Delhaize, a Belgian food retailer, reveals how they carried their customers onto the digital frontier during a global pandemic.
The digital imperative arrived sooner than expected, as the COVID-19 pandemic changed the way we do business forever. As lockdown measures swept the globe, offices went dark and shops shut their doors, customers flocked online in droves. What they discovered there was a bright world of 24/7 service, seamless omnichannel journeys, and immersive experiences. Some of these customers will never fully return to the old brick-and-mortar world, and the ones that do will now have heightened expectations.
Digital transformation was already a priority for many companies, but the crisis highlighted the digital imperative in ways that we couldn’t have anticipated. Businesses that haven’t yet turned to digitalisation to put the customer first are already falling behind: Now is the time to evolve to face the future.
To find out how retailers are adapting to the challenges of the New Normal, Salesforce spoke with Jonathan Hertog, Director of eCommerce & digital at Delhaize. Hertog explains how the Belgian food retailer came up with some pretty innovative solutions for tackling the crisis.
When lockdown measures first hit, Delhaize saw a significant boost in its online channel. And while there may have been a huge peak in demand, customer expectations didn’t change. Customers still expected personalised experiences, overnight shipping options, and efficient customer service.
“You know that there might be a storm coming — but it’s not until you’re in it that you can see what you need to do.”
With clouds approaching quickly, Delhaize had to move quickly to steady the ship.
Delhaize realised that the sharp increase brought on by the ‘hoarding’ period was more than they could handle, so they’d have to make some concessions to their service. Since they were providing essential products, it was crucial that they increase the capacity to serve as many people as possible. This meant that they could no longer offer precise delivery windows. It also meant they had to put limitations on certain products due to potential supply-chain issues.
These changes could have strained customer relationships in normal times, but Delhaize’s customers understood the challenges they were facing — especially at the peak of the pandemic. As lockdown measures eased, however, things changed.
“A month later the old expectations came back. You’re up against high volumes and very high expectations”, Hertog says. “This whole period has been a tremendous learning experience. We learned how to handle bigger volumes quickly, and it’s geared us up to face the future.”
Delhaize managed to increase their online capacity when their customers needed it most and grew more agile and resilient in the process. Now, they realised that there were limits to online growth: they needed their online channel to work hand-in-hand with their brick-and-mortar stores.
Digital is the connective tissue between the old retail world and the new. Retailers can turn to digital to offer exciting online experiences and new ways of shopping, but they can also use digitalisation to improve the brick-and-mortar experience. For Delhaize, optimising the in-store shopping experience is crucial, especially in an uncertain climate.
“People are changing the way they shop,” Hertog says. “Basket sizes are increasing these days, but the frequency is decreasing. They want to frequent the store a lot less. They’re risk-averse, but also, some of the fun of shopping has gone.”
With Delhaize’s customers making fewer trips to the shop, those trips need to be a value proposition. During the pandemic, Delhaize moved traditional paper media such as promotional folders online, and they’re now looking at ways that digitalisation can improve the in-store experience.
“Digital in-store experiences remain a difficult topic. How can you offer something that is really relevant, which isn’t slowing down the customer, and which makes the shopping journey more pleasant?”
Delhaize has not yet found the perfect answer, but they are constantly performing tests on potentially relevant propositions, as this is clearly the way to go: Digital should support in-store shopping.
Delhaize isn’t alone in trying to adapt to customers’ changing behaviour. Many retailers have started offering innovative contact-free alternatives to the in-store experience, including kerbside service and click-and-collect options. These alternatives not only provide a safer experience, they often offer a quicker and more convenient one. This doesn’t mean that this contact-free, digital-first shopping journey will become the norm, but retailers should expect some of these new customer behaviours to stick.
Another thing that will stick is the growth in eCommerce channels. Jonathan Hertog states, “During COVID, we had a huge increase in online spending. In these two or three months, the increase in online market share was roughly the same as we had in the past five years combined.”
Due to the length of lockdown measures, these new digital adopters weren’t just using Delhaize’s eCommerce channel once; they were using it frequently. “People had to try it two, three, four times. This is the frequency you need to change behaviour. People won’t go back to the old situation. They have now become online shoppers.”
If there’s one thing that the crisis has shown us, it’s that organisations that can be agile and re-imagine their business will thrive. It has also illustrated how important omnichannel experiences are, both for businesses and their customers. Delhaize sees the crisis as more of an accelerator than as a transformative agent, as the digital imperative was set to transform business, crisis or not. Now that we’ve arrived there earlier than anticipated, what might tomorrow bring?
Jonathan Hertog and Delhaize anticipate customers turning towards stores for experiences and inspiration, while using online platforms for their recurring shopping, perhaps through automatic subscription models. In a world where virtually everything can be delivered straight to your door, customers need a reason to go to the shop. And for retailers, the chance to transform the shop into a brand showroom, or to offer immersive in-store experiences, is too good an opportunity to pass up. Being a store is no longer enough – you have to become a destination.
Contactless shopping, the reimagining of physical stores, socially responsible behaviour and communication, and agile modes of operations – these are the hallmarks of the new retail landscape. As we look at the New Normal and beyond, we see an exciting new landscape emerging; we just need to embrace the digital imperative to thrive in it.
Curious to learn more about how Ahold Delhaize succeeds in the new normal? Watch the opening keynote of Salesforce Live: Benelux, where they share their successes with Salesforce, like Just Eat Takeaway.com and Salesforce Chief Innovation Officer, Simon Mulcahy, who shares his point of view on the digital imperative.