shortly thereafter. The most full} developed
markets for Ahold are in the United
States and The Netherlands. Complex
company operations are largely
determined by the individualism
of today's consumer, a marked trait
in these countries. How can our
stores best satisfy the buying needs
of today's consumer, and how can
we optimize our operating results
in turn?
The modern family has fewer
members, each with his own con
sumption pattern. The old-fashioned
family-size dessert bowl has evolved into
individual desserts in a host of flavors.
Standards and values are becoming more diver
gent per family and per consumer. This means that
market segmentation based on lifestyle or customer profile
is no longer easy. 'Yuppies' are sometimes the most assiduous
bargain hunters. The 'working mom with two kids' can be rushing through the store
with a pile of heat-and-serve meals one day, and the next spend hours tracking down
exotic ingredients for a gourmet meal. Everyone has a particular lifestyle with a certain
mix of preferences, and the acceptance of various ever-changing styles is high.
Naturally, manufacturers and the retail industry have themselves contributed to this
developing individualism. With the enormous growth in availability at the supermarket,
the consumer's options have multiplied.
PROCESS REVERSAL
However, the era of unbridled growth in assortments as the premier response to the
customer's individualism, and as a way to distinguish oneself from the competition, is
coming to an end. Profits from uncontrolled growth in assortments are falling off, and
profit growth under unchanged policy should mainly depend on realized cost savings.
Traditional marketing analyses - segmentation based on lifestyles - are not up to the
task of determining which products deserve shelf space and which do not. Traditional
practice too often fails to anticipate when certain products will suddenly be in greater
or lesser demand.
A new approach is needed to keep in close step with today's consumer, providing
him products he wants, when he wants it, while keeping related distribution costs to the
minimum. Market research and marketing models are becoming less important and are
Annual Report 1995 Royal Ahold 29
