CMOs You Should Know: Diane Dietz, Safeway

Former Dominick's Bagger Holds Reins at $41 Billion Grocery Giant Turned Media Channel

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CHICAGO ( -- Diane Dietz has a very different job than she would have been a decade ago. Then, she would have been a marketer; today, she's a medium.

Diane Dietz
Diane Dietz
In the past 10 years, retailers such as Safeway, the 1,712-store chain where Ms. Dietz is CMO, have become a media channel because of the sheer number of consumers that pass through their doors. After all, most major chains can guarantee more eyeballs on a weekly basis than big network TV shows. In the meantime, grocers have more firmly entrenched themselves as marketers in their own right, with better house products, giving them additional leverage with national brands to command exclusive deals.

"Media fragmentation has affected where consumers get information," Ms. Dietz said. "We are fortunate in the sense that we have a lot of traffic in our stores and a lot of shoppers."

Safeway's making the most of that traffic with specific programs designed to build profitability in specific areas of the store. Ms. Dietz cited programs to demystify the wine category (for consumers who like wine but don't know what to buy), and another initiative, taking a page from Whole Foods to identify locally or regionally sourced produce in store. Both programs have been successful, though Ms. Dietz declined to give specific sales gains.

Ms. Dietz, whose first job was working as a bagger at a Chicago-area Dominick's grocery store, said she feels like she's come "full circle" as CMO of the $41 billion behemoth that now owns Dominick's (its other big brands include Vons, Pavilion's, Randalls and, of course, Safeway). She moved from Cincinnati, where she had worked for Procter & Gamble for almost 20 years, to Northern California two years ago to take the Safeway job. Ms. Dietz recently had her first child, Sophie, now five months. While that's made her life a lot more chaotic, she said motherhood has also given her more ways of identifying with her target consumers: busy moms.

"We try to focus on meal solutions for people don't have a lot of time," she said. "We make it easy for them when they run to the store and don't know what they're having for dinner." The chain has worked with a number of consumer-package goods marketers, including Pepsi and ConAgra, to build meal solutions tied to time of year or a specific event, such as the Super Bowl.

These co-branded meal solutions use both house and name brands with an understanding that most buyers these days want a little of both. "What we try to do is partner with national CPG vendors and we really look for solutions for the shopper, and consumers in some cases our brands are more appealing, and in other case than national brands are more appealing," she said. "The key to success for national brands, especially in today's economy, are innovation, understanding the consumers and having the right value proposition."

Of Safeway's own private-label strategy, Ms. Dietz said that "years ago it was more about a price proposition, vs. today, where it's more about developing brands with promised solutions to the consumer." An example is the company's O Organics line, launched three years ago with the insight that consumers wanted organic, sustainable products in traditional grocery stores at a reasonable price.

That's particularly important today, as price has become a bigger issue. Ms. Dietz noted that while convenience has historically been the biggest deciding factor in where consumers shop, the recession made price the biggest driver, meaning that the same shopper was willing to go out of her way -- maybe even making multiple stops -- if it meant saving money.

Ms. Dietz must also balance a host of privacy issues as she considers how far to go in trying to help consumers in store by way of their smartphone. "The key is to make is to ensure it's value-added," she said. "If it becomes an intrusion, it won't work. That's a consumer turn-off. But it's a space that we're spending a lot of time [in]."

As a long-time P&G marketer, Ms. Dietz describes Safeway as a progressive company in terms of its marketing practices. As CMO, she has control not just over marketing, but the company's supply chain, points of distribution, and each of the business units. "[It] gives you a very different view of the business rather than a marketing manager that comes in at the last minute," she said.

And after 19 years with Procter & Gamble, she applauds Safeway's alignment of P&L ownership with the marketing department. "When you have ownership and accountability together I think that's a more robust assignment," she said.

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