Unlocking Omnichannel Success: Insights From Ahold Delhaize CEO Frans Muller

Hello, everyone.

This is omni talk retail.

I'm Chris Walton.

And I'm Ann Mazingo.

And we are coming to you once again from the fusion group's booth at grocery shop.

Booth a two 10.

I got that right.

Anne.

A 210.

A 210.

That's a good way to say it.

Ann.

Yes.

And it is with great pleasure that I introduce the man standing between us.

Anne.

Yes, and that is mister.

Franz Miller.

Miller, the president and CEO of Ajo Delays.

Franz, welcome to Amitalk.

It's great to have you here.

It's unbelievable.

Nice to be here at 8210, and I'm looking forward to be a part of it today.

Well, France, please share with our audience, who may not be familiar about Ajo del Hayes, a little bit about the business and kind of where you are, what countries you're in, that kind of thing.

Au the less is a little difficult name to pronounce to start with, and a lot of folks in the US don't know that name as a retailer name.

But we operate five brands in the US, 60% of our total businesses here.

So that's about $16 billion here on the east coast.

So we operate from the north in Maine to the Carolinas, and the rest of the business is in Europe and Indonesia.

So we are a little mix of us and Europe retailers.

We operate supermarkets.

We have 98% of our sales is in food.

We also operate a very nice platform in a marketplace in the Benelux countries, which is very successful, a market leader there.

It's called Bol Bol.

So if you're a readership or you're a listenership, you have to google that.

It's pretty cool company also.

And that's our company.

We have number one in two positions along the whole east coast, and we have in total 16 brands in our company.

So a little bit different than a few competitors with one brand on the facade.

We believe in local, we believe in closer to communities.

And most of our brands are more than decades young.

And the oldest one is 155 years old.

And how long have you been in this role?

In this role?

It's about eight years now.

Okay.

And you see, you oversee all of that?

I'm supposed to.

That's my job description at least, right?

I think so, yeah.

Yeah, yeah.

I mean, you just listed off a few minutes all of the properties that you oversee.

It's quite a job responsibility.

Yes, it is.

We also have 400,000 team members.

400,000.

Wow.

Who are helping and who supporting and who do a terrific job for us.

And what are some of those banners in the states?

What are they called?

Yeah.

So in the north, we have Hanaford.

Yep.

Main, Vermont, Mass.

Then we have stop and shop in Massachusetts, New England and New York.

Then we have the giant company in Pennsylvania.

Then we have the giant food company in Washington, Baltimore, and we have food lion in the Carolinas.

But they are in total ten states in the south.

And all brands have number one or two positions in their dmas, their market areas.

And, yeah, we have pretty good business overall.

Yeah.

Right.

Okay.

So you came a long way to speak on stage today.

I'm curious, what did you talk about?

I got some very good questions from Melissa Repko from CNBC, and she wanted to know a little bit more about the company.

So, a little bit.

The question you asked me.

Oh, I steal all my questions from Melissa rep.

No, no, no.

There's no pluggy out here.

I don't believe that.

So, no.

So we talk a little bit about who we are.

We talk a little bit about our four years strategy growing together.

We talked about a few elements on how do we like to grow, how did consumers change in the last couple of years, and what do you think going forward?

Of course, we talked at the grocery shop about e commerce, digital media, and these kind of things, as you can imagine.

Yes, yes, as you can imagine.

And we talked also a little bit more about private label, which is, of course, an important driver for growth and differentiation.

Well, I heard from a few people who heard your session that one of the key things that you were focused on in that conversation was talking about retail media.

But of all the things you just mentioned, retail media, ecom growth, digitization of the stores, is there one thing that kind of takes priority in your mind over the other?

All of those initiatives, like, is something, does something rise to the top?

The one thing which is, of course, rising to the top is how can we, as an omnichannel company in bricks and mortar and online, can bring the best customer value proposition to the table?

And how can we excite and satisfy our customer base?

We have roughly 63 million customers a week.

So it's a few folks to make happy.

That's a lot.

And I think that is the top of mind.

And all the other elements are more or less support factors to make that happen.

Okay.

So it's focused on the customer.

And of those, is there a technology or an area of investment that you feel like is most important right now for retail investors?

The most foundational for us is proper and clean data.

Okay.

Okay.

Interesting to make sure that you have the right data.

So you have fact based, which is okay.

80% of our customers will buy through loyalty systems in 2028.

That is now roughly 65%.

So we are rich in data, in knowledge and insights, I must say.

And that we can use to make your expectation even more satisfied by giving you a better product or a better customer experience or a more seamless journey, or an experience where you can combine a to go store with retail online with the full shop.

And that is what we try to do.

And we are already a long time in omnichannel.

I mean, you heard the stories, and years ago, the people said there will be no stores anymore.

Right?

You might have heard about it.

Yeah.

