Hello, everyone.

Welcome back.

This is Omnitalk Retail.

I'm Chris Walton.

And I'm Anne Mazinga.

And we are coming to you live, day two from FMI, from the Simbi booth, booth 108, where Simbi and Omnitalk are retail's single source of truth.

You brought it back today.

Yep, brought it back.

I'm running with that the rest of my life.

I know you will.

The rest of my life.

I have no doubt.

I actually like that tagline.

It's really sharp.

Yeah, Shocker.

He loves it.

Good job.

But without further ado.

What's that?

I said, good job, Simbi marketing team.

Yes, good job, Simbi marketing team.

Well done.

Well done.

All right.

But without further ado, I want to introduce our next guest.

Today we have Bobby Gibbs.

Bobby is a partner at Oliver Wyman.

Bobby, thanks for coming to join us today at omnitalk and being with us at fmi.

Thank you for having me.

And it's really wonderful to be here at Midwinter.

It's a real.

It's a real.

Just amazing gathering of all the leaders of the industry.

That's right.

I forgot they call it Midwinter.

Yes.

It's very, like, Shakespearean of them.

It feels like.

Like we're going to a play.

Well, and it's a reminder of why you really want to be in South Florida, because it is Midwinter.

If it was mid summer, you would want to be middle.

Not so close to selling 100%.

That's right.

That's true.

Good point.

Good point.

Bobby, let's start by giving our listeners just a little bit of background on you and your role at Oliver Wyman.

Sure.

So my role is to work with our clients to improve, mostly improve their customer value proposition.

So what they sell, how they sell it, what they set the prices for, what goes on the shelf, what goes online, really help them drive growth and improve performance.

So, Bobby, are there any macro trends when you look across all your clients that you're seeing people try to do in regards to what you just said?

Yeah.

So last year was really the return of growth into food retail.

So overall units were up 1.1% after a year of decline and kind of giving share away into food service.

And so really the theme is growth.

And the big way we're talking about doing that is by winning more eating and meal occasions and by capturing more of the times of day and the times of year that people are eating and putting food retail at the center of that.

Bobby, you talk to a lot of clients in this space.

You've been doing this for a while.

Is there anything this past year that's kind of surprised you about a direction that a company was taking, good or bad, or just something that you feel like you weren't expecting as you take a look back at the last year?

So I think for me, probably the biggest surprise, and probably not a surprise to you guys though, is just the way in which Walmart has really doubled down its digital strategy and the way in which that they have brought in so many new incremental shoppers into the store.

And we say into the store, really into the store area through the buy online pickup and store.

Not necessarily in the store.

Right?

Yeah, in the ecosystem.

Right.

So how do you.

So we've been talking about that a lot.

In fact, we were just talking about it before you even showed up here, like literally before you came in.

And so what is the long term implication of that?

Like, if they continue to do that, what fallout will there be on the rest of the grocery industry, do you expect?

Well, I mean, I think the big thing is if you look at how different food retailers make money, so many retailers now, their profit doesn't come from selling products.

It comes from membership and affinity programs.

It comes from data monetization.

And so the idea of selling product, you know, to break even and then making money off of all of the ancillary fees.

Think about the way an airline, airlines don't make money flying people.

Airlines make money by having planes and selling points to banks.

Retailers are now making money by having customers buy products and monetizing that data and collecting affinity program dollars and providing more than just products.

But is that a sustainable model, particularly if you're losing or draining customers off to Walmart more frequently?

So if you're kind of a regional chain, the answer is yes, because there's lots of places growth can come from.

Growth doesn't just have to come from another retailer.

It comes from people today going into food service.

It comes from having people spend more on the indulgence of wonderful meal preparation.

So kind of adding more variety into what you're eating.

There's lots of ways to grow, and I think that you'll see the strong regional players continue to grow at the expense potentially of those regional players who aren't able to keep up.

So if you were to advise the regional players, what would you be telling them to do?

I think that the top thing is to keep investing your digital proposition.

You know, keep finding ways to bring customers in and keep finding that differentiation.

You know, so many Retailers we talk to who are kind of in that kind of middling set, they say, well, we went on value, we went on convenience, we went on fresh.

The problem is if every single retailer is trying to win on value, convenience and fresh, no one's gonna win because they're all gonna have the same proposition.

Right?

Right.

Bobby, one thing that you mentioned as a way to get incremental revenue is food service in the store.

It's something that we've been hearing from a lot of retailers that they're looking into, like to differentiate themselves from the Walmarts, to get people to come back to their stores, to use their stores as community connection places.

What would your advice be for those retailers who are pretty, they're even taking product off the floor pad in some cases to make more room for these community spaces that then have to be activated.

They have to have traffic too.

What would you advise them as they're kind of embarking on that journey for differentiation?

