The COVID-19 pandemic accelerated consumer adoption of e-commerce, as well as grocery retailers’ focus on the omnichannel shopping experience.
Ahold Delhaize USA, which already has a strong foothold in omnichannel with 28 warerooms and fulfillment centers and over 1,300 click-and-collect sites in the U.S, has identified five consumer trends that will influence its continued transformation into the space, CEO Kevin Holt said during a presentation March 24 at Western Michigan University’s 55th annual Food Marketing Conference.
While “only a fraction of the trends,” Holt examined how personalized value; convenience; local and trust; healthy and sustainability; and local brands will all play into an integrated online and in-store world. “These are the cornerstone components that are going to drive, at least for us, how we think about building our omnichannel for the future and how we think about ourselves as a retailer—the investments that we’re making, the areas that we’re building capacity and capabilities in, and what we’re doing in order to serve the local marketplace for achieving what we hope to be a very, very promising future,” he said.
Personalized Value: When it comes to personalized value, consumers want—and expect—two main things: personalized discounts/deals and customized shopping experiences.
“[Technology] is so much a part of our life, it’s so much a part of how we socialize, how we get information, how we exchange, that it has become just ubiquitous in everything that we do,” Holt said. “This enables us [as retailers] to have a different relationship with consumers because the platform is there.”
Key to delivering personalized discounts/deals is relevancy. “They want them to be meaningful to what is important for them, for solutions in their life or the lifestyle that they lead,” Holt said. “Customers want to feel very personalized in their shopping experience, as well, whether it’s in-store or online. … Both of them together is what matters.”
"Customers want to feel very personalized in their shopping experience, as well, whether it’s in-store or online. … Both of them together is what matters."
Holt said Ahold Delhaize USA last year delivered over 9.8 billion personalized offers to consumers, which led to “consistent retention rates in our omnichannel loyalty programs of over 80%.”
“We’ve had over a 400% increase in the amount of new customers that we’ve acquired digitally, so you can see why this matters a great deal,” he added.
Convenient and Easy Omnichannel: Consumers also want the omnichannel experience to be convenient and easy: meet them where they want to shop and offer delivery within hours, not days.
The ease of e-commerce sites plays into this. “Being able to navigate and finding inspiration and recommendations isn’t always easy,” Holt said. “So getting better and better at doing that and understanding your customer is very important.”
He added that 56% of online shoppers are more likely to return to a website that recommends products them.
Local and Trust: Trust is twofold: “It’s not only the trust in the brand itself … but it’s also trust in that I can trust that you will be my advocate or my ambassador for taking care of me, providing me with solutions that I need, assortments that I need, value that I need,” Holt said, adding that it also means being capable of picking the freshest produce for consumers and having 100% of their online order available.
"It’s not only the trust in the brand itself … but it’s also trust in that I can trust that you will be my advocate or my ambassador for taking care of me."
This was a tough feat at the height of the pandemic, and Holt said because the retailer had “such a tough time with out-of-stocks,” it had to close down some of its click-and-collect sites “to keep our trust” and reopen them only when they could fill at a much higher rate.
Meanwhile, local means different things to different consumers. As such, Holt said, “you’ll see retailers forming partnerships with local farms and restaurants to drive consumer engagements, or building relationships with local producers and highlighting [that].”
Ahold’s The Giant Co. banner saw success with a recent partnership with Caputo Brothers Creamery and Troegs Independent Brewery on a limited-edition cheese called Mad Elf Beer Cheese. “This was very successful locally,” Holt said. “In doing this, we ultimately supported a local business, we supported Pennsylvania farmers, and it’s an equation where everyone wins, and we think this will be very important going into the future as well.”
Health and Sustainability: “As we came through COVID also, healthy and sustainability became a much larger issue for people, and we believe that this will continue to be true,” Holt said. “Consumers are really looking for brands to create healthy solutions and partnerships, and better versions of existing products. People are looking for transparency in their products, and they are looking for clean labels in their products.”
For retailers, this means building robust health platforms, with capability for customers to filter around their lifestyle or dietary needs, he said.
It also means transparency, clean labels and reducing packaging and packaging waste. In a survey of Ahold customers, 43% said they are now very focused on sustainability as being important to them, “and consumers are expecting retailers to provide these healthy solutions that make their lives easier, and to do it in an affordable way,” Holt said.
Private Brands: In the past year, Ahold saw 34% growth in private brands, Holt said, adding that 25% of consumers said they have tried a new retailer’s private brand, and 73% of those consumers say that when they try these brands, they will continue to use these brands.
“This is a trend we think is very important,” he said. “And it isn’t just the traditional idea of private brands at a value. What it really is is private brands being differentiated in a way that actually provides additional value.”
For Ahold this means looking at new, innovative products, Holt said, citing The Giant Co.’s recently launched Cook-in-Bag private-label line of 14 different oven and slow cooker meat and seafood products.
“It’s a great example of providing that convenience … and being fast, but also having ready meals for consumers without the mess and prep work,” he said. “Quality, sustainability, packaging, innovation—all of these will be critically important as we think about private brands going forward and the prominence that private brands will continue to grow.”
Putting It All Together …
Each of these trends play into what Ahold calls “the connected consumer” and offering them—both online and in-store “uniquely local brand solutions to make [their] everyday lives a bit easier so they can enjoy the moments that matter,” Holt said.
“We believe this is what consumers will be looking for in the future, and those who can make these connections, offer personalized solutions and deliver on what customers’ needs are—they will be successful,” he added.
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