The Diverse Strategy Behind Hy-Vee's Success
It's been a busy year for Hy-Vee, punctuated by major strides in technology and health and wellness. Jeremy Gosch, CEO of the Midwest retailer, took the stage at last week's Groceryshop event in Las Vegas to discuss the company's evolving strategy, value proposition, focus on customer health, and more.
Defining Strategy & Value
Hy-Vee is, obviously, a grocer, but as Gosch explained, the company's overall strategy diverges quite far from just selling food. Hy-Vee is the only food retailer in the country that owns a bank, and it also owns a pharmacy benefit manager and a telemedicine company focused on mental health, while also offering primary care services through a partnership with Exemplar Care.
"We've got a unique strategy and go to market, and we're very diverse as an organization," Gosch said. "That's part of our strategy as we continue to evolve."
Value is also paramount to Hy-Vee's strategy, with price being table stakes, Gosch says, especially since many consumers equate value to price. Two years ago, the company launched a price campaign to match its top 15,000 items with the largest or the cheapest retailer in any of its markets.
"That takes away the stigma of paying more if you come to a regional grocer," he explained. "Once that's done, you've got the playing field leveled."
Another part of the price and affordability equation is a robust private label program. Last year alone, Hy-Vee developed 1,400 new private brand items across its portfolio based on what its customers wanted most.
The next focus for Hy-Vee's value proposition is service and quality. "Service, for us, really is defined by whatever the customer needs, whenever they want it, wherever they want it. And that means both online and in store," Gosch said.
As for quality, Hy-Vee works to ensure that it has the best fresh product quality and variety among its competitors across all the areas of its stores. Its bakeries are from scratch, and its artisan bread is made from a 100-year-old starter.
"Our foodservice continues to evolve with the customer," Gosch said. "We've got dining destinations that are unrivaled. And then produce: We go out and really procure partnerships with the best providers in the country, many of which we're exclusive with because of our standards. So, it's a combined strategy."
The Health & Wellness Imperative
As Gosch explained, Hy-Vee's mission statement revolves around making its shoppers' lives easier, healthier and happier. "Healthier is a big part of what we do," he shared. "And we've got the opinion that it is our job to help our customers live healthier and make better food choices."
In addition to having dietitians in its stores and encouraging food as medicine, Hy-Vee has undertaken larger pilot programs related to health and wellness among different populations. One such program included a partnership with Evermore to incentivize diabetic patients to buy and eat fresh food in an effort to lower their A1C numbers. After six months, Gosch said, more than 83% of that population had A1C numbers in the normal range.
The grocer and its dietitians are also undertaking programs to help GLP-1 patients change their eating behaviors so they can keep off the weight they lose for good. Hy-Vee also focuses on aging populations within its footprint through its bi-monthly Senior Health Days, where senior citizens can meet with pharmacy staff and dietitians to learn more about staying healthy.
Engaging E-Commerce
A final focus Gosch discussed is Hy-Vee’s ever-evolving e-commerce business. "We've been in e-commerce since 2013, and lord knows we've succeeded and failed many times since then," he shared.
This year, Hy-Vee launched Fast Delivery, which promises grocery deliveries to customers' homes in 30 minutes or less. While this is a huge feat, it hasn't stopped the company from continuing to evolve in e-commerce.
"We're in the midst right now of doing a full rewrite of all of our digital properties," Gosch explained. "Our goal is all about speed and meeting the customer where they're at. They obviously want quick, so that's where we're going."
When it comes to store pickup, Gosch noted that the new goal is to have customers in and out in three minutes, as opposed to the current standard of five minutes. Additionally, Hy-Vee is working on exponentially decreasing the amount of time it takes for customers to place a digital shopping order.
"As we look at our website, it takes, on average, probably 40 minutes to shop through our website," he said. "We want that to be five minutes or less as we move into the new iteration with AI and everything else that's going to push us forward."
This article was originally published on P2PI sibling publication, Progressive Grocer.
