no longer central to this; rather, careful regis
tration and analysis of actual consumer
behavior play the most vital role. The
direct management of distribution
based on consumer purchases is
known in trade jargon as Efficient
Consumer Response (ECR).
The key to this process
reversal is check-out scanning of
product bar codes. All product
purchases are precisely registered
and analyzed per check-out trans
action, specified by the moment of
the day. This system is employed in
Albert Heijn stores in The Netherlands.
The American Ahold chains will soon follow
suit. Information about a specific customer's
buying behavior can be further defined bv use of
a customer card. Albert Heijn is currently testing an
advanced electronic customer purchasing card, with functions
for identification, payment, customer loyalty (savings programs) and convenience
(e.g. self-scanning and computation of bottle deposit refunds). In close cooperation,
the American chains are also testing and developing their own advanced customer pur
chasing card, a first version of which will soon be introduced at Finast in Ohio. With
the individual customer knowledge provided by scanner data, distribution can be better
directed more precisely and flexibly to changing demand. Distribution can be better
geared to actual need, and the assortment customized to the local consumer population.
The customer card also makes possible individualized communication. Based on his
purchases, and only if requested, the customer receives detailed product and store
information with special promotions specifically suited to his preferences. The new
one-on-one relationship benefits the customer and retail industry alike.
Information technology is speeding the evolution from mass sales formerly
initiated by suppliers based on their expectationsto precision retailing, guided by actual
consumer behavior. Although directed application of modern information technology
is the sine qua non for precision retailing's existence, there are quite a number of other
factors as well which ultimately determine which store format, products and services
Ahold's store chains provide to consumers. These factors consist of specific market
conditions, such as competition, population density and infrastructure, local culture
and traditions. Ahold chains themselves decide on the optimal mix of store types
and products for each region and within the regions as well. At the same time, widely
30 Annual Report 1995 Royal Ahold
