The Transformation of Supermarkets: From Products to Digital Platforms

18

September

2024

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Purchasing goods in bulk, stocking shelves, and selling to customers; this is how supermarkets used to operate as they were using a traditional product-based business model. Over time, supermarkets evolved by integrating technology, such as self-service, price scanners, and loyalty programs (Sundarabharathi & Muthulakshmi, 2023). The landscape is changing rapidly as supermarkets shift toward a digital platform business model. This shift focuses on personalized experiences, with data analytics predicting consumer behavior and adapting to innovations (Sundarabharathi & Muthulakshmi, 2023). One key player embracing this transformation is Albert Heijn, a Dutch supermarket chain leading the way in digital innovation.

Albert Heijn was the first Dutch supermarket who took the omnichannel approach where in-store meets online (Albert Heijn Launches Subscription, ‘My Albert Heijn Premium’, 2021). The introduction of digital tools, like Albert Heijn’s bonus card and mobile app “AH app”, have transformed the way customers interact with the brand. Their bonus card initially started as a loyalty card for discounts, but has since evolved into a sophisticated data-gathering tool. The combination of the bonus card and the multifunctional AH app, lets Albert Heijn track customers’ shopping habits. With the use of artificial intelligence, the supermarket can recommend personalized offers, recipes based on what you buy, and even predict future purchases. This personalized shopping experience keeps customers engaged while generating valuable data.

As these apps and digital tools grow in functionality, they are part of a broader trend where supermarkets collect an increasing amount of data. Every interaction, from the products scanned to online searches, feeds into algorithms that help supermarkets optimize inventory, suggest new products, and refine marketing strategies. This approach transitions supermarkets from merely being places to purchase goods to digital platforms that provide value-added services based on consumer behavior.

The future allows supermarkets to become even more platform oriented due to new technological innovations and upcoming trends. There are different opportunities around the corner for supermarkets to make this transformation. Examples are the replacement of barcodes with QR codes in 2027 in the Netherlands and Artificial Intelligence becoming more sophisticated (DigitalTrends, 2023)(NOS, 2024).

As supermarkets adopt these technologies, their business models will need to continue evolving towards more digitally-driven, data-powered operations. It is interesting to see how it affects the business models of supermarkets like Albert Heijn right now, and how it will develop in the future years. How far can we transform to this digital platform model and will the traditional physical supermarket as we know disappear completely in the future?

References:

Albert Heijn launches subscription, ‘My Albert Heijn Premium’. (2021, 27 oktober). https://www.aholddelhaize.com/en/news/albert-heijn-launches-subscription-my-albert-heijn-p

remium/

DigitalTrends. (2023, 19 juli). How Artificial intelligence (AI) is becoming increasingly sophisticated. Medium. https://medium.com/@digitaltrends1/how-artificial-intelligence-ai-is-becoming-increasingly-sophisticated-4b837f7e31ba

NOS. (2024, 26 juni). De streepjescode bestaat 50 jaar, maar het einde nadert. https://nos.nl/artikel/2526164-de-streepjescode-bestaat-50-jaar-maar-het-einde-nadert

SUNDARABHARATHI, M., & MUTHULAKSHMI, C. (2023). American Supermarkets – PAST, Present Vs. Future Trends and Technologies. In G. Venkataswamy Naidu College & Manonmaniam Sundaranar University, Res Militaris (Vol. 13, Nummer 2, pp. 6270–6271).

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Is freelancing the future of working?

11

October

2022

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Gig economy has caught a lot of attention in recent years. It can be defined as a labor market in which employers rely heavily on independent contractors and freelancers rather than full-time permanent employees (Chappelow, 2019). Growth of the gig economy is being fueled by digital platforms that allow contractors to connect with employers. Gross volume of the gig economy in the United States is projected to reach 455 billion U.S. dollars in 2023 (MasterCard, 2019). Currently, there are over 70 million freelancers in the US and they are forecasted to make up more than half of the country’s workforce in 2027 (Upwork, 2017).

Uber and Airbnb are the companies that are getting the most attention, however, the complexity of work done through freelancing is limited not only to transportation and accommodation industries. Very exciting part of the freelancing market are freelancing platforms which allow professionals from different fields to connect with exciting opportunities from all around the world and earn additional or even the main source of income. Some of the most popular skill areas for digital freelancers include IT, design, sales, marketing, writing, customer support, finance, engineering and legal. There are multiple platforms that allow for professionals to connect with companies, namely Toptal, Fiverr, Freelancer.com and Upwork. The last one is currently dominating the market, so it will serve as a basis for this evaluation.

