Post-COVID Retail: The Dutch Market looks to digital technologies
Across the globe, the COVID-19 pandemic disrupted supply chains and accelerated already rapidly shifting consumer behavior – made all the less predictable by ever-changing political rhetoric and government advice as the crisis unfolded. In the Netherlands, the combination of these factors has forced retailers and wholesalers to find salvation in digital technologies.
The sector in the Netherlands has had a torrid year - according to Netherlands Statistics (CBS), Dutch consumer confidence is at an all-time low since 2013, albeit with a slightly improving outlook. And the number of brick-and-mortar stores continues to fall – with an 11% drop since 2010. In 2020, there were approximately 97,000 brick-and-mortar stores compared to 86,000 in January 2019. A trend particularly visible in the non-food retail segment. E-commerce, however, is growing.
Despite this bleak outlook, there are various examples of businesses that are taking the opportunity to invest in technologies and solutions that will improve vital business areas, such as supply chain and customer experience.
For example, in November 2020, fashion retailer Wehkamp extended its workplace management contract with Pink Elephant. The IT provider was first chosen back in 2017, and besides, workplace management will now also provide service desk and on-site support services.
Further, in November 2020, fashion retailer Zalando, which operates many physical stores and an e-commerce platform in the Netherlands, chose AWS as its primary cloud provider. Zalando, which already uses AWS services, including analytics, compute, database, networking, serverless, and storage, will seek to accelerate and scale automation through further AWS services.
Food retailer Albert Heijn, one of the most tech-savvy retailers in the Netherlands, said that it would further test self-scanning capabilities through computer vision (i.e., image registration) in Autumn 2020.
In August 2020, Ahold Delhaize, owner of bol.com, and Albert Heijn, invested in five supply chain companies to build next-generation products and services through the Supply Chain Seed Program in partnership with Venture Café. Companies receiving special attention included:
- End2End Solutions, a provider of Internet of Things (IoT) solutions aimed to improve supply chain visibility by addressing quality, compliance, security, logistics, and performance management.
- Evergreens Farms a vertical farming technology provider promoting solutions to enable farming regardless of weather conditions while delivering quality products.
- GoWheels! a provider of the sustainable and cost-effective cart and trolley wheels.
- NanoThings a provider of cold-chain traceability solutions leveraging IoT from source to store.
- Produce Pics a provider of computer vision applications to minimize food waste in the supply chain.
In May 2020, food retailer Plus deployed Sweden-based Pricer AB's electronic shelf label platform and SmartTag Power labels to enhance store performance and customer experience. Plus Retail has also integrated Pricer's cloud-based ESL platform (Pricer Plaza) for overall efficiency.
In March 2020, fashion and homeware retailer HEMA selected US-based software and consultancy company Blue Yonder over its existing DCM solution from Teradata to improve and manage the process and demand forecasting and replenishment capabilities through AI and ML prediction solutions.
Simultaneously, food retailer Jumbo continued to invest in its in-house Jumbo Tech Campus to attract talent to bolster its multidisciplinary teams. DevOps is a big focus for Jumbo as it used to take several weeks to bring a new product or service to market, with the firm now pushing releases out several times a day.
Additionally, Jumbo opened a new distribution center in 2020 in Nieuwegein. This center leverages RPA technology provided by German-based Witron. Order Picking Machines (OPM) and Dynamic Picking Systems (DPS) were deployed to move pallets and crates in roll containers automatically. The center further benefits from 13,500 solar panels and rainwater collection systems to ensure greater sustainability.
It’s clear that while the retail segment continues to grapple with an uncertain future, many of the firms in the Netherlands are willing to invest in technology if it helps them to solve ongoing challenges, or those specific to the unique cricumstances of the pandemic. For IT Providers, this creates a market filled with opportunity.
Recommendations for IT providers
- Dutch retail and wholesale businesses continue to lack an understanding of the Internet of Things' potential and how it applies to their business. Consultancy opportunities with a comprehensive business case may result in news deals.
- In adverse times with limited budgets, Dutch businesses are looking for fast ROI use cases.
- Partnering with partiers such as the Innovation Center for Artificial Intelligence, the AIRLab (AI for Retail Lab), or other local FieldLabs and digital hubs will provide IT suppliers with greater access to what retail and wholesale businesses need or expect from digital solutions and services.
- Dutch consumers know what they want, and this leads to greater personalization expectations. IT providers should focus on a narrative that provides customizable and flexible propositions.
- The Dutch government is increasingly in favor of open-source software and data sharing among different industry verticals. Therefore, IT providers should tailor their solutions with open-source in mind while at the same time ensuring regulatory compliance and data privacy is up to standards.
COVID-19 has led to many new supply chain challenges, leading retail and wholesale companies to plan for the future through digital and sustainable technologies. This trend is set to continue as food retailers are predicted to continue to grow over the coming years. The overall retail and wholesale market will have to find new solutions to compete with digital-savvy peers and build resilience in a post-pandemic scenario.