Hello everyone, this is Omnitalk Retail.

I'm Anne Mazenga.

And I'm Chris Walton.

And we are here for our last interview of our Friday, January 31st coverage of FMI.

We are coming to you live from the Simbi booth.

Booth number 108 will be here tomorrow as well.

Yes, and we will still be retail single source of truth tomorrow as well.

Not just today, but tomorrow as well.

Give Chris a tagline and he will not forget it, I guarantee you.

But more importantly, we have a long time Omnitalk retailer.

Well, one of our.

You're one of our fans and we're one of your fans.

Been for a long time.

We have Chad Peterson, the SVP of digital at Lowe's Foods.

Chad, welcome.

Thanks for having me.

This is your second time on, on.

The show, I believe.

It is.

Yeah.

We had a great podcast a little while back.

Yeah, we were like one of our first guests like in the early, early years of Omnitalk.

So yeah, it's great to see you again.

So for those of, for those that are maybe new to Omnitalk or new to Lowe's, like explain, explain a little bit about your background, your role, because it's expanded recently as well as about the company.

Yeah.

So been in digital a long time.

So it's actually going on a quarter century, which is insane.

I've been fortunate to be with Lowe's and Alex Lee for the last seven plus years now.

And that's my only experience in grocery.

So seven years in grocery.

So.

But really excited, kind of head up all of our digital initiatives at retail.

So you think about started with E Commerce and it's grown quite significantly into Omni and how do we look at things across the store?

And of course Lowe's Foods is part of Alex Lee Retail, which is part of Alex Lee Incorporated, which is a Hickory based, amazing family owned company, both wholesale and retail.

So we're on the retail side for Both Lowe's Foods 80 plus stores and KJ's Markets now down in South Carolina and Georgia.

So great addition to the family.

Well, Chad, your role is different now.

When we first met you, you were heading up E Commerce.

Now we've seen tons of evolution in what that means for a grocery retailer.

Will you talk a little bit about just some of the changes that you've seen, even just expanding your role beyond E Commerce as a title and more into digital and kind of what the implications that will have for your team at Lowe's Foods?

Yeah, you know, we've been talking about that a lot.

Just at this show alone with all of our colleagues that, you know, we all kind of grew up in this E commerc boom for grocery back in like 2018, 2019.

We know what happened in 2020.

And e commerce was the fastest kind of growth engine to bringing us up to speed on digital.

Now, as the dust is settled, it's not just about the buying online, it's about the online being part of the journey.

And that's probably the hardest thing for grocers to figure out.

What kind of systems, what kind of platforms.

And so as the role has evolved, we're looking at technology and how that digital weaves into the whole journey.

Okay, that's digital, that's commerce, that's digital offers, it's point of sale.

Yeah.

It's payment systems, it's frictionless across the store.

So a lot of this is also looking at kind of a North Star.

How do we have an aligned digital strategy that's not driven by E Com?

It's driven by the leadership team.

Right.

So marketing, merchandising, category management, it.

Right.

And all of our companies to say this is our aligned roadmap and our aligned North Star.

And that's what we're really building across now.

And now we gotta figure out how to go execute it, which is the big challenge that's kind of the role there.

As long as some of the hardware and systems.

Because you can't just set a promise on the phone and not deliver on it at point of sale or at our beer den or whatever.

It's gotta be end to end.

I imagine that helps the conversations internally too, of what you're going to do, but also what you're not going to do as well as you prioritize things.

Is that true?

You have to do a lot of soul searching and you have to be true to your North Star.

Right.

And you know, we talk to technology providers.

There's a ton of amazing providers.

It's, we want every shiny penny possible, but it's where and how does it fit in the strategy.

And so the strategy and kind of moving strategy ahead of technology is part of what we're after.

So how do we make sure that our solution providers, our development strategy, follows what we need as a business and how we monetize it because we got to pay for it, you know, and grocery margins are tight, so there's not a ton of capital.

Yes, we've heard that quite a bit today too.

All right, so which leads me to my next question then.

So, you know, the other thing we've Been hearing today and talking with different people is, you know, the consumer is more demanding than ever.

You know, they want, they want a frictionless experience, they want a fast experience, they want a personalized experience.

How do you balance all of that in defining your strategy?

Do you lever up one versus another?

Do you try to accomplish them all to a degree?

Like how do you think about that?

We use the phrase both and a lot.

Both and.

Okay, so you can't not just invest in one thing.

And that's the hard part with digital.

Yeah.

And because expectations are set by the big companies and the Amazons of the world, everybody has to kind of conform to that expectation.

Right.

You know, why are you telling me this over here and showing me this over here?

Why does it not line up?

And that's trust.

Digital builds trust, especially when you're setting up a promise and you got to deliver on it.

Whether it's clipping a digital offer, making sure that you get the discount at point of sale, placing your online order, making sure we're in stock.

Right.

