Paw Paw Shopping Center: A New-Age, Old-School Operator

MICHAEL GARRY

For a grocer, Marv Imus, 48, is a self-confessed tech geek who spends hours a day dissecting data about shopping trends to get a clearer idea of what shoppers are buying at his one-store operation, Paw Paw Shopping Center, Paw Paw, Mich.

And yet Imus, president of the family-owned store, is really not very different from his father, James Imus, who founded the store in 1947 and at age 89 can still be found cutting cases and stocking shelves.

"Technology just gives me the ability to do business like dad did 40 years ago when we had 500 customers rather than 15,000," he said. "He knew them, knew what they wanted. Today we have so many more customers, items and competitors, but we use technology to still do the 'old-style' business. It's what independents do best."

Thus, whenever Imus evaluates technology, he always asks whether it will help him understand his customers better and make them feel closer to the store. "It's the litmus test for everything I do," he said.

This strategic use of technology may be his best defense in the supercenter war zone that is southwest Michigan. Within a 30-mile radius of Paw Paw, a tiny bedroom community just west of Kalamazoo, there are eight Meijer or Wal-Mart Stores supercenters. On Feb. 1, another Wal-Mart supercenter sprung up in South Kalamazoo — the fifth year in a row that a major competitor opened a nearby store in the first quarter.

Yet Imus continues to hold onto his customer base by using his wits, technological know-how, and ability to partner with a slew of software vendors looking for a supermarket test bed.

WORKING WITH SPARTAN

His reach also extends beyond his own operation. For example, he has supported his wholesaler, Spartan Foods, Grand Rapids, Mich., as chairman of its Technology Advisory Board and part of its Model Store Re-engineering process.

"Marv has been a leader in the use of technology, particularly in regards to loyalty marketing and a strong partner with Spartan Stores in the advance of technology in retail store operations and customer service," said Dave Couch, vice president, information technology, Spartan Stores.

Imus has also served on industry committees and is a frequent speaker at industry events, last week participating in a panel discussion on SN's Supermarket Technology Report at the National Grocers Association conference in Las Vegas. And he is a member of the Industry Advisory Board and Technology Committee for Western Michigan University, where he received a degree in economics.

For his skillful use of technology and industry leadership, Paw Paw Shopping Center has been selected as the winner of SN's 2005 Technology Excellence Award in the independent category.

This is Imus' second award in the last four months. Last October he received the first Al Lees Jr. GEM Award for Electronic Marketing Excellence Over Time from Retail Systems Consulting, Naples, Fla. Al Lees Jr., who died last year, was a friend of Imus and also well known as an independent who embraced technology. "The main message from Marv Imus, and the reason he is the first winner of the Al Lees Jr. GEM Award, is 'Know Your Customer.' Nobody does it better!" said Carlene Thissen, president, Retail Systems Consulting.

Imus' ability to understand his customers' needs is based on a frequent shopper program that is now more than 15 years old. He maintains five years of individual shopper sales history in a data warehouse residing in one of four in-store servers. Another server is used to analyze that data; a third acts as his electronic link to Spartan; and a fourth server runs his Fujitsu ISS45 front-end systems. All four servers exchange information with each other. Another 10 PCs fill out his technology arsenal.

The software engine driving Imus' customer analysis is from S4, a division of Data Systems Inc., Omaha, Neb., one of the many software providers he has partnered with over the years; others include TCI Solutions, DataSage and, most recently, AdPilot. "As a small store, I couldn't afford software — I still can't afford it," he said. "So we use the store as a test bed and I open my abilities to work with the software companies and I get the software at a much lower cost."

Having taken over as president of the company from his brother two years ago, Imus actually has less time to devote to technology. Still, during the course of a 15-hour workday, Imus spends about three hours — usually early in the morning or in the evening — analyzing his data. "I try to see how customers have changed in the past three months," he said. "Now at the beginning of the year, I also look year-to-year to see which customers have decreases and which have increases, and try to determine why that is."

One conclusion that Imus has drawn is that his best shoppers are now middle-aged, between 45 and 55, and over the past few years he's focused on catering to them. "We've gotten more into whole health and natural health, and expanded into higher-end wines," he said. "But we have to be careful not to get too upscale."

Imus uses the S4 system to figure out which clusters or individuals to target, and then he decides what to offer them. For example, to drive sales of gluten-free products, he will identify customers buying similar products, such as low-carb, and send them offers for gluten-free items.

He most often uses direct mail to send out offers, and will occasionally transmit e-mail to between 15% and 20% of his shopper base. "Those [e-mail] customers are the most active in the store, and e-mail is a very effective means to communicate to them."

BIRTHDAY BONANZA

One of his most famous and successful loyalty card programs — his birthday cake program — combined technology with the personal touch. To shoppers in the top 10% of spending — about 1,000 people — who were nearing a birthday, he sent a birthday card inviting them to the store for a free 6-inch birthday cake, decorated to their specifications. For Imus, one objective of the program was to "introduce people to my cake decorator," planting the seeds for lucrative decorating projects in the future.

At one point, he was doing 150 birthday cakes a week. In fact, the program worked so well that he "burned out the cake decorator," said Imus, who has not been able to find a suitable replacement. But by then his bigger point, about catering to the customer, had been made.

He still sends birthday cards, as well as hand-signed Christmas and Thanksgiving cards on alternating years, to top shoppers. The cards are "not necessarily with an offer," he said. "It's just a recognition and contact. It gets an amazing response." It's not something they would likely see from a chain, he noted.

Imus receives plano grams for resets from Spartan, but he tweaks them with products he carries from other distributors. If Spartan discontinues an item, he will alert frequent purchasers of that product and even suggest another store that might carry it, expecting those shoppers will continue doing the bulk of their shopping with him.

Imus also connects with his shoppers through an online shopping program, which is hosted by MyWebGrocer, New York. He does about 50 orders a week, including group orders to after-school programs and factories. It's a break-even business for him but he foresees growth.

Imus has plenty of ambitious plans for his shopper analysis. Next up is predicting what shoppers are likely to buy based on the stage of life they are about to enter. Imus is not afraid to try something new — even if it doesn't work. "Customers realize I'm trying something," he said. "It all adds up so they think of us as a friend rather than a retailer."