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The Innovation Table | Juan Rodriguez on Creating Value for the Customer

By November 2, 2023February 27th, 2024No Comments
The Innovation Table | Juan Rodriguez on Creating Value for the Customer

Juan specializes in pricing with 9 years of experience within the E-commerce and grocery industry. Currently at Kroger’s Vitacost, Juan handles the Cost and Strategic Price team with precision and strong attention to detail. With a solid background in merchandising, Juan excelled in bridging together both worlds to consistently deliver exceptional results.

Juan brings a wealth of knowledge and expertise to every project to stay updated with the latest industry trends.

Juan actively contributes to The Surfrider Foundation, Feeding South Florida, and loves to travel and play pickup basketball.

Edris Bemanian: What has motivated you to continue focusing on merchandising, analytics, and pricing? 

Juan Rodriguez: I love how quickly I’m able to create value for the customer and the business. Once I collect the insights needed, I can make an instant impact. It’s really motivating to see a direct result of the work you put in. And also, I think I should mention growth opportunities – joining Vitacost early on has provided opportunities to take on new roles and responsibilities as the company grows. I feel like I’m always learning.

EB: The instant impact idea is one that a lot of people in retail have in common. What was the first “a-ha!” moment that made you realize the kind of impact you could have?

JR: I went to school at Florida Atlantic University – Go Owls! – and the closest market to me in Boca Raton was one of the largest natural foods retailers in the US. Boca Raton is a pretty high-end place. Their strategy is much different now, but at the time this retailer was very premium and targeting a very specific shopper. So, I remember shopping there as a college student and loving it, but feeling like, “This place isn’t for me.”

That experience really stuck with me. So, when I started at Vitacost, I used to joke about being like, the Robin Hood of health food. So, I guess that was the “A-ha!” moment. I realized there was a huge opportunity to make those products and those experiences accessible to more people. People with food allergies, gluten intolerance, or other needs. I wanted to cater to college students and value-based shoppers who wanted to have more control over their health but weren’t the stereotypical premium health foods shopper.

I was able to find distributors to partner up with me, and that I think was the launching point that we went from a vitamin company to more of a complete package of Health and Wellness. Being able to deliver on that idea was really satisfying.

 And that’s still something that customers still love about Vitacost – our focus on providing healthy, high-quality products at great prices, that have a positive impact on people’s health goals and personal health journeys.

EB:  So, you took your own experience and saw that there were items and shopping experiences that weren’t available to everyone, and you were able to go and source producers or suppliers for those products, make them available to your customers and you know, create more availability and a better experience. That’s an awesome answer.

EB: And how did you get into pricing in the first place?

JR: Well, that’s a great question and a funny one to answer. Once I felt we had gotten merchandising to the right place, I had an opportunity to jump into pricing and take it over. Not just for my category that I was responsible for but overall.

For some reason, not that many people are interested in pricing, and I found that funny because I was very drawn to it. My background isn’t in finance, but I know business and I know operations. Pricing made sense to me. There are so many different data points, inputs, and considerations that go into pricing—such as the cost of shipping the product for those of us in e-commerce—and that makes it a good challenge. Pricing and merchandise together are the ultimate drivers of store choice, so I’m proud to be able to partner across different teams at our company to drive our goals forward. 

EB: Thanks for sharing that, Juan. Sidenote here, but what is your favorite product from Vitacost.com? 

JR: Oh man, I’m a sucker for snacks and especially anything salty. I love SeaSnax Seaweed Sheets. When it comes to sweet, probably Jennies Organic Coconut Bites.

EB: I need to try both of those. When you think about getting this food category off the ground for Vitacost, would you count that as one of your biggest accomplishments in the industry?

JR: Definitely. It was really challenging to successfully grow that food category because at the time, the focal point was very clearly vitamins and sports nutrition.

EB: I’m really interested in this sort of inflection point when a company successfully transforms or broadens what they do. How long did that transition take customers to catch on to what you were doing when you began introducing food items into your assortment? How long was it before you started to see food items showing up in your customers’ baskets?

JR: The change happened really quickly. At first at a really small scale. The baskets didn’t change drastically but all of a sudden some food items started appearing in our list of top sellers. For whatever reason, people would respond to what felt like random SKUs. We’d see something jump from 100 to 1000 unit sales over a short period of time, and we took that as a flag that we’re on the right track.

EB: What advice would you give to companies who are known for a particular department or vertical and are trying to dabble or explore something new?

JR: First, I’d say just accept that it’s hard! [laughs] It’s hard for any business because what you’re known for is what you’re known for. Any time you make a change you’re going uphill a little bit, and it takes some luck. It’s really difficult but it’s something where you just gotta give it a try – you won’t know until you make the jump.

