Growing Online Retail
Increasingly, Ahold’s focus isn’t just about bricks, but also clicks. The company has set an ambitious goal to triple its global online sales by 2016, which would bring it to about $2 billion. In the U.S., those efforts are focused on Peapod, which has been associated with Ahold since 1991, while in the Netherlands the online business is Albert.nl.
This is being supported by investments in technology.
“On both sides of the ocean we have the No. 1 position in food online,” Boer said. “So we really know how to do food, and we want to expand that faster and bolder.”
The company will test how it can further leverage its brands online, and success will hinge partly on delivery strategies.
“Peapod has been good at developing great systems, including list-building technologies, but we need to handle the delivery process faster,” Schlicker said. “We’re thinking that potentially you could get down to a four-hour window from the time that you ordered to the time you get the delivery.”
Also important is providing flexibility in how consumers pick up their orders. This has included experimenting with curbside pickup, which enables customers who shop from home to pick up orders without leaving their cars.
Other strategies are being mulled as well. “If they order it online, or on a mobile phone, do they want it delivered to their home?” Schlicker began. “We’re also looking at strategically placing pickup points off major highways. They can order it at lunchtime and pick it up at 5 p.m. We’ve seen examples in Europe where that’s been successful, so we’re aggressively looking at those types of things.”
Ahold’s online business is “close to break even in the U.S. and Europe,” Boer said. However, top-line growth will be a big part of the mission going forward. “It’s about how can you grow your business,” Schlicker said. “And not only that, we want to grow it at least three times in the next couple of years, and internally we have more aggressive targets than that.”
Meanwhile, last month Ahold announced it’s acquiring Bol.com, the Netherlands’ largest online retailer, whose business concentrates on categories including books, entertainment, electronics and toys.
Sharing best practices between Europe and the U.S. is just as important in the home shopping business as with other operations, executives said.
“There are things from the supply chain side that we’ll be able to incorporate from Europe,” Schlicker said. “And there are some things on the technology side we’ll be able to export to Europe.”