Ahold Delhaize Succeeds with Collaboration
From leaning in to retail media networks to creating third-party marketplaces, even established retailers that have very entrenched business models have made bold moves this year, according to Ahold Delhaize's Mark Williamson, who says partnership is the recipe for success in these endeavors.
“When this whole thing started, the first evidence of a partnership came internally. Peapod Digital Labs realized it could not keep up with the pace of change and the circumstances on the ground unless they were all lockstep,” said Mark Williamson, the supermarket chain's vice president and head of media partnerships at Peapod Digital Labs, during a discussion with Quotient founder and CEO Steven Boal on the third and final day of the Path to Purchase Digital Expo last week.
The first thing Ahold Delhaize did as a company responding to the COVID-19 pandemic was put cross-functional teams together and improve communication to work through new needs such as getting personal protective equipment to store associates, keeping the websites up and running while they were being inundated with traffic (which Williamson admitted the company wasn't initially prepared for), and responding to all the regulations on the ground, supply chain issues and availability of labor.
Williamson said the retailer — which just reported strong third quarter results that again saw double digit comp and digital sales growth — also had to step away from the “transactional” type of relationship with CPG partners that often involved tailoring a brand's national marketing plan to Ahold Delhaize's five local banners.
“Now the conversations are about what the circumstances are like on the ground, where’s e-commerce penetration at, what’s moving customer behavior, how are they shopping the store differently, what’s the breakdown of category shopping in store and online," he said. "We’re getting into much deeper conversations around the actual statistics of shopper behavior and that’s informing how we’re partnering together.”
Ahold Delhaize has gotten better at ensuring partnerships include its merchandising organizations as well because replenishment and supply chain are key inputs in terms of determining what a media plan and a marketing plan can look like.
"In a large part because of our relationship with Quotient, we’re using advertising technology to look at the total business and the state of things with our supply and promotions and using that to inform what media programs look like going forward," Williamson said. "And that allows us to be nimble based on what circumstances are on the ground.”
Peapod Digital Labs is able to analyze data that’s moving through the system, such as what shoppers are looking at, engaging with and what they are shopping for, to optimize the digital shopping experience, Boal said. “You take that and marry it with what’s in stock, what’s coming down the line and then you overlay the national experience with the local experience, and the shopper gets great value in an environment where they’re most familiar and that’s quite a big leap from five-six years ago when merchandising was mostly a physical shopping experience," Boal said.
“Our goal is to make the customer in charge of fulfillment,” said Williamson, noting click-and-collect as the area of growth right now, though there is a lot of crossover. “That is where customers are voting with their wallets and behavior.”
Boal believes that “pure-play e-commerce" is not a winning strategy and lacks the efficiency, infrastructure and physical brand affinity among shoppers that has been built over all these at brick-and-mortar stores. “It’s the retailers with the most stores, closest to the shoppers in their markets, that synthesize the relationship between e-commerce and physical that allows shoppers to go back and forth that will be the winners," Boal said.