You know, I think for me it's less about the food service and more about thinking about the job that's to be done.

In this case, it's putting something that you're proud of on the table for your family, for your friends, even for yourself.

Okay.

It is a real challenge for food retailers to help people regain the love of cooking, the love of preparation and be convenient at the same time.

People are time starved and people want to put something really great on the table.

And I think food retailers who do can solve both of those or are well positioned to grow.

So do you see that taking place in own brands trying to create better products, better partnerships, assortment?

I see it as more about cross merchandising.

So thinking about bringing your fresh product, your grocery, into parts of the store that aren't just, okay, pasta aisle, pasta sauce aisle, cereal, but here's my dinner part of the store and it's my fresh, it's my protein in the center.

And I'm going to have some national brand products in there that are funded.

I'm going to have some private brand, but really kind of building your merchandising strategy around the entire plate.

Okay.

Going back to differentiated product too.

So, you know, some, you know, you said that's a key piece for the regional grocers.

And going kind of coming off Anne's question too.

Does it differentiate product?

Given the rise of online and the rise of online marketplaces and how easy available products are these days, does it almost necessitate that that product differentiation get created in house through the own brands versus trying to Go and partner with the national brands for those types of goods.

Does it necessitate.

No.

I mean, you're always going to have companies like Trader Joe's that are just really differentiated in what they offer in the market.

But every retailer doesn't have to be Trader Joe's.

Now, if they can find some element that fits them, all the better.

But there are a lot of great innovations coming out of national brand products.

What you need is the right merchandising strategy to link that into a great fresh assortment.

Again, you can't win just with fresh, but you still fresh as the bar.

Exactly.

Yeah.

Right, right.

Like Sprouts is a good example of that.

Like, they find the national brand really cool.

New brands that they come in, they put them in the store, have a merchandise team for that, and have great fresh, too.

And I think you spoke to Stan from Sprouts earlier, and I'm sure you talked about this.

Their real challenge is the number of in and outs that they do throughout the year to kind of keep up that innovation.

There's lots of rooms to win.

They found one.

Most retailers will struggle with that amount of innovation.

What's really great about Sprouts is they found a way to do that.

Yeah, right.

Across multiple states, too.

Right?

Yes.

Well, Bobby, let's conclude with some of your predictions for kind of where the grocery industry is headed here in 2025.

What do you think some of the biggest things are that we'll be talking about?

That happened in 2025, when we're at Midwinter in 2026.

Yeah.

So I think a year from now, we're going to look back and be really surprised by somebody's healthcare play, whether that be another clinic offering, whether that be a new partnership with a major healthcare plan.

There's.

There's just so much interest from the health care industry, which is a $4 trillion business, to find ways to drive down costs through food retail.

I just.

I think we're going to see a.

New partnership and explain that a little bit more.

Like, what is that?

How does that take shape in a.

In a.

In a retail store?

Yeah, so.

So there's a few programs.

The biggest one is something like a Medicare Advantage supplemental benefit.

That's a card you get, you know, issued by your Medicare Advantage plan that gives you the ability to buy OTC products, increasingly food.

So that.

That in itself is pouring, you know, some 20 and 30 billion dollars of revenue into food retail today.

So you see that going from, like, I know right now in the state of Minnesota, we Have those programs funding like $75 of meat produce, certain dairy items for every six months.

You see something like that increasing or somebody coming in to make that more significant.

Exactly.

And a lot of that today happens between like a program administrator and a retailer.

I think what we're going to see is more of a partnership between the payer who has the.

The actual funds and the retailer in partnership with the administrator who actually you need to get the card to work.

Right, but I just.

Retailers are so good at driving consumer engagement and the healthcare industry desperately needs that.

Right.

So is it more that or is it like clinics too?

Because you mentioned clinics as well.

Clinics is part of it.

I think there's a bunch of different elements that you can build more of a health ecosystem.

You've got some retailers who have pulled back on clinics because they haven't made it work, but there's a few that are working.

And, you know, H E B has clinics that they're expanding slowly.

You know, Kroger has actually expanded clinics in a new market focused on Medicare Advantage as a specific population.

So again, you know, Albertsons with Sincerely.

Health in a lot of ways.

Yeah.

But Albertsons with Sincerely Health is an app that's focused on health and well being that, you know, isn't paid for by insurers.

You know, might we see a partnership between Sincerely Health and a health payer?

Maybe, you know, might we see another retailer launch a program like that?

Amazing.

Well, thank you so much, Bobby.

We've learned so much from you expect.

To go in that last.

I know.

At all.

I know.

Thanks for taking the time.

Thank you to all of you who've been staying here, hanging out with us all day.

We've got a couple more interviews coming up and until then, be careful out there.