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Ahold Delhaize CEO gives 4 reasons why ‘stores still matter’

BY Michael Johnsen

Companies that can set themselves apart in a crowded landscape will be able to stay ahead, Ahold Delhaize CEO Dick Boer, said during a speech during the Zaandam, Netherland-based retailer’s annual general meeting. The pace of change has accelerated significantly during the seven years he’s served as CEO, and the role of retail is changing thanks to the influence of digital, Boer said.

But that doesn’t mean retail is going away.  Boer outlined four points of differentiation key to the success of each of Ahold Delhaize’s banners. The outgoing CEO said that each of Ahold Delhaize’s banners delivers on shopping experience, uses its expertise in fresh and healthy to benefit the shopper, uses online and digital personalization tools and maintains a leading position in terms of technology and implementing innovation.

Of these four points of differentiation, Boer said experience is perhaps the most critical to the success of a retailer. “Stores still matter,” he said. “And that will be the case in the future, too. The more virtual the world becomes, the more need there is for the real world. Because people are social animals. They like to meet other people. They like to be surprised and inspired. They like to touch, feel and smell new and fresh products.”

Regarding the promise of fresh and healthy, Ahold Delhaize is the only retailer with a goal of having half of all own-brand sales originate from better-for-you products by 2020, Boer said. “We are also making our existing own brands healthier. For example, Stop & Shop, Giant/Martin’s and Peapod reduced the sugar content in their own-brand products by almost 1 million pounds last year.”

Personalization is another key factor that Boer expects will contribute to Ahold Delhaize’s future growth. For example, Food Lion’s Shop & Earn program, referenced in the video above, gives customers an opportunity to earn money back after they’ve capitalized on personalized offers. “Last year, our brands sent out no less than 2.5 billion personal offers worldwide,” Boer said. “Meanwhile, we continue to invest in personalizing the shopping experience even further.”

Finally, technology enables Ahold Delhaize to bring to life many of its market differentiators. He used the example of a Peapod shopper who, despite being blind, was able to use the recently rolled out Ask Peapod voice ordering service as “a great example of how we can continue to reach more customers by using technology.”

Though the tools Ahold Delhaize’s brands are using to retain their customers are new the needs they’re meeting are not, he said.

“Ten years ago, you needed to visit several stores to find the lowest price for a bottle of Coke. Now, you can find the lowest price across five different stores within a few seconds. Ten years ago, only pizzerias offered home delivery. Now, it is perfectly normal to have groceries and restaurant meals delivered right to your kitchen,” Boehr said. “But at the same time, there are some things that never change. One hundred years ago, fine, local products and good personal service were important. That is still the case a century later. A hundred years ago, customers wanted the best quality at the best price. And that will still be the case 100 years from now.”

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