Customer Centricity Key in Mature Markets

GLYNN DAVIS

LONDON — When operating in mature markets, it is paramount that food retailers listen to their customers if they are to differentiate their offer from that of their rivals.

That was the message of Zygmunt Mierdorf, a member of the management board at Germany-based Metro Group, who spoke at the IGD Global Retailing 2007 conference here this month.

Metro Group, which is often the first international operator to enter a new market, recognizes that success in developed markets requires a customer-centric business model, Mierdorf said.

“When it's a ‘greenfield’ [country] you just put the stores down, but when it's a mature market then you'd better listen to the consumer. You have to change from a pure buying company to [one that is] customer-centric.”

For this, Mierdorf said it is essential that customer data are collected, but he recognizes that this can often require a fundamental change in a company's culture, and on top of this there is the tough task of mining the data.

Metro Group has used its customer data to implement several targeted initiatives aimed at the business customers of its cash-and-carry operation. These include promoting a consultancy service to 300,000 relevant customers, with the offer of using the skills and knowledge of Metro, thereby ultimately encouraging them to buy more of its products.

And in Eastern Europe, the company offered specific wholesale customers the opportunity to brand their stores “Aro” — after Metro's private-label range — to compete more effectively with the hard discounters. Metro helps them with the likes of communications and store layouts.

“You have to learn from your customers and accept that change is life and then react quickly and entrepreneurially,” Mierdorf said. “This strategy for mature markets is not a Plan B. It has to be a major part of your business, which is why Metro is successful in mature markets as well as in new markets.”