The Independent Grocers Alliance (IGA) Global Rally was held Feb. 7-11 in conjunction with the National Grocers Association (NGA) Show in Las Vegas for the second time this year. NGA had a record turnout for its show, and IGA was close to one as well.
“It makes sense,” said Mark Batenic, CEO of IGA Inc. “It’s one trip. There are a lot of educational platforms both from us and from NGA that are valuable for the retailers and then of course, the vendors—many of them are Red Oval Partners (manufacturers and service providers) showing off their products and demonstrating the information technology they have and can share with the stores.”
IGA continues to grow “very nicely” in the U.S., he told Geoff Welch, VP-Midwest for The Shelby Report, who was in Las Vegas for the events.
“We had a net increase last year in store count, which was refreshing, because for the last two years we were sort of flat,” Batenic said.
IGA owners today are feeding the future by reinvesting in their stores, training their employees and embracing new technology that can reach shoppers who are “bombarded by multiple venues,” he said.
“We just spent our whole IGA Global Rally here this week in conjunction with NGA talking about ways to reach the new shopper, and the new shopper doesn’t just mean the Millennials,” Batenic said. “It means anybody who comes in your store, because there is an enormous amount of ways to connect with that shopper, and that’s what IGA is doing.”
He said that IGA is rapidly growing outside the U.S. as well. An Australia member-partner grew by more than 90 stores over the past year, and in China, member-partners added three new companies to the Alliance. IGA’s reach also now extends to India, Nigeria, Fiji and Papua New Guinea.
“We’re constantly being asked to investigate new countries. They’re investigating us,” Batenic said. “We’re very, very happy with the growth, but we’re never satisfied because family-owned entrepreneurial business is the cornerstone of business around the world,” he said. “We just happen to be in the grocery sector. That same platform applies to any other businesses out there.”
More than 400 people attended the IGA’s annual awards banquet during the Global Rally to celebrate international award winners and the previous year’s achievements.
While NGA will return to Las Vegas a year from now with its show, IGA will be in Orlando, Fla., near Disney World for its 2015 rally.
“We’ve had our largest conventions down there,” Batenic said. “It’s a family place, which goes along with what IGA is—a family business. We’ll have a very large international contingent there, because they like Mickey Mouse, too.”
Two areas of focus as IGA looks ahead
Looking ahead to what’s next for IGA and independent grocers—and “there is an ‘I’ in ‘independent’,” Batenic said—there are two big ideas.
First, more retailers are being encouraged to embrace the technology their shoppers are not only using, but also bringing into the store with them.
“Shoppers, regardless of age, all have smartphones. Smartphone penetration today is enormous in this country,” Batenic said. “Reaching the shoppers via the different methods that we have, that we’re embracing, that we’re showing them, that we’re doing, it’s a way to reach the shopper. That’s one thing.
“The second thing is that for the first time ever that we can remember in recent history, which would be 30 or 40 years, we’re aggregating the volume of the United States IGAs. In other words, we’re doing some negotiating on behalf of all the stores collectively,” Batenic said.
A partnership with marketing analytics firm reach | influence is helping IGA track that volume.
“We are receiving the daily transaction logs of over 600 IGA stores, so we know exactly what the shoppers are buying, and in turn we’re using this information to help negotiate unique promotions for the IGA stores only with the Red Oval Partners that are part of our organization,” he said. “So this has been a real eye opening.”
That work began last September, and Batenic said that IGA has “solid evidence” that basket size is regularly doubling and sometimes tripling when shoppers take advantage of the unique promotions.
“We’re doing a terrific job in this and it’s just not Red Oval Partners,” he said. “We are using IGA exclusive brand products in these promotions as well, as the shopper becomes more familiar with the brand. And the good news is we set this up so that there could be a win-win-win-win for everybody.”
From the shopper to the stores to the licensed distribution centers to the manufacturer/producer, it cascades backward as a “four-win sequence,” he said.
In addition, IGA soon will introduce another unique marketing opportunity just for IGA retailers via electronic coupons.
“We’re continuing to push forward and we have to do it quickly, because today more than ever the shopper is being bombarded with ways to do different things, to buy things and to find information,” Batenic said. “That’s where I see it going.”
He said IGA’s growth will continue because of the benefits that come from pulling together. The independent retail grocery sector represents $131 billion in sales annually in the U.S. IGA constitutes $8 billion of those sales through its stores in 44 states.
“We are the largest brand with independent stores in the United States, and our distribution companies—we’re the largest brand that they support, so it will continue to gain importance as the retailers understand that they have to become interdependent, not give up their independence, but become interdependent on each other and on a brand like IGA to help them,” Batenic said. “Independent retailers, wherever they are, are still the cornerstones of their communities. You can’t forget that. And they are providing more jobs than any other businesses around.
“But in the next breath, they need to somehow work more at being interdependent without losing their identity or anything else,” he said. “We think IGA brings that to them. We’re always asking more and more stores to join not because we are trying to be giant killers, but because it brings to them information that they need.”