The robots that refuse to haggle

No matter how much shopping centres owners have been putting on a brave face, the numbers don’t lie: between January and the end of September this year, across the 140 centres monitored by the Retail Institute, a 28.9 pct slump in footfall was recorded compared to the same period of 2019. During the Black Friday promotional period, footfall was down 23.5 pct on the previous year. The reason for this is obvious: people are still afraid of Covid and are preferring to stay home, or are at least limiting going out to the bare minimum, as shopping habits have been transformed in the wake of the pandemic. This unprecedented situation has forced retail chains to become more creative, by developing their online operations, investing in vending machines, entering into partnerships with petrol stations and introducing mobile apps – anything to improve the access to their goods and stop them from losing customers.

Click and Buy

One convenience store chain that has been investing online sales is Żabka, with its Żappka app, which allows users to order goods online before picking them up from the nearest store. At the beginning of December, the chain rolled out trials of its order-and-collect service to almost all of its 6.8 mln stores across Poland. “At the current time, when we need to maintain social distancing and with the heightened awareness of safety while shopping, the take-up of this service has been excellent among our customers,” insists Tomasz Blicharski, the deputy CEO for finance and development at Żabka Polska. Kaufland has also introduced a click-and-collect service, which was launched in May 2020 in 14 supermarkets across four cities. Those who use the app can order goods remotely three days in advance and then pick them up from the store of their choice. Drugstore chain Rossmann also offers a similar service via its own app: “Rossmann Go allows you to pay your shopping bills just by using your mobile phone without having to pay at the till,” explains Marcin Grabara, the deputy CEO of Rossmann in Poland. He also says that the chain has made plans to install self-service tills in all its 1,500 stores and roll out its Rossmann Go app further at a slightly later date. “We’ve begun to speed this process up because our customers now expect their shopping to be safer and quicker as well as contactless,” he explains. Since December 1st, customers have been able to scan and pay for their shopping in Rossmann using the mobile app as well as at self-service tills that had already been installed. Over the last year, the chain significantly increased the number of such tills in its stores – from 900 at the beginning of 2020 to 2,100 by December, even though its initial plan had been to increase their number to only 1,500 by that time.

This machine behind the counter

The Covid pandemic along with the Sunday trading ban have also led to a surge in the installation and use of vending machines. Products less commonly associated with such machines are now increasingly being sold from them in many countries. Another advantage that they have is that even a small store fitted with vending machines can offer a range of goods that would otherwise require up to 100,000 sqm of traditional retail space. “Queues in front of stores, maintaining social distancing and checking everyone's temperature are a lot of hassle – but are unnecessary when buying goods from a machine. This is a safe and hygienic way to shop and has also been unaffected by the lockdown. Importantly, it’s provides a pleasurable way of interacting with modern digital technology, with all the colourful screens, contactless payment systems and well-designed product displays. Entire streets of automated stores are already on their way. During the pandemics it has become a sensible alternative to traditional retail,” claims Paweł Mazur of Automnia, the exclusive distributor of vending machines in Poland for a number of companies. In Kraków, a staff-less Lewiatan store has been operating for a few months now; while the first completely automated cafeteria in the country has opened on the 20th floor of the Sky Tower building in Wrocław. The vending machines in these two locations operate 24 hours a day regardless of employment laws or the Sunday retail ban – and there’s literally no limit on where they can be installed.

Bread buns in the middle of the night

Organisational changes are also required if retailers hope to survive in these difficult times. Such changes include longer opening hours for supermarkets, some of which now operate 24 hours a day. Biedronka has introduced its Akcja 24 sales drive to its supermarket chain, under which at the end of 2020 more than 1,200 of its stores opened until 2am and 600 stores were open 24 hours. “Akcja 24 makes it possible to buy essential goods throughout Poland under safe conditions,” declared Biedronka’s operations director Paweł Stolecki at the launch of the drive.

