeah.
Ann Mazingo:Which is a great segue to the question we want to ask you to.
Ann Mazingo:In closing here too is the connected store.
Ann Mazingo:While an idea is still, like you said, it's maybe not even any two in terms of the total connected store.
Ann Mazingo:Right.
Ann Mazingo:We're still, we're still in the preseason in a lot of ways.
Ann Mazingo:So as it's starting to take shape and with our grocery ex, our grocery executive audience, as well as our retail audience in general, that can benefit from your insight and knowledge, what are some of the lessons you've learned over these past few years that you could maybe impart on others so they don't make the same mistakes that you've made potentially in trying to understand?
Ann Mazingo:Right?
Ann Mazingo:Yes.
Ann Mazingo:Either the things you've learned that you got right or the things maybe you missed.
Chris Walton:Otherwise, I should have got the cupcake early.
Chris Walton:Cause I'm worried they're not gonna have my flavor.
Ann Mazingo:Yeah.
Chris Walton:No.
Neal Stern:Hey, hold one of those.
Ann Mazingo:Yeah, hold the cupcakes.
Chris Walton:No, I think, first of all, you're gonna have to make mistakes.
Chris Walton:That's a great point.
Chris Walton:That's the part where we said we're gonna fail fast.
Chris Walton:We're gonna test, we're gonna hopefully not commit.
Chris Walton:Right.
Ann Mazingo:You don't wanna over commit.
Chris Walton:We don't wanna over commit, but we wanna try things.
Chris Walton:Right.
Chris Walton:So we know coming in some of the things we're trying is not gonna work.
Chris Walton:And I would say, yeah, one of the lessons is don't be afraid to try because if you don't, you're not going to get anywhere or you're going to be, you know, you're going to be a laggard.
Chris Walton:But, yeah, I think, I think the cool thing in connected store, and here we are sitting in the fusion booth, like, what else can you layer on carrot tags.
Chris Walton:Pick to light for the consumer.
Chris Walton:Pick the light for stocking.
Chris Walton:Those are, those are cool things that are coming the future.
Chris Walton:And then where we get excited about it is they're saying, okay, that's a technology.
Chris Walton:If I put it in, what, what else can I do with it?
Chris Walton:Right, right, I, and now we get excited for our customer base of saying, oh, you're gluten free.
Chris Walton:What if you're able to go down the aisle and hit the button and you can find their products that are gluten free?
Chris Walton:We have tags on our items, but our tags get to give you two attributes.
Ann Mazingo:There's only so much you can put on a tag.
Chris Walton:We have items coded to 100 attributes.
Chris Walton:I can only put two items on the tag.
Chris Walton:So can I help vegan customers find their way?
Chris Walton:Can I help gluten free customers find their way?
Chris Walton:I got the technology, now I got to start to figure out ways to layer on value to it.
Chris Walton:Right.
Chris Walton:But if you're just looking example, if you're just looking and saying, well, I'm going to look at labor savings.
Chris Walton:Great.
Chris Walton:But what else can I be thinking about in the future?
Ann Mazingo:So option value of tech is very important to you.
Chris Walton:Yeah.
Chris Walton:And the ability to have flexibility in thinking about what that, what that value is today and what it might be in the future.
Neal Stern:All right.
Ann Mazingo:All right.
Ann Mazingo:Well, that closes us up.
Ann Mazingo:Thank you, Neil.
Chris Walton:You're welcome.
Ann Mazingo:Thank you for spending time with us.
Ann Mazingo:Thanks for, thanks for going in depth, too.
Ann Mazingo:We always appreciate that and appreciate your time that you spent with us today.
Ann Mazingo:And so on behalf of all of us at Omnitalk, Ann, this, thank you again.
Neal Stern:Yes, thank you again to fusion group for making the coverage possible.
Ann Mazingo:Yes, yes, they're still here.
Ann Mazingo:They're having a happy hour right now with Instacart.
Ann Mazingo:It's only like, what time is it, Ann?
Ann Mazingo:It's ten to five.
Ann Mazingo:There's wine, there's cheese, there's Kobe beef.
Ann Mazingo:So come on, stop on by.
Ann Mazingo:We'll see you.
Ann Mazingo:We'll say hi.
Ann Mazingo:And until next time, and be careful out there.
