Oliver Wyman partner Coen de Vuijst sits down with Wouter Kolk, former CEO of Ahold Delhaize Europe and Indonesia. They discuss the changes in the retail industry, focusing on how core principles like product assortment, pricing, and customer focus have stayed the same despite significant shifts driven by digital technology and changing consumer behavior.

They address the rising importance of sustainability in retail, highlighting the need for transparency, and examine how recent global events have impacted supply chain resilience and the value of long-term supplier relationships.

The conversation includes Wouter's views on retail leadership, the challenges of attracting talent in a competitive market, and the future of the industry, including potential consolidation among various retail formats. This video provides insights into the current state and future direction of retail, along with leadership strategies for new professionals.

Coen de Vuijst

I am Coen de Vuijst, managing partner of Oliver Wyman Netherlands. I'm here with Wouter Kolk, former CEO of Ahold Delhaize Europe and Indonesia. Wouter, thanks for joining us.

Wouter Kolk

Well, thank you for hosting me. It's nice to be here.

Coen

Needless to say, you have many years of experience in retail, but I wonder, if you look back, what has remained the same in retail, and what has really changed? What are the major kind of changes you observed?

Wouter

It's still all about the products, assortment, price, quality, and how you set things. But the essence of retail, I would say is still the same. A lot of things have changed, but I think that core is still the same. And you see when brands are losing the plot, they most of the time lose the focus on the customer, on the essence of what they are really all about in terms of the basic marketing principles. They completely lost the path, and that has not changed, and I think will not change.

Coen

What are the biggest changes that you do observe versus when you started?

Wouter

Well, if you look at when I really started, it was a real long time ago, but I think there are a couple of areas where significant change has been made. If you look at digital and online. I think the digital evolution, the contact with your customers has completely changed and still will change a lot.

If you look at stores itself, non-food has slowly moved out and more fresh and food for now departments have improved. There also a big evolution has happened, stores have become more digital, more like marketplaces in terms of advertising and communicating with customers.

That has become much more intense. Areas as sustainability, food waste, plastic, a lot of topics there did not exist or were not that present back then and are now very dominant.

Coen

Let's start with sustainability. How do you see the role of the retailer in this domain? Some say the retailer is just there to offer the variety of options, from sustainable to less sustainable and let the customer choose, Or do you believe there's a stronger role for retail to curate and to pre-select?

Wouter

I think that's a difficult topic, to be honest. My belief was always that you should offer the choice to customers and that they choose. What kind of system works well for the customer that they can easily make a good choice.

I mean, at least show the customers that is A, and that is B, C, D, E. You choose. And we will need the same for environmental friendly products. If you want to reduce your CO2 footprint and as a customer you would like to choose the best CO2 option, we need similar systems for that.

Coen

So, giving the transparency to the consumer and let them choose, okay. So, Wouter the world has been, to put it mildly, fairly dynamic over the last couple of years with of course COVID having a huge impact on society, but also on business. Followed by the Ukraine situation.

And those events also had big effects on the retail industry at large, including the supply chain. Do you think about supply chain resilience and security of supply differently now than you did say five years ago?

Wouter

I think there are a couple of dimensions here. Things that come from far away, can we bring it closer? Can we produce it closer? I think about different relationships with suppliers.

We have strategic partners, with whom we have long-term relationships.

Instead of every year we start again to see who's the best. Maybe we say, okay, we should engage into three-to-five-year agreements. So, that the farmers or the growers have more continuity.

Coen

And then in order to reduce the risk and increase resilience, do you then deliberately choose for dual sourcing or having multiple options?

So, you can fall back on a plan B?

Wouter

It's more about having a circle of friends in terms of who you can work with, on a European level or in the US, and grow your network.

But on the other hand, if there is scarcity, they can also easily have other alternatives, and then it's better to commit to one or two partners for a longer-term and then have agreements on open book calculations or certain prices, and that helps everybody.

Coen

So, we've seen retailers evolve from traditional retail more towards almost becoming a tech company. How do you attract the right talent to a retailer versus your competition in the labor market, which is the tech companies themselves?

Wouter

In the old days, retailers were more classic tech companies, of which I would say they were implementing a system. No real development or evolution.

Now the retailers are more sophisticated. So, there's more development, there is almost the same work as you would have when you work at Google or similar. So, I think there is a shift in terms of what they can do.

But the nice thing about working at a retailer, is you can be doing meaningful stuff. You can nudge customers to eat healthier. You can develop and test new products quicker. You can help with technology to reduce food waste.

I think now it's not only just tech for tech, but it's tech also for a real purpose. I think for a lot of tech talent, it's very interesting to work for retailers, who are open for that.

Coen

Over time we've seen the eternal battles between big box formats and smaller formats, ELP versus high-low, of course the rise of online. And then the pure online players competing against the omnichannel players.

Where does this go in the next 10 years? Do you see massive consolidation? Do you see one format winning versus others? How do you see things unfold?

Wouter

Consolidation is happening everywhere. Scale matters in retail because it's super competitive, the margins are still low and over the years have come down and they're not going to come back up.