So that's been a huge kind of calling card as to how do we tie all those things together.

And it's difficult, it's hard.

And it takes everybody to kind of execute from the digital to the sops in the stores for producing the product, using our registers, talking to our guests, helping them enroll.

It doesn't matter what it is.

And it's the thread that ties it all together.

Yeah.

So, Chad, is there a two part question?

One, what are the technologies then that you're primarily focused on?

And two, who's driving those technology decisions?

Because you have an IT background.

Used to be like the CIO was in charge of finding like these are the technologies we're going to invest in and then bringing them to the rest of the team.

But as you look at Lowe's Foods and what you're prioritizing, who's kind of giving input?

Is IT merchants?

Is it, you know, marketing?

Is it it?

Like, how does that kind of come together?

Supply chain, all of the above.

And so what we're trying to do is we put a discipline in place for technology procurement.

I'm pushing the business and my peers and leadership to say, what do we want to go do?

What's the problem we're trying to solve?

How do we want to change the business?

How do we want to drive loyalty, for example, what does loyalty look like for us?

Go back to it to say this is a strategy, this is the revenue we think we're going to drive or the savings that we're going to enjoy and let our IT organization.

And I'll help as well think through who are the folks that might be able to help and do kind of a landscape search and then come back probably to the solutions that we see at shows like this and grocery shop and others to kind of pull them together to say let's go rfp.

Okay.

And so that we're not disappointed when it comes to getting the features and functions that.

Right.

It's a merchant, a marketer expects to deliver the value.

Yeah.

That's the right way to do anything.

Looking at the problem takes a while to get through versus like what looked cool at this.

I mean you can go in a lot of wrong directions if you don't take the approach that you're, you're espousing here.

So Chad, I'm curious, are there any innovations or technologies that you're really excited about exploring in your role in this, in this coming year?

Yeah, I mean I think since there's so many, I think, you know, just kind of looking around here.

Right.

Evolution of shelf labels.

Right.

And anything that can impact that digital experience, whether you're in the aisle, point of sale, kind of future proofing.

We have some robotics.

Right.

How can that help our operations teams but also potentially help the digital experience, you know, kind of tighten things up.

Loyalty backbones.

Right.

For differentiated loyalty kind of capabilities and.

Right.

You know, again, there's no one platform that does everything right.

So you have to find partners and vendors on the fulfillment side, you know, technology side that work with one another and have open architecture.

And I think that's our fundamental.

Anybody we work with has to have kind of a microservices headless architecture or at least approach.

If it's, you know, black box on prem.

That's not going to work for the future because we have to have a portfolio that can work with one another.

Right.

That makes sense.

That makes sense.

So let's shift gears a little bit because I want to.

I'm curious how much, how much of your sandbox is devoted to this topic now?

How do you think about the physical store evolving like and particularly with the, you know, how digital plays into that physical store experience.

How are you thinking about that?

It's a great question.

So we'd love to have.

I'm not sure if you guys have been to a Lowe's food store before, but Lowe's Foods is experiential.

We are entertainment based, so we are an entertainment company that creates food experiences.

Yeah.

What's the chicken dance called?

Again, the chicken dance.

The chicken dance.

We do the chicken dance.

I thought it had like a time line or something.

Well, it's our own version.

Yes, it's our own kind of distinct version to celebrate the best chicken in the Carolinas under our chicken chandelier.

Yes.

But again, we have events that happen in our stores.

We have our community tables.

You know, Tim talked about it this morning, where we, we gather.

Right.

So we bring the community.

And growing community is what we're all about.

So how do you, how do you do that authentically with digital?

Well, digital should be educating and informing about opportunities to come in the store.

Digital should be infused elegantly into the store.

But we don't put big screens up in our stores.

People have asked us to put screens up at the beard end.

No, we want you to have a conversation versus watching the game.

Right.

So you can't grow community if you're distracting, but you can bring in digital elegantly.

And that's what we're trying to figure out.

That's the hardest part.

And then how do we bring our, as we talk about provocative with a twist of wit, kind of our approach to marketing and brand and kind of, you know, tongue in cheek, catch our audience off guard, make them laugh a little bit, make them think and make the brand stand out.

Digital can help with that as well.

Is loyalty a keyword in that discussion or equation?

Of course.

How so?

Well, you know, we have tons of great grocery stores all across the country.

We want a store that our guests look forward to coming into.

You know, and what I love being on the commerce side.

If we can motivate a household to use Lowe's Foods to go, which is our first party commerce.

It's been around since 1997 actually.

Yeah, you guys were one of the first.

Right, right.

So we do the heavy lift and then the guest has a reason to park their car, come in on a Thursday night for Thursday.

Thursday half price pint nights.

And what are they going to do?

They're going to buy a few more things, they're going to see their neighbors and their friends and then they're going to pick up their order.

That's the perfect experience because now they can take time to enjoy the store.

