Looking toward a brighter future. (Nonfoods for Profit).
With retailers from across the entire mass retail world joining the General Merchandise Distributors Council (GMDC) association, GMDC President and CEO Dave McConnell is confident that his Colorado Springs, Colo.-based retail group is headed in the right direction.
McConnell, president of GMDC for three years, says that a combination of efficient meetings and a solid return on investment for retailers and suppliers is making both CMDC conferences more attractive for industry officials. Still, with a slowing economy and increased demands for efficiency, McConnell is well aware that his group's work is never done.
Grocery Headquarters had an opportunity to talk with McConnell at the conclusion of GMDC's HBC Marketing Conference in Orlando, Fla., in mid-September. Below are some of his comments.
What is the current state of GMDC?
Dave McConnell: In a word, excellent. We're coming off of two of our most successful conferences since 1997. Probably the most exciting news is that in its inaugural year our new wholesale/retail registration package outperformed our expectations. Wholesale/retail participation was up more than 30% at the spring general merchandise conference and more than 20% at the fall health and beauty care (HBC) conference we just completed two months ago. The added benefit of these attendance gains was that we were able to increase supplier participation in a marketplace where trade show attendance has been markedly down at almost all events.
This bodes well for us in 2003 as we now begin to add new members to our roster. Our supermarket and wholesale grocer membership base has always been, and continues to be, our strength. We've also been successfully recruiting retailers and wholesalers from other trade classes. Walgreens and Eckerd have already joined the association, and we're very hopeful that Rite Aid, after attending both 2002 conferences, will be a member soon. In addition to growing our retail drug base, we were successful in recruiting major players in the wholesale drug arena, such as Cardinal Health and McKesson. Finally, we will continue to develop our strategy for attracting retailers from the value channel to the association. This year, both Dollar Tree and 99 Cent Stores attended conferences and company officials from both retailers said they found them to be very productive.
Another bright spot was the continued evolution of our Educational Foundation. We released two important new bodies of work in the Web based Women's Well Being Pharmacy Continuing Education program we developed in conjunction with the University of Illinois at Chicago. This program is terrific and geared not only toward pharmacists but also pharmacy technicians, nonfoods store personnel and store management. It's available at no cost on the home page of our website, gmdc.org.
What is the outlook for nonfoods?
The GM and HBC categories are under a lot of pressure and have had a tough run, particularly in supermarkets, in the first eight months of this year. Consumers at all income levels have become much more conservative in their purchase patterns and have shown a real desire to seek out value and price when they do make nonfoods purchases. Shopping trips are down to 1.9 times per week across all trade classes, according to Wendy Liebmann of WSL Strategic Retail, and the only areas where more shopping seems to be occurring is in the value-oriented outlets such as dollar stores, supercenters, home improvement centers and mass merchandisers. More traditional outlets, such as drug and food, have been hit hardest, which is reflected in almost no nonfoods growth and even losses in some cases. I believe that underperforming retailers really need to sit down with their trade partners and evaluate their go-to-market strategies to make sure that they're delivering the right products at the right price to these value-orient ed consumers.
GMDC is changing the 2003 HBC conference format. Why?
Our mission statement is to provide the most productive workdays of the year to our wholesale/retail and supplier membership, and we're constantly looking for ways to make an outstanding format (our controlled casual conferences or CCCs) even better. In discussions with our various boards over the last year, we've developed a plan for the 2003 HBC Marketing Conference that we think will improve productivity by shortening the conference by one full day and eliminating our half-day of leisure activities on Sunday afternoon.
Consolidation in the I-IBC manufacturing side of our membership has created an environment where we feel we won't need to facilitate CCC appointments for more than 200 HBC suppliers at any given conference. We can engage these suppliers with our wholesale/retail membership by asking the suppliers to participate for the entire conference, instead of creating two separate and distinct supplier groups as we have in the past. We think this approach is a win for everyone involved. Suppliers have a longer time frame to set appointments with their trade partners, and time-pressed wholesalers and retailers can now reduce precious time out of the office while meeting with all of the key companies and executives that drive their HBC business.
By the way, with a much larger supplier membership base of 360-plus companies at the GM Marketing Conference, we'll continue to run that conference from Saturday morning through Tuesday afternoon with two supplier groups.
What's in store for the future of GMDC?
In addition to the format changes for next year's HBC sessions, we're going to be focused on designing and developing an even more robust CCCnet conference preparation and follow-up tool kit on the GMDC website. Our members have given us some great input on what they'd like to see improved and added to this already terrific conference tool. At the same time, we're going to aggressively market its use to our membership. It's still a new service and with usage levels of just over 50% for wholesale/retail conference participants and less for suppliers, we think we've got plenty of room to get more members engaged in utilizing it.
We're also going to focus on identifying more innovative and unique product manufacturers and bringing them to our conferences. Our wholesale/retail members tell us that one of OMDC's biggest competitive advantages over other trade events is our ability to consistently deliver these types of suppliers. We want to grow productivity by growing that segment of our membership, while being careful to take great care of the current group of large- and medium-sized manufacturers that drive such a huge piece of the overall nonfoods business.
We'll also continue to focus on developing and deploying industry studies with an additional one to two studies coming from our Educational Foundation. A special study focused on excellence in merchandising has already been approved and is in the process of being shaped and funded right now. Our joint foundation board of six suppliers and six wholesalers/retailers has developed a very effective team approach to identifying and evaluating industry and consumer trends, and then creating studies that are actionable in the marketplace to address those trends.
Finally, we're evaluating ways in which we can enhance the productivity of our conferences by bringing more of the right players in the industry to our conference venues. As we look at possible new candidates for participation beyond our current membership, we've created dialogues with our various boards as well as other associations to analyze our options and the ROI (return on investment) to our members that any new participants might bring.