ahold’s online strategy and ambition hanneke faber · ahold’s online growth ambition: 20-25%...

Hanneke Faber Chief Commercial Officer

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Ahold’s online strategy and ambition

Contents

• Retail landscape

• Ahold’s online strengths

• Ahold’s online strategies for growth

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Contents




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Digital developments impacting retail landscape

• “Age of transparency”

• Price / value

• Food integrity

• Technology advances / Moore’s law

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Presenter

Presentation Notes

Based on the extensive trend work we have distilled 6 priority trends that shape our operating environment: US market structure Recovering consumer fundamentals Focus on health & integrity of food production Focus on price & promo Consumer increasingly visit value or premium beside mainstream supermarkets Online will continue to grow becoming a sizeable channel also in food This environment if offering challenges as well as opportunities. In order to realize our ambition we need to be focused and sharpen up. These trends include the following. I will elaborate on each of these trends in the following slides

Predicting what’s next in tech can be perilous…

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Presenter

Presentation Notes

http://www.youtube.com/watch?v=FW651kusiBI

Online market growth will continue

Source: combination of McKinsey, Euromonitor, Forrester, Ahold research

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Close to 20% of general merchandise sales expected to be online in 2020

18%

14%

19%

11%

4%

8%

1% 1% 1% 3–4% 4–5%

2013 2020 2013 2020

3-5% of food sales expected to be online in 2020

General merchandise Advanced shift

Food Emerging shift

Customer expectations are increasing rapidly

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Delivery times

Same / next day

Delivery fees

Decreasing tolerance for fees, especially in general merchandise

Assortment

Unlimited, including fresh

and frozen, services

Presenter

Presentation Notes

Delivery times: China/US 2-5 day delivery time accepted today at Taobao and Amazon; NL at overnight already; same day is coming (show visual screenshot bol.com ‘order before 11, have it next day – free’) Delivery fees: decreasing tolerance, especially for orders with few items. Assortment: not just non-perishables (show Amazon Pantry), fresh too (show Peapod); desire for unique assortment vs ‘commodities’

Marketplaces, marketplaces

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marketplace as % sales

2013 2014e 2015e 2012

8 10

16

20

Contents

• Retail landscape • Ahold’s online strengths


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Ahold’s online growth ambition: 20-25% CAGR

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billion

2014 €1.4 billion online sales*

Ambition 2017 €2.5 billion online sales*

Peapod Albert Heijn Online bol.com

€1.4

Peapod Albert Heijn Online bol.com

€2.5

*Estimated consumer sales includes sales from third parties (f.e. Plaza sales)

Presenter

Presentation Notes

2.5 billion is Consumer Sales, meaning including sales of Plaza partners. 60 mln incremental investment in EBIT is primarily Bol.com 250 mln capex is from LTP plus a small addition for Bol.com warehouse, which is not in the LTP and should therefore be funded by savings in other parts.

Ahold has a unique set of strengths to win online

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Strong online brands in

dense urban markets

Easy and inspirational

online shopping experience

Broad range of high quality

products

Serving customers anyhow, anytime,

anywhere

Operational excellence in online

fresh food


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dense urban markets




products


anywhere


fresh food

Strong online brands with market leading positions

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• Five million active customers

• More than nine million items

• More than 4,000 merchant partners through our marketplace, Plaza

• Average items / order: 1.8

#1 online retailer in the Netherlands / Belgium

• Covers 84% of Dutch households

• More than 25,000 SKU’s

• Average items / order: 74

#1 online food retailer in the Netherlands (ah.nl)

• Covers > 50 million people, 17% of U.S. population

• 12-18,000 SKU’s

• Average items / order: 55

#1 online food retailer in the United States

Customers love and trust our brands

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Top 100 most trusted Dutch brands (2013 IPSOS Brand Monitor)

1. 2. 3. 4. 5.

Top 100 most influential Dutch brands (2013 IPSOS Brand Monitor)

1. 2. 3. 4. 5. 6. 7.

#61 in U.S. Internet Retailer Top 500

We operate in dense urban markets, which allows us to be profitable in home delivery • The Netherlands (404 p/km2) and Belgium

(361 p/km2) are both in global top 10 most densely populated countries.

• U.S. northern East Coast ranks as the 11th most densely populated global region in the world (450 p/km2), and is the most heavily urbanized region in the U.S.

• Our 25 years of online logistics experience makes us profitable on mature, dense routes

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persquaremile.com


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dense urban markets


products


anywhere


fresh food



Just in time personalization at bol.com

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AH.nl: tens of thousands of recipes, straight to list

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Peapod: One-click easy filters

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Leading, innovative technology capabilities

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Supply chain systems

Transportation Price management Web and mobile experience

Customer service systems

• Central replenishment systems (<1 day of inventory)

• Warehouse management systems with smart picking algorithms (>400 items / hr food picking)

• Automated optimized routing (84% full vans)

• Patented yield management real-time scheduling (fee / slotting)

• Driver mobile field technology - text alerts for ETA, arrival and pickup

• Automatic benchmark pricing

• Integrated pricing with stores, including zip code-level pricing in U.S.