And our personal shoppers did the heavy lift.

So I mean, that's just one example, right?

Yeah, but Chad, how else then if you're going for experiential, how else does that change?

Like the feature physical footprint of the store?

Do you see any changes coming?

And as we kind of look to what Grocery stores look like in the next five to 10 years.

Do you think that that will change?

Will there be more space dedicated to the personal shopper part of the journey?

Like back of house space to prep and pack those orders.

And then you're having the chicken chandelier be more front and center.

Like, how does that.

The chandelier gets bigger?

Yes.

I don't know.

I hope not because it's pretty big right now and actually his wings flap and everything.

But actually, our staging rooms for commerce are probably, I would think, biggest in the industry.

There's several thousand square feet.

Because we're building the future and because we're fortunate that leadership accepts and understands how big commerce could be.

But growing our seating areas in our stores.

Okay, right.

So they used to be a small area.

If you look at our latest stores, there is.

There are a significant number of tables, long rows of tables, and that's where people gather.

And that's where people sit.

They work.

They're drinking a coffee, they're getting a beer, they're eating from Sammy's or salad bar or Chicken Kitchen.

That's probably one of the biggest changes.

And again, that's not a secret.

A lot of grocers are figuring out that blend of food service and grocery.

Right.

So to create the meal solutions.

But for us, it's about the gathering and getting the guests in the store to enjoy whatever they want to enjoy.

And Chad, this is a question that I hear you like.

I love this concept, but you're still taking that space that at the.

You're sacrificing scratch square footage on the floor to sell products in the grocery store.

How do you rationalize that as a company in that.

Or is it just there will be bigger baskets, the people will come more frequently because we have food service in store versus like giving.

Dedicating more floor pad to selling products.

It goes back to my earlier answer of both and.

Right.

So, yes, we might be taking up a little bit more room than usual, and we do that with our staging rooms as well.

But we know that the behavior that it'll drive.

We believe in our growth of community.

Right.

By getting the guests in the store, we are kind of locking them in to becoming loyal.

Those foods households bring in their friends, bring in their family.

When we open a new store, we bring in local, the mayor and influencers.

And the first time that they come in the store, they are just raving about this experience.

Right.

And so that's what we want.

And it organically drives the revenue.

And so we can take the time to kind of design the stores to dedicate more space to that.

Yeah, but sometimes you can rent out our space as well.

You can have tea parties, you can have cake decorating, and we do a lot of events on our own as well that organically drive that entertainment and drive footsteps in the store and of course that drives revenue.

Right, got it.

Chad, I'm curious too.

We've heard today a couple things around the food service element and particularly, you know, given the digital focus of your job and food service being still a value oriented play for most grocers relative to the other consideration set that's out there for most consumers.

Are you piping that into to your customers via like, can they order online and pick up the food service items in the store or have them delivered from the Lowe's store to their home?

How are you thinking about that evolution?

So?

Well, commerce is something we've been investing in for a long time.

So when you think about the grocery order, where you can order anything now through Lowe's Foods to go groceries, catering, cake so you can put on full events and if you want the quick turn.

Right.

Like the quick things, that's what we're working on right now, trying to figure out and unlock that experience.

Because we have our boxcar coffee, we have our chicken kitchen, we can mobilize anything.

It's a matter of how do we do it in a seamless way.

Got it.

That's intuitive.

So we can deliver on the promise.

Right.

It's a different operation, it's different technology.

And there's a technology solve that we'll need someday.

Right.

So talking about strategy, if our strategy is to grow food service, we need malleable technology that will help us really stand up.

An alternative E comm approach.

But make it seamless for the guests so they're not going to five different apps.

Exactly.

That's the perfect example of what we were talking about.

And that's the challenge right now or the friction point for you as a grocer to be able to enable things like ordering from the chicken kitchen directly to home is just how do you make it that seamless experience so I don't have to go to doordash, to Uber Eats, to Instacart, et cetera.

Make it easy for the guests so that they don't have to think they can just purchase it, trust it, and then enjoy it.

And being intentional about where you expect them to look for it.

Right.

Whether what's on your app, on another app, whatever, but being intentional about why.

You'Re doing it and be true to our brand.

Right?

We are very, very focused on the Lowe's Foods brand.

It took a long time and a lot of people to build and we have to maintain that brand equity and deliver it in everything that we do and it doesn't come easy.

It's a lot of work to make that brand work.

I have no doubt.

No doubt, Chad.

Well, Chad, thank you so much.

Thank you so much.

My pleasure for those omnitalk fans, Chad.

We've been trying to get Chad back on the program here for a while and we finally made it happen here in Florida at fmi.

Thanks FMI for hosting us at this conference.

Thanks to Simbi as well.

We're going to be back tomorrow, booth 108.

If you want to stop by, say hello.

We're going to be here doing interviews all day long and until then, Ann.

Be careful out there.