Page 1

winning over

how long is too short for an effective loyalty programme?

interview:

Walter robb co-ceo Whole Foods andreas weigend

former Chief Scientist at Amazon

DIGITAL FIR

ST:

Find out h o Skype and w Spotify, Paypal ref ined their indu stry design is v and why UX ery imp for your b ortant usiness

Beyond big data

amsterdam in one day where to go what to do

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foreword

Welcome to the first issue of ‘Winning over hearts and wallets’, which is also the theme of this year’s Retail Loyalty Congress. Why? Very simply because you can’t win one without the other. To keep your checkouts busy, you need to be loved. But how can you manage that in this time-pressured, cut-price, online era? Take a look through this magazine for inspiration – and come to Amsterdam in September to find out more.

Retail is at a turning point. Social, economic and also

technological changes are turbulant waves rocking the

To win, learn to anticipate the rules of the game

retail boat as never before. Read our article on how you

have to get CLEVER to survive– and even turn today’s

instabilities to your advantage. Examine the McKinsey

view on what retailers are doing right – and wrong. Discover how shopping 3.0 actually works. Gain an

understanding of the latest technologies and how they’re

being implemented across the globe. Explore the social developments affecting shoppers’ behaviour. Study the biographies of our world-famous guest speakers and

start preparing the questions you want to put to them in September.

Many of us have already come together before at our previous Retail Loyalty Congresses in Eindhoven, Milan

and Bonn. This year’s event gives us the opportunity to take you further and explore key issues in greater depth, under the guidance of top specialists in each field.

I hope that this magazine gives you a taste of what you

can expect from our 4th Retail Loyalty Congress, and look forward to seeing you in September.

Robert van der Wallen CEO Brand Loyalty International BV

03


06 Dutch Retail Landscape

Overview of Dutch retailers

14 Interview Walter Robb

Co-Ceo Whole Foods Market

18 Global development in loyalty

To survive and to thrive, get CLEVER

22 How long is too short for an effective loyalty programme?

The impact of successive short-term reward programme on turnover in retailing

24 Interview Andreas Weigend

Former Chief Scientist at Amazon on the relevance of data.

54 Why corporate social responsibility is good for business

BrandLoyalty’s view on sustainability

58 What, where and how to buy

74

Global developments in food

AMS TER DAM

60 Interview Mary Portas

UK’s leading authority on retail and branding

Walter robb

64 Highlighted: Jumbo Food Market (EDLP)

“Fresh, easy and healthy, for the lowest possible price”

68 Ten years of returning the favour BrandCharity 74 Amsterdam, the must sees and must do’s

10 hotspots

82 101 King’s Road

Building on a vision

14


60

mary portas 26 Digital First

Digital section

30 Company Disruptors

Companies that refined their industry

32 Breakfast or Social Media?

What’s the first thing you do when you wake up?

33 First encounters

Children and their media

34 First gadgets

Gadgets to take into account

37 UX, defining the 21st century

24 andreas weigend

42 30company disruptors

How UX can make the difference

42 Interview Reinout Goedvolk

Partner at McKinsey

48 Winning over Hearts and Wallets The evolution of the loyalty card 52 25 years from now

reinout goedvolk

gadgets 34

What will your kitchen look like 25 years from now?


A visit to the Dutch retail scene is part of the Retail Loyalty Congress 2013

BUSY, BUSY, BUSY! The Dutch retail landscape is as busy and crowded as our inner cities are. With six big formats and about twelve smaller ones, customers can take their pick. In order to keep shoppers – and expenditure – within city centres, Dutch policy does not allow urban-edge food hypermarkets to be built. Supermarkets function as a crowd magnet.

06


No shortage of supermarkets With

on

specialists to opticians – accompanied by

euro on alcohol and tobacco (vs. 15.2 billion

37,354 km2 of land (448 inhabitants per km2),

16.85

million

inhabitants

living

three large supermarkets which may even be

euro in 2011). 79% of the foodstuffs bought

the Netherlands are one of the thirty most

located right next door to one another

were purchased from supermarkets.

densely populated countries in the world.

Market share within the Netherlands as a

supermarkets. In fact, the Netherlands contain

Branches, franchises and entrepreneurs or supermarket owners

one supermarket for every 2,900 people!

Most of the supermarkets in the Netherlands

share in 2007 to 7.5% in 2012. Jumbo did

What this means in terms of town planning is

are branches of the existing formats. A store

things differently: twice in a row, it took over

that you will see an enormous concentration of

manager runs the day-to-day business.

chains that were slightly bigger than Jumbo

different large supermarkets located close to

Purchasing, marketing, ICT, HRM and supply

itself. Its first takeover was of Super de Boer in

one another in urban areas, with a few lonely

logistics are taken care of centrally from

2009, a manoeuvre repeated in 2011 with the

corner shops dotted around the countryside.

headquarters. That’s also where economies of

takeover of C1000. In both cases, Jumbo was

scale are achieved.

obliged to sell on some of the stores, but on

Perhaps they’re also the one with the highest density of supermarkets: there are around 5,900

of

these,

including

1,450

mini-

whole has for many years been dominated by Albert Heijn (33.7% in 2012). Jumbo and Lidl are the only chains experiencing real growth. Lidl grew autonomously from a 4% market

82% of Dutch people live in urban areas, and

balance what remains is a chain with nearly

most of them have a choice of three super-

In addition to branches, there are franchisees.

600 stores and around 20% market share.

markets within a 3km radius – a distance that

They rent the format’s trading name, together

This means that Jumbo – a smart and

only takes them a few minutes to reach by

with central services such as purchasing,

ambitious operator – is quickly catching up

bicycle. This makes the situation in the

logistics and marketing. On the shop floor

with market leader Albert Heijn.

Netherlands totally unique, but at the same

itself, these franchisees are free – within

time highly complex. For many years, the

defined

winner of the inevitable price war has been

decisions, such as on the local range,

the customer.

promotions and the reward programmes. Of

boundaries

to

take

certain

the 850 ‘regular’ Albert Heijn stores in the

33.7%

Netherlands, about a quarter are in the hands

20%

of franchisees. A third variant comprises

City centres mustn’t become ghost towns

entrepreneurs/ supermarket owners. These

Large-scale retail stores have always had a

to

hard time of it in the Netherlands. While furniture

therefore attach themselves to a format if that

independent businesses have an attractive

7,5%

store available in a good location, and want reap

the

rewards

themselves.

They

4% LIDL

jumbo

retailers and DIY stores are allowed to open

is possible: for example C1000 (which has

premises on the edge of town, this is forbidden

been taken over by Jumbo).

territory for food retailers. The only place they

When a takeover happens, the entrepreneurs

can welcome customers is to stores with an

are not automatically part of the deal; they

Other factors to consider

average size of 700 to 1,200m in designated

have the freedom to switch to another format.

Dutch supermarkets as a whole are still

2

shopping locations in or near residential areas,

Albert heijn

managing to achieve annual growth in turnover,

or in town centres. So what’s the thinking behind

To buy or not to buy?

this? Well, the argument goes that hypermarkets

The price war that raged in the Netherlands for

people are employed by Dutch supermarkets,

would draw customers away from town-based

ten years was over by 2012. Consumers didn’t

to a greater or lesser extent. For instance, 59%

food stores. Shopping streets would become

buy any more food, alcohol and tobacco that

work part-time for under 16 hours per week.

deserted. As a result, you will see lots of malls

year, but they did spend 2.5% more on these.

Only 10% of supermarket staff work full-time.

with a hundred small shops – ranging from

Dutch people spent 26 billion euro on foodstuffs

hairdressers to sandwich shops, electronics

(vs. 25.4 billion euro in 2011), and 15.6 billion

amounting to 3% last year. Around 244,500

07


Albert Heijn When it comes to supermarkets, AH is part of the national heritage. It was founded in 1887 as a small grocery store in Oostzaan, just above Amsterdam. By 1910, there were 10 branches and in 1916 the first private-label products arrived: coffee and biscuits. The first self-service Albert Heijn store opened in 1952. Now a full-service supermarket, and the market leader for longer than anyone can remember,

Facts & Figures

Albert Heijn was the first to do lots of new things.

Owner

Ahold group

HQ

Zaandam

delivery service (Albert.nl). It’s a full-service

Banners

Albert Heijn, AH XL, AH To Go, Albert.nl

supermarket format with competitive prices

Number of stores in 2012

For instance, publishing its own customer magazine (AllerHande) and starting a home

and economy products across key categories.

• Albert Heijn:

850

Average sales area: 1,280m2

After first offering customers the option to

• Albert Heijn XL:

32

Average sales area: 3,600m2

have their groceries delivered (“right into your

• Albert Heijn To Go

56

Average sales area: 149m2

turnover 2012

€10.1 billion

groceries online and then pick them up on your

market share 2012

33.7% (total AH)

way home from – at the moment – a limited number

Customer reach 2012 (source GfK)

kitchen”), Albert Heijn has now also started providing AH Pick-Up Points. You can order

of locations.

“groceries delivered right into your kitchen” The chain’s activities include AH To Go and AH XL. It’s good in deli, fresh produce and gourmet food. AH’s mother company Ahold acquired non-food internet retailer bol.com in order to grow via online business and offer customers more choice, especially in terms of non-food, greater convenience and better value. Bol. com offers books, entertainment, electronics and toys. 08

• Total AH: 85% (of all Dutch households shopped at AH in 2012) Website: www.ah.nl


Jumbo Jumbo is the only Every Day Low Pricing (EDLP) supermarket in the Netherlands. It’s characterised by good service and a wide assortment. In essence, it’s a friendly format that offers speciality sections such as a bakery, and deli counters for fresh foods. A family firm with more than ninety years

Facts & Figures

of history behind it, Jumbo started off as a

Owner

Jumbo Supermarkets

HQ

Veghel

Banners

Jumbo, C1000

wholesale business dealing in colonial goods. Over the last few years, Jumbo has grown considerably due to the acquisition of two supermarket chains that were each larger than Jumbo itself at the time: Super de Boer and

Number of stores in 2012 • Jumbo

370

Average sales area: 1,193m2

• C1000:

206

Average sales area: 925m

turnover 2012

€7.0 billion (including C1000)

C1000. It will take till around 2015 to dismantle and integrate the latter.

2

market share 2012

Jumbo offers customers seven guarantees, including the following: “Are you fourth in line in the checkout queue? We’ll give you your

• Jumbo

9.6%

• C1000

12%

Customer reach 2012 (source GfK) • Jumbo 50% (of all Dutch households shopped at Jumbo in 2012) • C1000 55% (of all Dutch households shopped at C1000 in 2012) Website: www.jumbosupermarkten.nl

groceries free.” Another is: “Have you found a product whose sell-by date is today or tomorrow? We’ll give it to you free.” And: “Have you seen one of our products available cheaper elsewhere (excluding special offers)? You can have it for free.” Jumbo recently opened Jumbo Foodmarket, an innovative combination of supermarket, catering and hospitality, with chefs on the shop

“Have you found a product whose sell-by date is today or tomorrow? We’ll give it to you free.”

floor and many artisanal departments. A new and unique concept in the Dutch food retail landscape, it has around 35,000 products, 300 employees and 6,000m2 of floor space.

09


aldi Aldi is the ‘longest serving’ hard discounter in the country. The chain carries a limited range but within this range constantly aims for the best price:quality ratio. For the last few years, Aldi has added fresh products like bread, meat and fruit and vegetables to its range. This was mainly due to pressure from its up-and-coming competitor Lidl. Traditionally, Aldi is a strong non-food retailer.

Facts & Figures Owner

Aldi Holding

HQ

Culemborg

Banners

Aldi

Number of stores in 2012 • Aldi

499

Average sales area: 583m2

turnover 2012

€2.9 billion

market share 2012

7.6%

Customer reach 2012 (source GfK) • Aldi: 57% (of all Dutch households shopped at Aldi in 2012) Website: www.aldi.nl

10


Lidl The German Schwarz Group has gained a nationwide presence in the Netherlands, which it entered in 1997 under its Lidl discount banner. Lidl pursues an aggressive expansion and pricing policy. Lidl entered the Dutch market as a hard

Facts & Figures

discounter but in recent years has become a

Owner

Lidl Nederland

HQ

Huizen

Banners

Lidl

‘no-nonsense service’ supermarket. Due to its low pricing for fresh products, Lidl has become a direct threat to the ‘great service’ supermarkets. Lidl has achieved a nationwide network and is

Number of stores in 2012 Lidl

370

Average sales area: 800m2

turnover 2012

€2.5 billion

market share 2012

7.5%

now working on filling the gaps. Although it is not often present in the centre of large cities, Lidl stores can be found in suburban areas, small towns and villages.

