Lessons in the rearview mirror

Loblaws and the discipline of marketing will survive the resignation of Dave Nichols, but neither will ever be the same.Dave did what few have done. He transformed a company, which, in turn, transformed entire industries.I do not want to add to...

Loblaws and the discipline of marketing will survive the resignation of Dave Nichols, but neither will ever be the same.

Dave did what few have done. He transformed a company, which, in turn, transformed entire industries.

I do not want to add to the myth of the man – he is better able to do that than I am – but I think it important to understand the impact of this visionary.

His rewiring of Loblaws from a passive channel of distribution into an aggressive brand-builder epitomized the transition of power from manufacturer to retailer.

Scanner data

Many people attribute this shift in power to the emerging availability of scanner data, which gave retailers a more immediate and intimate understanding of what customers wanted.

This is only part of the reason.

The real shift happened because Loblaws out-marketed, out-hustled, out-experimented the staid, often complacent marketers of branded products.

Dave showed those of us schooled in traditional packaged goods how the art of marketing needs to be practised in the hyper-competitive, highly customized 1990s.

Brands need to be flexible. They need to respond quickly and innovate constantly. They should stretch consumers, surprising and delighting them, while fulfilling their function.

While many marketers talk to ‘the lowest common denominator,’ Dave assumed that the customer was curious, experimental, smart and hungry for variety.

He did not accept the conventional wisdom that food was a low-involvement item that needs only cursory communication of its taste benefits.

Instead, he gave his customers copious detail about food, its origin, its preparation and its presentation.

In the age of information, Dave became an expert in selling knowledge, capability and know-how, as well as food.

Dave did not create the new definition of value which is driving the modern North American economy, but he was the most eloquent Canadian in responding to it.

He figured out what now seems so obvious – that people wanted richer ice cream, more chocolate chips in their cookies, fatter shrimp and cheaper pasta.

He also understood that selling function of value was not enough.

While some marketers moved away from image-building in deference to the pragmatism of the 1990s, Dave simply built a more relevant image.

The many people who stock his products in their kitchens are appreciating the value, but, importantly, they are also making a statement.

They are saying: ‘Look how smart I am buying anti-brands. Look how savvy, how sophisticated, how self-confident.’

Innovations

The innovations to the customer were matched by innovations in marketing communications.

Dave moved out of a traditional agency and set up his own production facility over a decade ago, when such a move seemed foolhardy.

At first, his roughly-shot, harshly-lit videos seemed to be acts of hubris that detracted from the image of quality. Instead, he showed many of us that advertising execution is a disposable commodity, and that the only important thing is to have a good idea.

Dave sprinkled his message in every medium. He even made packaging a medium.

Not only did he embrace infomercials, but he also had the guts to run them on the cable channels that are only licenced to show stop-action video.

Poor production values, in a lesson on reverse psychology, only seemed to add to the Loblaws perception of smart quality.

Several years ago, during an interview on CBC Radio, Dave admitted that he ‘stole’ most of his best ideas from others.

Generics, the ‘Insider Report,’ Green products, all came from other marketers, usually in other categories.

This seemed to me to be less an expression of humility than one of passion. Dave would try anything smart to make his store the best.

Lots of what Dave tried did not work (and he did not have to pay the penalty of listing allowances to make those mistakes.)

But the lesson for marketers is that action builds its own image and momentum. Too much marketing effort goes into preventing mistakes, thereby preventing even the mistakes that end up working big-time.

Tactics

While I am a fan of Dave’s vision and a consumer of his products, I did not like some of his tactics. Sometimes he beat up on suppliers to get the innovation, quality and price he wanted.

Such ruthlessness seems to me to be short-sighted, burning out the goodwill of the very people Loblaws will continue to need to deliver its promise of high-quality, low-cost.

Other people in business have their own Dave stories. But to dismiss his achievements because of his style is unfair. Dave helped cause the crisis in brand marketing and advertising that is so preoccupying to the industry.

He did that by being the better marketer.

By learning from him and catching up, brands will get better, marketers will get smarter, and customers will get more of the value and attention they deserve.

I do not know what Dave will do next, but my hope is that he will focus on the u.s. and push traditional American marketers into a similar crisis.

If we export the cause of the chaos, then maybe we can export the marketing expertise to solve it.

John Dalla Costa is an author and consultant to senior business executives.