There’s this fantastic restaurant in New York City that has gotten famous for goat brains. Goat brains cooked in this really delicious kind of curry-style dish. It’s one of their best sellers. And look, the chef didn’t know, and probably couldn’t have known, that goat brains were going to be a hit, but he took the risk of adding it to the menu because he loved it and he saw potential.

EB: So, are we going to see Kroger or Vitacost selling goat brains any time soon? [laughs]

JR: [laughs]Nope! But there’s a lesson there about taking risks and identifying unique opportunities. And then when you try something and you see a response, it’s about doubling down and going after it. Initially, I had three categories, but when we started getting new sales on food, that one became my focus. Obviously, you have to take care of what you’re already doing, but when we started to see our food category start to take off, I know I was gonna be riding the coattails because that’s what was going to produce.

Goat Brain Soup

EB:  So there’s an element of quick response time? Like you need to be able to quickly reposition based on the signals you’re getting. If something’s resonating, you put focus and energy there, whereas if something isn’t as successful you iterate and maybe slow your roll a little. It sounds like there’s a lot of creativity and experimentation.

JR: Absolutely. And it’s not just at the business level, but in what you expose yourself to. You’ll never stop being a consumer, right? So, I’m always going to trade shows and experimenting with new products, trying all the free samples, and figuring out what’s out there. I’m not vegan but lately, I’ve been really diving into vegan products and experimenting.

“This is good, but what if I add a little seasoning?” or, “This protein is interesting, let’s throw it in with some rice.” And then you’re going to run into things that you just don’t like. And that’s okay too, because it might not be for me, but it might be perfect for someone else. I think it’s as long as there’s excitement and a willingness to branch out.

Most people don’t want to eat the same things over and over again. People like variety and experimentation, and as a retailer, I want to be a part of that and support that. That’s something I love about the industry.

EB: What are some of the most common challenges you’ve faced, or that people in the industry face generally?

JR: First, I’d say gathering and managing your data. Everything you do has to be data-driven. If you don’t have clean data and you don’t trust it, it’s really hard to move as quickly as you need to.

EB: There’s definitely a garbage-in, garbage-out dynamic at play when it comes to pricing and competitive data. What’s helped you overcome that and get your data management to a good place?

JR: You can’t just brush it off. You can’t just look at numbers, you really have to get under the hood and understand how it all works. Understand that if you’re collecting a million data points a week, there are going to be issues even if things are going great.

EB: That’s a great takeaway about the nature of scale in data management. When the numbers get big, you’ll always have errors even if your performance is nearly perfect.

JR: Exactly. Understand how the data is collected and what its limitations are. Nothing is perfect and nothing is ever going to be 100%, but if you take the time to understand and clean up your back end, you’ll be able to achieve what you need to do.

And I’d also say you want to involve your team. I want everybody aware of the data so that if anyone on my merchandising team or customer services notices something wonky they call it out. Or sometimes it’s even from customers. If a customer is saying, “Hey, why is this so much higher than the competitor,” I need to be able to look at that.

EB: Amen. I think when you’re building a complex process, you have to remember you’re all on the same team. So, when you do find a data issue, regardless of where it comes from – internal, external, third-party, or first-party – people immediately report it, and we can start the processing of fixing it. Everybody has to have a shared ownership and a shared goal of success.

JR: Yeah. I have to say, overall things are better than they’ve ever been. The quality of data has improved so much over the past 6 or 7 years. At one point, it felt like it was a 50/50 chance that my data was wrong. Today my confidence level is high. I used to spend so much time verifying every single line, and every price that came in because I was so worried about errors. We’ve done all the work now so that when numbers come in – either I know they’re right, or I know where the issue might be if they’re not.  I know where to look. Is this an error? Is this a real price? Did we lose a link because a URL changed? Stuff like that.

EB: Well said. Building out the right processes in terms of how you handle and interpret the data is just as important as which tools you select to help you with your pricing journey. Any other key challenges come to mind?

JR: Yeah, I think once you have clean data, the next challenge is being able to execute. Figuring out the timing of your changes. You’re always working to tighten your turnarounds as much as possible so the decision or the action follows the data as quickly as possible. Competitive intelligence is critical to this business and it’s constantly evolving with improved precision rates. We’re not far from being able to predict competitive behavior very precisely.

Competitive Intelligence

EB: So, it’s about improving speed and getting as close to real-time as possible. And then also making sure that everything is in sync so you can quickly push your insights downstream.

