Ahold Delhaize USA’s JJ Fleeman on Diversity, Sustainability and Retail Media, Part 2
In Part 1 of Progressive Grocer’s interview with Ahold Delhaize USA CEO JJ Fleeman, the executive spoke about when the price investments, enhanced customer service and targeted remodels outlined as part of Ahold Delhaize’s Growing Together strategy, would take place, as well as the company’s ability to focus on local but leverage its size and scale when needs, and the opportunities to grow own brands in the United States. In this part of the conversation, Fleeman tackles diversity, sustainability and the company’s social media capabilities.
Progressive Grocer: One of the important points that was brought up during Strategy Day was Thriving People. How does the U.S. business approach diversity? Does diversity pose different challenges in the U.S. than anywhere else? Clearly, it’s something that the company – not just this company, but all companies – need to work on to get full representation and inclusivity.
JJ Fleeman: I’m super-passionate about people. They really are what differentiates us. If you look at food retailing, we all have different strategies, different positions to deliver different real estate positions, different loyalty programs, but people create those things, and they’re the reason why we have the opportunity to actually sit here and have these conversations, which is something I’m really proud of. Our teams’ diversity, inclusion and equity are really important inside of our company. We want to create an environment where anyone feels welcome regardless of what your background is, and we mean literally anyone.
That’s embedded in our culture; that’s embedded in the work that we do around associate programs. It’s in the training that we do in the business resource groups that we have, and we have sponsorships of those. We try to invite a conversation about any topic and all topics so that people feel comfortable being themselves, and there’s nothing we can’t talk about what we try to do from a representation perspective. As you heard [Ahold Delhaize Chief Human Resources Officer] Natalia [Wallenberg] say yesterday, we don’t give goals, but we do want our stores and our teams to represent the communities that they serve. We’ve made a ton of progress on that. I’m actually really proud of the teams’ progress on that. That’s great. We’ve got work to do on it, of course, but it’s not a thing that you have to force in our organization. People are naturally wanting to do it. They see the benefit of having differences of thought, differences of opinion at the table, but also different backgrounds. We’ve done really nice work, but our goal is to have our teams reflect the customers and the communities that they serve, whether that be in a store or a distribution center or an office environment.
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PG: How is the attitude toward sustainability evolving, and how are Ahold Delhaize’s U.S. brands helping with that evolution? Obviously, Europe has been a little bit ahead of the United States in terms of adoption of green initiatives, and Ahold Delhaize USA has had access to those kind of insights from Europe and what Albert Heijn and the other European brands have done and have already rolled out.
JJF: We’re maturing a lot. I think you can see market to market. The difference, whether you’re talking about scope 1, 2 or 3, we’ve learned a ton by partnering across Europe, to the point that you’ve raised. There’s been a number of initiatives that Albert Heijn has taken the lead on that we’ve been able to benefit from, whether it be product development or taking sugar out of products or those types of things, or the focus that they’ve done on CO2 emissions and things such as that. We’ve been able to learn and do things there. At the same time, what I think would surprise people is brands like Food Lion, as example, have been Energy Star leaders for decades and have all the certifications. Hannaford has been a leader in waste and those types of things. But to be honest, it hasn’t been too hard to really create a connection for associates and for customers, because most people are pretty passionate about it.
We’ve been able to take some of the [sustainability] things, focus primarily on the community, and really leverage that to build partnerships across those communities. What we find is not every customer is passionate about it, and not every customer will pay more for it, but we’re seeing more and more customers that it really matters to them. … We see the younger generation super-passionate about it, but there’s many people that aren’t in the younger generation that are [as well]. We’ve made good progress on it. I think you’ll see that it’ll become more and more a part of every organization’s DNA as we move forward. I actually think we have a leadership position in it and believe that it’ll benefit us over time.
