Q&A with Farhan Siddiqi: Grocery retail catches up to tech
Farhan Siddiqi took over as Chief Digital Officer at Netherlands-based grocery retailer Ahold Delhaize in 2018. Here, he explains how to keep up with big tech disruption, why payment technology matters and how the sector can maintain e-commerce momentum in the wake of Covid-19.
What are the risks and opportunities in grocery retail at the moment?
The risk is that if you don’t innovate, others will innovate around you. The opportunity lies in establishing a direct connection with the customer and using data to understand them better. Do we know how millennials and Gen Z fulfil their nutrition needs? Is our brand relevant to them? If we don't stay in tune with how they shop, we will lose those generations.
I'm optimistic about the growth of e-commerce in the wake of Covid-19, but there is a big caveat. People were forced to switch to e-commerce to avoid visiting shops an\d putting themselves at risk, but if we don't have enough delivery sites available and don’t improve the current experience, then they will revert to going to the shops. So if we lose that momentum it is on us.
Who are the trendsetters? And how do you compete with them?
We have to deliver on customers’ expectations, and in the new world those are being shaped outside of our industry.
Tech companies act as disruptors by creating value propositions that solve pain points, and then they create business models around the new customer experience. Consumers are smart: when they experience what Google has to offer, their expectations change and very quickly they want the same from their healthcare provider, bank and grocer. We constantly have to keep up with that demand.
Retailers have to pay attention to trends and strengthen their positions, but they can also strengthen their ecosystems by anticipating which partners will become ultra-competitive in some domains.
Have any market developments been transformative?
The wake-up moment for the industry was when Amazon acquired Whole Foods. Initially, it was mostly hype. But then it started integrating assortment, loyalty and promotions with Amazon Prime and prices dropped. Those are important market signals.
We have a look at all those changes along with what's happening with disintermediaries like delivery and pick-up service Instacart. Instacart is important because it was working with Whole Foods. After the acquisition there was a debate whether Instacart was going to be shut down; it wasn't, and it moved from there to every other grocer. You can combine all these signals to see where the industry is going and where the growth potential is.
What about the payment experience? How can that be made more convenient for consumers?
We want to take the friction out of the customer experience: people don't wake up and say, ‘Let me go pay someone.’ Wherever they are spending money, it's a pain point, and there is a lot of opportunity to take the friction out of that process using automated checkouts and self-checkouts.
In e-commerce, people want to pay in different ways. In some countries, they are accustomed to paying with debit cards; in others, there is a plethora of payment types — digital wallets, peer-to-peer, direct bank accounts and government programmes. And these are evolving. While we are living through Covid, we need to make sure we are making it easy for people to use their benefits [online]. So we need to make sure we accept as many payment types that people want to use, and make it easy for them.