Customer reach 2012 (source GfK)

The store is good in fruit and vegetables, and

• Lidl: 63% (of all Dutch households shopped at Lidl in 2012)

recently started a fresh bread bake-off.

Website: www.lidl.nl

‘no-nonsense service’

11


Plus PLUS stands for attention, quality, local and responsibility. These brand values are what distinguish every PLUS supermarket. PLUS grew strongly between 2000 and 2010 through the acquisitions of several stores. The chain is now focusing on local market domination. PLUS is converting its regular stores to the Plus Brilliant format, which offers a better margin mix due to the addition of fresh products. Ultimately, PLUS has the ambition to become the supermarket that provides the best service in the Dutch retail environment.

PLUS supermarkets have a large fresh food range and fresh bakery products sections, and are located

Facts & Figures Owner

Sperwer Group

communities across the Nether-

HQ

de Bilt

lands. Fresh food counters, recipe

Banners

PLUS

in city centres as well as in smaller

ideas and other services underline the retailer’s commitment to food and customer service.

Number of stores in 2012 • PLUS

255

PLUS is a cooperation of super-

turnover 2012

€2.0 billion

market entrepreneurs and part of

market share 2012

5.8%

the Sperwer organisation.

average sales area: 935m2

Customer reach 2012 (source GfK) • PLUS: 27% (of all Dutch households shopped at PLUS in 2012)

‘a commitment to food and customer service’

12

Website: www.plus.nl


Facts & Figures

Facts & Figures

Owner

Detailresult Group

Owner

Cooperation

HQ

Velsen-Noord

HQ

Velp

Banners

Coop, SuperCoop, CoopCompact

Number of stores in 2012

266

Banners

Dirk van den Broek, Bas van Der Heiden, Digros, Dekamarkt

(173 Coop, 36 SuperCoop, 57 CoopCompact)

Number of stores in 2012 • Dirk van den Broek

53

Average sales area: 936m2

• Bas van der Heijden

27

Average sales area: 936m2

• Digros

16

Average sales area: 936m2

• Dekamarkt

86

Average sales area: 650m2

turnover 2012 • Dirk, Bas & Digros

€1.3 billion

• Dekamarkt

€650 million

group market share 2012

5.6%

Customer reach 2012 (source GfK)

turnover 2012

€869 million

market share 2012

2.7%

Customer reach 2012 (source GfK) • Coop total: 15% (of all Dutch households shopped at Coop in 2012)

Website: www.coop.nl

Facts & Figures Owner Sligro (45%), Sperwer (45%),

• Detailresult total: 25% (of all Dutch households shopped at Jumbo in 2012)

Spar entrepeneurs (10%)

Website: www.lekkerdoen.nl / www.dekamarkt.nl

HQ

Waalwijk

Banners

Spar, Attent, Spar City Store

Number of stores in 2012 Spar 268, Spar City Store 9, Attent 104

Facts & Figures Owner

Sligro Foodretail

HQ

Veghel

Banners

Emté

Number of stores in 2012

130

turnover 2012

€833 million

market share 2012

2.7%

turnover 2012

€465 million

market share 2012

1.9%

Customer reach 2012 (source GfK) • Spar: 8% (of all Dutch households shopped at Spar/City Store/ Attent in 2012)

Website: www.spar.nl

Website: www.emte.nl

Facts & Figures Facts & Figures Owner

Hoogvliet Super B.V.

HQ

Alphen aan de Rijn

Banners

Hoogvliet

Number of stores in 2012

60

turnover 2012

€650 million

market share 2012

2.1%

Customer reach 2012 (source GfK) • Hoogvliet: 13% (of all Dutch households shopped at Hoogvliet in 2012)

Owner

Vomar Voordeelmarkt B.V.

HQ

Alkmaar

Banners

Vomar Voordeelmarkt

Number of stores in 2012

57

turnover 2012

€500 million

market share 2012

1.6%

Customer reach 2012 (source GfK) • Vomar: 8% (of all Dutch households shopped at Vomar in 2012)

Website: www.vomar.nl

Website: www.hoogvliet.nl

13


How did you end up in

the grocery business? When I was in my early 20s, I began reading Wendell Berry, Francis Moore Lappe and Robert Rodale, publisher of Organic Gardening magazine. I learned how to garden, grind my own flour and make my own bread, and began thinking about how to build a more wholesome world. Later, when I taught high school, I planted an organic garden that the students helped take care of. And for a year in California, my (now former) wife and I ran her family’s almond orchard. Fast-forward to 1991 when I was putting together my own natural foods store and that’s when I met John Mackey. The rest is history!

Why does Whole Foods Markets have two CEOs?

One plus one equals three! I have a long history of friendship and partnership with John, the Executive Team and the Board of Directors, so this was a natural extension based on our complementary leadership attributes. Collaboration is the wave of the present and future, and that extends to the organisation model as well.

With a long and varied entrepreneurial history in natural foods

What is the difference in roles and responsibilities?

ranging from retailer to farmer

We have different strengths and passions within the common

to consultant, Walter Robb joined

goal of making Whole Foods Market the very best company we

Whole Foods Market in 1991. He became president of the Northern Pacific Region in 1993, Executive V PO in 2000, COO in 2001 and CoPresident in 2004. Walter currently oversees purchasing, marketing, distribution and quality standards. He is a Board Director at the Whole Planet Foundation, the Retail Industry Leaders Association, and the Whole Kids Foundation. BrandLoyalty recently interviewed Walter Robb to find out how he’s managed to combine success with sustainability at Whole Foods Market. 14

can. I served as President and Chief Operating Officer for 10 years, closely tied to the operations side. John has spent more time on the Conscious Capitalism and Health Starts Here programmes to move the business forward. We work and collaborate on all major decisions together.

What are the core principles of Whole Foods, and where do they come from? At Whole Foods Market, our core values have been our guiding principles since the beginning of the company. Since we opened our doors, we have always celebrated the difference natural and organic products can make to quality of life. T hat is why we set high standards for the products we sell, with the simple goal of selling the highest-quality products we possibly can. We have always believed that quality and transparency are inseparable – and that educating our customers about natural and organic foods, health, nutrition and the environment is part of satisfying and delighting the millions of people who place their trust in Whole Foods Market each day.


15


What are the major challenges that global retail faces with regard to sustainability? In my view companies will need to continue to embrace a wider circle of responsibility with all their stakeholders. T here is no more operating in a silo and this practice will not maximise the potential of the business - something which can only be achieved by working with and integrating the needs

willwalter bespeaking at the robb Retail Congress Will Loyalty be speaking at 2013loyalty the retail congress 2013

and interests of all stakeholders. T he long arc of history keeps bending toward greater transparency and accountability, and the recent tragedy in Bangladesh points out very clearly the challenge and the responsibility of failing to do so. Companies themselves need to operate with more sustainability at their core.

What has Whole Foods done so far with in relation to sustainability?

What is your opinion of how retailers worldwide are dealing with sustainabilityat this moment? Could you name examples? I think in general there are positive changes underway and

We’ve long supported organic agriculture, which is steeped

that customers and communities will continue to ask and

in sustainable practices. Our new construction uses green

even require progress as a prerequisite for their business.

materials, and we retrofit existing locations as much as possible to green building standards. We have company-wide recycling and composting programmes. We’ve implemented sustainability stores,

programmes

including

a

in

every

company-wide

department

seafood

in

our

sustainability

Why does Whole Foods have many loyal customers, and what do you do to keep your customers happy?

programme that helps educate customers about worldwide

We continue to evolve the retail experience that we offer to

fish populations. We fund non-profits in all our communities,

our customers and we set the bar for the food industry with

in addition to two important global initiatives: the Whole Planet

leadership decisions such as our recent GMO announcement.

Foundation and the Whole Kids Foundation.

I think our customers know that we’ll do what we say we’ll do – we offer them the best natural and organic food in

How does Whole Foods balance decisions when customers’ needs or wishes contradict sustainability principles?

an environment that energises them while they shop. Our

Fortunately, most of our customers are really knowledgeable

products at great value!

about sustainable practices – in fact, they are usually pushing us to go further, do more – so we work really hard to stay ahead of the game and meet their expectations. Customer feedback has driven us to adopt compostable takeout containers in many of our stores, for instance, instead of plastic. Many stores offer special item recycling, like corks or batteries.

stores are inspiring, our Team Members are friendly and knowledgeable, and more and more people are learning what most of our customers already know – that we offer great

How do you see people shopping 10 years from now? What will be the role of online and what could other companies learn from Whole Foods?

Our challenge is to keep telling our customers about our

Retail shopping will be much more integrated and seamless

efforts in sustainability.

across all channels.

16


Customers who stand in the aisle of a store, happily ordering discounted goods online via their smartphones, are just the most visible demonstration that the world of retail will never be the same again. A new mentality is required to keep up with, learn from and then leap ahead of such social and technological developments. It involves fundamentally reassessing the new retail environment, analysing the drivers of loyalty, and maximising the value of loyalty data insights. The new retail environment

behaviour. Although people still need to shop,

of retail positioning: in the past, shopping was

We no longer live in a simple, predictable,

they’re going – and thinking – about it in very

based on physical stores and had to be Easy,

bricks-and-mortar world. Retail markets are

different ways.

Enticing, Efficient and Expert. Gildenberg

subject to a number of huge external influ-

suggests that the essence of these attributes

To survive and to thrive, get CLEVER

has evolved, and that it’s now better to think of

in certain countries to double-digit growth

According to Bryan Gildenberg of global

NOW: immediate access to the desired goods

in others. Social changes – such as increas-

insight and consultancy firm Kantar Retail,

and services.

ing urbanisation and female participation

retailers and suppliers need to replace old

WOW: anything that creates a gratifying

in the workforce – are leading to different

viewpoints with a brand new perspective. In

shopping experience.

patterns of income distribution and growth,

his 2012 paper “Tear down these walls!”, he

SMART: buying a ‘smart’ product means you

which then affect shopping habits. Techno-

outlines how out-of-the-box thinking “might

feel ‘smart’ too.

logical forces are having an astonishingly

save” in-the-box retail. For instance, by shifting

RIGHT: the right product, in the right place,

swift impact on individual and institutional

our focus from what Gildenberg calls the “4Es”

at the right time.

ences. Macroeconomic variables that shape global retail demand continue to be highly volatile, ranging from austerity measures

them in terms of outcomes: Now, Wow, Smart and Right:

19


In order to prosper in a multi-channel world,

embraces digital in the loyalty experience, the

Gildenberg states that retailers need to get

physical store provides an anchor in a shifting,

CLEVER by creating a new sales model based

multichannel world.

on six key pillars:

Convenience

The new loyalty

Leveraging NOW to make shopping faster

The upsurge in consumers’ use of technology

and easier in any way

means the retail scene has to evolve in order

Loyalty

to stay competitive. The same applies in the field of loyalty. Gildenberg’s colleague

Leveraging RIGHT by understanding and

Rachel Donovan reiterates the necessity of

steering the drivers of loyalty

examining more closely what goes into loyalty

Execution

programmes, rather than solely what comes out of them. In her 2012 paper “Evaluating

Covering all 4 bases: convenience,

Loyalty Programmes in a new way”, she argues

experience, loyalty optimisation and value

that loyalty data is only beginning to achieve

Value Leveraging SMART to connect store-related

its potential in terms of creating value for the shopper and enabling trading partners to leverage the information generated.

expertise to actual purchase

Experience Leveraging WOW to connect meaningfull

Dimensions enabling the evaluation of loyalty programmes

with customers to stimulate sales

ROI Focusing on multiple-opportunity investment

Loyalty programmes contain four primary dimensions that can be analysed to ensure a close fit between resources and ROI:

rather than low-cost production SHOPPER: Consumers need to be truly Yes, times are changing – requiring bricks-

rewarded. To remain competitive, rather than

and-mortar retailers to be more CLEVER

just offering discounts, programmes should

in their strategic approach. But what hasn’t

be compelling enough to convince shoppers

changed is that humans are social creatures

to choose one retailer over another.

hungry for experience. As much as we

RETAILER: Retailers need to be willing and able

love the benefits of technology, there’s still

to do four things: market and implement the

a special place in our lives for physical

programme in-store; provide

interaction with stores we can walk through.

transactional-level data for analysis; respond

These will remain an essential point of access

to insights derived from the data; and engage

for the retail brand. Their role may have

suppliers in sharing this wealth of data.

changed, but they still provide a place where

SUPPLIER: Loyalty suppliers need to allocate

every dimension of the brand comes alive for

resources to analyse and cross-reference the

us to see, touch, smell, taste and hear. Loyalty

data, share it with their retail partners, and

initiatives then become a critical solution that

leverage it for joint business strategic planning.

intensifies the customer experience – giving

FINANCIAL: The cost to the supplier of

the retailer a competitive edge. The store does

obtaining access to data should be related to

what technology cannot — it allows us the full

relevant aspects of the programme, including

usage of our senses. And when the retailer

its incremental sales potential.


