Retail is incapable to master digitization under its own steam alone

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Retailers should be open to develop partnerships and cooperations with, for example, big tech companies and digitial solution providers. They are not able to reinvent the wheel nor have they the resources and expertise to develop their digital offerings by themselves. Speed of digitization matters.

Case

REWE

 

The supermarket chain REWE ramps up its last mile delivery services. The group-owned marketplace was discontinued and investments are now directed towards fullfillment and payment tools. A mayor strategic move was the engagement into the last mile delivery startup Flink. From now on REWE is the exclusive supplier of all delivered goods. With this move, REWE intends to keep up with pandemic-fueled market developments and strengthen its long-term positioning in the eFood sector.


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Six years ago, IT was still the bottleneck and we had to completely reorganise the whole organisation. Now, however, IT plays a key role in developing the business models. We work in a completely agile way and at eye level with each other. I see myself as a coach in this process. Thinking from the perspective of the end customer involved a major transformation of the business concept and required new thinking throughout the organisation. It’s about attitude and taking responsibility. Because such a transformation is in fact never over and cannot be driven from the outside.

Benjamin Beinroth

Fressnapf

The retail sector has no choice but to digitize under its own steam. Retailers often get in their own way and want the big solution from the start without thinking specifically about the customer journey that applies to the respective customer group and business model. If you really focus on what is important for your customer and on which processes and touch points you currently have, you can identify where to begin with digitization. Only then should you think about (external) solution providers. In my opinion, customer added value in the customer journey takes precedence over technical excellence!

External partners’ innovative know-how is extremely important – which is why, it will never work without partners. For a change process to be successful, you need a critical mass of the right people who are capable of influencing the company. People that embody the required culture and experience need to be present to help others in the change process. This is particularly the case in IT and related business areas as well as for the recruiting of recruiting new professionals.

Frank Postel

Breuninger

Retail requires external input and sources of inspiration in order to be able to develop novel approaches with other service providers. This includes other industries, such as hospitality, healthcare and other services.

Retailers don’t require their own developers, but they do need project managers who have the knowledge needed to bridge the gap between their own business model and the technical service provider.

The development of the Digital Mall by ECE aiming at making the center’s offer visible to customers…that was the beginning. In the future, the mall will also be used as an urban logistics hub. For this purpose, “Stocksquare”, a joint venture between ECE and Otto, will serve as a bridge between online and brick-and-mortar retail. From the center / mall onwards, “Ship from Store” will be used to create additional sales channels and increase space productivity. Another goal is to accelerate the last mile to the customer by offering a delivery service on a bicycle.

Klaus Rethmeier

ECE Hamburg

It depends a lot on the people and the mindset. The speed in digitization is so brutally high and many retailers are left behind behind. That means they need a lot of money to become more digital. And the companies also need to have the right people to bring that expertise too. Another aspect: does the board have a digital strategy? And what USP, i.e. what tech competence do you have as a retailer? An Amazon has set the bar high, especially in terms of supply chain and logistics, completeness of the product range, the targeting accuracy in the customer approach, and a seamless customer experience across all areas. The opportunity is there, but the challenges are great. We are not the better retailers if we have technology at our disposal. Technology itself is not the differentiating factor in the market. That means retailers themselves have to create something new with the technology that’s available which makes them unique. It’s the job of the retailer.

Axel Kress

Microsoft

I think retailers can’t do it because they don’t understand digitalization yet. So, digitalization does not mean putting a screen in the store and playing videos. It is something accompanying and emotionalizing that, in the end, actively supports the entire sales process and the brand experience. Digitization can go so far in the future that the store is only a “point of experience”, the actual purchase is made online and is delivered to your home. That means that the topic of digitization needs to be understood much more as an hidden support. Something from which the customer and sales associate must benefit noticeably.

Retailers can definitely manage digitization on their own, it’s just a question of speed. I believe that retailers have a better sense of their customers’ acceptance. So it’s not about digitization for its own sake, but simply to make sure that the speed at which you digitize things always keeps pace with the customer, to see how far the customer will go with you. That’s why so-called hybrid models are often offered. This way you say: Dear customer, you can decide yourself what you want.

Antje Brüning

Westlotto

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