So, I think consolidation will happen. Because of what we just talked about, for example, technology and sustainability and all the other responsibilities that retailers will have.

Coen

It raises the bar on scale.

Wouter

Completely and makes for somebody to start very difficult. Even a lot of formats, discount or service supermarkets will start to look more the same. Because even the discounters start to become more digital. Some of them are also going online.

You see that they're also improving their stores, improving their ranges.

They sometimes also not only have private label, but also A-brands. You see that the service supermarkets become leaner and meaner. There will be more consolidation, and I think everybody is moving slightly in the same direction.

Coen

So, Wouter you've had many different management roles and of course increasing level of responsibility. How would you describe your management style, the way you lead, and how has that evolved along your career?

Wouter

When you start to lead teams in the beginning you feel insecure. I must say that I was in the beginning not so aware of what kind of impact you have on people and on teams. What you do matters.

Coen

So, lead by example?

Wouter

But it's also sometimes very symbolic. If you find it important that you make good contact with a lot of people in a store, then make good contact, but you have to do it yourself.

I find context also very important. Like where are we going? What is the situation? Why are we doing things? And then I think what I like a lot is to agree on the what. Okay, what are we going to do? What are we going to achieve? But how you do it is really up to you or up to me.

Coen

What lessons learned would you have for say, the new generation that is starting their career?

Wouter

What is so nice about retail, and why I liked it a lot is that it's very tangible. A lot of businesses are run on spreadsheets and on PowerPoints, but here you can actually see it, and try and test things quickly to see how customers are responding. How are employees responding. And when you really think like, okay, I've tried it in 10 stores, I've talked to customers and it's not flying. Forget about it. Okay. I was like, okay, that was a stupid idea. Let's go and move on.

Coen

I've got a question around how you've balanced work and life, because as a manager with such big responsibilities, it’s easy to get, completely swamped with work.

You've always come across as fairly relaxed and healthy. How have you managed that balance and what would be your advice for people to stay sane for a longer period of time?

Wouter

I think a couple of things are important for me. First is structure. I've always tried to build a good structure in terms of when do I meet people? When do I see people? I try to manage my agenda really well.

I think also discipline. So, it's always good to plan wide spaces where you can deal with situations so that not everything is clogged up when something happens. And it's good to understand how you like to work as a person. So, that you also have planned time for yourself to relax and unwind and feel healthy and fit.

Coen

Well, Wouter, many thanks for sharing your experience. I think very useful learnings, also for the new generation that is coming up. So, thank you very much.

Wouter

You're welcome. It was exciting to be here, and I love the topic, I love the business, so happy to talk about it. Thank you.

Oliver Wyman partner Coen de Vuijst sits down with Wouter Kolk, former CEO of Ahold Delhaize Europe and Indonesia. They discuss the changes in the retail industry, focusing on how core principles like product assortment, pricing, and customer focus have stayed the same despite significant shifts driven by digital technology and changing consumer behavior.

They address the rising importance of sustainability in retail, highlighting the need for transparency, and examine how recent global events have impacted supply chain resilience and the value of long-term supplier relationships.

The conversation includes Wouter's views on retail leadership, the challenges of attracting talent in a competitive market, and the future of the industry, including potential consolidation among various retail formats. This video provides insights into the current state and future direction of retail, along with leadership strategies for new professionals.

Coen de Vuijst

I am Coen de Vuijst, managing partner of Oliver Wyman Netherlands. I'm here with Wouter Kolk, former CEO of Ahold Delhaize Europe and Indonesia. Wouter, thanks for joining us.

Wouter Kolk

Well, thank you for hosting me. It's nice to be here.

Coen

Needless to say, you have many years of experience in retail, but I wonder, if you look back, what has remained the same in retail, and what has really changed? What are the major kind of changes you observed?

Wouter

It's still all about the products, assortment, price, quality, and how you set things. But the essence of retail, I would say is still the same. A lot of things have changed, but I think that core is still the same. And you see when brands are losing the plot, they most of the time lose the focus on the customer, on the essence of what they are really all about in terms of the basic marketing principles. They completely lost the path, and that has not changed, and I think will not change.

Coen

What are the biggest changes that you do observe versus when you started?

Wouter

Well, if you look at when I really started, it was a real long time ago, but I think there are a couple of areas where significant change has been made. If you look at digital and online. I think the digital evolution, the contact with your customers has completely changed and still will change a lot.

If you look at stores itself, non-food has slowly moved out and more fresh and food for now departments have improved. There also a big evolution has happened, stores have become more digital, more like marketplaces in terms of advertising and communicating with customers.

That has become much more intense. Areas as sustainability, food waste, plastic, a lot of topics there did not exist or were not that present back then and are now very dominant.

Coen

Let's start with sustainability. How do you see the role of the retailer in this domain? Some say the retailer is just there to offer the variety of options, from sustainable to less sustainable and let the customer choose, Or do you believe there's a stronger role for retail to curate and to pre-select?

Wouter

I think that's a difficult topic, to be honest. My belief was always that you should offer the choice to customers and that they choose. What kind of system works well for the customer that they can easily make a good choice.