From transactional to conversational

FINANCIALLY, 3..0 loyalty programmes

technology enables that conversation to be

require higher participation costs, but the

real-time. The faster a retailer can react to

ROI of targeted promotions is perceived to

the data and understand what is resonating

Early generations of loyalty programmes were

bring higher returns.

with its shoppers, the better the opportunities

simply based on a basic transaction. Some

According to Donovan, the ever-increasing

for that retailer to build on its bricks-and-

still are, although they may evolve to become

innovation and sophistication of technologies

mortar store experience to facilitate long-term

more of a conversation. For this, transaction-

and data analysis systems are encouraging

shopper loyalty.

level data is still required. Moving up a gear

retailers to evolve and refocus their efforts

in sophistication, the ability to mine extensive

to take their loyalty programmes to the next

data enables retailers to engage in a 1-way

level. Loyalty

conversation with shoppers. This allows them

CLEVER retailers to engage in a meaningful

to influence consumer purchase behaviour

conversation

and brand choices. But it’s at the 2-way conversational level that things get interesting. This is shopping 3.0: a direct dialogue withindividual consumers that maximises operational effectiveness across stores:—true loyalty that’s also truly cost-effective.

New insights; new value Shopping 3.0 enables retailers to establish true loyalty, because shoppers select it due to trust, reliability and ‘tailored’ offers. Price becomes less important. Retailors engaging at this level need to be highly engaged with the data: cleansing, refreshing and segmenting it in a sophisticated way. Equally, loyalty suppliers need to be able to mine the data and work out how to enhance shopper value.

How 3.0 loyalty programmes encourage an interactive experience SHOPPERS talk back to retailers and theirsuppliers, and receive more sophisticated and target offers as thanks.

RETAILERS

canoperationally,,categorical

ly, and managerially support loyalty insights and programmes.

SUPPLIERS

can customise merchandising,

marketing and human resources to support retailer programmes, while providing more detailed insights and recommendations.

programmes with

their

today

enable

shoppers,

and


How long is too short for an effective loyalty programme?

“Start collecting for luxury dinnerware!” It’s a tempting offer, especially if it continues for the right length of time. It’s impossible to imagine the Dutch retail market without these kind of reward programmes. However, many of them (which typically last six to eight weeks) are too short to actually raise turnover. According to Klaas van der Veen, MSc, in his thesis ‘The Impact of Successive Short-Term Reward Programmes on Turnover in Retailing’, the true gains are made in the final weeks.

Patience is its own reward Van der Veen examined the effectiveness of short-term loyalty programmes aimed at adults, which involved collecting for high-quality products from top brands. He established that there is on average an 8.8% increase in turnover during the final eight weeks of the reward programmes. Before this time, there is no significant increase in turnover. Van der

basket frequency

Veen also discovered that deploying the reward programmes regularly over a period of several years delivers positive results time after time.

Too good to stop When consumers increase their average spend in order to obtain a desired reward, this is known as the Point Pressure Effect (PPE). Van der Veen proved that retailers often fail to seize the opportunity to increase their turnover if programmes finish ‘too early’. These research results also correlate with BrandLoyalty’s own experience. We find that the ideal duration for a short-term loyalty promotion in the retail sector is fourteen to eighteen weeks.

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The science behind shopping Van der Veen’s paper won the Thesis of the Year Award 2012 from Groningen University’s Faculty of Economics and Business. Of course, a programme’s duration is not the only critical factor for success. There still remains much more to discover when it comes to short-term loyalty effects. Over the next few years, Groningen University and BrandLoyalty will work together to carry out further research into the structure and effectiveness of short-term loyalty programmes to establish the critical elements determining the success of a loyalty programme.

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Andreas Weigend:

Beyond big data

Andreas Weigend was Chief Scientist at Amazon. He now teaches at Stanford, runs the Social Data Lab, and works with companies that want to leverage the data that people create.

24

CLICK!


Within a few years, you will happily reveal the most intimate details about yourself to your favourite websites. In exchange, you’ll get a hot love life and cool stuff magically showing up at your door without having to click anything. It’s a compelling picture of the future painted by Andreas Weigend, the famed inventor of Amazon’s recommendation engine. Weigend is one of the world’s authorities on social media and consumer behaviour.

andreas weigend Will be speaking at the retail loyalty congress 2013

So what does he think about the two new trends:

In the 1990s, Amazon pioneered the use of data to help its customers

• companies using social media/big data to

make better decisions.

predict this behaviour, and • consumers sharing their data for their own profit?

According to Weigend:

Firstly, implicit data: Clicks and purchases of all users are aggregated to suggest items to a shopper in response to their most recent click.

• It’s easy for companies to predict what you’ll do. • Companies don’t have to be sneaky to collect data

Secondly, explicit data:

on you — you’ll be willing to share it.

Customers have the opportunity to publish reviews that potentially

• Dating sites have become masters at predicting this kind of stuff.

influence the purchasing decisions of other customers. This user-

• Next up is something he calls “zero-click shopping” — meaning

generated content turned marketing – previously viewed as carefully

that you’ll buy stuff automatically, without going online

controlled and released information – on its head.

to shop for it!

History of data

Amazon is the world’s data refinery: Amazon takes the data that people create, refines the data, and returns results, allowing people

A hundred years ago, the only data a shopkeeper had to work with

to make better decisions. Amazon now influences how a billion

was the inventory on the shelf, and the money in the till at the end of

people shop.

the day. That data was recorded with a fountain pen. The consumer based her purchases on pretty pictures on the box or on anecdotes

During his speech at the Retail Loyalty Congress 2013, Andreas

from her friends.

Weigend will discuss the three common questions that many people ask every day:

Fifty years ago, mail order companies knew where you lived and what you ordered. In addition, they could buy some basic demographic information about you. That was it for personal data in those pre-web days.

(1) Who should I work with? (2) Which route should I take? (3) Where should I stay on my next trip?

With the advent of e-commerce, retailers could track every click and

The answers to these questions, and the decisions, are now

purchase, and capture every abandoned shopping cart.

influenced by the personal data of a billion people.

25


26


DIGITAL

FIRST

Because digital is so important for the future of retail, we have created a digital section in the first issue of this magazine. And let’s just say that this section is about more than being, staying

and becoming ‘First’ as a retailer in your market. It’s also about putting your customers ‘First’ and building valuable services

around them. Technology plays a key role in both situations because of the digital era we live in.

Smartphones now offer unprecedented opportunities to engage customers, thereby offering personal service on a mass scale. Business intelligence derived from your company,

together with consumer data, enhances these new services and can be a key competitive advantage.

In Digital First we will highlight what it takes to be first in digital

from a customer, technology and management perspective. For instance, we will take a look at some other industries that

have already experienced the digital revolution, interview people who have unique insights into the challenges and

opportunities that digital offers, and even take a ‘science fiction’ peek into the future to see what life could be like in 2038.

Last but not least, it’s also the first issue of this magazine, so we hope you enjoy it.

- Hearts & Wallets Digital -

27


Increase your customers’


Bright Stamps is an innovative digital solution that makes it possible to collect stamps digitally. With Bright Stamps you can communicate 1 to 1 with your customers and gain real time customer insights. Moreover this new way of engaging increases spend and customer loyalty.

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Company Disruptors Companies that refined their industry

Everybody wants their product or service to be groundbreaking. Only a handful of companies are lucky enough to achieve this. But luck isn’t enough. You need the ability to change people’s lives. That’s exactly what Spotify, Skype and Paypal did.

Spotify

Skype

PayPal

Spotify launched in October 2008. It was the

People used to spend a fortune on long-distance

Sending money to your relatives today is pretty

first company that enabled people to legally

calls to speak with their relatives who didn’t

easy. But before PayPal was released in 1998,

listen to music online. Once they had convin-

live nearby. This changed drastically when

things were different. You needed to bring the

ced large European record labels to collabo-

Skype was released in 2003. It now became

money yourself or risk your envelope getting

rate, Spotify grew to enormous proportions.

possible to call anyone for free using the

lost in the post. When Paypal was founded, it

With the help of Sean Parker (Napster/Face-

internet. When Ebay took over, Skype stopped

quickly reached one million users because it

book), they conquered America. Thanks to

growing, and was forced to ditch 70 per cent

integrated with Ebay. Everything looked bright

Spotify, people don’t have to pay €10 to buy a

of the company a few years later. New CEOs

but scammers, hackers and even the mafia

single album. Instead they pay €10 a month for

introduced Apple- friendly software as well

caused trouble. A period of turmoil started and

a complete music library of 20 million songs.

as group video calls. This served to revitalise

Ebay even created its own payment system.

It seems that people like using Spotify: at this

Skype, leading to a huge takeover by Microsoft

Against all odds, PayPal started growing again,

moment the service has 20 million users from

in 2011. Today the service is available in 27

and there are over 56 million people using

all over the world, a quarter of whom pay the

different languages and has 650 million

Paypal today.

company a monthly subscription fee.

users worldwide.

30


31


Breakfast or Social Media

what’s the first thing you do when you wake up? You probably know about cultural

The British are famous for their large cooked

Smartphones and tablets are now playing a

breakfasts: eggs, bacon, sausages, beans,

huge role too. In America, the first thing half of

tomatoes and mushrooms, eased down by a

all social media users do is check Facebook

nice cup of tea. In the United States, people

or Twitter. 16 per cent of these people say that

start their day with something sweeter, such as

this is how they get their morning news. Asia

pancakes with syrup, or sugar-coated cereals,

is now by far the largest ‘Facebook continent’

and their most popular morning drink is coffee.

in the world, as India (45.8 million), Indonesia

completely different from in the

On the other side of the world, things look a

(42.2 million), the Philippines (27.2 million) and

lot different. In China, people start the day with

Thailand (14.0 million) have the most people

United States. But do you also

rice and vegetables with meat or fish. Coffee

that like, share and comment on a daily basis.

and tea are common, but most of the time

China isn’t on the list because Facebook is

know about the differences in use

breakfast also consists of soup, which means

not permitted. And that has been bothering

a drink is not really necessary.

Facebook for years now. But maybe they

differences in this world. Like for instance that breakfast in China looks, feels and also tastes

of social media? For instance, how many hours does a Chinese person spend on Facebook?

32

should worry about other things - like more But in the last few years, morning routines

teenagers deleting their Facebook accounts to

have changed. They no longer consist of

stop their parents from logging in to check on

taking a shower, brushing your teeth, shaving

their social whereabouts.

(or doing your make-up) and having breakfast.


First encounters we already know that adults spend more and more time behind their computer, smartphone or tablet. But there is a specific group of people that is rapidly growing in their media use, and it consists of children. Kids these days are now exposed to media for multiple hours a day, and it doesn’t look like these numbers will decrease anytime soon. A fact that is worth reckoning with, because the children of today are the adults of tomorrow. In the 1980s, children used to play outside and occasionally watch TV. Then the 1990s arrived and television started to play a more important role. Today it’s not the TV that keeps kids from playing outside. It’s the internet and the ease with which children can get on it. Take for instance the United Kingdom. Among children aged 5-15, smartphone ownership has increased incredibly (28% vs. 20% in 2011). Of all devices that let them access the internet, kids aged 12-15 say they would miss their smartphone the most. Tablets have also undergone significant growth in use. Around 1 in 7 of all children aged 5-15 uses a tablet computer on a daily basis. In 2011, research showed that a child from the United States uses media for 7.5 hours a day. In the 0-8 age range, 52% of all kids have access to smartphones or tablets. In China it’s even more extreme. As of November 2012, the country has 1.1 billion mobile phone users. 220 million of these use 3G technology, and 60% of all users claim they started using the internet before the age of 10. The same survey reveals that 40% of Chinese children aged 10-18 used a mobile phone to go online for the first time.

33


Google Glass Google Glass is probably the most talkedabout gadget, ever. With this smart device you can instantly photograph the things you see, share your favourite moments live with your friends, and even translate your own voice. Price: €1,200

GADGETS

These are the first gadgets you should take into account, now and in the future. Why? Because it’s only a matter of time before everybody offers their own Wi-Fi network, takes photographs with a blink of their eyes or gets corrected by their cutlery for eating too fast.