Being a digital platform, Upwork facilitates the interactions between companies and freelancers. What made the company such a success story are its additional functionalities that make the process of signing the contract safe and simple. Firstly, hiring companies can see the portfolios of freelancers which serve as proof of the quality of their work. Additionally, employers bear any costs only after the work has been approved by them, so the risk of having to pay for work of inadequate quality is reduced virtually to zero. Moreover, the company emphasizes its focus on data security and privacy (Upwork, 2022). All these factors contribute to the fact that the average rating of professionals by clients stands at 4,9 out of 5. Main company’s values – freedom from the physical office, flexibility and efficiency – don’t come without their shortcomings (Popiel, 2017). Notable trade-offs of freelancing on the platform include the infrequency of work, intense global competition and barriers to high wages (Popiel, 2017).

Is freelancing the future of working, though? In 2020 the freelancers on Upwork earned $2.3 billion cumulatively – given the fact that there are millions of contractors registered on the platform, it does not seem like much (Upwork, 2022). My prediction is that freelancing will be becoming increasingly important in the coming years, but we won’t see 9-5 jobs coming away anytime soon. I believe that stable, indefinite employment contracts with all benefits that come with them will still be of preference for the substantial part of workers.

References

Chappelow, J. (2019). Gig Economy. [online] Investopedia. Available at: https://www.investopedia.com/terms/g/gig-economy.asp.

MasterCard. (2019). Projected gross volume of the gig economy from 2018 to 2023 (in billion U.S. dollars). Statista. Statista Inc.. Accessed: October 09, 2022. https://www.statista.com/statistics/1034564/gig-economy-projected-gross-volume/

Popiel, P. (2017). ‘Boundaryless’ in the creative economy: assessing freelancing on Upwork. Critical Studies in Media Communication, 34(3), pp.220–233. doi:10.1080/15295036.2017.1282618.

Upwork. (2017). Number of freelancers in the United States from 2017 to 2028 (in millions). Statista. Statista Inc.. Accessed: October 09, 2022. https://www.statista.com/statistics/921593/gig-economy-number-of-freelancers-us/

Upwork. (2022). Upwork | Hire Freelancers. Make things happen. [online] Available at: https://www.upwork.com.

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The Break-Up of Ant’s Alipay – When Platforms Become Too Powerful

1

October

2021

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Imagine powerful tech companies such as Google knew about every single item that you have purchased, both offline and online, in your entire life. Now skip the imagination, because if you were to use an online payment platform your entire life, they would. 

As more and more people use online payment services for their own convenience, online payment platforms are fast gaining in popularity. One of such online payment platforms is Alipay. Alipay is a Chinese mobile and online payment platform that was created as the payment arm of the large Chinese eCommerce website called Taobao (Ant Group). With over 1 billion users, Alipay says they have created “an inclusive digital ecosystem accessible to everyone” (Alipay, n.d.). 

They make it sound great. Yet, there are concerns that Alipay is so dominant that no one can compete with them (Ovide, 2020). As a result, China decided to break up Alipay last month (Yu & McMorrow, 2021). To understand how Alipay can be ‘broken up’, it is important to first understand how Alipay operates. The image shows the revenue streams of Alipay (Cuofano, n.d.). As you can see, their revenues consist of escrow fees, also known as transaction fees, ancillary services and credit pay instalment fees. The latter refers to the highly lucrative lending business and is, not surprisingly, the part China wants to separate from Alipay.
In addition to separating Alipay’s lending business from its main business, officials have stated they want the separated business to have its own independent app. Notably, this would require Ant Group to turn over the user data that determines its lending decisions to a new credit scoring joint venture, which would be partly state-owned (Yu & McMorrow, 2021). The main reason being that big tech’s monopoly of power comes from their control of data, and China wants to end that. 

Though it might seem just to control a company that becomes ‘too’ powerful due to possession of user data, it feels unjust that a government can restrict this way of operating by obliging an online platform to be split-up and most importantly, hand over the data. 

This raises the modern dilemma on data: who is morally justified to take data ownership, and thus become powerful?

References
Alipay. (n.d.). Accessible digital payments for everyone. Retrieved from https://global.alipay.com/platform/site/ihome
Cuofano, G. (n.d.). How Does Alipay Make Money? The Alipay Business Model in a Nutshell. Retrieved from https://fourweekmba.com/how-does-alipay-make-money/
Ovide, S. (2020). Don’t Even Try Paying Cash in China. The New York Times. Retrieved from https://www.nytimes.com/2020/10/27/technology/alipay-china.html
Yu, S., & McMorrow, R. (2021). Beijing to break up Ant’s Alipay and force creation of separate loans app. Financial Times. Retrieved from https://www.ft.com/content/01b7c7ca-71ad-4baa-bddf-a4d5e65c5d79

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