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Interview: Jumbo eCommerce director Roland van den Berg

It has been a busy November for the Netherlands' second largest grocer, Jumbo Supermarkten.

The retailer launched its inaugural eCommerce operation earlier in the month and, on Wednesday, it unveiled its second Jumbo Food Markt, which allows shoppers to head into the store to try freshly cooked food and talk to staff about recipes and ingredients.

"You could say we have developed Jumbo's everyday low price version of a Whole Foods," Jumbo's eCommerce director Roland van den Berg told Essential Retail, referring to the new Food Markt concept.

Opening the new format is part of the retailer's strategy to increase its customer base, raise the company's profile and provide multiple channels from which shoppers can access the brand. Meanwhile, the online retail site at Jumbo.com – which was 22 months in the making – represents the business's new digital channel.

"The ultimate goal for Jumbo has been to create Jumbo fans but now the target is to create omnichannel Jumbo fans," van den Berg explained.

"The most important goal is to create fans – we are truly customer centric, not purely finance driven. The online site should help the Jumbo brand be more loyal to its customers."

Working with the specialist retail strategy consultants and systems integrators, Javelin Group, Jumbo has developed its website to offer customers an opportunity to order online for next-day pick up from dedicated selected Jumbo Supermarkten stores. There are also a number of "solo pick-up points" located near highways and areas where commuters can conveniently collect their orders on the way to or from their workplace.

Javelin Group designed the site, and helped develop an eCommerce fulfilment centre – or dark store – and the pick-up points, as well as implementing Informatica's product information management. The website is built on the Intershop platform.

"It's our aim to get national coverage for pick-up points as soon as possible," said the eCommerce director.

"Home delivery is something we will consider for the future because we have created a dedicated e-fulfilment facility, which can easily serve home delivery."

The obvious question to ask, certainly from a UK perspective, is why is such a large player in Dutch retail only just going online? There are a number of reasons; one being that eCommerce only represents 1-2% of the overall grocery market in the country and is still at a nascent stage in its development, but another is the company has been focused on other matters.

In 2009 and 2012 respectively Jumbo acquired rival grocers Super de Boer and C1000, which has helped establish the business as the clear second largest supermarket in the Netherlands, behind Ahold. The integration of the new stores into the Jumbo portfolio is set to be completed next year, paving the way for the company to dabble further in its digital offering.

Van den Berg said: "We've been quite busy with our bricks and mortar store growth and the acquisitions, which has involved migrating the stores over to the Jumbo brand and converting three or four stores a week – it's been a significant operation.

"We need to be sure that our online offer is in line with our seven guarantees, which revolve around price, service and choice. This is why we have taken longer to launch. We say that we're the last retailer to go online, but with the ambition of being the best."

There are currently around 20,000 SKUs on the website but the company has plans to grow this number in the future. The store pick-up points offered are either drive-thru or walk-in, giving customers a variety of fulfilment options, while shoppers who order before midnight can collect their goods after 4pm the following day. Order before noon and their items will be ready the next morning.

The eCommerce boss views the UK, where online sales represent around 5-6% of the overall grocery market, as something of a benchmark in terms of internet retailing. He admires British supermarkets, saying most of them have been able to exploit the customer loyalty and other new opportunities the internet presents.

Part of the reason for choosing Javelin Group to develop the Jumbo.com website, he acknowledged, was because of the company's experience working with British brands such as Tesco and Waitrose – but he believes there are things that his business's website can do better than those operated by UK retailers.

"Traditionally UK retailers have started fulfilment from store, picking in store because they have big sites and long opening hours, but we have taken on a classic distribution model," he argued.

"I know that our fulfilment operation is designed to be more efficient than those you find in the UK, except for perhaps Ocado where a lot of capex has gone into fulfilment development. We have UK players visiting us and seeing what they can learn."

However, Van den Berg would not encourage UK retailers to expand to the Netherlands, calling it "a crowded, highly competitive market" that is defined by low margins and low price levels.

In Dutch grocery, the only foreign players with any real penetration in market share are German discounters Aldi and Lidl. Although the growth of these two businesses has been a major factor in the recent shake-up and increase in competition within the UK, the Jumbo digital boss commented: "Our company and Lidl are the only two players exceeding market growth at the moment."

It has clearly been a time of significant change for Jumbo Supermarkten in recent years, and this month's developments have started the business on a new path to attract customers and allow the retailer to continue taking the fight to Ahold, which attracts about a 33% share of the Netherlands' supermarket spend.

With approximately 20% of the grocery market pie now belonging to Jumbo, it is the clear number two player in the Netherlands. And for now at least it is the company's home market where future growth opportunities exist.

"We are a very ambitious retailer and have ambitious shareholders – I hope that's illustrated by our recent growth," van den Berg commented.

"Currently our focus is on the Dutch market, wrapping up the consolidation of our recent acquisitions and making the food market and online concepts mature. The future holds a lot of opportunities but we don't have any plans for an international expansion in this point in time."

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Jumbo.com

Javelin Group

Intershop

Informatica

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