3Doodler Printing Pen Writing used to be pretty two-dimensional. Until recently, because the 3Doodler Printing Pen is the first pen that can lift your imagination off the page. Everything you draw instantly changes into an object. Price: €80

Cookoo Watch The Cookoo watch is pretty much an extension of your smartphone. Never again will you need to check your smartphone for a missed call, text message or email. Why? Because the Cookoo watch will tell you in real time what’s happening in your social life. Price: €129

Nest Thermostat This award-winning device doesn’t just regulate the temperature inside your house. The Nest Thermostat also learns from every time you use it. After a few weeks, you’ll notice that you don’t need to adjust the temperature at home because Nest already did. Because it knows. Price: €195

34


Leap Motion We’re all used to controlling our computer with a mouse and keyboard. But soon there will be no more clicking, tapping, dragging or dropping. Thanks to Leap Motion, computers will respond to your natural movements. Price: €63

HAPIfork HAPIfork is an intelligent piece of cutlery that helps you eat more healthily and lose weight. According to its creators, being healthy is all about how fast we eat. This fork allows you to monitor and reduce the speed at which you eat your meals. Price: €80

Karma Social Hotspot Karma is a portable 4G mobile hotspot which can be used by anyone as long as the owner permits it. Owners who give permission receive 100MB of free data for every person that uses their network. This way, in a few years’ time, everyone will have free Wi-Fi. Price: €61

Little Printer Little Printer is exactly what it looks like. And more. With this little printer gadget - and your smartphone/ computer - you can create custom mini-newspapers the size of a receipt. Time to introduce some creativity into your current yellow post-it note life. Price: €170

35


Drive traffic by making your promotions go mobile quickly

50

Bright Promo is a digital promotion channel in which customers can discover offers with their tablet or smartphone. The products can easily be added to a personal shopping list that you can edit anytime, anywhere. Bright Promo is integrated quickly, will increase visibility, and drive traffic to your business.

www.icemobile.com/bright


defining the

21st century

The first rays of sunlight peek through the curtains of your bedroom while your alarm starts buzzing. You switch off the alarm, get out of your bed and go into the bathroom where you take a refreshing shower and brush your teeth. You get dressed, make yourself coffee and breakfast, check your emails and the latest news, then head off to work. You walk to your car, open the door, get into your car, switch on the radio and find out you are almost out of fuel. On your way to the office you stop at a petrol station, fill up the tank, pay for it and continue on your way. Just another day in your working life. But did you realize that by the time you reach the office, you’ve already communicated with at least 10 different interfaces?

User experience (UX) design is the discipline that deals with the design of interaction between a product and its user. The designer regards the situation of the user and creates an interface that is desired at a specific moment. The difference between a mere product and one you really love is the quality of the experience it brings you.

DON’T MAKE ME THINK! The base of good user experience lies in the design of a functional product or service. A product or service that allows the user to perform a certain task or reach a goal in a pleasant way. It may sound obvious and easy, but often it is quite challenging to create a simple design. Take for instance the water cooler at your office or meeting room. It always makes you think: “is it the blue or the white button that will give cool water? Does the white colour mean ‘normal’ or is it a reference to ‘ice’? Do we really need 2 buttons here?” It is frustrating because it makes us think about something as simple as getting a glass of water.

37


Make it personal Sometimes the function of 2 services is the same, but the manner of

BMW decided to use new technology, and replaced the current car

delivering and selecting information determines the quality of the user

key with an app that allowed users to enter their cars. With BMW’s app,

experience. Just as an example, let’s look at weather forecasts. For

the user needed to take 13 steps to get into their car. Users probably

decades, fairly precise weather forecasts have been available, though

preferred a normal ‘old fashioned’ key over this piece of innovation.

recently they have become much more useful. “Today on average 20ml

Now look at Mercedes-Benz’s solution and the amount of steps the user

rain will fall, it will be 20 degrees and the humidity is high…” these

has to take. The car key senses when the user approaches and opens

numbers and description are informative but not very useful. Knowing

the car automatically. It only involves 4 steps!

that it will rain in your city in the next 45 minutes – when you plan to go for a nice run – makes the information relevant and usable: you can act on it. The user experience of weather forecasts has improved because the forecast has become more personal. It filters the relevant information to your situation and allows users to act on it.

Car Key

1

Driver approaches car

Driver approaches car

2

Takes key out of purse or pocket

Takes smartphone out Car doors unlock of purse or pocket

3

Presses key to unlock door

Turns phone on

Opens car door

4

The car door unlocks

Slides to unlock

Enters the car

5

Opens car door

Enters passcode into phone

6

Enters the car

Swipes through a sea of app icons

BMW KEY APP

7

Taps the desired app icon

8

Waits for the app to load

9

Opens ‘unlock doors’ menu

be taken into account.

10

Taps item to unlock the doors

Let’s compare different experiences when opening a car door.

11

The car doors unlock

12

Opens car door

13

Enters the car

Look at the bigger picture UX is much broader than the pleasant function of a product or service. User experience considers all the touchpoints in the context (place and time) in which the product or service exists. The product or service is important but to deliver a great experience, the entire context needs to

BMW and Mercedes-Benz both designed new ways for users to open the door of the car, but the way they executed their user experience design differed greatly.

38

Mercedes Smart Key

#

Driver approaches car


APPIE CASE STUDY ALBERT HEIJn

behaviour which is difficult to change. From that we derived an overall mission: to beat the pen. One way we beat the pen was by simplifying ways to add groceries to your list. Previous purchases, current offerings and even full recipes can be added to your list by the touch of a button. Later releases added bar code scanning and voice input.By letting users sort their list according to the walking route of a store of choice, we provided them with another important benefit over the paper list and pen. Up close and personal Appie was launched a year after the introduction of the iPhone on the Dutch market. It was the first service-oriented application by a supermarket chain in the Netherlands. The target audience was very diverse, from tech-savvy students to mothers running big families. The possibilities for creating relevance for these people were numerous. Frequent releases, built-in Feedback features, careful monitoring of conversations in social media, thorough analysis of usage statistics, and Albert Heijn’s extensive knowledge of their customers provided valuable insights which were used to create new and improve existing features. We’ve combined these insights with classic concepts (e.g., a shopping list and a recipe book) and opportunities offered by the mobile platform to offer relevance where and when customers need it and most appreciate it. To introduce and explain new features to the less tech-savvy users, we added hidden surprises, movies or sounds that reward people for using certain features. Users became fanatic in searching for these - e.g. Easter eggs - and were very keen to share them with friends and family,

How to be first in UX for food retail

thus demonstrating the fun and explaining the ease of use of Appie.

Appie is a mobile shopping service from Albert Heijn (Ahold) and has been available since 2009. At this moment Appie is one of the

Albert Heijn received a lot of positive feedback from its users, which is

most popular apps in the Netherlands: it has been downloaded by 1

used for the development of future releases. Users recognise their own

out of 2 people with an iPhone or Android device. For 1 out of 4 of

feedback in the updates and feel that Appie listens to them. At this

those it has become an integral part in their day-to-day routine. The

moment it still is one of the most popular apps im the Netherlands. It

success of Appie is said to be largely attributed to its outstanding

has become an integral part in the daily routine of its users, who refer to

User Experience. In 2012 Appie won an IXDA in the category

the service as ‘My appie’.

Optimising Daily Life. Appie makes the relationship with customers more personal. Albert Beat the Pen!

Heijn scored the number one position in an independent study about

Central to the design of Appie is the shopping list. It’s used for

empathetic brands; Appie played a key role in its success. This service

preparation and during shopping. We set a goal to transcend the

has established Albert Heijn’s role as a pioneer and innovator in

conventional way of doing groceries and creating lists: persistent

servicing customers, gaining both emotional as well as transactional loyalty among its user base.

39


Aim for the heart User experience not only focuses on the big picture, but also aims to perfect all details that can affect the way users feel about a product or service. The emotional responses we have to products and services can be in the details, which the example of Airbnb clearly illustrates. Accommodation service Airbnb experimented with using a heart icon instead of a star, for bookmarking accommodation. Brian Chesky, founder and CEO of Airbnb explains, “We had these ‘stars’ on the site to save places, and we changed them to a ‘heart’ icon as an experiment.” The experiment was shown to 1 per cent of Airbnb users. He continues, “We quickly realised that people were saving these properties in a way that they hadn’t with the star icon, and that the amount of time they spent on the site went up dramatically. The utility and way to ‘favourite’ was the same, yet the emotional connotation of ‘hearting’ something rather then

“The 19th-century culture was defined by the novel, the 20th-century culture was defined by the cinema, and the 21st-century culture will be defined by the interface.” - Lev Manovich

‘starring’ it was different and evoked other behaviour.”

What can be gaineD by great UX? Each day we come across numerous different interfaces and in the future this will increase drastically. More and more, it will be the case that the interface, the way we interact, and the systems these interactions will take place in (experiences) will determine why we favour and choose a certain brand or service over another. User experience creates a dialogue with users and thus makes them feel closer to a brand. By focusing on user experience, you can become part of this dialogue. It can define what people experience in their interaction with your brand or service and create meaningful relationships.

40

“To design is to communicate clearly by whatever means you can control or master.” - Milton Glaser


1

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1

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The mobile agency for food retail


An eagle-eyed assessment of the challenges and opportunities facing food retail Reinout Goedvolk, partner at global management consulting firm McKinsey, qualified as a medical doctor but chose to specialise in the business of retail and healthcare. Years of experience at a top level in both sectors has taught him how retailers can gain – or lose – from technological and social changes. We join him as he gives frank and thought-provoking answers to the big questions challenging our industry today.

42


The

Retail and loyalty in the digital era

McKinsey perspective

Q: Reinout, what are the key things you’ve learned from working in food retail?

A: Firstly, in an increasingly globalising world, it’s an industry that’s still very regionally and locally driven. Being successful therefore requires having a real in-depth knowledge of your local customers, suppliers, etc. You can’t assume that what works in one smaller geography will automatically work elsewhere. There are no one-size-fits-all solutions. A second key learning, that I think is unique about retail, is that executional excellence matters in all industries, but there’s very little room for error in retail, partly due to the relative profitability and margin structure, but also because you have to do everything at scale. Whatever you decide to do – change a format, hold a promotion or launch a loyalty programme – to do it well means a significant investment, certainly compared with the profit you’ll be making that year. The third thing I would say is that even though in a day-to-day world people are still focusing on execution, I think we’re seeing a paradigm shift where it’s clear that grocery retail could be at the brink of yet another fundamental change. Shopping online and delivery through multiple channels, not just in the physical shop, could actually be more significant than just a niche in the reasonably foreseeable future. At the beginning of the 20th century, the big change came in the form of self-service supermarkets, in the 1960s hypermarkets appeared, then came the online regular retailers in the 1990s and 2000s, and now we see such an increase in mobile use of loyalty, pick-up locations and home delivery that a real meaningful change in the way that shoppers experience grocery retailing could be happening again.

43


Q: But who’s doing this – is it this just the early adopters?

A: First of all, the number of users is increasing very, very rapidly. Globally, more than half the phones sold as of this year are smartphones:

“I think we’re seeing a paradigm shift where it’s clear that grocery retail could be at the brink of yet another fundamental change.”

that includes all the emerging markets. Yes, there’s a big difference per shopper segment and age group, but the trend is clear. Also, not all new solutions necessarily require smartphones. Some shoppers will want to have a purely mobile relationship with their retailer, and just have things delivered at home; there are segments who will benefit from pick-up but who will still want to do some top-up shopping in a physical location; there are those who simply want to combine a personal store experience with the convenience of paying with their phones when they exit; and there are some of course who won’t adopt anyway. But we’re beyond the early adopters stage and I think over the next few years, the availability of more convenient solutions will drive this forward. What I don’t expect is that the majority of the market would suddenly be in e-commerce, where people get groceries delivered at home; that’s not a very credible solution. But the total mix of options will certainly make sizeable inroads.

Q: So we all need to buy shares in firms that sell lockable boxes at petrol stations?

A: That’s just one option. There are also firms that help build virtual supermarkets in metro stations, where you can just click or take the QR code of the product you like. But what may work underground in Seoul won’t necessarily work in a suburban area in Pennsylvania or in Germany. So you have to understand, based on the local market dynamics, which of these channels and delivery models work best. But I think what is clear is that retailers who depend on a physical presence alone will be heavily disadvantaged, because that will just leave a relatively lower-margin, lower-growth, high-operating-expense business to maintain. Even If only 10 or 20% of the market goes down these other routes, that is a very hard hit for those who have to maintain expensive brick-and-mortar stores.

