By Leslie Sarasin, President and CEO, FMI
At FMI’s 2020 Midwinter Executive Conference we’re challenging attendees to imagine, envision and deliver on experiences that are authentic to their brands and businesses.
Oscar Gonzalez, co-president and COO of Northgate Gonzalez Market, is chairman of the event and a true leader when it comes to creating genuine experiences that hold true to his company’s personality. Shoppers have gone as far as to call his stores “Mexican Disneyland” and as Northgate Gonzalez Market celebrates their 40th anniversary this year they plan to hold true to the proven values that create a successful grocery experience. Under Oscar’s leadership we’ve created a program that pushes the imagination, asks provocative questions and delivers on tomorrow’s promises, but first, I invite you to hear from him on important emerging issues including the new marketplace, workforce, community relations, and health and well-being.
Sarasin: You’re the CEO of a family-owned business. How do you respect tradition while bucking the classification as a “traditional” grocery chain? How do you differentiate among the competition?
Gonzalez: Our family has worked extremely hard at generating a strong alignment relative to our core values – values such as respect, honesty, humility, and hard work. These values can be summed up by our commitment to servant leadership.
Being a mid-sized family-owned business is a real strength for us. It allows us to move very rapidly to the changing needs of the communities we serve. No segment of the population is changing faster than the Hispanic community. As the Hispanic community acculturates, their needs and wants change. The combination of acculturation, the aging of our population, and the impact of millennials all come together to form dramatic changes in shopping behavior. The ability to change faster inside the organization than the changes that are happening outside the organization has been a major competitive advantage for us.
Sarasin: Our industry’s leaders must stay ahead of the curve. Consumer demands and swift shifts in technology are constantly evolving—strong trading partner relationships are vital as business models shift. As a grocery executive, how do you make the distinction between taking risk and advancing innovation in your company?
Gonzalez: First, risk-taking and entrepreneurship are in my family’s DNA. We know that significant returns typically come from taking risks—but we want to make sure that they are calculated risks, with a good chance of success. We fully realize that we must be unique and different from our many competitors if the business is going to be successful. We are constantly searching for new ideas and how to best incorporate them into our business. Innovation is a key component of our strategy. That being said, I consider us more of a second adopter of technology. Building technology from the ground up is very expensive and very risky. Technology changes so quickly that by the time you are done it is nearly obsolete. We look for out-of-the-box solutions with open architectures that nearly eliminate integration time and expenses. This allows us to inexpensively adopt current technology very quickly with no customization or integration expense. Our approach is think big, start small and move quickly.
The New Marketplace
Sarasin: Do you agree that the new marketplace requires a more personalized experience? How are you meeting these shopper requirements by looking at customer service through a different lens?
Gonzalez: Allowing our shoppers to personalize their selections is a key component of our strategy here at Northgate Gonzalez. Our guacamole and ceviche stations are a good example of how shoppers can mix and match—some customers may like more or less serrano pepper or any other ingredient in their guacamole. Our full-service stations are made to order, offering a level of personalization and service that excites and delights our shoppers.
We are also focused on the customer experience – and how do we enhance it. A major goal is to bring fun, passion, excitement, and an authentic homeland experience to our stores. Our stores have increasingly emphasized the feeling of a Mexican open market, or Mercado – with the sounds, aromas, music, and products that many of our customers have never experienced outside of Mexico. We have emphasized our fresh departments – with large produce and full-service meat departments. We also have an extensive selection of hot foods, made-from-scratch bakery items, and freshly made tortillas – where we grind and cook our own corn.
Sarasin: Our U.S. Grocery Shopper Trends research indicates that successful food retailers will take a “both/and” approach when it comes to ecommerce. What is Northgate Gonzalez’s position on the most appropriate omnichannel strategy? Are you finding demand among consumers for multiple experiences? What are the biggest challenges and opportunities?
Gonzalez: Today we are focusing most of our resources around the in-store experience. Our stores are designed and operated to bring theater and true customer engagement to life. We call it activating the space. This level of differentiation is what makes us truly unique. Although it is difficult to replicate this in the omnichannel, we do recognize that each individual’s needs are different. We are currently piloting kiosk and mobile ordering in our cocina and carniceria departments to enhance the in-store experience. We have buy online/pick up in store on our future roadmap. We have also partnered with Shipt for click and collect.
Sarasin: Northgate Gonzalez is all things local when it comes to its people as well as its products, and as I understand it, you strive to hire regionally and retain that hometown feel. Tell me why this is important to you and your company culture in a changing marketplace.
Gonzalez: Northgate Gonzalez is a people first family company, and our values are deeply rooted in our culture. We have a strong commitment to both our family and service values. We hire people who we believe will share our values and we all strive to live up to those values every day. We believe that values drive behaviors and behaviors executed over time, create the culture. When people ask our associates, “What is different at Northgate?” almost unanimously their first response is, “We are treated like family.”
Sarasin: What are your observations about the future of the grocery retail workforce and how companies can remain competitive?
Gonzalez: Human talent, especially those associates who are enthusiastic and truly want to serve, will always be our number one passion. Nothing is changing more rapidly than our workforce. Just like our shoppers, our people have needs and wants and those needs and wants have changed rapidly. Quality of life, sense of purpose, having a say in what they do, as well as being part of a winning team is what our people want. We have invested heavily in talent development to help our people achieve both their personal and professional goals. Aligning the goals of our people with the goals of our company brings this to life.
Community Relations and Well-being
Sarasin: Food retailers are the cornerstone of their communities. Can you please share how Northgate Gonzalez is making an investment in its neighborhoods and how you impart your values through your stores’ civic and social work?
Gonzalez: The Gonzalez family truly believes that they have a responsibility to “elevate” the communities where we have stores. The three aspects of the company that are the company’s supporting “pillars” are education, well-being, and faith – aspects that we have focused upon for years. We believe that education can really change the trajectory of an individual and a family – and we have provided increasing amounts of scholarship funds for our associates and their families. Through our Viva La Salud program, we have focused on educating our customers about healthy eating. Our commitment and connection with faith-based groups has been part of our DNA from the very beginning. We have most recently acquired a high-quality local urgent care provider to serve both our associates and the communities we serve.
Sarasin: In order to eat well, consumers need to be able to shop well. How does Northgate Gonzalez embrace more than just the health and wellness goals of its customers and support their well-being?
Gonzalez: We view our stores as “portals” for health and wellness to our communities – not just for the purpose of providing affordable, high-quality, and healthy food, but to have a much larger positive impact on the community. In our 41 stores, Northgate has had over 800 events in the last year supporting our communities in the areas of classes, mammograms, vaccinations, health check-ups, 5k runs, and more. Recently, a Northgate-related entity made an investment in an urgent care organization, and we are testing the inclusion of an urgent care facility in our stores. And finally, we have developed partnerships with numerous local, county, and state-wide, health-focused community organizations – all to promote the health and vitality of our customers and communities.