From Reuters:
“Ahold Delhaize has hit ‘roughly half’ its goal to grow revenue from businesses beyond grocery stores to 1 billion euros by 2025, CEO Frans Muller told Reuters, an effort focused on selling ads on its supermarkets’ websites and monetising insights on consumer data.
“Grocers like Ahold Delhaize are building ventures that sell online advertising to consumer goods companies, including the ability for their brands to appear first in shoppers’ searches or feature as ‘sponsored products’ – offerings pioneered by Amazon.
“They are also working to improve the quality of the data insights they can sell to the consumer goods companies, who in turn use it to target shoppers with ads for their products. The data is encrypted and aggregated so that it cannot be traced to individual shoppers.
“Muller said Ahold Delhaize, which owns supermarket chains including Stop & Shop in the United States and Albert Heijin in the Netherlands, uses revenue from advertising to keep food prices lower as inflation persists in Europe and the U.S..”
KC’s View:
We’ve been talking a lot about this on MNB in the recent past – the importance that many retailers are placing on the development of alternative revenue streams that allow them to grow overall margins while holding the line on prices.
Two things about this.
First, it gives larger retailers an enormous advantage over smaller competitors, simply because they have more data to leverage and opportunities to offer. Which puts greater pressure on smaller businesses to find their own opportunities, doing things that bigger companies cannot or will not do.
Second, I feel really strongly that retailers have to be careful about the degree to which they exploit these new revenue streams. If in their zeal to extract more money from more sources they end up creating store environments – both physical and digital – that are so noisy and cluttered that they detract from a positive experience, it’ll end up hurting them long-term.
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