World Retail Congress: how to accelerate eCommerce

For Dutch-Belgian grocer Ahold Delhaiz, online food sales had already increased rapidly prior to the pandemic. “We were already doing about $4.5bn in eCommerce last year and our ambition was to get to about $7bn next year but will now probably hit that mark by the end of this year,” chief digital officer Farhan Siddiq told delegates at World Retail Congress Connected.

The company has 6,500 stores in 10 countries. Despite remaining open during the pandemic, the proportion of consumers using online for the first time rose by 30%.

Its strategic focus is to capitalise on that extra growth through convenience, value and inspiration. “We are in a really good position, leveraging digital and technology to deliver on all of those. So it’s for us to lose those customers, we are at a very interesting tipping point where we can create habits.”

However, as the grocery sector remains low margin, managing that large shift of customers to online needs to be profitable - especially if there is an expectation that grocers absorb the cost of picking and delivering. He says it’s important retailers look at all the different elements available to make that work, such as early stage automation, the assets they have and omnichannel.

Also speaking on the panel, Joan King, senior VP E-commerce at home store retailer Crate and Barrel, says the increased use of online has to some extent boosted profitability - particularly as its 86 stores reopened and people used them as showrooms to complement their online research. Since the pandemic its online business has grown from around 40% to 70%. 

Complementary channels

She says there has been a shift in expectation across both channels. “The site needs to play more of that guided role of inspiration and discovery that we’re used to [from the in-store experience]… And also when customers are getting to the store, they are ready to transact... so we have to make sure it is super efficient,” she says. “So the level service in each channel has changed a bit in response to how customers are using them to make that purchase.”

But for her, the biggest change to the business is the speed of decision-making. “I think the pace we’ve moved in during the last several months is ten-times faster than in previous years and that has really helped us capture demand.” It has “transformed the business,” she says. “That triage mode… has helped us to be more effective in our leadership.”

Carsten Keller, VP of direct-to-consumer at German eCommerce company Zalando, agrees that agility has been key. He says the company acted quickly to expand its platform after the pandemic hit, inviting bricks and mortar retailers onto its platform and waived commissions. Consequently it gained many more customers in the last few month and now has 34 million across its markets.

“In a matter of few days we had a campaign out talking to all the people on high street that were closed, and then in another matter of days we had hundreds of retailers [on board] now selling to our customers. And that was awesome to see - how speed drives business into a new direction.”

The main takeaway for Ahold Delhaiz is making the new model viable for customers, stakeholders and teams, says Farhan. “It’s a really good catalyst. I hate to say it, but let’s not waste a good crisis… Thank god we’re getting away from the term ‘lets take this off-line’. I haven’t heard that lately!"