I mean, at least show the customers that is A, and that is B, C, D, E. You choose. And we will need the same for environmental friendly products. If you want to reduce your CO2 footprint and as a customer you would like to choose the best CO2 option, we need similar systems for that.

Coen

So, giving the transparency to the consumer and let them choose, okay. So, Wouter the world has been, to put it mildly, fairly dynamic over the last couple of years with of course COVID having a huge impact on society, but also on business. Followed by the Ukraine situation.

And those events also had big effects on the retail industry at large, including the supply chain. Do you think about supply chain resilience and security of supply differently now than you did say five years ago?

Wouter

I think there are a couple of dimensions here. Things that come from far away, can we bring it closer? Can we produce it closer? I think about different relationships with suppliers.

We have strategic partners, with whom we have long-term relationships.

Instead of every year we start again to see who's the best. Maybe we say, okay, we should engage into three-to-five-year agreements. So, that the farmers or the growers have more continuity.

Coen

And then in order to reduce the risk and increase resilience, do you then deliberately choose for dual sourcing or having multiple options?

So, you can fall back on a plan B?

Wouter

It's more about having a circle of friends in terms of who you can work with, on a European level or in the US, and grow your network.

But on the other hand, if there is scarcity, they can also easily have other alternatives, and then it's better to commit to one or two partners for a longer-term and then have agreements on open book calculations or certain prices, and that helps everybody.

Coen

So, we've seen retailers evolve from traditional retail more towards almost becoming a tech company. How do you attract the right talent to a retailer versus your competition in the labor market, which is the tech companies themselves?

Wouter

In the old days, retailers were more classic tech companies, of which I would say they were implementing a system. No real development or evolution.

Now the retailers are more sophisticated. So, there's more development, there is almost the same work as you would have when you work at Google or similar. So, I think there is a shift in terms of what they can do.

But the nice thing about working at a retailer, is you can be doing meaningful stuff. You can nudge customers to eat healthier. You can develop and test new products quicker. You can help with technology to reduce food waste.

I think now it's not only just tech for tech, but it's tech also for a real purpose. I think for a lot of tech talent, it's very interesting to work for retailers, who are open for that.

Coen

Over time we've seen the eternal battles between big box formats and smaller formats, ELP versus high-low, of course the rise of online. And then the pure online players competing against the omnichannel players.

Where does this go in the next 10 years? Do you see massive consolidation? Do you see one format winning versus others? How do you see things unfold?

Wouter

Consolidation is happening everywhere. Scale matters in retail because it's super competitive, the margins are still low and over the years have come down and they're not going to come back up.

So, I think consolidation will happen. Because of what we just talked about, for example, technology and sustainability and all the other responsibilities that retailers will have.

Coen

It raises the bar on scale.

Wouter

Completely and makes for somebody to start very difficult. Even a lot of formats, discount or service supermarkets will start to look more the same. Because even the discounters start to become more digital. Some of them are also going online.

You see that they're also improving their stores, improving their ranges.

They sometimes also not only have private label, but also A-brands. You see that the service supermarkets become leaner and meaner. There will be more consolidation, and I think everybody is moving slightly in the same direction.

Coen

So, Wouter you've had many different management roles and of course increasing level of responsibility. How would you describe your management style, the way you lead, and how has that evolved along your career?

Wouter

When you start to lead teams in the beginning you feel insecure. I must say that I was in the beginning not so aware of what kind of impact you have on people and on teams. What you do matters.

Coen

So, lead by example?

Wouter

But it's also sometimes very symbolic. If you find it important that you make good contact with a lot of people in a store, then make good contact, but you have to do it yourself.

I find context also very important. Like where are we going? What is the situation? Why are we doing things? And then I think what I like a lot is to agree on the what. Okay, what are we going to do? What are we going to achieve? But how you do it is really up to you or up to me.

Coen

What lessons learned would you have for say, the new generation that is starting their career?

Wouter

What is so nice about retail, and why I liked it a lot is that it's very tangible. A lot of businesses are run on spreadsheets and on PowerPoints, but here you can actually see it, and try and test things quickly to see how customers are responding. How are employees responding. And when you really think like, okay, I've tried it in 10 stores, I've talked to customers and it's not flying. Forget about it. Okay. I was like, okay, that was a stupid idea. Let's go and move on.

Coen

I've got a question around how you've balanced work and life, because as a manager with such big responsibilities, it’s easy to get, completely swamped with work.

You've always come across as fairly relaxed and healthy. How have you managed that balance and what would be your advice for people to stay sane for a longer period of time?

Wouter

I think a couple of things are important for me. First is structure. I've always tried to build a good structure in terms of when do I meet people? When do I see people? I try to manage my agenda really well.

I think also discipline. So, it's always good to plan wide spaces where you can deal with situations so that not everything is clogged up when something happens. And it's good to understand how you like to work as a person. So, that you also have planned time for yourself to relax and unwind and feel healthy and fit.

Coen

Well, Wouter, many thanks for sharing your experience. I think very useful learnings, also for the new generation that is coming up. So, thank you very much.

Wouter

You're welcome. It was exciting to be here, and I love the topic, I love the business, so happy to talk about it. Thank you.