Q: What about little corner shops? Will they continue to exist?

A: Interestingly enough, we see a growth in convenience in several places in the world. There are several demographic factors driving this: consumers seeking convenience, going for smaller but more frequent amounts of shopping, getting groceries while commuting to and from work, and avoiding high petrol prices by avoiding long drives to a hypermarket. But at the same time, in the current times, people want value, they want high-quality products and produce that they recognise and that’s difficult to do independently. So the corner store may even grow, but as a mum-and-dad outlet? Less likely.

44


Q: In terms of loyalty, what do you think are the trends?

Q: Is digitalisation leading to greater feedback?

mobile becoming part of the way that loyalty to stores is experienced.

consumer, also through social media. The number of active responses

Another is tailoring, with a much more individualised loyalty offering

and so on that Whole Foods in the US has put out through Twitter is

specific to that consumer’s needs. A third is innovation in terms of

immense, and we see that in many other countries as well. Wal-Mart

what’s actually experienced: just doing pots and pans is not enough

in Japan asked customers which items were too expensive, and

any more – we see much more innovative, commercial, advertorial-style

actually took action to reduce the price on about 100 items. I think

promotions appearing. Last but not least, we’re looking at a new wave

that’s interesting – it’s a new level of customer interaction. Also with

of data insights coming from loyalty, where retailers have moved from

that other trend in loyalty – tailoring – digital allows us to process data

“I do loyalty just to drive sales” to also “I do loyalty to get the next wave

better and personalise what’s offered. Digital shopping has moved

of shoppers and an insight into my customers.”

from customers having to search through a mass of 10,000 products

A: One is digitalisation, as mobile comes of age – social media and

A: Yes – we see an increasing dialogue between the retailer and the

just dumped on the web to much more sophisticated online or mobile

Q: So what type of insights are being produced by loyalty data?

shopping portals with pre-populated checklists based on your previous

A: There’s a wide range of potential. Certainly, there are improvements

answers: you can select entire recipes, be reminded of products you

on traditional insights into the products, assortments, pricing and

may have forgotten, or receive suggestions of alternatives that offer better

promotions that customers respond well to. But also on the impact of

value or better quality.

various promotions across demographics and trends. And insights into general behaviour: how do these people walk through your store, what

Q: Who’s doing this at the moment?

do they see and not see, what are the moments that they buy, how do

A: Albert Heijn has a fairly sophisticated web ordering system, and

these fit into their patterns, are there unmet needs that we could tap

Ocado will tell you “use this product, it’s cheaper” or “you have a history

into? You could also think of combining the data from the loyalty cards

of ordering these, do you want some?” or “have you forgotten this?”

with other insights we might have about these consumers: if they don’t

This basically reduces the time spent shopping, but also leads to much

spend money with us, where else do they spend it? I think that there’s

greater usability and satisfaction for the customer, and in some cases

a whole wealth of information that could be generated that could yield

even increases the basket fill beyond what they would buy in a normal

new opportunities.

store, which from a retailer point of view is a very attractive proposition.

Q: Are there any other ways in which food retail is changing to meet customer demands?

Q: In terms of privacy, would you say that the younger generation, who put all their personal data on Facebook, are less concerned?

A: Consumers want to interact with their retailer, where, when and how

it’s convenient for them. And increasingly for large groups of shoppers,

A: That’s my sense, but I think retailers will have to find a way of using

that means from their homes, on their PCs, on their iPads, on their way

this data appropriately. And I think it’s important for retailers to be clear

to work, on their smartphone.

to consumers about the benefits, such as greater convenience and

Q: Maybe so they can place their shopping list and pick it up – bagged and cooled – at the end of the day?

individualised promotions. If the benefit isn’t clear to the public, that’s when you tend to run into trouble.

A: Exactly – when they like. Or to find it in a locker at the petrol station on their way home, or to pinpoint when they want it at home, that’s what people are increasingly looking for. Again, it won’t be all shoppers or all consumers, but a significant proportion will want that somewhere. In the mind of the consumer, it has to be a single, integrated solution.

Q: And is all this high-tech, convenient ordering being complemented by reliable low-tech deliveries?

A: That’s why I think convenience and corner stores will continue to exist, because you need that top-up of instant shopping.

“If you don’t take that leap of faith you can seriously fall behind.”

45


“Bricks-and-mortar stores won’t suddenly disappear, but if you’re not

Q: How interested are retailers in general in the whole idea of digital? Is it seen as a threat or a promise?

careful, suddenly very profitable and

confused about what it means. Basically, there are four components:

significant portions could be moving

A: It’s a double-edged sword for most retailers, and people are easily E-commerce – selling products online and shipping them to customers without a brick-and-mortar infrastructure – is seen by more retailers as a significant threat than an opportunity. So they should assess how they

out of that channel, so retailers will need to be ready for that.”

can cover it effectively without cannibalising the business they have. Digital customer interaction, including social media and digital loyalty programmes, is seen as a great opportunity. Customers would still go to your regular store, but maybe after receiving offers on their mobile,

to get it right. In e-commerce models, people can learn a lot from the

or an email you’ve sent. Or they may go online at home after shopping

leading applications that have been made for loyalty programmes,

in the store, post a question or comment on Twitter and get a response.

as we are beginning to see what the results are. So for retailers who

This also continues to drive customer insights and relationships. So if

haven’t placed their bets yet, now is a good time to take stock of those

retailers fall behind in this, they leave a big gap for the competition.

learnings and invest, because it’s been long enough to see results.

Use of data for insights and internal operations is the third component. This and digital interaction are clearly imperatives and opportunities.

Q: Most people at the top of retailing grew up in a pre-digital world. Are they sticking their heads in the sand and resisting the changes, or going with the flow?

Q: Is it mainly with upmarket consumers that digital’s succeeding, or only in developed markets?

A: No – smartphone use is very broad. Several non-western markets are even experiencing greater smartphone adoption and utilisation of these kind of new channels than for example in Europe and the US, and

A: There’s a huge variation in how people are responding. About a

in Asia the demand is very high. For example, mobile banking has re-

quarter of retailers are cutting-edge, have made investments in their

ally taken off in India. So in some markets in the world, the evolution of

digital offerings they bring to customers, with new formats, going

grocery retail may skip some of the phases it went through in western

online, going pick-up, building their own teams to have mobile solutions

Europe – and may leap to a world where digital is already an accepted

for customers, and so on. A small number of retailers across Europe

and integrated part.

are leading the way in select markets, particularly in the UK, some in the Nordics and Benelux, and the rest are slowly following along. I think there are many cutting-edge examples in Asia and the US they could

Q: In developed countries, is there a reluctance to disband legacy systems?

learn a lot from as well, also because consumers in the metropolitan

A: We see that partially in store infrastructure of course – for a retailer,

markets in the US, South Korea, Malaysia and Japan tend to be even

because you have so many bricks-and-mortar locations, it’s hard to

more tech-savvy. There’s also a sizeable middle group, dabbling a bit

move away overnight from that investment.

and experimenting, and looking to the leading, cutting-edge retailers to

Retailers also find huge complexity in implementing new digital solutions

see which way to go.

because of their frankly almost prehistoric data infrastructure, which often makes it so difficult to enable these things.

Q: Are some retailers first waiting for technologies to prove successful? A: It’s hard to prove who will be the exact winners. It’s clear that not all

Q: Can you be at all sure that any system you buy will be futureproof?

digital models are working. For example, there are some wonderfully

A: No – but that’s why I wouldn’t over-complicate it, because then you

successful examples such as Amazon that have grown very rapidly.

won’t have spent too much money setting it up in the first place. Trying

Within grocery retail, there aren’t that many great examples, but we’ve

to go for over-elaborate solutions that are perfectly embedded and fully

seen some such as PeaPod, Press Direct or Ocado that have found their

integrated with existing data gets very expensive and takes a lot of time.

niche. But it took a lot of fine-tuning. The fact that it’s digital or online

Go for pilots instead, and be prepared to take short cuts.

doesn’t ean it will be a success. It really takes quite a lot of learning

46


Q: What proportion of investment should be spent on digital? A: In recent years, people have felt that 10-25% of the marketing budget should be spent on a form of digital. As we see consumers digitalise, that proportion will have to go up. But ICT investments involve the entire company – they’re not just a

Going

marcom issue. And as you go digital, the cost of some of the work you do of course comes down. Sending an email or putting out a Facebook message is quicker and cheaper than printing and sending a brochure with new prices and promotions every week. There are many opportunities where digital can help save costs, and a relatively small proportion of your budget may achieve a very significant proportion of your outreach. There is some consensus about what people are spending now, and it’s clear that will need to grow, but that very much depends on whether retailers are willing to take this leap of faith, take their heads out of the sand and explore these new avenues.

Q: It always helps if a leap of faith has some basis in reality though, doesn’t it?

A: There’s plenty of success to reflect on and believe in, and in fact if you don’t take that leap of faith you can seriously fall behind. There are also so many examples outside retail. It’s hard to believe that, over time, people won’t figure it out.

Q: Could grocery retailers learn from other industries?

5 most common mistakes 1. T  hinking it’s just another marketing tool, rather than an integrated business model change. 2. L  ack of clarity in how to drive customer benefit to achieve revenue and profit for the retailer. 3. Waiting too long to engage fully. 4. Assuming one size fits all. 5. ‘Penny wise, pound foolish’ – and not leveraging available technologies or third-party knowledge.

A: Absolutely. Of course we haven’t seen the drama of Blockbuster

5 top tips

stores vanishing in grocery retail, but there are places where online is

1. Immerse yourself in digital to gain a real

making huge inroads. For example, there are successful websites in the US that have taken out almost entire categories of products. Take Diapers.com: what could be more convenient for a young mother than just ordering everything for your baby in one box that arrives once every two weeks at a very reasonable price? Bricks-and-mortar stores won’t suddenly disappear, but if you’re not careful, suddenly very profitable and significant portions could be moving out of that channel, so retailers will need to be ready for that.

Q: So what will the future look like?

A: We don’t know what it will fully look like in 5 years’ time, so there is

understanding of what’s happening across different industries. 2. A  lign digital as a clear part of the business model to drive benefit to the customers and organisation. 3. E  nsure top-down leadership and buy-in for that strategy. 4. O  btain customer & shopper insights to know how, where and when to use which solutions. 5. D  on’t over-complicate. Allow for rapid piloting and take short cuts to establish what works for you.

a chance that as we learn and models come by, that some things will work better than others. But I think that having a clear strategy, combined with a ring-fenced budget, business savvy and resources closely aligned with the business, is the best way for retailers to rapidly learn what works with their specific geography and customer base.

47


winning over hearts and wallets the evolution of the loyalty card Supermarket loyalty programmes are continuously evolving to embrace the latest technology. Bluetooth, NFC or UHF: every new technology seems to gain even more data - the holy grail when it comes to offering personal service. What should be the first thing you do when improving your loyalty programme? The age of service Back in the good old days, people received personal service in the supermarket. The shop owner recognised his customers and was able to give them that special something extra to keep them coming back. In 1930, with the opening of the first supermarket that offered self-service and volume selling, there was still space and time for this personal touch. Nowadays, due to the scale of supermarkets, it’s difficult for supermarket chains to reward loyal customers in a personal way. With the power that customers have through digital, it’s easier for them to search for better deals elsewhere and become less attached to one shop. Welcome loyalty card: the well-known replacement of simple visual recognition by a shop owner. Supermarkets hope to gain a lot of knowledge

Fighting the plastic battle

from people using their cards by connecting demographic with transactional data. But it’s

Three out of four Americans are members of

hard to make customers use their card on eve-

at least one retail loyalty card programme. The

ry shopping trip if you can’t offer them any real

average household has signed up for no less

benefits. And a lot of companies have problems

than 18 memberships. You might think that

in analysing all these piles of data so as to get

these numbers show people’s love for cards,

actionable insights. The loyalty card isn’t an

but it actually shows a silent battle that is fought

easy way of giving extra service like in the past.

in people’s wallets. Many companies feel that

In fact, it nearly replaces the only remaining

these card owners are loyal customers, but it

human interaction in the shop: the cashier looks

in fact has more to do with showing their past

almost more focused on getting the plastic card

behaviour than real brand preference.

than in having a chat with the customer.