• Personalized offers, valid off- and online

• Strong mobile interfaces (40%)

• Real-time personalized websites

• Intelligent search • Recipe integration • “Guess my order” • Top retail apps: Appie

#1 in NL; Peapod top 10 in U.S. InternetRetailer.com

• Advanced customer service systems supporting multiple centers and phone / web / Chatbot / email

• Track and trace • Sophisticated fraud

protection (low bad debt) Pr

oprie

tary

sys

tem

s H

R 1,000+ IT experts (Amsterdam, Utrecht, Chicago, Boston)

• Agile, autonomous teams, with state-of-the-art software development skills • Best-in-class application of big data concepts and techniques


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dense urban markets


anywhere


fresh food


products



Broadest range online in the Netherlands at bol.com • Grew from one to 26 categories from 1999 to 2014

• More than nine million products

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Broadest range through the premier Dutch marketplace

Key results to date:

• Over €100 mln third-party revenues

• One in six products sold via third parties

• Partner’s revenue typically increased by 10-30%

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Unique ranges of food products

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Own brand Own-brand sales: AH.nl 51% Peapod 30%

Quality and diversity in Fresh Fresh / frozen sales: AH.nl 47% Peapod 40%


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dense urban markets


fresh food




anywhere


products

Serving customers anyhow, anytime, anywhere - with unique omni-channel shopping options

Omni-channel customers are more loyal and spend >20% more vs. supermarket-only customers

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on average

+21%

Unrivalled delivery options 1. Broad store network 2. Home delivery 3. Pick-up points

Omni-channel, cross brand shopping

• One loyalty card on- and offline

• Joint marketing programs

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dense urban markets




products


fresh food


anywhere

Operational excellence in fresh food, built on an omni-channel supply chain

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Simple inbound Efficient picking and transport

Best-in-class sourcing for on- and offline

Contents




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Ahold’s online strategies for growth

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More customers

Market share and market growth

More places

Well-positioned for geographical

expansion

More choices

Continue to expand quality, ranges,

value and choices for our customers and our partners

More customers - significant opportunities for growth • Online market growth expected to be robust

in U.S. and NL

• Peapod: 2% share in best zip codes; average 0.5%

• AH.nl: 6% penetration in Amsterdam, 2.5% national

• 40% of our 5 mln bol.com customers bought only from one single category

• One out of two shoppers in the Netherlands

shops via bol.com, but only one out of five shoppers in Belgium

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0%

10%

0

500

1.000

1.500

2.000

2.500

3.000

2012 2013 2014E 2015E 2016E 2017E

Online sales* Online share of total*

More places - we are well-positioned for geographical expansion

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Gradual expansion into Midwest; Indianapolis warehouse to open in 2015

Entering north / south NL end-2014 Will enter Belgium in 2015

Amsterdam

Rotterdam

Antwerp

Midwest

More choices - for our customers

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# of SKUs at

10k 18k

NJ warehouse NY’s best

# of SKUs 0

5

10

15

20

25

30

1999 2004 2009 2014

# of

cat

egor

ies

More choices - for our partners

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What marketers are looking for:

• Higher ROIs

• Sufficient reach

• More personalization

• Richer product content and storytelling

• Closer to point-of-purchase

More choices - for our partners

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National media reach: Netherlands

• #1 newspaper: 530k

• National news: 2 mln

• #1 women’s magazine: 375k

Ahold reach: Netherlands

• Albert Heijn stores: 14 mln visits / week

• Bol.com: 820,000 unique visitors daily

• Allerhande magazine: 2.7 mln readers

In summary: we are well-positioned, and have vast opportunities for future growth

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We have leading online positions and

unique capabilities

We have clear strategies for growth:

more customers, more places, more choices

Cautionary notice

This presentation includes forward-looking statements, which do not refer to historical facts but refer to expectations based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those included in such statements. These forward-looking statements include, but are not limited to, statements as to online growth and strategy, investments, omni-channel strategy, customer expectations and untapped media and marketing opportunities. These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond Ahold’s ability to control or estimate precisely, such as the effect of general economic or political conditions, fluctuations in exchange rates or interest rates, increases or changes in competition, Ahold’s ability to implement and complete successfully its plans and strategies, the benefits from and resources generated by Ahold’s plans and strategies being less than or different from those anticipated, changes in Ahold’s liquidity needs, the actions of competitors and third parties and other factors discussed in Ahold’s disclosures. The audience is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of these presentations. Koninklijke Ahold N.V. does not assume any obligation to update any public information or forward-looking statements in these presentations to reflect subsequent events or circumstances, except as may be required by law. Outside the Netherlands, Koninklijke Ahold N.V., being its registered name, presents itself under the name of “Royal Ahold” or simply “Ahold”.

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ahold’s online strategy and ambition hanneke faber · ahold’s online growth ambition: 20-25%...

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