These days, retail industry observers have begun seeing the term “unified commerce” take over from what was once known known as “omnichannel.” Either way, Ahold Delhaize USA CEO JJ Fleeman said his company has been a leader on that front for quite some time.
“Actually, I like that term ‘unified commerce.’ I think we’re actually really good at it. It’s a key priority for us and a key strategy for us and our mobile-first strategy,” Fleeman told Joe Laszlo, Groceryshop vice president of content, in a keynote talk at Groceryshop 2023 in Las Vegas.
A 30-year veteran of Ahold Delhaize companies, Fleeman took the helm as CEO of the global food retailer’s U.S. business in April from Kevin Holt. He previously served as chief commercial and digital officer of ADUSA and as president of the company’s Peapod Digital Labs e-commerce and digital innovation arm.
“If you look at our legacy, we’ve been a long-term local retail brand. We also had 30 years of e-commerce [starting with Peapod], and we’ve created that unified shopping experience over the last couple of years,” Fleeman said. “I actually think we’re doing quite well at it. We’ve made some key strategic investments, and one that I'm most proud of is that I had the opportunity and pleasure to lead the team that built our customized, owned property that we call Prism. It’s one that I think that has set us apart not only from the ability to fully integrate or get that unified commerce experience, as you’ve said, but it also gives us the opportunity to connect with consumers in the way that they want to be connected with and allowing them to shop with us in whichever channel is most important to them that day.”
Laszlo noted that the online grocery boom triggered by the pandemic has decelerated. But when he asked Fleeman about e-grocery growth targets, the CEO cited something perhaps more important: creating stickiness with customers.
“If you look at our banners and our brands, we’re leaders in food e-commerce share; we are growing that channel very aggressively,” Fleeman explained. “But I don’t really think about it in terms of a penetration rate or a target necessarily because what I want to do is to make sure that we’re allowing our brands and our frontline teams to provide shopping experiences for our customers and whichever channel that they would like to shop in. Of course, online is a key focus for us, and more so not about the channel, but about the digital engagement.”
Why? Grocery customers who shop both online and in-stores make more and bigger purchases, he noted.
“As we look across the basket, we for sure see that our omnichannel customers spend more," he said. "They are more loyal, they’re more engaged, and it says that’s really kind of what they want and what they’re interested in from us. So I think that we’ll continue to see acceleration in the channel for sure. Stores are really, really important. We’re seeing customers gravitate more and more back to our stores kind of post-COVID. But the unified commerce that you’re talking about really is the focus. Our omnichannel experience is what we're really focused on, and we’re really making some good improvements there.”
But that doesn’t mean Ahold Delhaize USA hasn’t kept an eye on ways to expand its brick-and-mortar store base. Currently, ADUSA includes nearly 2,100 supermarkets along the East Coast under the Stop & Shop, Giant Food, Giant/Martin’s, Food Lion and Hannaford banners, as well as online grocer FreshDirect.
Laszlo pointed to two recent merger-and-acquisition deals: Kroger’s mega-merger with Albertsons, and Aldi’s recent deal to acquire Southeastern Grocers. Is ADUSA considering M&A transactions in the current environment, he intimated.
“We see a lot of consolidation happening in the marketplace. As I think about Ahold Delhaize, first and foremost, we have wonderful brands. We have brands with very strong heritage. We have brands with very strong shared positions. We are the leader in the markets on the East Coast that we serve. Our beautiful The Giant Company [Giant/Martin’s] just had its 100th anniversary. Our beautiful Food Lion brand is focused on its 43 consecutive quarters of comp [sales] growth, which is a really remarkable trend,” according to Fleeman.
“So we see a lot of room still for organic expansion. We’re very commercially aggressive on the East Coast, but to the point that you’re making, we also plan to grow in an inorganic way,” he told Laszlo. “And I think that the combination of organic/inorganic but—back to the point around retail media, and we can get into a few others—there’s also revenue stream growth. We opportunities for growth in part through funding of some of the change inside of the industry. Tech investments are more and more part of our portfolio, so we see a good opportunity for our business to really grow. We’re very aggressive there, and it will be a combination of organic, inorganic and a few of these other kind of strategic plays that we're making.”