The trust stemming from Ahold Delhaize’s effective response to the coronavirus pandemic (which was examined in this space in the last issue of MMR), together with its long-standing commitment to delivering a comprehensive omnichannel experience, bodes well for the company as it looks to a post-COVID world.
“We strongly believe in the combination, under the umbrella of a strong local retail brand, of options that allow our customers to do a full supermarket shop, go to a convenience store or a shop in a railway station, or buy products online,” says president and chief executive officer Frans Muller. “This is a winning formula because it brings maximum convenience to a customer, delivering the same products, the same pricing, the same loyalty plan.”
In the wake of the pandemic, most consumers are likely to gravitate to respected local brands, according to Muller. “With all these crises going on, people are getting back into their communities,” he says, “with positive implications for local employment and local services.”
The shift doesn’t preclude a growing role for e-commerce, an area in which the retailer will accelerate investments. A pioneer in online retailing, Ahold Delhaize’s digital capabilities include omnichannel brands like Giant Food and Stop & Shop, both powered by Peapod, in the U.S., and bol.com, the leading e-commerce site in the Netherlands. The company saw online sales surge 77.6% in the second quarter, putting it on course to hit 7 billion euros by the end of 2020, a year ahead of plan. Still, questions about the profitability of the e-commerce business persist.
“Selling food online isn’t profitable at this point,” Muller says. “But the bigger issue is, how do you see an omnichannel customer. If we were to say, ‘We won’t give an online opportunity to a shopper, and she won’t come in our supermarket anymore,’ then we lose more than just her online business.
“If we say, ‘Well, she is coming to us online and she loves our fuel station coffee, and she loves visiting our supermarket,’ then we have a share of her wallet that is higher than we normally would get, If you look at the total customer and her lifetime value and profitability, it’s a different thing.”
At the end of the day, Muller thinks, trust will matter more than other considerations in the aftermath of COVID: “If customers believe in the way we do business — whether it’s food safety, social compliance or how we deal with the climate — and conclude, ‘That’s what I like; that’s the right company for me,’ then they’re going to be very loyal to our brand.”