And we always said, no, no, online will grow and will grow with a faster pace than bricks and mortar, which it did.

But stores will be super important.

And omnichannel is, for us, the name of the game.

Yeah, well, omnichannel is really not anything new, too.

I mean, we've been doing omnichannel things as grocers for a long time.

We've had places where you could drive up and get your groceries put in your car and that kind of thing, too.

But I want to single you out for a second because.

And Fraz might be a needle in a stack of needles because he's a retail CEO that just said he's focused on data.

Yes.

Which is something that we've never heard in our history of doing.

He said the customer first, and then he said data.

So you check the right boxes in the right order.

But, yes, data is.

But that has never been said by a retail CEO on our history of our show.

So kudos to you because we're always talking about kudos.

Needle sounds quite sharp, by the way.

I think good data.

Sharp's the right word, though.

Good data is the right word.

Yeah.

Good data to understand you better.

Good data to build a category, good data to do the forecasting into supply chain.

And we talked a little bit of AI and gen AI at the fair here as well, at the grocery shop as well.

And I think good data combined with revised tooling technology can do a lot of things good and to save money, better efficiencies, to save food waste, all these kind of things.

So, yeah, I'm quite excited about data.

That's great to hear that that's a priority for you.

Thank you.

I love it.

We love that.

We love hearing that.

So I want to ask you on a similar thread.

So retail media, it's been the talk of the town now for a few years.

How do you, in your role as CEO, define retail media?

And how do you think, is it more than advertising?

Like, how do you think about that whole concept?

Retail media in itself, I would say, is more providing better insights, which you make available to the parties in your supply chain.

Okay, so if we have more knowledge about categories or cross selling or upselling or conversions, and we make debt available in a proper way, then these kind of things are worth something, because you can make a big benefit with this.

And that's why retail media is an opportunity.

Starts, by the way, with data.

Starts with data.

And if we do this in the right way, and we have still quite some work to do, we have a target out there for complementary revenues.

How we call that shopping data, retro media data and loyalty data.

3 billion complementary revenue to reinvest in our business.

But that starts with data.

And so.

But insights, how can we know you better?

How can we say to our CPG partners, those customers make that cross sell, those partners have this type of profile.

This is how we can grow the category, this is how we can grow the basket.

But in the end, we would like to go further.

We would like to grow you as a customer.

And we see that omnichannel customers, well treated and well taken care of, can be one and a half to three times bigger than only online or only bricks and mortar.

And that's, of course, in size of the price to fight for.

Yeah, so I want to capture what you said, though.

So the way I interpret what you said is you kind of look at retail media as a way for one plus one to equal three with all the constituents that you work with, particularly the CPGs.

Like if you guys invest in it mutually, it'll just grow to the benefit.

It'll help both parties grow going forward into the future.

Is that the right way to sum it up or what am I missing there?

101 is three.

And I don't know how you calculate it.

Oh, that's called us math.

That's how we do things.

It's a little bit creative calculation here.

But he went to Stanford, don't worry.

No, no.

It must be right then.

So, highest educated person seven is pretty good school.

So, no, I think what is important here for us is that we make those insights available in a way which is efficient also for our partners in advertising, the CPG guys, which is giving the proper insights, but also based on our market positions in the markets where we operate.

What you uniquely offer, for the moment.

Where we talk about the US with number one and two positions, close to the community, very trusted brands that also, they enjoy the conversion because in the end, they also say, okay, I invest this in media and advertising.

What do I get back for this?

And conversion has to do with return on the investment.

So the ROIs must, in the end, be the driver for this.

And we make this available.

We have cockpits and these kind of things where they can see the rois and conversions.

So this is what we still have some opportunity for.

How does loyalty, like, you mentioned that your loyalty members, by 2028, they're going to be how 80% of your customers will be loyalty members by then?

How does that play into your kind of measurement or roi when it comes to retail media investment, too?

Because I feel like you're getting to know the person better.

You're giving me better offers.

You're kind of creating a flywheel.

Then how do you think about investment in retail media and the increase in loyalty members as another result?

Loyalty, as the word almost says, you have to earn.

Yeah.

And I only get your loyalty or your willingness to buy through a loyalty card so that you will get more insights if we do something for you as well.

Yeah, this is a great retailer.

Yeah.

So that is things like.

I think they're the personalized comment comes in.

Yeah.

If we understand you and we give you offers or prices or whatsoever, hey, this is really what I want.

This is spot on.

Or we make your journey, your shopping journey, more seamless.

Or when you say, well, what's for dinner tonight?

And then you don't notice, and we give you some ideas on the spot or based on what is in your fridge.

Yeah.

Or the recipes you like and these kind of things.

If we have these kind of things and we do this across all the channels to go online, the big store, I think those things make us then for you, a good partner.

And then you think, well, then I'm prepared to enter your loyalty scheme.

