Digital Transformation Project – PLUS Mobile App 2.0 – Team 38


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PLUS Retail is a Dutch supermarket chain with 255 stores across the Netherlands. The co-operative is run by over 200 independent entrepreneurs and reported approximately 2.1 billion net sales in 2014 (PLUS.nl, 2015). PLUS seeks to align its operations with four strategic pillars it has identified, namely: Attention, Quality, Local and Responsibility. These pillars are reflected both in the types of products and services PLUS chooses to offer, as well as the environmental initiatives it takes.

Currently, the Dutch supermarket industry is growing, especially with regards to the online segment, which grew by 55% in 2014. Despite the industry growth, PLUS has been losing market share, and so is required to implement new strategies to combat this. As the market is shifting away from only traditional retail stores, and towards a multichannel industry, PLUS needs to align its current IT strategy with the main market trends and consumer preferences.

In recent years, PLUS has realized the potential of optimizing its value chain through the use of information and communications technology (ICT). In 2013, it launched the “IT Excellence” program, with the goal of improving the IT infrastructure and optimizing processes. However, as changes are only being implemented now, it can be stated that PLUS is lagging behind with regards to its competition.

We believe that PLUS should develop a sophisticated mobile application, which will include a store locator, a product finder and an order management system. It will also enable PLUS to offer tailored promotions to its customers, based on their purchasing habits. There are many advantages expected from the implementation of this solution and the supermarket chain cannot afford to miss out on this opportunity and needs to be innovative in its digital strategy.  The app will not cannibalize the offline communication but improve processes and make them more efficient. There will be a high impact on the core organization but rather a low impact on the core strategy.

There are numerous benefits to using this solution. As the online grocery market is expected to double in size over the next 2 years, totaling 1 billion by the end of 2016 (Syndy, 2015), PLUS is expected to greatly profit from this growth with the implementation of this solution. This is mainly due to a higher service level provided and a larger customer base reached via the app. In addition, online customers tend to spend an average of 20% more than offline customers (Ahold, 2014). All these factors would result in a 52.5% increase in online sales and 35% growth in online market share, in the first year after implementation. The second year could result in an even greater increase, with 85.3% sales boost and 48% market growth, resulting in an additional 15 and 30 million in revenues, respectively.

Through the application, PLUS would be able to leverage its current status of being a competitive supermarket in the Netherlands in terms of its customer service while reinforcing its four pillars of ‘attention’, ‘responsibility’, ‘quality’ and ‘local’. The risks association with its development and implementation such as the ambiguity of the accompanying costs can be mitigated through thorough planning and proper staff training, which is undoubtedly within the skill set of PLUS’ experienced management board. Should the proposed digital transformation be a successful one, PLUS will be on its way to becoming a strong adversary in the online grocery retail space.

References

Syndy, (2015). The State of Online Grocery Retail in Europe.  [online] Amstelveen: Syndy. Available at:

http://www.syndy.com/report-the-state-of-online-grocery-retail-2015/ [Accessed 15 Sep. 2015].

PLUS.nl, (2015). PLUS retail – PLUS als organisatie | PLUS . [online] Available at:

https://www.PLUS.nl/info-over-PLUS/organisatie/PLUS-retail [Accessed 18 Sep. 2015].

Ahold, (2014). Ahold Annual Report 2014.  [online] Available at: https://www.ahold.com/Financialinformation/

Annual-reports/Annual-Report-2014.htm [Accessed 17 Sep. 2015].

Members:

Martin Kayser           353884mk

Benedikt Kolbert      353958bk

Kiki Huang                354902kh

Michal Floss              356166mf

Thomas Gratzmuller  357457tg

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