Digital Transformation Project: Albert Heijn Personalized Shopping

Albert Heijn is a super market chain in the Netherlands and has the biggest market share. Albert Heijn claims that it is the pioneer in the development of the modern supermarket with innovations such as self-service payment possibilities as part of its multichannel approach. We focused our project on Albert Heijn’s customer loyalty program and its bonus card. With the ongoing development of digitalization more and more firms consider and deploy big data, so does Albert Heijn with the bonus card, as an extension to loyalty programs. What are these loyalty programs? These programs encourage customers to return to the supermarket by means of a loyalty card, the bonus card in Albert Heijn’s case. This is a major strength for Albert Heijn, as they are the only one in the industry using such a card. Research has shown that a customer loyalty program leads to an increase in annual purchasing for a substantial proportion of customers and effectively increases repeat purchases rates (Lewis, 2004).

A bonus card has the advantage to offer personalized marketing to the customers of Albert Heijn. However, if a misclassification (personalized marketing to the wrong individual) occurs, personalization could back-fire and this would have a counterproductive effect. Unfortunately this happened with the old bonus card. Albert Heijn uses the bonus card since 1998, however, they had to renew the bonus card because of the dirty and corrupt old database. They had to throw away the old database with purchase information of more than 15 years. How did this happen? The main cause is that customers were tended to swap cards (NRC Q, 2015). Which information strategy regarding to a disruptive or IT enabled service could Albert Heijn best implement in order to clean the big data set and leverage personal information collected via the Albert Heijn Bonus Card?

A solution for Albert Heijn is a mobile phone bonus card, as customers will much less swap these mobile bonus cards with each other. This will result in more personalized data, which is way more valuable for Albert Heijn, but also for the customers. They will receive now more personalized marketing, which increases customer satisfaction according to R. Goldsmith and J. Freiden (2004). The idea of our project contains a digital transformation of the current physical bonus card into an in-app digitalized bonus card.

Team 29:

• Floris Hol 419214
• Tim Prein 346786
• Wouter Bakker 357176
• Jesse van Hofwegen 375283
• Jeroen Gelderblom 371908

References:

Ronald E. Goldsmith Jon B. Freiden, (2004),”Have it your way: consumer attitudes toward personalized marketing”, Marketing Intelligence & Planning, Vol. 22 Iss 2 pp. 228 – 239

Lewis, M. (2004). The Influence of Loyalty Programs and Short-Term Promotions on Customer Retention. Journal of Marketing Research, 41(3), pp.281-292.

Nrc.nl, (2015). Waarom Albert Heijn met de Bonuskaart vijftien jaar achterloopt. [online] NRC Q. Available at: http://www.nrcq.nl/2015/01/03/waarom-albert-heijn-met-de-bonuskaart-vijftien-jaar-achterloopt [Accessed 8 Oct. 2015].