Digital Transformation Project: Group 44 | Albert Heijn Digital Transformation


The good old meets the good new

Which one of the existing food retailers in the Netherlands is the oldest? It’s  – Albert Heijn.  Albert Heijn was founded in 1887 and today it is a leader in the food retail industry.  However, the recent stagnation trends in Dutch food retail market as well as the fierce rivalry may threaten the company’s dominant position. Therefore, we suggest that it is high time for the deep-rooted Dutch traditions of food retailing to embrace new technologies.

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Inspired by shopping

“There was not a single screen,” said one team member commenting his recent shopping experience in the newly opened Albert Heijn store in Kralingen. The rest of the team agreed.  Yet adding a screen with a company logo or simple advertisement does not provide a company with exceptional value and is surely not a source of digital transformation. Bearing this in mind, we came up with a sophisticated targeted in-store promotion system. The system shows customized individual promotion to every customer that walks nearby as well as other fascinating functionality.

How does it work?

A customer with the Albert Heijn app walks into the store. The phone automatically connects to the free Wi-Fi. The CRM (customer relationship management system) informs a decision engine that a customer is near a certain screen in a particular store. The decision engine then takes the information from the CRM and advises the CMS (content management system) to display an advertisement relevant for the customer as he walks by the screen.

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Actually, to make this system a reality, not many new modules are required. Each large retailer already has established CMS, CRM, Sales and Inventory monitoring systems in place. The key challenge lies in the connection and integration of all of them.

What are benefits of this system?

We decided to illustrate the benefits of our system with some real life examples.

Example 1. Pushing complimentary sales. Let’s assume that the most sold good on Friday evening is red wine. Red wine goes very well together with cheese. Therefore, our system will kindly remind customers every Friday evening about adding delicious cheese to red wine.

Example 2. Upselling. Friday evening again, the sophisticated system already determined that the most sold product is red wine. Hence, the system screens kindly recommends you to try a premium wine this time (and a better cheese as well of course sure).

Example 3. Excess Sell Off. Though one can say that “there is never too much cheese and wine”, food retailers might object. If the cheese warehouse is overstocked and the cheese runs the risk of going bad, the sophisticated system is projecting ads that are persuade you to treat yourself with some delicious cheese until the excess stock is sold off.

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Summing up

The installation of digital screens in store, the development of a smart decision engine and the linkage of multiple existing systems providing different data opens up multiple possibilities for Albert Heijn to tap into their vast data pool and extract and use relevant knowledge from it.

Group 44 – Digital Transformation Project

References

Ahold Group. (2014). Ahold Annual Report 2014.

Euromonitor International. (2015, 10 9). Albert Heijn BV in Retailing (Netherlands). Retrieved from Euromonitor Passport: http://www.portal.euromonitor.com/portal/analysis/tab

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