ECR seeks to identify and limit inefficiencies
in the entire chain, from raw materials
bought from manufacturers to sale to
the customer. Widespread mutual
exchange of information is essential
to this process.
Currently, all Albert I leijn
stores order their products daily
based on scanner data. They are
supplied at least once a day, usually
several times, depending on the
size of the store. The time between
ordering and delivery to the stores
is no more than eighteen hours. The
largely automated process saves work in
the stores, ensures exact supplies of each
product, that is to say, minimal but sufficient,
and also results in smaller stock in the chain's
distribution centers. These can then receive more frequent
'just in time' deliveries from suppliers.
THE MOMENT-DRIVEN CONSUMER
However, ECR is not just a cost-saving concept. It also simplifies and opens up new
commercial opportunities for Albert Heijn. The flexible distribution and information
network is directed by consumer demand. Deviations from standard patterns, by day
or by location, are handled better and with broader margins. An analysis of the Dutch
market clearly shows the opportunities for growth this offers Albert Heijn.
In Holland, supermarketing is so well developed that acquiring new customers is
a difficult and costly undertaking. While the concentration process is still in full swing
in the United States, with weak chains being bought out by larger and stronger ones,
this is largely a thing of the past in The Netherlands. Expanding competition is
characteristic of the Dutch situation. Restaurants, the fast food sector and gas station
shops are all trying to get a piece of the retail food market. Furthermore, customers
more readily switch stores for some purchases these days, if it is more convenient for
them. Consumer buying behavior has become more opportunistic and moment-driven.
To realize growth in this environment, it is of primary importance that Albert
Heijn be in the right place, at the right time, with the right product choice. The Albert
Heijn convenience stores currently being developed along commuter routes will offer
many ready-to-serve meal choices and a limited selection of household products,
Annual Report 1995 Royal Ahold 33
