Enterprise Marketing & Promotions Management

FMI Connect: Perspectives On Technology, The Third Wave and People

By / June 2016

Events, Insights

During FMI Connect, Steve Case, the founder of America Online who now leads investment firm Revolution LLC, gave his perspective on technology innovation in terms of waves.

Progressive Grocer spotlighted the Q&A discussion between Steve Case and Todd Morris, president of U.S. Catalina. Based on his new book, “The Third Wave: An Entrepreneur’s Vision of the Future” Case said we’re now in the third wave of tech innovation. The first wave was “building the internet,” noting that in 1985, only three percent of people were online. However, by 2000, people couldn’t live without web access.

The second wave was building on the internet, such as apps. The third wave will fully integrate our daily lives online. Case says this requires a “different mindset and playbook.” He pointed out that this current third wave has similar characteristics with the first wave, providing opportunity to learn how to mobilize resources to turn dreams into mainstream reality.

Case expressed the need for successful companies to foster inventive problem-solving. “They need to get out of the mindset of managing and into the mindset of imagining,” he said. Case asserts that the key to further innovation will be strategic partnerships to accelerate the process.

Case concluded by identifying tech trends for the food industry, such as convenience and consumers’ willingness to sacrifice privacy for convenience. Healthy, fresh and natural produce are also priorities, as well as the experience created in the store.

Meanwhile, at the June 21st United Fresh Breakfast Keynote, Craig Boyan, president and COO of San Antonio-based H-E-B, also described three waves in terms of 30-year differences in consumer income.

Progressive Grocer covered the event describing the first wave from 1945 to 1975 with grocery market growth due to consumers’ wage growth. The second wave the following 30 years saw developments with the rise of globalization and technology replacing humans in the labor force. This in turn created a slowdown in median household income growth.

The third wave, beginning in 2008, has begun with negative income growth and increasing consumer debt. With consumers’ income expected to continue to decrease over the period, Boyan predicts a flat to declining grocery industry for the next 30 years.

These factors will lead to consolidation and increased competition among grocers. Boyan highlighted H-E-B’s competitive store openings rising from eight in 2011 to 61 in 2016.

Other vital areas Boylan outlined for grocers to address:

  • Sales – With the past decade’s inflation and deflation, it’s been proven that the grocery industry is not recession-proof.
  • Changing consumers – Food marketers need to start focusing on Millennials as the Baby Boomers start using other options to purchase meals.
  • Shift from grocery to foodservice – Consumers are now spending more at restaurants compared to grocery stores for the first time ever.
  • e-Commerce – Although only three percent of groceries sold are purchased online currently, Boyan warns the trend will continue towards online. Food marketers need to develop the right business model and manage the economics of such popular trends as free delivery.
  • Food safety – Boyan referenced Chipotle’s recent food safety woes saying, “When one industry or company makes a mistake, we all pay for it.”
  • Health and wellness – As an industry, food marketers must address the issues of health. Boyan pointed out that U.S. consumers with diabetes are expected to double over the next few years, including one-third of children at risk of contracting the disease. He also underscored the increase in daily calorie intake from 3,000 calories 30 years ago to 4,000 calories today, which contributes to the obesity epidemic and the rise in cancer-related deaths.
  • People – Boyan was critical of hourly wages declining almost every year for 30 years and the need for grocers to invest in people. He encourages food marketers to take care of employees as a way to reduce full-time turnover. Higher retention rates and hiring the right people empowers grocers to sell products.

In both sessions, there was an emphasis on investing in people – grocers’ team members – to stabilize businesses, increase innovations and continue the forward-looking focus of the food marketing industry.

We wholeheartedly concur with Steve Case’s assertion that rapid innovation can be better achieved with strategic partnerships. That’s the reason we aligned with dunnhumby for a comprehensive solution to facilitate the complex promotions management process. Our partnership is not only an investment in technology it’s a commitment to our team members as we continuously innovate to keep our customers ahead of their competitors.

If you weren’t able to attend FMI Connect this year, please contact an Aptaris representative to learn more about the latest industry trends and news.

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