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movements in-store.And ultrasound technology (inaudible to the human ear), allows users to be tracked further away by a mobile application. Via these new technologies, all kinds of location data is now added to clients’ profiles, together with demographic and transactional data. This speeds things up at the cash register because swiping or scanning a card is not necessary. Ultimate tracking methods such as these make it possible for people at head office to write business rules to influence customer behaviour by offering automated ‘service’.

From big data to putting your customer first New technologies and smartphones now offer great opportunities to engage with customers by offering personal services on a mass scale, making it possible to go back to the intimacy of the past. Loyalty programmes can serve to improve the product or service for customers. Companies such as Starbucks show that by recognising people over a bigger distance, they can already give a personal welcome to customers entering the store. Uber, the firm that offers ‘Everyone’s Private Driver’, also shows how technology can improve personal service. There is no more hassle with paying, because

Tracking with new technologies

passengers can simply pay their cab driver with an app, making the transaction quick and

Nowadays, lots of companies are replacing

pleasant. Supermarkets can use data to make

or enhancing their loyalty programme with

their staff become experts again, by giving

new identifiers to improve tracking so as to

them the opportunity to give personal advice

gain even more data. This could be all kinds

and coupons based on a customer’s data.

of RFID, which differ in terms of the distance between the terminal and the identifier. NFC is

So what’s the first thing you should do to

well known, and still awaiting a breakthrough

improve your loyalty programme? The answer is

that could come if device manufactures like

to make technology not a goal in itself, but an

Apple add it to their devices. Aside from

instrument to improve customer engagement.

NFC, companies can add higher-frequency

Instead of just giving discounts, a programme

technology (HF, UHF, MX) to their loyalty cards

should be used to make the experience better.

to recognise people over a bigger distance.

The new loyalty card should be the ID to the

Customers could be recognised when they

holder’s personal store. This card, whatever

enter the store or specific locations in the

technology it contains, should win over not

shop.Wi-Fi and Bluetooth LE (Low Energy)

just customers’ wallets but - more importantly

also provide the possibility to track people’s

- their hearts. 49


The personal shopping assistant that

over hearts and wallets


Bright Shopper is a digital ecosystem that changes the way customers shop. It helps create a smart shopping list from products, promotions or ingredients from the recipes you offer. Bright Shopper will be an indispensable part of the customers daily shopping routine and therefore increase customer loyalty and drive more sales.

www.Icemobile.com/bright


4.

10.

1.

9.

5.

6.

8.

2.

3.

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25 years from now One thing is certain: in the future our homes will be smarter and more efficient. Kitchens will still be the most important social space in our home and will function as the heart of the house’s ecosystem. We came up with a drawing of what kitchens may look like 25 years from now. 7.

1. 3D FOOD PRINTING

- Consumers have the option to print their own meals. This is a quick way to produce our own food. A whole range of different ‘food cartridges’ can be ordered and be delivered to our homes.

2. SERVER

- The server functions as the brain of the kitchen. It connects all devices and smart products and allows the kitchen to work as an ecosystem.

3. rubbish BIN/ENERGY SOURCE

- Compost and non-recyclable waste (everything basically) is thrown into a rubbish bin and exposed to high temperatures, transforming waste into energy. The energy is fed back into the kitchen, powering the entire kitchen’s ecosystem.

4. FRIDGE - Our fridges are more open, so we can actually see what’s in them. They re-use water and are powered by energy generated from waste.

5. FOOD PIPE - Supermarkets distribute food through networked food pipes. The food from their distribution centres is delivered directly to consumers’ homes.

6. SMART PACKAGING - Conserves food for a longer period of time. Made using nanotechnology and biomimicry, it informs consumers if food has gone bad and lets them modify it to their needs or preferences.

7. GREEN WALL - Providing a fresh option for every meal, the green wall can accommodate 11.

all kinds of plants which are grown vertically using water and a mineral solution. The water used is recycled and the plants grow quickly and in a contained space. Seeds to grow vegetables and herbs can be delivered through the food pipe.

8. SENSOR - Placed inside people’s bodies, sensors help control and plan their nutrition and health by collecting the necessary information and communicating it back to the server.

9. COOKING

- We are still cooking on a heat source with pans. Technological innovation will lead to more efficiency in the kitchen, allowing us to prepare our food far more quickly than we are used to.

10. AR INSTRUCTIONS - Recipes hold interactive holographic instructions, making it easier to eat a healthier and more varied diet.

11. BROCHURE

- “Real” meat is much more expensive and exclusive than printed meat. This is an example of how promotions might work: Filet Mignon, grass-fed €12.00; printed €3.50.

53


S

Defining the ‘s’ word

SUSTAINABILITY Why corporate social responsibility is good for business Everyone’s talking about it, but what does it actually mean? Simply put, it’s about the 3 Ps: People, Planet and Profit. These all have to be in harmony with each other. The common perception is that the third P – profit – is always in conflict with the first two. But nothing could be further from the truth.

54


Our philosophy According to Jasper Rikken, Buying Director at BrandLoyalty, sustainability is an asset rather than an expense. “A company that neglects people and the planet in its activities cannot expect to remain in profit – or even in existence – for long. In fact, treating people and the planet in a sustainable way can actually reinforce profit. It’s a win-win strategy.” Enthusiastically, he continues: “For us, loyalty means building long-lasting relationships. We believe that the only way to sustain these is by showing respect for people and the planet in the broadest sense. We put this into practice in our own operations, our loyalty programmes, the products we deal with and the value chain in which we operate. This also helps our clients achieve their own sustainability goals.” People

Respecting human rights

BrandCharity: caring for children

Social Compliance Initiative (BSCI), which

employees set up BrandCharity to help

audits the working conditions of its factories

and support children around the world. The

and production centres. Practically all of its

charity has proved highly successful and

suppliers worldwide have been BSCI audited or

has now formed a partnership with SOS

approved. The BSCI Code of Conduct is based

Children’s Villages, which provides shelter

on the most important international labour

and schooling for orpaned and abandoned

standards for protecting workers’ rights. These

children. BrandCharity’s strategy is now to

include

focus on education: an advantage that benefits

BrandLoyalty is a member of the Business

International

Labour

Organisation

Conventions, United Nations Declarations,

Ten

years

ago,

some

of

BrandLoyalty’s

communities for generations.

OECD guidelines for multinational enterprises, and the UN Global Compact.

Personal and professional development

Closer to home, the company’s focus on creating healthy working conditions is equally clear. Sport is a key element, with on-site facilities, instructors, and even a physiotherapist. Staff are encouraged to stay active by joining in team events such as running, cycling and hockey, and there’s a high rate of participation. In addition, brain training is available in the form of Brand Loyalty University – which enables staff to explore different loyalty-related disciplines – as well as professional mentoring and on-the-job training.

55


BETTER...

Planet

Profit

To reduce its use of air freight, BrandLoyalty

“Lots of our loyalty programmes target children”,

Protecting the environment

•e  conomic sustainability can be

Hitting the target

achieved through the creation of value for everyone in the supply chain, from the

is increasingly sourcing items from local

explains Rikken, “so they give us a great oppor-

primary producers through to our customers;

manufacturers rather than importing goods

tunity to get the sustainability message across.

•s  ocial sustainability will be achieved

unnecessarily from China. The company also

Our concepts often emphasise how children

by showing respect for individuals and for

selects ‘lean & green’ suppliers as much

can help protect the environment, and we see

the communities where they live and work;

as possible. BrandLoyalty’s SAS (Stock

how eager they are to do so. It’s yet another

Allocation System) is another smart way of

example of how you can combine business with

is best achieved by showing respect to the

reducing return flights – with their associated

sustainability if you really believe in both.”

living ecosystems we all rely on as well as

costs and CO 2 emissions. What’s more, the new BrandLoyalty HQ in Den Bosch and new warehouse in Venlo are being constructed

Driving the sustainability of our business

social

For us, the most commercially attractive and

responsibilities seriously. It’s a big challenge,

environmentally useful contribution we can

assessment method for sustainable buildings.

but we believe that in the long term, we will

make is to focus on supplying our customers

all benefit from the positive impact that our

with responsibly sourced products, materials

Choosing our products wisely

takes

its

corporate

by eliminating unnecessary waste.

BREAAM, the world’s leading design and

according to the ‘very good’ standard of

BrandLoyalty

•e  nvironmental sustainability

policies have on the environment and society

and service tools to make their businesses

All the products that BrandLoyalty uses

as a whole. Sustainability and quality are in­

more sustainable too.

involve careful use of natural resources. POS

separable for us: a product sourced by Brand-

materials are mostly made of recycled paper,

loyalty should make a positive contribution to

with FSC paper used as standard for Instant

at least two of the three elements of sustain-

Loyalty Promotions. New NES (Non-Enveloping

ability: social, environmental and economic.

System) sticker packaging is an innovation that in 2012 alone allowed BrandLoyalty to make huge savings in transportation: 43% less, and virtually zero packaging waste. Plastic or foil flow packaging was eliminated and this alone cut carbon emissions to the minimum.

56


Brand Loyalty’s view on sustainability We must: 1. Ensure respect for SOCIAL STANDARDS

people Planet profit

We can secure our business (licence to operate) by challenging ourselves and our partners to respect and uphold socially acceptable standards in the whole value chain, through: • good working conditions • respect for human rights • ensuring products are manufactured, used and disposed of safely • transparency and openness in all these aspects • giving something back to society via our BrandCharity foundation

2. Reduce our environmental FOOTPRINT We can reduce our environmental footprint in our own business activities and throughout the value chain, and save costs, through: • efficient use of natural resources • efficient transport • smart packaging • savings in our own business operations and buildings

3. Stimulate OUR PEOPLE’s Development We can develop and motivate our people as they drive our business and are our most important asset, through: • giving them responsibility and room for their own development e.g. via our own University (BLU)

• excellent secondary working conditions, including encouragement and facilities to engage in sport

4. Create attractive, SUSTAINABLE CONCEPTS We can develop sustainable products and concepts that inspire our clients, exceed their expectations,help them to meet their own sustainability requirements, and offer them solutions for their consumers, through: • offering sustainable alternatives in our portfolio • developing concepts for education and awareness of sustainability issues • collaborating with clients to reduce the footprint of our loyalty programmes

57


“Any time, any place

anywhere

This Martini jingle from several decades ago was ahead of its time

It’s a very accurate description of what today’s food customers want. Which is to enjoy whatever snack or meal they feel like, at any time of the day, wherever they are. Food retailers are playing a large role in fulfilling this desire, because they are competing keenly with the food service branch to seize more buying moments.

58


What, where and how to buy Global developments in food What should we buy? Always wanting to eat anything, anywhere,

it anywhere: from a stall on a street corner, in

Here’s the trend: customers are becoming

means that the food has to be made available.

the deli, at the sandwich shop, from the coffee

brand-loyal. They like to be seen with

This asks a lot from any sourcing and supply

takeaway, but also in the supermarket – whether

packaging from Deli X or (mini)supermarket

chain.

big or small – and preferably everywhere else.

Y. They like being part of a brand or format: it

Here’s the trend:

gives them status and ‘friends’ (e.g. via ‘Like

And

making

everything

available

worldwide (tropical fruit in Nordic areas, Dutch dairy in Central Africa) does have its price.

us’ on Facebook!). Retailers are doing more

Customers know that and don’t want it any

and more to load their brand with ‘feelgood’ or

more. Recent food scandals are the stuff of

‘right choice’ arguments.

Grisham-worthy thrillers.

How should we buy it?

Here’s the trend: customers are becoming

We normally simply buy what is offered to

concerned about the quality of the food they

us. But active influence is the latest trend.

eat. They want to be able to trust what they

Retail brands have to do all they can to

put into their mouths, know where it comes

identify their most influential customers, make

from, how it was produced, and that it’s safe.

a commitment and listen to what they have to say. In this way, customers can give their

Traceability and accountability, across the chain. More transparency is being demanded.

customers want to be able to buy food

shopkeeper very valuable information in a

So it’s no wonder that organic and local

anywhere, at any time, in order to snack on

highly personal, direct manner. Their reward?

produce are doing well everywhere.

while they walk away, to gobble down at a

Promotions and other ‘nice to know’ stuff sent

small table, to magic one-two-three into a

straight to their smartphone. Taking things

tasty meal at home, or to share.

further, you could choose to have shoppers as

Where should we buy it? Increasingly, non-food purchasing is being

affiliates, crowd-led product ranges, shopper-

done online, where an interaction is developing

That’s what convenience means to them. So it’s

with countless new possibilities and models.

no wonder that in addition to all possible sorts of

Food and online may well go together, but due

deli counters, food retailers are experimenting

Here’s the trend: customers are influencing the

to the ‘now’ factor in eating moments (you’re

with

a

range offered in their favourite stores. And in

hungry now; you’re in good company now),

conveniently arranged assortment of (partly)

turn, retailers are glad to have a better insight

and the live experience that food offers (smell,

prepared food and ingredients. Such as AH

into this ever-evolving phenomenon called the

colour, presentation), food is an immediate

To Go in the Netherlands, and Pret a Manger

customer. Whoever has the best connection

satisfier. That’s why you want to be able to buy

in the UK.

also has the best range.

small

urban

formats

containing

designed deals, or more. That’s how it works.