PG: One of the things I find really striking about Ahold Delhaize is the fact that the health of the planet is always linked with people’s health. I love that concept of sustainability and health across one’s personal health and well-being to the health and well-being of the planet, which I don’t think enough companies, especially in the United States, do. They don’t put those two pieces together.
JJF: No, I think that’s right. In order to get any of these things done over time, you have to have the discretionary effort of people, and the more that I think we can connect it to people’s passion, we can create emotional connections with people that when we talk about the things we want to do for customers, we want to do the very same thing for our associates, I think we have a better chance of getting them done. I actually appreciate you seeing that, and it’s something that … we’re very intentional about with our work.
PG: Another major topic that was brought up during the presentations was retail media, the fact that you’ve taken retail media in-house and the rising importance of it as a solution. It’s definitely a trending subject; you read about it everywhere. How would you say that your shoppers are adapting to retail media across your brands? It’s still kind of new, so I don’t know what the learning curve is for your shoppers or how they’re responding to it.
JJF: First, I would say that I think it’s important to talk about how to approach the topic, and you can either approach it from a pure income [perspective,] or you can approach it from a better customer experience. … In some ways, we talk about it as being a new thing and a new trend. I guess technically it is, because for many years retailers were not publishers of media, but media and publishing have existed for a long time. The benefit that we believe that we give the topic is that we’re the closest connection to the customer. So, rather than having broad reach and customers getting inundated with ads or flows of information that are completely irrelevant to him or her, we believe that we can have customers have more relevant content based off retail media.
I think [customers are] adapting well. I mean, we see probably the most change online as customers are seeing ads, they’re seeing offers, they’re seeing connections. The thing that’s important for us is to make sure that what we’re putting in front of customers is something that they’re actually clicking on. No. 1, you can't generate income if they don’t [click on ads], and so you have to be really on top of your game to be really customer focused.
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We haven’t seen any kind of … resistance to it, but we’ve tried to take [it] a step at a time, so you won’t walk into our stores and see [them] littered with digital billboards and all of these types of things; you’ll typically see these things, points of engagement, at natural touchpoints. So, if you’re at a deli board looking at meat, or if you’re in the back of the aisle, take a look at an end cap or something like that, where customers would naturally be looking for retail price points or POS. We’re trying to use those normal touchpoints to introduce retail media. Other people may have different strategies, but ours are more about making sure that we enter the space in a way that’s benefiting us and customers, and just as important are CPGs because we’re wanting to give them a better return on their dollars.
I think where we see it going is that there’ll be more. Most of it today is online. We’ll see more points of interaction in the store. Maybe we’ll see more points of interaction in the parking lot. I think we’ll probably see more points of interaction at partnerships out in the community. We do a little bit now with fuel and things and things like that, but actually we’ve seen huge increase and we’ve seen a lot of penetration increase from customers. It’s been good.
[We’ll] try little things, too. One of the things that’s nice about media is you can test things. You can put this offer up or this offer up or this offer up, and you pretty quickly realize what works and what doesn’t.
PG: So as these programs get more sophisticated, I suppose that the offers that they’re able to provide are more tailored, more personalized, and more likely to be taken up by shoppers because they’ll think, “Oh, that’s exactly what I need.” I guess the idea is to really provide people with very targeted offers, things that they’re going to be much more likely to purchase or be interested in.
JJF: Exactly. I think where we’ll mature to – actually, I think we’ll move here quickly – is today, if [you’re] shopping, you’ll have something that’s sponsored, and it’ll hopefully feel pretty consistent with the things that you look at in the future. I’m hoping pretty quickly it’ll just [be] options for you, things for consideration. And it’ll be broader, because … when I shop, I have a pretty consistent kind of pattern, but sometimes I just want a little something different, a little creativity, a little innovation, a little inspiration. Online, sometimes you can lose that inspiration, whereas when you’re in a store, it’s like the points of interactions remind you of things [that] are a little bit more inspirational. We can bring the online business to be a little more points of interaction, inspiration, like the stores can be.
