Now that you have established this new, leaner retail organization, how do you envision the future of Billa’s business model? What are the future retail priorities you are aiming at?
The future of retail is personalization, supported by digitization and the right local entrepreneurship. Now that everything is under one brand and one leadership with one data backbone, we can better serve each individual store and customer. We can provide personalized products and services on site by being close to the customer, and this will be the role of brick-and-mortar retail. Only through digitization can we put together the optimal ranges and make the optimal quantities available.
Local entrepreneurship will also be an important factor. We are planning to establish a franchise system, which will coexist with the integrated retail branch system. We must promote entrepreneurship throughout the business and the retail organization. A major priority for me is to make the company faster and more agile. Instead of one big steamship, it will consist of many agile speedboats.
We must promote entrepreneurship throughout the business and the whole retail organization.
Let us talk a little about the context for this transformation. How and to what extent have retail customer trends and demands changed in recent years?
The retail customer was already becoming more individual, driven especially by digitization. This was accelerated by COVID. The online business grew 80% in the first year of COVID and another 25% in the second year. Digitization is also taking place in brick-and-mortar retail, where all processes and procedures are becoming digitized. In addition, order proposals, quantity planning, and the merchandise management system have been digitized. Digitization in retail is an incredibly exciting field that needs the right people to handle it.
You seem to be looking at digitization in retail as a means not only to scale and improve central decision making, but also to enable strong, decentralized entrepreneurship.
Exactly. That's a huge opportunity, and it fits the spirit of the times. Of course, every entrepreneur or franchisee must have the basic business under control. But, in addition, in physical retail he or she will always be closer to local customers and staff and make a difference to the local offer and to the engagement between staff and customers.
This strategy will also help to develop our management approach: The old, hierarchical, conservative management approach is already dead. The new management style is made even more dynamic by the interaction with franchises and is therefore much more cooperative, open, and flat.
As well as digitization in retail, sustainability has become really important for you. What role will it play in the future?
Everyone is now aware of the impact we have on the climate. We are the generation that still can do something. We are responsible for the quality of life of future generations. Sustainability in retail is therefore not a niche topic; it runs through the entire company. For example, we built the first green building in Styria, and we have 100% green electricity in all our stores across our network. This renewable energy does not just reduce CO2 emissions; it also reduces costs. Ecological and economic goals go hand in hand.
During COVID, we had delivery delays for international products, and people became more aware of the distances involved: Today, there is a strong desire for regional products. A high proportion of our fresh products are regional, and fresh meat, eggs, milk, bread, and pastries come 100% from Austria. Regional products of course also have the advantage of being readily available.