Retail chains are also starting to move into areas that have been less impacted by the Covid regulations. Some are aiming to become more like post offices, while others are opening their stores in petrol stations, which is what Auchan has been doing. In November the retailer opened its first Easy Auchan store in a BP filling station in Warsaw. “We are following the trends closely and concentrating on changes in consumer behaviour. Working with BP allows us to adapt our sales format to better anticipate the needs of our customers,” explains Gérard Gallet, the chairman of the management board of Auchan in Poland. Along with the petrol stations themselves, Easy Auchan stores are open 24/7.

Where there’s a will...

Polish retail chains have been responding with admirable ingenuity to the pandemic-induced restrictions. But is what they are doing actually ethical? That’s a question every consumer must ask themselves whenever they enter a store owned by whatever brand. Retailers’ creativity has for one thing been keeping lawmakers on their toes, since they can be certain that every loophole in new and frequently-rushed legislation will be exploited and that every uncertainty will be interpreted by retail chains in ways that are most beneficial to themselves. The question also arises of to what extent these solutions are altering consumers’ shopping behaviour. Once the pandemic has run its course, will we want to keep using the self-service tills, buy bread at petrol stations or soup from vending machines? It would by no means be outlandish speculation to assume that many consumers have welcomed the changed modes of shopping and will want them to remain even after normality returns. We will not only be working in a hybrid manner, this is also how we’re going to be doing our shopping.

DIGITALISE OR DIE

Elżbieta Mączyńska, chair of the Polish Economic Association

Even though the crisis that has engulfed both the global and the Polish economy is mainly being attributed to Covid-19, negative trends and imbalances had been identified long before the outbreak the pandemic. However, the virus has put these imbalances under the microscope, revealing how fragile countries, businesses and economies were and how unprepared they were for the ensuing crisis. It has laid bare an economy that was mindlessly chasing after quick profits while building up huge levels of debt – as American economist and Nobel prize winner Joseph Stiglitz put it, it was like a speeding car without a spare tyre. The pandemic has brutally exposed the fact that the world was in no way prepared for the crisis when it came. It lacked basic systemic safeguards, both in terms of computer systems and medical provision (including adequate supplies of disinfectants, surgical masks and respirators). Moreover, supply chains turned out to be absurdly long and occasionally under virtual oligopolistic control.

The pandemic struck at a time when civilisation was taking its next major step into a fourth industrial revolution. Artificial intelligence has become symbolic of these changes by combining the potential of physical, digital, and biological technology, including in such areas as developing vaccines. It has opened up possibilities for bringing about a transformation in every aspect of our lives that were previously unimaginable. And the pandemic has actually sped up these changes. It has been forcing the pace of digital development, portalisation and the use of a wide range of digital applications, as well as acting as a catalyst for new forms of business, education, employment (including remote working) and property investment. It is also changing how individual households are run. It is estimated that the pandemic has advanced digitalisation in Poland by around 5–7 years. And with this, it is also eradicating computer illiteracy.

This is all the more important because naturally it will be those who embrace the fourth industrial revolution quickest that will come out on top in civilisation’s latest race towards the future. This is true when it comes to both the economy and the everyday life of the average citizen. In terms of the retail sector, we could take your small local shop as an example. These are often run by elderly, digitally illiterate people. If such businesses don’t start at least selling goods online or using online wholesalers, which are after all often much cheaper, they will be forced out of business or bought out by those that do know how to do this and make use of such resources. Small businesses will not cope on their own if they don’t take such steps. A crucial factor here will be state support. I’m not talking about financial aid, but about the proverbial handing out of fishing rods rather than the fish. This could involve, for example, free advice or education about new business models and the use of software. But this is not the only condition that needs to be met in order to be able to stay afloat in the new 4.0 reality.

One other crucial condition is to achieve a state of ‘antifragility’ (a term coined by Nassim Nicholas Taleb in his book ