How Albertsons maintains close customer connections

NRF 2022: CEO Vivek Sankaran shares lessons in earning loyalty
Peter Johnston
NRF Contributor
January 18, 2022

In a well-attended session on Monday afternoon at NRF 2022: Retail’s Big Show, Albertsons CEO Vivek Sankaran discussed his company’s discoveries and experience in the art of earning and keeping customer and employee loyalty in a time of rapid and unpredictable change. Sara Eisen, co-anchor of CNBC’s “Closing Bell,” moderated the discussion.

A close relationship with its customer base has long been a distinguishing characteristic of Albertsons and, in Sankaran’s opinion, an index of its worth. “I find one of the best things about us is customers who’ve been with us forever,” he said. “I talked to a customer recently who has been shopping with us for 47 years. In my opinion, that’s the true measure of our value.”

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This “customer stickiness,” Sankaran said, plays out in customers’ relationships with the Albertson’s staff. He recounted an experience he had in December, while he was working in an Albertsons in Dallas with Ron Watson, the store’s produce manager. In the four hours Sankaran was there, three customers approached Watson and gave him Christmas cards.

“We build a closeness at a very fundamental human level,” Sankaran said. “Then on top of that, you’re using a lot of technology — personalization, ecommerce, delivery — that builds on this emotional bond and creates a lot of stickiness. And I think that’s a lot of the value of the company.”

What about the pandemic, Eisen asked: How did it change people’s relationship with the grocery?

In the beginning, Sankaran said, the pandemic created chaos for all hands. “We had to figure out what to do,” he said, “because it was so unpredictable. One of the things we had to learn was where the customers were going in relation to it. We had to understand what they were looking for from a safety standpoint, and also from a product standpoint. We needed to understand how we could make things simpler and easier for them, and also to make sure the associates were safe.”

But the first question was, what were customers looking for? “There were three things that came out of COVID for us,” he said. “One was understanding what the customers wanted. Then we had to have a deep empathy for the associates, because without them, you can’t have a retail operation. Third was speed. It’s like hockey. It’s hard to know where the puck is going, but if you can react quickly to change, you gain an advantage. And that’s what we’ve learned to do.”

“How did you keep morale up so that associates would be able to work through this difficult and uncertain time?” Eisen asked.

Essentially, by figuring things out as they went along, Sankaran said. “In the beginning,” he said, “there was very little prescriptive information about how to keep people safe. Before COVID came to the United States it had already broken out in Europe, and we learned from what had been done there — things like putting up plexiglass, for example.”

Looking ahead, Albertsons is preparing to deal with the post-pandemic world and capitalizing on its learnings.

One thing the company is doing, Sankaran said, is putting an increasing emphasis on food freshness. “Secondly,” he said, “we’re focusing on creating stickiness, through loyalty programs, ecommerce, our pharmacies, rewards programs and so on. We are giving customers added incentives to stay with us.”

And what leadership lessons, Eisen asked, can you share, looking back over your career?

“I’m having a blast,” Sankaran said. “My leadership is still a work in progress, but so far it has proceeded through three phases. The first phase was problem-solving, which I’ve always enjoyed. Then I went to Frito-Lay, where I just learned to get things done. And now I’m enjoying getting people to do things they didn’t think they could do.”

At NRF 2022: Retail's Big Show, Albertsons CEO Vivek Sankaran discusses areas of focus for the future.

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