Grocery shopping is a fact of life, and more than a century ago its necessity enabled a Chinese immigrant named Hok Yat Louie to build a supermarket empire. The company, H. Y. Louie Co. Limited, began in 1903, when Louie opened a general store in Vancouver’s Chinatown.
Today, the company has blossomed into British Columbia’s second-largest family business: a $4 billion company that employs 8,000 people in four different businesses, including food wholesaling, the IGA food chain, London Drugs, and an import-export division.
IGA is a brand of grocery stores that operates as a franchise in 30 countries. In British Columbia, H. Y. Louie owns five Marketplace IGA stores and three Cash & Carry stores while supplying the province’s remaining 40 independently owned IGA grocers.
However, shifting consumer behaviour has demanded innovation on the part H. Y. Louie to meet the needs of customers.
with Jim Chan
1. What does innovation mean to your company?
Innovation to H. Y. Louie is being able to address what the consumer is asking for. We have to be able to provide the means for them to order groceries online with ease and the ability to look up nutrition values or the ingredients of products. It’s a more convenient way for them to do their shopping.
2. Is there a technology, trend, or idea that’s driving your company forward?
Yes—immediate access to information.
3. Where do you hope this innovation will lead you in the next five years?
Five years from now, everything will be online shopping. If we look at our market, the millennium age group and generation-X shoppers will be our primary buyers. We’ll have to understand where and how they will buy things.
4. How do you cultivate innovation among your workforce?
It’s a matter of selling it back to team. They all go grocery shopping too, so they understand what they see out there and how we can bring that back here and improve the shopping experience of our customers.
5. How can a company encourage innovation without breaking the bank?
It’s a matter of understanding technology and how it can help the business. You don’t have to implement everything. It’s a matter of what makes sense to help the business.
“Grocery stores are different today than they were a decade ago,” says Jim Chan, IT director for H. Y. Louie. “A decade ago, customers pushed a buggy down the aisles, reading the backs of cans for nutritional information.”While the mechanics of grocery shopping haven’t gone away for millions of shoppers, Chan says a new generation of shoppers wants to order groceries online or get information about the food they buy or compare prices by scanning a label with their smartphone. “Today, customers have done nutrition research, and they know what products they should be buying,” he says.
As H. Y. Louie has transitioned from a primarily warehouse distribution organization to a more retail-oriented business, Chan is overseeing the implementation of a new Enterprise Resource Program (ERP) because H. Y. Louie’s current ERP is 18 years old. He says a new ERP will provide better data and better real-time business information. A new system will integrate the components of finance, merchandising, and sales, including product category management. It’s one way an older company is adapting to new norms within its industry to offer customers the best possible shopping experience.
“It will strengthen our ability to be more retail-oriented and provide sales forecasting and inventory forecasting in real time,” says Chan, a 25-year IT veteran. H. Y. Louie expects to have the new system implemented by 2014.
Chan says he encourages innovation among his IT team using a combination of empowerment and team-building exercises. Every two weeks, he likes to hold group meetings to gather ideas and feedback. Members of the IT team are also grocery shoppers, and they bring their experiences back to the company to improve the shopping experience.
But even with these new strategies in place, the team follows the business principles set forth by H. Y. Louie more than half a century ago. Louie encouraged his Canadian-born children, who had taken over the business, to be earnest, fair, and loyal in their dealings with customers, and to discuss business with fellow workers and be amiable to them.
“To be innovative, we really look at our market,” Chan says, adding that baby-boomer shoppers, generation-X customers, and the youngest new-millennium customers all prefer different ways of shopping.
“The millennium age group is where innovation comes in,” he says. “If our products are not available electronically, they are going to go somewhere else to buy it.”
Up next for H. Y. Louie is online grocery ordering, where customers can shop online and have their grocery order assembled and ready for pickup. Online price comparisons are already available at such online locations as Yelp and Groupon.
“It’s a matter of how we keep up with our competitors,” Chan says, “and how we provide the stores with better access to inventory to improve their sales and business, too.”