59


Mary Portas Mary Portas is one of the UK’s leading authorities on retail and branding. After transforming the department store Harvey Nichols in the early 1990s she established brand communication agency Yellowdoor, which later re-launched as Portas. She began her Shop! column in the Telegraph Magazine in 2005 and her weekly reviews inspired the BBC television series Mary Queen of Shops, in which she tried to rescue failing retailers. In 2011 she was commissioned by the Government to lead a review of the UK’s High Streets: the Portas Review. In this article for Marketing magazine, Mary shares her tips for getting to the top.

Never underestimate the power of branding. It has a massive impact on society and where brands are powerful they affect people’s choices and how they live their lives.They can be hugely impactful; the positive influence they have on educating and informing can literally open eyes to opportunities. Some of the smaller start-ups like TOMS or even Innocent’s rise shows that through positive messaging and brilliant branding, you can make waves across the globe.

60


MARY PORTAS Will be speaking at the retail loyalty congress 2013

I KNOW “Inspiration comes from tangential encounters with remarkable people�

61


Be mindful.

And the future of Marketing?

Just keep going.

We have a duty as marketeers to make sure

Well brands are here to stay.

that the messages we leverage for brands are

We’ll never move away from our love of brands.

what I care about. I find myself saying I won’t

in line with our own ethical and responsible

Maybe from the brash and the bold, but the

put any more on my plate, but then I do. I can’t

position. Once you are in the public eye you

consumer and public want stuff that they

help it. It’s just a natural thing and I was either

have to be aware that anything you do has a

connect to. It makes them feel alive.

born that way or something happened to me.

I often get asked why I’m continuing to fight for

When the proverbial shit hits the fan, if there’s

knock-on effect. This goes for brands, but also When people do good work you should

one thing I’ve learnt it’s to keep soldiering on.

really thinking about what you are doing. Am

reward them.

I behaving well? Is this good practice for me,

I remember I left Harvey Nichols because they

Oh, and if you need help getting up in

my family, the people who work for me and the

wanted to tie me in to a 5-year share option.

the morning, have a baby.

people who listen to me?

But I’d already done the work, I’d already

Or an agency.

for people. It’s not about being careful, it is

rebranded it and I remember thinking “share If you tell the truth, you don’t have to

the cake now”.

remember anything.

I’ve borrowed this from Mark Twain (and I also always carry a notebook...) Inspiration comes from tangential encounters with remarkable people.

We’re designing the layout of my agency’s new home at the moment. We haven’t got Pixar’s budget, but we’re trying to follow their practice of ‘engineered serendipity’ – making sure the layout forces our people to bump into each other at points around the office rather than working in their skillset silos. Great ideas

My 6 tips

happen by chance. Never underestimate the word good. If you do really good work, with really good people, you will get really good results. We need to be more curious. At the heart of life is having an inquisitive nature. I always get the biggest kick from the next thing I am doing, the next thing I’m learning. Whether it’s finding a solution to one of my clients’ problems or immersing myself in culture, doing something new and pushing boundaries is a course to contentment.

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for getting to the top?

• Be humble • Work harder than the rest • Take risks • If you’re not laughing, get out • Treat people with respect • Swear in the toilets when no-one’s listening


Jumbo foodmarket

Make it, take it, eat it!

64

The Netherlands are a small country, and so are its shops. Fortunately, once in a while there is a business that thinks big and acts big. Jumbo Supermarkets (EDLP), the family firm from Veghel that has already often surprised the Netherlands with its promotions, has done it again. Friend and foe alike cannot believe their eyes. Jumbo Foodmarket: 6,000 square metres of food fun!


65


This isn’t the first time that Jumbo has been front-page news. It previously hit the headlines with its two takeovers of complete retail chains: Super de Boer and later C1000. Each chain was actually bigger than Jumbo itself at the time of the takeover – which is what made it such a cheeky move. The Van Eerd family behind Jumbo deserves praise for the way it keeps thinking and acting in order to make the most of every possible opportunity. So welcome to its latest stunt: the Foodmarket. Five times as large as the average Jumbo, with 35,000 articles, it offers one mega-huge fresh food experience (3000m2 of fresh food). Fresh, easy and healthy, for the lowest possible price: that’s Foodmarket’s aim. Yes, you can just come in to buy groceries – after all, there’s more than enough choice. But you can also decide to have your meal prepared for you in the shop itself, if you don’t have enough time to cook – or simply don’t feel like it. A third option is to eat your freshly prepared meal straight away in the Foodmarket Café: ‘Make it, take it or eat it’. Nearly forty employees are engaged in preparing and

“Fresh, easy and healthy, for the lowest possible price”

cooking meals: Italian, Asian, Sushi and Dutch cuisine. In addition to chefs, there are culinary specialists on hand to give advice and tips.

‘Food from home’

Due to sustainability considerations, a major part of the fresh produce comes from the area around Breda, where the Foodmarket is situated. It’s even been made possible for farmers to drive their tractors right up to the doors of the store – a real show-stopper that’s great for publicity. Nevertheless, sourcing local produce does have a serious goal: it reduces Jumbo’s environmental footprint. Foodmarket is a testing ground for Jumbo. It’s where all sorts of new products and concepts will be introduced and tested. The organisation will carefully note the amount of interest from its customers in preparing and cooking meals. There’s also a coffee corner where own-label coffee is roasted and served fresh, and a service point for a dispensing chemist. What’s more, Jumbo is working together with dieticians from a nearby hospital to help people in and around Breda to eat more healthily and to improve their lifestyle. The dieticians are available at Foodmarket several days a week. A typically Dutch aspect is Jumbo’s desire to make Foodmarket a cosy, friendly place. Research carried out during visits to French hypermarkets revealed that Dutch shoppers miss this homely feeling. That’s why Jumbo has worked hard on creating the right design, decoration, lighting and shopping experience.

66

A visit to Jumbo Food Market is part of the Retail Loyalty Congress 2013


KEY FACTS • New private labels specially designed for Jumbo Foodmarket. • 35,000 articles. • Foodmarket will be used as a research and development laboratory for the Jumbo format. •Of Jumbo Foodmarket’s 415 employees, 30-40 will be deployed to cook meals for customers.

• Expected customer range: 30km. • ‘Make it, take it, eat it’ principle applied throughout the store. You can take products to your home (= supermarket) or create and eat products in the Foodmarket Café. • Floor surface area: 6,000m2. • 700m2 of fruit and vegetables, including a cockpit in which fresh fruits are sliced, squeezed and served. • In each department, customers can witness the process of preparing products and meals.

• 1,000 parking spaces for Jumbo Foodmarket • 17 checkouts including 4 self-scanning checkouts • Special Foodmarket magazine. • Online catering ordering platform, e.g. for lunches. • 4 Food Kitchens: Italian, Asian, Sushi and Dutch cuisine. • More Jumbo Foodmarkets are planned.

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10 years of returning the favour

“It’s the business of every business to help itself do well. But shouldn’t we also help others do well too?”

69


Why not help if you can? This was the question that inspired a small group of BrandLoyalty employees to found BrandCharity in 2003. Their intention was simply to give something back to society. What’s more, they knew that they and their colleagues possessed the talents, skills, knowledge and energy to make good things happen. That first year, they raised €13,000 to construct a playground and basketball court for a school in the Philippines. By deciding to focus on ‘Welfare for Children’ as their guiding principle, they also created the cornerstone on which BrandCharity has been built. Created by people, for people

“A big reason that BrandCharity has achieved so much is that it’s a grassroots initiative”, explains BrandCharity board member Miranda Evans. “It was started by a few colleagues, and it keeps growing because everyone throughout the company gets involved. People are active in fundraising at every possible level – from running marathons right down to getting themselves sponsored to wash cars or come to work by bike!” Twan Matheij, Chairman of BrandCharity, takes up the theme. “The fundraisers are great fun – they’re a really worthwhile team-building challenge and create a positive atmosphere. We’re also delighted that our business partners are joining in more and more.Their contribution is proving invaluable in getting projects off the ground.”

SOS Children’s Villages With

BrandCharity’s

increased

success

came

some

inevitable

challenges, such as how to run projects in a sustainable manner and make optimal use of funds. “Last year, the BrandCharity board decided on a new strategy: to focus on education. We also agreed on the need to team up with a long-term partner to share our ideals and help us realise our goals,” says Miranda. “The BrandCharity project team initiated the search for one with experience, local presence, integrity, accountability and an open, transparent way of working. SOS Children’s Villages ticked all the boxes.” 70


Education works for generations

Twan smiles, “As the old saying goes, ‘Give a man a fish, and he eats for a day. Teach him how to fish, and he can feed himself for a lifetime.’ There’s nothing more sustainable than education: the lessons learned are then passed on throughout entire communities, benefiting increasing numbers of people for many years to come. SOS Children’s Villages provides education and housing for orphaned and abandoned children, transforming them from recipients of help to valued members of society.”

From little acorns, mighty oaks may grow

BrandCharity may have started small, but it’s gone from strength to strength. In 2013, we expect to contribute €60,000 to our current project: a primary school in Gulu, a village in Uganda. In addition, we are supporting a project that trains street kids to bake Dutch biscuits (‘stroopwafels’). Twan explains, “BrandCharity is serviced by a 6-member board and a different project team each year. Over the past ten years, we’ve grown and reached out more into the world just like the company as a whole, but our concept remains the same. Basically, it’s all about people who have more doing something to help people who have less. Seeing these people, in turn, growing up to help other people is just an amazing feeling.”

Give a man a fish, and he eats for a day. Teach him how to fish, and he can feed himself for a lifetime.

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Redefining the Race Skating is to the Netherlands what the Eiffel Tower is to Paris. You just can’t imagine one without the other. As soon as the temperature begins to dip below zero, many Dutch people start wondering out loud if the legendary Eleven Cities Race can finally be held once more. The last time that this heroic 200-kilometre race across the northern province of Friesland could be held was back in 1997.

Long-distance skating has been the most popular winter sport in the Netherlands for decades. Of the 86 medals that this small country captured in the Winter Olympics, a total of 82 were claimed by skaters. Long-distance skating brought the kingdom 27 Olympic titles.

However, these included only one gold place for figure skating (won by Sjoukje Dijkstra) and a single gold medal (won by Nicolien Sauerbreij) for snowboarding. So it’s no wonder that large Dutch firms are keen to associate themselves with long-distance skating, considering that the sport gains extensive coverage on various TV programmes and sports channels every week over the winter. In fact, that’s what made BrandLoyalty decide to set up its own skating team in 2012.

www.teambrandloyalty.com


team

Skaters are born... and made

The company entered into a partnership with top coach Jac Orie, whose name has been a guarantee of success since 2002. He has steered his pupils to win countless world titles and has – as coach – twice seen Olympic gold: with Marianne Timmer in 2006 and Mark

Tuitert in 2010.Orie is a human movement scientist who utilises his scientific approach

to push his skaters to the top. Just like BrandLoyalty, he bases his work on data and exhaustive analyses, before determining the correct course to embark on. Each year,

his support team carries out around 100 scientific tests on the skaters to enable him to optimally monitor their progress. It’s an extremely professional approach, just like BrandLoyalty’s own way of working.


TOP10

The must-sees and must-dos 74


ANNE FRANK HOUSE

1

One of Amsterdam’s most visited sites is where the world’s most famous diarist went into hiding with her Jewish family for two years during World War Two, until they were betrayed to the Nazis. All but Anne’s father Otto perished at Auschwitz, so visiting the rooms where they hid – accessed by a movable bookcase – is sobering. Tip: avoid queues by buying your tickets online in advance; to avoid the crowds, visit at the end of the day (it’s open until 7pm).