JR: Yeah, speed and timing. This comes a lot when I’m working with my marketing team, for example.  Say I change a price, am I giving them enough time to communicate the change? Or maybe they have something on their marketing calendar, how can I make sure that all of my changes are in so that when they launch their customer emails with totally correct information? Or there’s a product coming into a new marketing campaign, and we don’t want to touch pricing, so we don’t have any hiccups on the launch. Maybe we both have what we need but we’re both using different tools that don’t talk to each other. You have to bridge the gap between teams so that the timing of changes works for everyone and ultimately supports the business.

EB: One of the things that you and I have discussed before, but I’ll bring up here again is the topic of Price Image drivers. Were you surprised by any Price Image drivers that have been identified for your program and your customers? Or any surprising instances of customer response to you incentivizing trips by investing in your Price Image drivers?

JR: Yes, there have been a number of times when the system would recommend surprising Price Image drivers identified in different categories. It would be tempting to not lower those prices and keep what feels like extra margin, but once we started testing out responding to these opportunities and tracking customer response, we began to see opportunities to make sure our customers were getting good deals for brands they care about.

Plus, everyone is wearing a lot of hats, right? And juggling many responsibilities between working with the warehouse, with vendors, etc. so it’s helpful to be able to surface actionable opportunities that you can use to reward your customers. Pricing perception is quite important. Especially in an era of word of mouth through small communities or even online. Perceptions could change quite quickly now, so you need to keep your finger on the pulse. And we have to work together with our merchant partners to help our customers feel they’re receiving good value.

EB: That makes sense. The way you described this feels like where the combination of art and science comes in. Where the science is putting forward a point of view around what can be done and then—more importantly—what should be done. Then the art is where the merchants bring in their intuition and come back to say ‘Hey, I see this slightly differently. Let’s talk so you can collaborate on what decisions to ultimately make. Then, so long as your system has reinforcement models, you can all learn what worked for next time.

JR: Yeah exactly. And that’s how we can engage with the merchandising team so they can continue their great work. I love it when they get engaged and I love when they challenge as that creates opportunities for learning. So long as we’re tracking and monitoring our decisions, which we are, then we can calibrate our next set of decisions. We have a solid group of merchants that are strong and know what they’re doing and how to use the data and insights.

EB: That’s another great example of change management. It looks like you took the approach of not forcing anything on anyone, but rather getting buy-in and working with them via collaboration to ease everyone to be bought into the process. At least, that’s what I heard as you walked us through that.

JR: Yeah, that’s right. You can export the recommendations, and even the raw data, and equip everyone with the transparency they need to get comfortable.

EB: Nobody wants black box optimization systems anymore – I’m 100% aligned to that! So, a fun question I like to ask: if you were to become the CEO of a large brand with everything going on around us, what would you do or focus on?

JR: Grow and focus on digital technologies and embrace new initiatives and changes to improve efficiency. I’ve been very on board with different AI tools I’ve been obsessing over lately. There’s a mentality where people are scared of it. And you should be, yes. You shouldn’t be giving AI too much personal information, but there are some cool applications that I would love to see.

Recipe planners, as one example. How about recipe planning based on weekly low-priced items to help offset inflation? I saw one project involving an inflation cookbook that I thought was very cool. This organization partnered with a food bank that helped shoppers come up with ways to cook with rice and lentils and proteins that were lower-cost and I thought it was wonderful.

Going back to my comments on AI: we’re obviously going to be using it, so why not use AI for things that can make a positive impact and be great?

EB: I like that, Juan. Very pragmatic and positive way to think about it. Are there any companies recently that have impressed you?

JR: There are a number of local ethnic grocery stores in Boca Raton that carry very hard to find products and ingredients that have inspired me and helped me explore new flavors and have shaped some of how we think about those departments ourselves.

EB: This has been a great chat, Juan. I’ll wrap it up with a few quick and fun questions. What advice do you have for someone interested in exploring pricing as a career?

JR: There’s always something new to learn. Combining your skills with industry knowledge is key. Stay updated on new trends and technologies. I hope you’re exploring generative AI. I hope you’re picking up analytical skills, learning a P&L, looking at the competitive landscape. Do all of these things and be intellectually curious. If you lack intellectual curiosity, pricing might not be the right field for you.

EB: What books are you reading?

JR: The Answer Is . . .: Reflections on my Life by Alex Trebek.

EB: Favorite life motto or quote?

JR: “Skills can be taught. Character, you either have or you don’t have.” Anthony Bourdain.

EB: What’s your favorite dish? How about your favorite restaurant?

JR: A classic bowl of ramen! And the last restaurant I particularly enjoyed was at Paladar 511 in New Orleans.

EB: This was a lot of fun, Juan. Thank you for sharing your experiences, your advice, and your valuable time. Looking forward to the next conversation!