SHELLEY BRANSTEN: Now let's hear from
an incredible retailer who is really
using technology to drive resiliency in their business.
That is Zabka Poland.
Today I want to welcome Tomasz Blicharski,
Executive Vice President,
Board Member, Managing Director
of Zabka Future at Zabka Polska.
Thank you so much for joining us, Tomasz.
TOMASZ BLICHARSKI: Thanks for having me.
I'm very much looking forward to our conversation.
SHELLEY BRANSTEN: Me too. Now,
Zabka is the largest convenience store change
in all of Europe.
A household name in Poland and I
think even maybe more importantly,
you guys are really changing
and challenging the status quo of
European retail convenience with
your rollout of autonomous stores.
Before we jump in anymore,
will you tell us a little bit about your company,
how your digital transformation journey
is building your reputation
as really the market challenger and innovator.
TOMASZ BLICHARSKI: I'm happy to do so.
As you mentioned, we are the leaders in convenience,
more than 9,000 stores but we don't really
consider ourselves a retailer or a pure retailer anymore.
We actually think about ourselves
as this convenience ecosystem
that obviously consists of more than 9,000 retail stores,
but also has this digital face to it.
We're the leaders in quick commerce in Poland,
we're the leaders in directly consumer meals,
we have the leading consumer app
that connects all of these dots,
and last but not least,
we're also operating the largest chain
of autonomous stores in Europe with more than 50 outlets.
SHELLEY BRANSTEN: It's really incredible.
I think, underneath that and all the technologies,
I love that you say that
your mission is to make lives easier,
which is so aligned with the Microsoft mission.
I've heard you say that going into
a Zabka store should be like opening
our refrigerator door at home.
Tell us what do you mean by that.
TOMASZ BLICHARSKI: Look, a lot of
retailers want
the customer to spend
as much time in their stores as possible.
They think about different ways
in how to the customers in
the store to increase
the basket size or increase the engagement.
For us, it's simple.
Our mission is to free up the free time of the consumer,
make their lives easier,
and we actually count
every second that the consumer is in the store,
and we want to make it even lower number.
The average time for a regular store is 106 seconds.
We actually are thinking,
the way we are organize ourselves,
the way we are thinking about our business is
actually to make this time lower.
What we do is try to
optimize the shopping experience to make
it as easy and as quick as possible.
SHELLEY BRANSTEN: Wow. That is,
as we would say in the US,
bucking the norm of usually traditionally,
the more dwell time in the store,
the higher the units per transaction,
the average order size.
But I assume you're saying
that it's actually as
you lower the amount of time in the store,
it's improving the customer experience
and your financials.
I think I know autonomous doors have been
a conversation in the retail industry for
a while and we are all so eager to hear more,
how do they work?
As I mentioned before, how the economics work?
How is customer adoption working?
Maybe you could share some of your early learnings.
TOMASZ BLICHARSKI: Autonomous has been big for
the last few years already.
We actually started thinking about it and
working on it already back in 2017, 2018.
We have started with an idea,
as I said, it's 106 seconds,
how can we shorter that?
How can we make it even more smooth?
How can we place stores in
retail lingo catchment areas
that were unavailable to us before?
Then we stumbled upon autonomous technology,
check out less stores back
in 2018 and we started developing
it with a partner with I-Phi, starting early 2018.
We're looking at how to optimize the customer journey,
but also the cost of
the technology which is super-important for any retailer.
In grocery, as you know,
everyone looks at the cost in great details.
The way the store works at the moment is
that this is camera only solution,
so deep learning,
computer vision only solution.
There are no shell sensors.
Everything is based on cameras and
only on these regular basic cameras.
Not depth cameras, which are expensive,
but simple, regular cameras.
From the customer's standpoint,
the customers enters the store using an app,
or also a credit or a debit card.
This is new and not all of
the solutions on the market have that possibility.
It's a dual track process for the customer.
This is to effectively lower
the barriers to entry to the store.
Once the customer enters into the store,
he or she takes a product and leaves.
There is no physical checkout process,
everything is done using technology
based on Cloud or based on other solutions.
Depending on if he or
she was using an app or a credit card,
it's either a receipt within that app,
or also a text message with a receipt.
That's it. It's simpler.
Actually, the checkout process traditionally
takes half of this 106 seconds.
This is eliminated to zero almost.
There you go. It's easier.