Anne Frank House, Prinsengracht 267 +31 20 556 7105 www.annefrank.org

BEGIJNHOF

2

Concealed behind rows of charming houses, this hofje (hidden courtyard) holds some rather intriguing secrets. The 15th-century English Reformed Church has four panels decorating the pulpit designed by Piet Mondriaan; one of the very few wooden houses in the city, dating from 1477, is at number 34; and hidden behind the façade of number 30 is an entire Catholic chapel dating from 1665! Finally, next door to the Begijnhof is the free-to-enter glass-roofed Civic Guard Gallery – where 17th-century paintings of prominent members of Amsterdam’s Civic Guard (the subject of Rembrandt’s Night Watch) are on view.

Begijnhof, Entrance via Spui Square www.begijnhofamsterdam.nl Civic Guard Gallery (Amsterdam Museum), Kalverstraat 92 www.ahm.nl

75


CANALS

3

The best way to see Amsterdam is from the water. And this year is particularly special as Amsterdam’s inner canal ring – a UNESCO World Heritage Site – celebrates its 400th anniversary. The Canal Company offer a wide range of tours on their boats – by day; by night; historical; hop-on, hop-off; with cocktails; by candlelight... Another great option for seeing the canals is to rent one of the yellow water taxis for a private, informal tour. They can pick you up and drop you off anywhere there’s water.

Canal Company +31 20 217 0501 www.canal.nl Water Taxi Amsterdam +31 20 535 6363 www.water-taxi.nl

CINEMAS

4

Amsterdam is renowned for its rather unpredictable weather. So when rain stops play, just head indoors to one of its architecturally stunning cinemas. The Tuschinski, built in 1921 by an early cinema enthusiast, is undoubtedly one of the world’s most beautiful cinemas – a magnificent carpeted feast of Art Deco and Art Nouveau, complete with plush chairs. At the other end of the spectrum is EYE, an amazing 21st-century addition to Amsterdam’s waterfront skyline, almost on a par with the Sydney Opera House. Not only does it screen an eclectic programme of films but it stages exhibitions and has a café-restaurant. To get there, take the free 3-minute ferry from behind Centraal Station.

Tuschinski, Reguliersbreestraat 26-28 0900-1458 www.tuschinski.nl EYE, IJpromenade 1 (Amsterdam-Noord) +31 20 589 1400 www.eyefilm.nl

76


DUTCH CULTURE

5

If you want to catch some classical music, head to the Concertgebouw – one of the world’s busiest concert halls – which is renowned for its sublime acoustics and famous resident orchestra. Both Het Nationale Ballet and De Nederlandse Opera reside at Het Muziektheater, where you can catch some first-class performances. For half-price tickets, go to www.lastminuteticketshop.nl

Concertgebouw, Concertgebouwplein 10 0900 6718345 www.concertgebouw.nl Het Muziektheater, Waterlooplein 22 +31 20 625 5455 www.het-muziektheater.nl

HORTUS BOTANICUS

6

One of the oldest botanical gardens in the world, it never fails to provide a serene escape from the nearby city centre. In fact, the terrace of its café is one of the city’s best-kept secrets. Originally founded as a medicinal herbal garden in 1638, it expanded in the 17th and 18th centuries when ships from the VOC (Dutch East India Company) introduced exotic herbs, spices and plants to the Dutch. One of its treasures – especially on a cold day – is its three-climate greenhouse. Another is its giant cycad – a plant which is more than 300 years old. And yet another is the Butterfly Greenhouse, where the winged insects gently fly around you.

Hortus Botanicus, Plantage Middenlaan 2a +31 20 625 9021 www.dehortus.nl

77


REMBRANDT HOUSE MUSEUM

7

Built in 1606, the year Rembrandt was born, this is where the famous 17th-century Dutch artist lived from 1639 to 1658, when bankruptcy forced him to move to cheaper accommodation. Thanks to the sad inventory of his household goods for auction, experts were able to authentically reconstruct the interior of how it would have looked when he lived there. The museum – with its excellent introductory film, free audio tours in various languages, and demonstrations of etching techniques and paint preparation – is quite simply fascinating.

Rembrandt House Museum, Jodenbreestraat 4 +31 20 520 0400 www.rembrandthuis.nl

RIJKSMUSEUM

8

Paris has Le Louvre; Amsterdam has the Rijksmuseum. Recently reopened after a decade-long renovation, this world-famous art museum is where you’ll find Rembrandt’s magnum opus The Night Watch, amongst 8,000 works displayed in no less than 80 rooms. Be sure to visit its newly-renovated neighbours – the Stedelijk modern art museum, and the Van Gogh Museum, dedicated of course to the troubled but genius 19th-century artist, Vincent. Tip: Buy tickets online in advance.

Rijksmuseum, Museumstraat 1 +31 20 662 1440 www.rijksmuseum.nl Stedelijk Museum, Museumplein 10 +31 20 5732 911 www.stedelijk.nl Van Gogh Museum, Paulus Potterstraat 7 +31 20 570 52 00 www.vangoghmuseum.nl 78


NINE STREETS

9

Nine streets in the heart of the canal ring – and charming Jordaan district – are collectively known as the Negenstraatjes (Nine Streets) and are a fabulous shopping destination. These little streets that criss-cross each other are packed with small shops offering anything from fashion by local designers to creative hand-made books and vintage wear, as well as one-of-a-kind shops such as De Witte Tandenwinkel, devoted entirely to toothbrushes, and De Kaaskamer, devoted entirely to cheese. Dotted in between are delightful cafés.

Nine Streets www.de9straatjes.nl

WYNAND FOCKINK

10

Hidden down a little passage off Dam Square is Amsterdam’s most charming proeflokaal (tasting house). Founded in 1679, it sells old Dutch liquors including jenevers, some of which are produced on the premises. The drinks menu is a delight: Naked Belly Button (made for mums-to-be); Bridal Tears (traditionally served after marriage ceremonies when the city hall was located on Dam square); and Lotion of Venus with its reputed aphrodisiac powers.

Wynand Fockink, Pijlsteeg 31 +31 20 639 2695 www.wynand-fockink.nl

79


1.

ANNE FRANK HOUSE

6.

hortus botanicus

2A.

BEGIJNHOF

7.

rembrant house museum

8a.

rijksmuseum

2B.

Anne Frank House Prinsengracht 267 +31 20 556 7105, www.annefrank.org

Begijnhof Entrance via Spui Square www.begijnhofamsterdam.nl Civic Guard Gallery (Amsterdam Museum) Kalverstraat 92 www.ahm.nl

3A.

CANALS

3B.

Water Taxi Amsterdam +31 20 535 6363, www.water-taxi.nl

4.

cinemas

4b.

5a.

5b.

Canal Company +31 20 217 0501, www.canal.nl

Hortus Botanicus Plantage Middenlaan 2a +31 20 625 9021, www.dehortus.nl

Rembrandt House Museum Jodenbreestraat 4 +31 20 520 0400, www.rembrandthuis.nl

Rijksmuseum Museumstraat 1 +31 20 662 1440, www.rijksmuseum.nl

8b.

Stedelijk Museum Museumplein 10 +31 20 5732 911, www.stedelijk.nl

8c.

Van Gogh Museum Paulus Potterstraat 7 +31 20 570 52 00 www.vangoghmuseum.nl

1.

9.

Tuschinski Reguliersbreestraat 26-28 0900-1458, www.tuschinski.nl EYE iJpromenade 1 (Amsterdam-Noord) +31 20 589 1400, www.eyefilm.nl

dutch culture Concertgebouw Concertgebouwplein 10 0900-6718345 www.concertgebouw.nl

Het Muziektheater Waterlooplein 22 +31 20 625 5455 www.het-muziektheater.nl

80

3a.

9.

10.

nine streets nine streets www.de9straatjes.nl

wynand fockink

Wynand Fockink Pijlsteeg 31 +31 20 639 2695, www.wynand-fockink.nl

8a.

8c.

8b.

5a.


4b.

3b.

10.

2B.

7. 2a.

5b.

6.

4a.

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BrandLoyalty’s new home: the Loyalty Expertise Centre When BrandLoyalty moves to its new premises in the centre of Den Bosch at the end of 2013, it will be more than just a change of address. The relocation represents a significant step forward, both for the company itself and for all its partners and stakeholders. 82


101

KING’S ROAD building on a vision

83


Space to grow. Room to think.

The brains of the business

“The most urgent reason for moving to a new headquarters was

101 King’s Road (Koningsweg), which is currently under construction,

of course the fact that we have outgrown our current offices”, says

is being built according to BREEAM environmental certification – and

Claudia Mennen, CFO at BrandLoyalty. “But rather than just looking for

BrandLoyalty’s vision. Its airy design enables it to be flooded with light,

larger premises, we wanted to find a structure that would let us achieve

enhancing the sense of energy and connectivity.

something greater: to turn BrandLoyalty into a knowledge centre for the

The Loyalty Expertise Centre will contain an auditorium where lectures

entire loyalty industry worldwide.”

can be held, but in fact the entire building – and its employees – will

Keeping ahead of the game

function as a knowledge hub. The aim is to create a very welcoming, stimulating environment for working, sharing and learning. It will be

She explains, “Developments in the loyalty field have wide-ranging

a place where colleagues, clients, students and specialists come

implications for retail as a whole. Loyalty programmes are often at the

together as part of an open community. “We believe that interaction

forefront of social change as they utilise new technologies, the latest

between people delivers added value”, comments Mennen, “so we’re

trends and popular communication channels to achieve their objec-

creating the conditions to make that happen.”

tives. We want to share the knowledge we’ve built up over nearly 20 years, and our new HQ will give us the opportunity to do so.”

84


“We believe that interaction between people delivers added value”

Turning the workplace into an experience She adds, “We believe in innovation and investment in people, which means we’re not following the current flexworking trend. Instead, the design of our new HQ will actively encourage people to enjoy and to benefit from their workplace.” The blueprint includes a gym, several restaurants, a barista, a dry cleaner’s and even a grocery pick-up service. The company’s aim is to help its staff work more efficiently

“we’re turning BrandLoyalty into a knowledge centre for the entire loyalty industry worldwide”

and make their lives easier by giving them their own desks in pleasant, comfortable surroundings, and supporting them to smoothly combine work and home.

Rejuvenation and transformation By the end of 2013, the building will house BrandLoyalty’s current total of 200 employees – and still have room for more. To ensure a constant flow of fresh ideas, 101 King’s Road will also be a place where startup companies and entrepreneurs can meet, work and share insights. With underground parking and its superb location - just a 2-minute walk from Den Bosch’s Central Station - the new HQ will no doubt attract visits from potential employees, clients and other interested parties. 85


Credits We would like to thank the following people for their contributions to this

winning over

edition of Hearts & Wallets:

Concept And exectution: Barry van Eijk, Lieke van Gorp

Creative Direction: Barry van Eijk, Sander Eijlenberg, Lieke van Gorp

Editorial Team: Gregor Lof, Chantal van Wijk, Olav van Dam, Karlijn van den Berg, Parmila Khubsing, Sander Ejlenberg, Marco van Bilsen

Design Team:

About this Publication

Barry van Eijk, Gijs Burgmeijer, Marcela

Hearts & Wallets is a publication of BrandLoyalty International.

Brandi, Lieke van Gorp, Jasper Scheurs,

Hearts & Wallets has been issued to mark the occasion of the fourth Retail Loyalty

Ruud Swart

Congress, 25-26 September 2013, Amsterdam, the Netherlands.

Info graphics/illustrations:

Copyright Š 2013 Brandloyalty International

Barry van Eijk, Dario Stefanutto,

Nothing from this publication may be copied, transmitted and/or made public by

Dado Queiroz, Ruud Swart

means of printing, photocopying, transmitting digitalised data files or in any other

Photography: Machiel van der Heijden, Esther Keim

Articles:

way whatsoever without prior written permission from the publisher. After specific permission from the publisher, articles from this issue may be republished and/or reproduced, provided that the source is mentioned. The publishers have done their utmost to identify all persons or organisations who own the rights to the visual images used. Should a person or organisation be

Marco van Bilsen, Olav van Dam, Koen

able to prove that their permission was required for any images we have used,

van Dijck, Rob van Erp, Pip Farquharson,

we hereby ask them to contact us as soon as possible.

Karla Heeren, Miika Kossi, Cathy Scott, Tim Senden, Jonne van Veggel, Jan van

This publication has been developed with the greatest of care. However, the

de Ven, Tom de Vogel, Renee Wessels,

authors and publisher disclaim any responsibility in the case that any information

Anna Witteman.

it contains may have been reproduced incompletely or inaccurately. Should any such omissions or inaccuracies come to light, the authors and publisher will be pleased to receive suggestions for amendments.

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BL-RLC 2013 Hearts Wallets