I'm prepared to take my own loyalty rebates based on my own buying behaviors.

And then you get customers who start to love us.

Yeah.

Well, yeah.

They have a reason.

You're saving them money.

And time.

And time, yeah.

Okay, I have another question for you.

So you've been in this role for almost eight years.

You said six.

Yeah.

So, no, in 2016, we had our merger.

Yeah.

And in 2018, I took this role.

So you're 100% correct.

Six years.

Six years.

Okay.

In 2013, I started as a CEO of delay, the last merge with ahold.

Okay.

That's how it all came.

Yeah.

So in this type of role, a good.

1011 years.

Okay, thank you for that correct math.

Yeah, I am wondering, I'm just Rotterdam.

University, it's not as smart as crazy.

No new math.

Okay.

I want to know what have you learned about being a retailer in those last eight years?

Will say the eight to ten years that you didn't know before you started.

Which I didn't know about retail or didn't know about myself.

You could both.

Both, yes.

I think if you look at the last couple of years and we still have in mind the pandemic, unfortunately, we still have in our minds the ukrainian war.

We have a crisis in Europe on commodities energy prices.

We saw a lot of people during COVID going through a lot of pain and problems and things to overcome that makes you as a human being or as a leader of a company, super humble, that's one thing.

And extremely appreciative for your people.

What they all did in those seven half thousand stores, distribution centers and offices.

So that's one thing.

The other thing is what I also learned from the business in itself, that of course, you know that retail is so local, but it got even more local because people trust the element.

Trust became even more important.

Yeah, right.

Because you go to your grocer who handles your product properly, who keeps you safe, who has well stocked shelves so, and who has a proposition which is affordable, healthy and sustainably sourced so that we all can feed our families, or if we cannot feed our families, that we can get support from them in our communities.

We one of the biggest contributors worldwide with food banks.

The global food bank network is a network we sponsor.

And in all our brands, all the 16, we are a strong contributor to the food banks with pride, by the way, and with humility.

So those are the things which are for me, important.

And I think, yeah, for us, a mission for our company and what drives our people.

In our company, the passion of our people is how to make sure that groceries are affordable, healthy and sustainably sourced.

And that is a big opportunity and it's not everywhere.

An effluent neighborhood.

Correct.

Right.

And I personally believe, but then we get a little bit philosophical.

That's okay.

I mean, we got time for this.

We like philosophy.

I personally believe that people who have access to healthy and affordable foods, plus have access to proper education, that then you at least set people in the opportunity to be successful or to be happy.

And that's where I'm super fortunate to work for Aja del S and that I can hopefully bring a contribution here to promote that, to make sure that that element is at least taken care of.

Well said.

I love what you said about the pandemic, too, because, I mean, I know, Ann, when we.

I remember when we were in the pandemic thinking that, you know, the grocery store is just that center point in people's lives, like it still existed in a way that I don't think any of us really understood or recognized at the time until it happened.

So.

All right, well, let's get you out of here on this last question.

You've got a lot of executives that work for you.

You've got a lot of experience in the grocery industry.

You know, people are still trying to understand what omnichannel grocery retailing is all about.

Is there one trait in an executive that you value or would encourage people to get better at day in and day out as they're doing their jobs?

I don't know if there's one trade, but maybe three trades.

Okay.

Yes, good.

Okay, good.

Why have one when three?

Raising the bar here.

One thing for me is that leaders and colleagues I work with go that extra mile.

Okay.

That's an important element of, I think, of an attitude.

The second thing is that people have a very good view for people.

If you, in retail, if you do not love people, you will not be successful.

And the third thing is, I would appreciate a lot of people where they, whatever their age is that they stay curious.

Yes.

That curiosity is there to think about innovation, think what can go better.

And in retail, it's a little bit, sometimes a little bit tough.

If your year is ended by the 31 December, our business year ends by that date.

Then the 1 January, the meters on zero, you start again.

So it's also sometimes.

Yeah.

Keeps you also bit of feet on the ground, which is nice industry to work for.

Yeah, yeah, right.

I love that.

Love that.

That's great.

Thanks for the three, too.

That was great.

Especially the last one.

I love the last one.

Well, that wraps us up for today, the first day of grocery shop 2024.

Thank you so much to the views and group for helping us bring you all of the coverage from the show recaps from the main stage with all of the guests that we've had today.

We will be.

How many guests did you have?

Four today.

Just you, a dozen of guests.

No, no, no.

Save the best for last.

Save the best for last.

But no, we had four today.

We've got five tomorrow as well.

So you're the anchor leg for today, though.

So you close us out for today.

Yeah.

So thank you.

Tomorrow morning, we'll be back with David McIntosh from Instacart.

And thanks again, Franz Miller from Ahold Del Hayes.

And thanks to all of you for following along.

We'll be back tomorrow.

Until then.

Yep.

Be careful out there.