RETAILERS LOOK TO TECHNOLOGY TO FORGE CLOSER TIES

ELLIOT ZWIEBACH

LAS VEGAS -- Retailers and manufacturers expect to use information technology to help each other improve their operations over the next year, panelists from both segments told the Western Food Industry Exposition here.

According to Bob Piccinini, chairman, president and chief executive officer of Save Mart Supermarkets, Modesto, Calif., "We need to use the information we have from technology -- information we didn't have a year ago -- to refine our operations and be more profitable, though we still have a long way to go on that count."

Kevin Davis, president and CEO of Bristol Farms Markets, El Segundo, Calif., agreed. "The greatest opportunities in the next year will involve more coordination of information between retailers and suppliers," he said.

John Eagan, vice president and senior general merchandise manager for Costco Wholesale, Issaquah, Wash., said he believes closer ties between manufacturers and distributors "will enable us to bring more to our members and cut our superfluous costs."

The lone manufacturer on the panel -- Bill Mick, vice president of customer marketing and business development for Kraft Foods, Northfield, Ill. -- said his company is thinking along the same lines, with plans to communicate better with retailers. "We need to harness technology better and communicate the information we get about consumer trends with retailers so they can make better decisions."

The panelists spoke at a seminar during the WFIE convention, Nov. 3 to 5, which was sponsored by the California Grocers Association.

The panelists' other comments on a variety of topics included the following:

"We're the only industry that signs 25-year leases on buildings that will become obsolete in 10 years," Piccinini said. "But it's hard to know today what we will need to serve customers in some future economy."

The technology that will allow electronic chips to be embedded in products will enable companies to learn more about consumer habits, Mick said, but concerns over privacy could become an issue.

Retailers have become lax about using technology to its best advantage, Davis said. "Too many retailers are opening new stores instead of using scan data to build their businesses."

An independent operator can't go head-to-head with supercenters on price, Piccinini said. "He has to find other strengths that he has, and he must develop relationships with consumers and keep more closely in touch with them."

Over the next five years Kraft intends to focus on convenience, ease of preparation, and health and wellness, Mick said. "We believe nutrition will be a profound determiner of what consumers buy," he explained.