Secondly, the stores can be smaller,
because there's no physical checkout area.
Therefore you can place it in
locations where regular stores cannot be placed.
We even have stores within other stores.
For example, we have a big department stores,
we are able to place
a small convenience stores within that.
Or we have stores in student houses or in train stations,
but in very small real estate
where regular stores couldn't work.
All of this is possible
because of the auto checkout technology.
SHELLEY BRANSTEN: It's incredible
because as you said,
you start with thinking about how do I
bring the experience down to 106 seconds.
But you've built this whole business and a retail
to you around just some of these premises,
which I think for many retailers that I speak to,
the friction, if you will,
has always been,
how do I do this at the economics that
really work for me as a retailer?
You're describing un-manned or un-person stores
where you've removed the checkout.
But as I'm hearing you talk,
your vision really goes far beyond
that to true autonomous retail.
Can you tell us a little bit about that because
it's so unique in the market?
TOMASZ BLICHARSKI: One side of it is
unmanned so there is
no physical personnel within the store,
other than for a certain tasks such
as replenishment or clean up, etc.
There are no permanent staff members of the sort,
that's one side of it.
The autonomous means something more than that.
Autonomous store is a little bit like connecting
the dots between the physical store
and digital store or
digital tools and digital technology data port.
If you combine the two,
and we call it phygital,
for lack of better word maybe,
then you can get the additional value.
There is a lot of synergy that you can drive from using
the proper data within the whole equation.
SHELLEY BRANSTEN: It's exactly what we heard
Dan talk about earlier in
terms of customer experience, data,
and automation really coming
together to really drive again,
one of the key themes that we heard from
the research which is about profitability.
You've already accomplished so much in these stores.
I'm glad you call that I-Phi who's been
an incredible partner to us both.
As you blur your eyes and think about the future,
how do you see the future of retailer,
and for all of those who are
listening and looking to you,
how do other retailers prepare for the future?
TOMASZ BLICHARSKI: Obviously, nobody has
a perfect view of the future.
When I look at it, I'm thinking what
are the main consumer trends on one hand,
where is the labor market going
and how is the technology enabling all these shifts?
The way I see it is,
first of all, I'm looking at the world of ecosystems.
Retailers will be turning
into different ecosystem that will surround the consumer.
The brands of retailers are
getting stronger and stronger,
their connection with the consumer
is growing better and better.
The data enable a lot of
additional value add if they're used wisely.
The technology to drive value from
data is increasing at an exponential pace.
If you think about it that
enables buildup of the ecosystems.
More and more retailers as I hear,
look at it from that perspective.
I think that will only continue to grow.
That's on one level.
SHELLEY BRANSTEN: Sorry. Go ahead.
I interrupted you.
TOMASZ BLICHARSKI: Yeah.
Then on the other level,
if you think about it,
historically before that can bubble the Internet era,
all retailers they are brick-and-mortar.
Then we have retailers that
were online only and they've taken a lot of market share.
Now I believe we're
in this era that
there's going to be a combination of both.
What I see in different parts of the world is that
pure digital retailers are going into brick-and-mortar,
and brick-and-mortar retailers are going towards digital.
There is a combination of physical assets
and digital technology that enables to drive value.
I think if you combine what I've mentioned
before about the ecosystem and this approach,
we call it phygital, you can call it omni-channel.
There are different ways to approach it
but combination of this ecosystem approach and
physical and digital is something that is going
to continue to grow and dominate the marketplace.
SHELLEY BRANSTEN: I think that
is so well said.
For all of our audience,
this idea of ecosystems,
and you mentioned bringing a Zabka store into
a department store closer to students or universities,
and then this phygital or omni-channel.
Those two ingredients,
regardless of how the things we
cannot predict for the future of retail,
those are fantastic grounding principles
for all of us to think about
in terms of the investments that we're making for
the customer and with the technology.
Tomasz, thank you so much for joining us today.
Thank you for being an incredible partner to Microsoft.
Thank you for being an inspiration or
a beacon for retailers globally in terms
of innovation and sticking to it through
very complicated and tough times.
We cannot wait to see what you do next.
TOMASZ BLICHARSKI: Thank you so much.
Thank you so much for
the opportunity to speak and meeting you, Shelley.
I hope everyone had an interesting session.
SHELLEY BRANSTEN: Absolutely. I know
they did. Thank you.