Wednesday, August 22, 2012

Dutch Department Stores Hema, Bijenkorf and V&D Are Facing Stiff Competition

The big Dutch department stores are under pressure. Hema, De Bijenkorf and V&D are facing stiff competition from the Heijn cooperation. Ahold (the holding company of Albert Heijn) bought online retailer for 350 million Euro.

The purchase was a smart move. had a turnover of 355 million Euro in 2011. It offers a range of products, such as books, electronics and toys. is considered to be one of the most visited retail website in the Netherlands and boasted of having 3.4 million active customers. It recorded sales of more than 17 million items during 2011.

As it looks now, only 2 retail stores will be around in another 20 years, only 2 will survive. Hema looks to be the leader of the pack since has a strong online presence. It is currently the fifth largest internet shop in the Netherlands. V&D is trying to catch up, while De Bijenkorf concentrates on enticing customers to make substantial purchases in their shops. 

The department stores can survive by position themselves cleverly. Ahold has introduce a three-prong approach:
  1. In store
  2. Online
  3. Collection points
Furthermore, they must integrate both online and shop floor. This is easier said than done, as this is also quite expensive. A good example of such a successful integration is the English brand Burberry.
The biggest challenge that the department stores are facing is managing costs. They also need to listen to their customers, and leverage collected data. 

It will be interesting to see how it will all pan out in the coming years.

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