The future of online grocery shopping
“What if AH would use the accumulated ‘Bonuskaart’ data to truly stand out from its competitors?”
In this blog post, I would like to share with you a service AH could implement in an effort to regain its relevance. I am curious to hear what you think!
The grocery sector has been lagging behind in terms of its online presence (online grocery accounts for 1.3% of the total Dutch grocery sector, compared to 25% for sectors such as electronics and fashion), but the emergence of aggressive competition is accelerating the online channel development. Market leader Albert Heijn (AH) is facing intensifying competitive pressure. Offline, the company has to deal with increasing popularity of low(er)-cost competitors such as Jumbo and Lidl. Online, there is a threat from traditional players as well as new entrants (Hello Fresh, Picnic) with innovative business models. It is clear that AH should respond before its position further deteriorates.
As you may know, AH uses a personal customer loyalty card called ‘Bonuskaart’ to gather data on its customers’ shopping behavior. With these data, AH is able to better understand its customers and provide them with personalized offers. This is nice, but does not lead to a unique value proposition. But what if AH would use the accumulated data to truly stand out from its competitors?
AH could introduce a ‘personal grocery prediction’ service. By using the latest analytic technologies, each customer’s shopping behavior can be analyzed so that patterns appear. Based on these patterns, an algorithm could generate a personal grocery list for every customer that requests one on the AH website. If needed, customers can adapt this grocery list in order to make sure it completely fulfills their needs, and click ‘order’. In combination with the current AH online shopping infrastructure, which includes pick-up points and delivery, this could provide customers with a convenient and time-efficient grocery shopping experience.
A number of additional services could make this service even more appealing. Think of adding a ‘discover new meals’ option, in which the system suggests recipes from the Allerhande recipe database and automatically adds the products to the customer’s grocery list. The better the service gets to know each customer’s preferences (by improving the algorithm and observing adaptations customers make to the proposed grocery list), the better the predicted lists will become. In the ultimate situation, AH could offer an ‘automatic order and delivery’ option, which would basically turn the service into a personalized version of Hello Fresh’ meal box, but then also including products that are not related to dinner, such as cereals and toilet paper.
What do you think of this idea? Is it feasible? Would you use this service if AH would offer it? Or do you know people who would? Let me know!
In case you were wondering: yes, we used this idea in our DBA assignments, so credit goes to 356849mm, 362278cl, 414788cl, and 418375nl.
– Syndy (2015) The State of Online Grocery Retail in Europe. Available at: http://syndy.com/knowledge-center/
– Keswiel, M. (2015) Waarom Michiel Muller AH en Jumbo wél aankan met Picnic. Available at: http://www.sprout.nl/artikel/e-commerce/waarom-michiel-muller-ah-en-jumbo-w%C3%A9l-aankan-met-picnic
– Smit, J. (2015) Waar ging het mis bij Albert Heijn? In: HP De Tijd. Available at: http://www.hpdetijd.nl/2015-04-18/ging-mis-albert-heijn/