Żabka’s Rise as an Autonomous Retail Leader
From June 2021 to July 2022, Żabka, in partnership with Netguru, opened 50 fully autonomous stores across Poland. This rapid expansion highlights Żabka’s leadership in the convenience sector. Starting as a franchise of small brick-and-mortar shops in 1998, Żabka has transformed into a technology-driven powerhouse, outpacing even Amazon in the rollout of checkout-free stores.
Żabka doesn’t just respond to customer demands; it proactively shapes its business environment. Adam Manikowski, Żabka’s managing director, noted in a recent interview with McKinsey & Company that “time is becoming the new currency.” This focus on saving customers time is the driving force behind innovation in the convenience sector.
Amazon, a major player in this field, launched its checkout-free Amazon Go store concept in 2016. These stores, developed alongside Amazon Fresh, were a notable expansion for the e-commerce giant. Żabka, however, took a different approach. As a brick-and-mortar leader, it embraced digital transformation to maintain its competitive edge. This digital evolution started in 2016, using technology to drive direct growth. They developed an AI system to speed up the opening of new stores, becoming a data-driven company. The establishment of the Żabka Future unit, which now represents 15% of the company’s workforce, further emphasizes this commitment to innovation.
While Amazon Go’s expansion has been slower than initially planned, with only 24 stores opened by 2021, Żabka has quickly gained ground. The competition is also working on similar initiatives; for example, 7-Eleven has rolled out its ninth Evolution store with delivery and mobile app checkout, and REWE has opened its second autonomous grocery store in Germany. However, Żabka is currently leading the European market. The first autonomous Żabka Nano store opened in June 2021, and by July 2022, 50 locations were already operational.
Żabka Nano stores offer a completely frictionless shopping experience. Customers enter using the Żappka app or a payment card, select their items, and leave. This is made possible by AI-powered computer vision and other systems.
This success is attributed to Żabka’s long-term commitment to innovation, speed, and digital resilience, a dedication to digital acceleration.
The Keys to Successful Digital Acceleration
To succeed, Żabka displays the need to move fast and deliver quickly while maintaining a broad outlook to stay focused on long-term goals. This involves:
- Long-term thinking and broad perspective
- Digital acceleration as an explorative journey
- Development guided by product life cycle
1. Long-term Thinking and Broad Perspective
In the Żabka project, the team was responsible for creating the engine for complex systems. This included product scanning, frictionless payments, image recognition, and more. This required long-term thinking to keep track of project goals and suggest alternatives when needed.
Long-term thinking also means not expecting immediate ROI. Rather, it involves building new revenue streams that may take years to fully mature while protecting the business from obsolescence. Digital acceleration is like a journey with constant adjustments.
2. Digital Acceleration as an Explorative Journey
Agile methodologies have become dominant in the IT industry, but a change in mindset is also important. Initial project assumptions must be treated as testable and not set in stone. Market leaders understand that innovation involves exploration, and not all explored paths lead to success. The key to productive exploration is fast experimentation and continuous testing.
As Steve Jobs said, “You can’t connect the dots looking forward; you can only connect them looking backwards.” Digital acceleration requires constant decision-making, discovery, and delivery.
According to Mateusz, Lead Project Manager at Netguru, “With digital acceleration, the first phase of the project is always uncertain. The way through that uncertainty is to fail fast, and swiftly adapt to the ever-evolving context of the project.”
3. Development Through the Lens of Product Life Cycle
Compromise is essential to the understanding of product development. There must be compromise between the business perspective and product development. Viewing projects through the lens of the product life cycle helps find this compromise. Development priorities change between initial project stages and every following stage. Courage is needed to transform customer behaviors.
The Future of Retail
Leading companies like Żabka are driving the future of retail by committing to innovation, making rapid decisions, and adapting to customer expectations. This is the essence of digital acceleration.
Mateusz Czajka, Chief Delivery Officer at Netguru, is responsible for delivering top-quality, innovative…
