From June 2021 to July 2022, Żabka, in partnership with Netguru, opened 50 fully autonomous stores across Poland. Żabka, a leader in the convenience sector, has rapidly transformed from a 1998 franchiser of small brick-and-mortar shops to a technology-driven entity outpacing even industry giants like Amazon in the rollout of checkout-free stores.
When examining Żabka’s success, it’s clear they don’t simply react to customer demands but proactively shape their business environment. They are leading the market by embracing change.
Leading the Market by Owning the Change
Adam Manikowski, Żabka’s managing director, noted in a recent interview for McKinsey & Company that “time is becoming the new currency.” Saving time for customers is a primary driver of innovation in the convenience sector. This brings Amazon to mind. While they’ve been planning to launch drone deliveries by the end of 2022 (after a decade of development), they promoted their autonomous, no-checkout Amazon Go store concept back in 2016. Developed alongside their Amazon Fresh stores, it was a surprising move for the digital-first e-commerce giant to enter brick-and-mortar grocery retail.
Żabka found itself in the opposite situation. As a leading brick-and-mortar store franchise, they chose to evolve digitally to stay competitive. Also in 2016, Żabka embarked on its digital transformation.
They began leveraging technology to drive growth directly. They built an AI system to accelerate new store openings and became data-driven. They also launched the Żabka Future unit, focused solely on innovative projects, which now comprises 15% of Żabka’s entire workforce.
Meanwhile, between 2016 and now, Amazon Go’s expansion has slowed. The initial store opened in 2018, with plans for 3,000 locations in the US by 2021. However, only 24 stores actually opened, along with 38 cashierless Amazon Fresh stores across the US and the UK.
What about the competition? 7-Eleven announced in a recent press release that they have introduced their ninth Evolution store, featuring delivery and checkout via a mobile app. In Germany, the supermarket chain REWE has opened its second autonomous grocery store. Similarly, small-scale rollouts are occurring worldwide, but Żabka is already leading the race, having only just begun. In June 2021, they opened their first autonomous Żabka Nano store, and by July 2022, they had 50 operational locations. They have clearly dominated the autonomous store market in Europe, surpassing all competitors.
Żabka Nano stores don’t have baskets, cashiers, or counters. To shop, you simply use the Żappka app or a payment card to enter, grab what you need, and then walk out. This seamless shopping experience is powered by AI-driven computer vision and other sophisticated systems.
How Did They Make This Happen?
This accomplishment is a direct result of Żabka’s long-term commitment to cultivating innovation, speed, and digital resilience within their business. In other words, it’s the result of digital acceleration.
Long-Term Thinking and True Commitment to the Future
To succeed at digital acceleration like Żabka, you must move quickly, producing deliverables on a daily basis. Simultaneously, you need a broad understanding of the project to keep track of the stage you’re at and what its main priorities are. In short, speed needs to be combined with a commitment to long-term goals.
I see three key elements enabling this:
- Long-term thinking and broad perspective
- Digital acceleration as an exploratory journey, not a pre-defined plan
- Development guided by the product life cycle
Let me explain:
1. Long-term Thinking and Broad Perspective
In Żabka’s project, our team was responsible for creating the engine for multiple complex systems to work as one ecosystem. Product scanning, frictionless payments, image recognition, automated doors, telemetry, movement sensors, and more needed to be integrated into a scalable, cloud-based backbone for their autonomous stores. That’s a lot of components, and each came with evolving expectations. Had we become bogged down on any single element, the whole project would have been delayed. Long-term thinking is crucial in such an environment.
You must continually monitor project goals (and their respective KPIs), assess their relevance, and propose alternatives when needed. This ensures that key project stakeholders are aligned. If they’re not, the volatile project environment can easily lead to frustration. Also, a longer-term perspective means that you don’t expect an immediate ROI from the project. You’re building new revenue streams that may fully materialize over a few years, while also protecting your business from becoming obsolete.
A digital acceleration project is like a journey. You know your destination and the general direction you need to travel in, but you’ll have to make countless small decisions and adjustments along the way which might lead you to places that you never even imagined.
2. Digital Acceleration as an Explorative Journey, Not a Pre-defined Plan
Having worked at Netguru for over ten years, I’ve observed how agile methodologies have become prevalent in the IT industry. However, methodologies aren’t everything; they must be matched by a change in mindset. One of the most dangerous mindsets is treating initial project assumptions as unchangeable, rather than testable and therefore subject to verification. Few product builds follow a linear path. Market leaders acknowledge that innovation involves significant exploration, where many paths lead to dead ends. Recognizing a dead end shouldn’t be viewed as discouraging – it provides valuable insights about what not to do.
Also, not all dead ends are alike, which might be the trickiest part of this exploration. It can be difficult to determine whether customers don’t like your idea or whether they simply need more time to understand it. The secret to effective and profitable exploration is a mindset of rapid experimentation and continuous user and market testing. Considering the essence of exploration, the classic Steve Jobs saying comes to mind: “You can’t connect the dots looking forward; you can only connect them looking backwards.” To transition from strict planning to exploration, you need to adopt a mindset of continuous and simultaneous:
- Decision-making
- Discovery
- Delivery
The initial product version will be incomplete in many aspects. But it’s a necessary step toward finding the ideal market fit. In successful digital acceleration initiatives, assumptions are rapidly tested, there are short iteration cycles, and customer feedback is gathered early on. All of this leads to achieving market fit more quickly.
My colleague Hubert, Lead Project Manager at Netguru, described it well when we discussed this topic: “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
Where do most misunderstandings and superfluous costs originate? I’ve been involved in product development long enough to know that lack of compromise plays a sizable role. Either the business perspective overpowers the product development viewpoint, or vice versa. Sometimes, a third variable interferes with both – changes in the project environment. In retail, a sudden shift in legislation or labor costs can completely derail the development roadmap. To succeed at digital acceleration, you must seek compromise between these worlds, on a daily basis, from beginning to end.
The pathway to this compromise is viewing projects through the lens of the product life cycle:
- No decision happens in isolation; it will influence other aspects of the project over time.
- Development priorities change substantially between initial stages and every subsequent stage.
- Investing too much in perfecting every element of the product early on can quickly deplete the budget before the product is delivered.
Courage to Transform Customer Behaviors
Leaders like Żabka are shaping the future. This isn’t simply because they are savvy or gain from economies of scale. It’s because they are dedicated to owning the change in their sector, boldly investing in innovation, and—most importantly—they can make swift decisions and alter plans based on customer expectations. That is the very core of how digital acceleration is achieved.
More posts by this author Mateusz Czajka Chief Delivery Officer at Netguru. Mateusz is responsible for delivering top-quality, innovative…
