Ahold Delhaize Gets to Know Its Customers
MINNEAPOLIS -- Ahold Delhaize's U.S. banners were once all family-owned, and the retailer wants them to feel that way again.
“Our brands need to be creatively and materially different and be truly local," Giant Food vice president and chief marketing officer John MacDonald said Thursday during a keynote presentation at the Path to Purchase Expo.
MacDonald said it's easy to get caught up in the seemingly constant stream of retail news that includes mergers and acquisitions, and new e-commerce strategies or store concepts. But Ahold Delhaize is trying to stay focused and develop a customer-centric model.
"Instead of being distracted by how we keep up with our competition, we really should keep up with our customers," he said.
The market is more fragmented than ever, with the same shoppers visiting six or seven stores for specific needs rather than making one big weekly shop. The rise in out-of-home consumption means supermarkets are also competing with restaurants. Retailers additionally have the challenge of catering to the needs of both Millennials and aging Baby Boomers, attracting new shoppers without alienating their core customers.
“The consumer is changing and a one-size-fits-all approach to marketing doesn’t work anymore," Stop & Shop senior vp and chief marketing officer Whitney Hardy said during the presentation.
All of Ahold Delhaize's banners want to create an iconic and relevant brand experience and forge a deeper connection with customers. While their physical offices are located across the East Coast, the banners are working closely together to achieve these goals through a "virtual open office" that encourages frequent informal communication and idea sharing.
“As large companies we silo ourselves, but this virtual open office idea allows us to collaborate in a way we think is quite unique," MacDonald said. "We peek our virtual heads up and we talk to one another.”
To develop a deep understanding of its customers and how they differ by banner and geography, marketing leaders across banners worked together to quickly develop a model they should focus on. Giant targets "Jessica," a younger, likely Millennial, shopper who has kids, really relies on technology and wants a retailer to share her values. Stop & Shop is now focused on "Liz," a mom juggling parenting and work who doesn’t want to spend much time in the grocery store. She also uses technology constantly and likes to eat healthy foods but doesn't always do so.
Ahold Delhaize's banners are trying to learn from each other how to best meet their specific customers' needs. The retailer created Peapod Digital Labs in May to serve as an incubator for digital technology, engagement and innovation. The goal is to use economies of scale, doing a test and learn at one banner and then deciding what to keep, scrap or expand. For example, this year the Guiding Stars nutrition-labeling program at Food Lion and Hannaford expanded to Giant Food, Stop & Shop and Giant/Martin's. The retailer is also closely watching the Hannaford to Go click-and-collect program to see if it can be expanded to other banners.
“You’re never going to absolutely nail it, but if you go through and make continuous improvement we can create something special," MacDonald said.