Retailers need to look at how they innovate and develop at scale if they are to successfully transition from their legacy positions, Ahold Delhaize CEO for Europe and Indonesia Wouter Kolk told delegates at the World Retail Congress in Amsterdam last week.
“We are trying to build scalable technology, so every brand and partner can use them, which is really new thinking for us,” he said. “It is no longer about traditional M&A activity to expand but about forming new relationships, using experts, not always the usual suspects. We need to build scale and simplify and decrease costs.”
He added: “Legacy players have to look at the future in a different way, the old successes don't count. But you should also look at your strengths and capabilities within your business.”
Ahold Delhaize is driving its business forward through a number of key initiatives, pushing its omni-channel approach, taking responsibility on health and sustainability, using technology and developing talent within the business.
On omni-channel he said it is about “connecting the dots - stores online and loyalty”, while he also picked out the out of home market for food as a big opportunity.
“We have moved a lot of non-food out of our stores to Bol.com and added in food options. We want to let people eat well, with quicker options to save time and money. Our aim is to try and make every brand better, so our local brands are stronger so they win in their markets,” he said.
RPA Perspective With a new team at the helm of its European operations and the mega-merger of Royal Ahold and Delhaize fully complete, Europe and Indonesia CEO Wouter Kolk has his eyes on rapid change as the supermarket group rethinks how it takes the best from its stores base and online.
That approach has been at full throttle since the turn of the year, with an Amsterdam trial of foodservice delivery, the acquisition of nutrition start-up FoodFirst Network (FFN) and the pilot of a scanning app amid a restructuring of the stores estate which will include expansion in Belgium, an ongoing shift away from non-food and development of more stores on smaller floorplates.
During his tenure at Albert Heijn, Kolk became known for his fast-paced innovation, but he remains committed to the group’s long-term principles. “When it comes to visiting a supermarket, I believe most customers want ease and efficiency,” he said. “So while you will see more fresh food, bakeries, fish and deli counters, I do not believe in experience through entertainment in supermarkets. People want greater choice and quality but they want it available efficiently.”
This same approach is reflected in the acquisition of Dutch online start-up FFN this April. FFN provides paying subscribers with advice and tips from experts on nutrition, health, exercise and relaxation through various media and the purchase is part of an initiative to make these more central to the group’s offer. Kolk says Ahold Delhaize intends to build up subscriptions and make services available to its Bonus loyalty card members, while the company is testing out foodservice delivery in Amsterdam.
“I am a believer that it’s our role to provide people with help and information, not tell them what to eat,” stressed Kolk. “While we have reduced sugar, salt and fat from our products, customers must have freedom of choice.”
Digital is also playing an increasing role. Ahold Delhaize Belgium launched a mobile payment app at its Delhaize Fresh Atelier store at the Galerie Ravenstein in Brussels last month, which allows customers to scan product barcodes with their smartphones and add the items to an electronic shopping basket before paying by app.
In addition, Bol.com, its online retailer based in the Netherlands, plans to open a branch office in Antwerp this month to better serve the 2,000 Belgian retailers who sell products on its platform and to create more opportunities to collaborate with local partners.
“Digital is crucial for our business because it gives us the chance to be more personal and to interact with our customers,” said Kolk. “Right now many of the communications in Europe and the US are through paper vouchers, newsletters and so on. If you travel to Asia, then everything is on apps already. It also enables us to be genuinely omni-channel – to recognise a customer online and to recognise them in store.”
In an increasingly complex world he also foresees more partnerships, both with retailers – Albert Heijn and Hema have plans to open two trial stores together later this year – and with digital players, leveraging global scale while remaining local.
“I don’t think that retail has been as successful at scaling up as some other industries, such as technology,” he said. “So in the future it may be less about M&As and more about partnering. We need to be global but still that neighbourhood store, with staff that customers recognise when they go in.”
