Albert Heijn's one-hour delivery test: what do consumers expect?

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Leading Dutch supermarket Albert Heijn recently started a test offering one-hour deliveries. Offering this service seems a logical step for the supermarket, enabling them to meet new consumer shopping preferences while at the same time making use if the existing network of supermarkets. How do consumers feel about this service and will they use it? 

The proposition

Consumers in Amsterdam are enabled to order groceries through a new dedicated app (Appie now).  ‘Personal shoppers’ gather the groceries ordered in shops and deliver them by bike, which is the most common form of transportation within the center of Amsterdam. Delivery costs will be 5 euro per delivery. 

The service will make use of Albert Heijn personnel who are off duty at that moment to deliver the goods. To best simulate future plans, deliverers are considered self-employed professionals, using their own bike and phone to handle the deliveries. Arne Lamet, business developer at AH online, explains to Distrifood: "We see this as a test of consumer needs. we have seen several examples abroad that this (instant delivery) is already put to practice. We now want to test whether there’s a similar need among Dutch consumers."

Motivations

Albert Heijn and their online business AH.nl have been the undisputed market leader in the Netherlands for some years now. As such they feel the need to respond to developments in consumer preferences: “With this test we want to show that AH is actively involved in saving consumers time. As for now, it will be an 8 week test and we have to decide how we will take it further form there”. Another advantage is for the company has to do with franchising: Over the last few years many franchise takers have complained that new online concepts (such as food boxes) compete with their own business. ‘The new system’s advantage is that income will directly benefit the stores without costing them anything”.  

The App

Amsterdam based TringTring is an independent delivery service, using bikes only      

Amsterdam based TringTring is an independent delivery service, using bikes only      

For this pilot Albert Heijn cooperates with TringTring, an independent food delivery services, that disposes of a fleet of bike deliverers and whose services are already available in an app. TringTring will deliver the same services in a dedicated app they built for AH, called Appie Now. ‘This co-operation allows us to directly get up speed, but it’s also fun to work with an start-up."

Features 

In order to use the service, shoppers need to download the Appie Now app.  Registration is compulsory, either by email or by Facebook login. Within the app consumers can scroll through product groups, choose their articles and pay.  At this point, it is only possible to pay with credit card, Paypal will follow. Consumers can track the delivery real-time on a map. 

Home Screen Appie Now app  

Home Screen Appie Now app  

Product Screen Appie Now app  

Product Screen Appie Now app  

Customer experience Quick Scan 

Already some media attention has been given to the project. As some consumers already have had some experiences with Appie Now, we find it very interesting to see what the first results have been. We will therefore monitor their expectancies and experiences. Our proven method is an easy way to understand whether their app will be successful and how to adapt to their target group needs and wishes.   

First feedback

As such we already asked two consumers to download and share their expectancies about such an service. Their answers provide us with quick first insights in whether people would use the services and why. 

Reasons to use

The people we spoke would use it only when there would be a certain urge for it, other than regular household shopping; Maria (37, mother of 3 children):  I will use it today as I’m cooking a recipe and missing out some ingredients. In general, I think this would be the foremost reason to use it. I would use it now and then. We will always need something we didn’t plan before. Considering that this can be seen as a perfect addition to our normal shopping”. 

Richard (29, running a start-up in Amsterdam) names a few other occasions in which the app could: “I like the app, although I don’t think it would use it that often for my personal needs, but I would use it for office deliveries, like lunches or the occasional Friday afternoon drinks here in the office”.   

Reasons not to use

The delivery costs are perceived as high and will limit the usage of the service. Maria: “5 euros is much, living close to a Albert Heijn, I rather do the shopping myself in many occasions. Delivery costs should be prized more like those of delivery meals; they are free if your order exceeds something like 15 euros". Albert Heijn might already be aware that this might be a hurdle for consumers. Therefore they don't charge for an order made in the first 48 hours after downloading the app.

At this point, it is only possible to pay with Credit card (the Paypal option does not work yet in the app). Both consumers find this an issue:  

Maria: "Using our Credit Card for our grocery shopping only does not seem logical, I'd like to keep track of our expenses and rather pay by debit card". It would be good if we could pay with iDeal. Richard: "in our household, the expenses on shopping are charged to a shared bank account. Using my credit card makes it impossible to share the costs between us." 

Not exceeding the hour when delivering is crucial for Richard: "If my experience would be that I had to wait too long, I would not use it anymore: the closest Albert Heijn store is a 5 minutes walk away from the office, which is also a good break for me. It definitely competes to that for me."

Marked as inconveniences by these consumers are the facts that there was not a search function available within the app to look for products as well as as that after the app crashed the initial shopping cart was not available anymore.  

Next steps

To fully understand the consumers and the likability the will use it, we will monitor a larger group  over the next few weeks and ask them how they feel about using the app also looking at their shopping experiences, when actually ordering through the app (delivery time etc) 

Chances for the one-hour delivery service by Albert Heijn:

To summarize the insights so far: it is likely that there is a huge potential for instant delivery as it meets consumer expectancies regarding comfort and speed. Especially in an urban settings with many companies and a good infrastructure that makes most of the city accessible within the hour (by bike), the instant delivery could be very successful.

If the test will proof to be a success, Albert Heijn could successfully grow through its existing network of physical owned and franchised stores. crucial for the success are easy payment options and being able to assure the 1 hour delivery time.