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The Graze journey: from pureplay to multi-channel

Health food retailer Graze began as an online subscription platform, but has used customer data to successfully cross the boundary into the physical retail space, says CEO Anthony Fletcher

Graze began life as an online retailer offering a subscription-based service to consumers who wanted healthy snacks delivered to their homes or offices.

Now, the healthfood retailer also offers its products as a healthy snack in many name-brand supermarkets and convenience stores.

Speaking at the Internet Retail Expo (IRX) 2017, Graze CEO Anthony Fletcher said he does not see Graze as an idea for a good product, but as a “radically new way of approaching a market”.

According to Fletcher, who was originally a product specialist at the Innocent Smoothie company, 50% of the time when consumers are looking for snacks they are hoping to find a healthy option but, due to the nature of the food industry, they are unlikely to find what they need.

The brand developed its own “technology-enabled factory” to give it the flexibility to develop and roll out products rapidly.

Likening the business model to the fashion industry, Fletcher said the ability to use consumer feedback and data to select the right products for stores and online Graze can make sure it is showcasing and promoting products its knows will sell.

Customers also provide fast feedback on whether they like or dislike a product, especially through the brand’s online channels. “If the product doesn’t work, we never make it again,” said Fletcher.

Due to the technology available in its factory, staff can design packaging and products in a web application, giving the brand the ability to take a product from design to launch in around 24 hours.

The brand launches new products every few weeks, and uses its close social media relationship with its consumers to decide what to keep and what to ditch.

Fletcher said this attitude towards the market was a display of a “different risk profile” as Graze’s appetite for risk and failure is different to many other retailers not willing to trial and change its products in the same way.

Single customer view across channels

Integrating its own customer relationship management (CRM) with third-party services, such as the Sainsbury’s Nectar loyalty scheme, allowed Graze to gain a single customer view across its online and offline channels to further grow its understanding of what its customers want.

This model is easy to scale internationally, and the brand can use its relationship with its customers to regionalise its product offering depending on the market.

“The first advantage we have by being the sort of company we are, by being direct to consumer, is the ability to use data to understand your consumer better than the next person. To put it in perspective, Graze gets 15,000 product ratings an hour back from its consumers,” said Fletcher.

But Fletcher insisted Graze is “a food business, not a tech business” and warned against “getting too carried away with technology.”

“The core is to have that view of the brand and what they’re trying to do, but the interesting question is about how tech will help you get there,” he said.

For many online retailers, there is a “snobbery” surrounding showcasing products in stores, according to Fletcher, who labelled the brand’s decision to cross from online to offline “controversial”.

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Fletcher said many businesses falsely think “you’re a tech business if you sell through a website, and if you don’t, you’re not” and become “hung up and over fixated on channels”.

But by offering its products in stores as well as online, the brand hopes it can drive customers towards its online offering once they discover its products in stores.

Rather than hindering the firm’s progress by spreading itself across many channels, Fletcher said: “The data we gathered online gives us multichannel advantages, which is just as useful for driving sales in a retail store.”

Although Fletcher denies that Graze is a technology business, he said the firm’s success was embedded in its tech staff, and added: “Wonderful developers and wonderful data scientists can do wonders for your business.”

Data science professionals are in currently in high demand as many industries are beginning to realise the benefits data analysis can bring to a business and its ability to innovate or improve customer service.

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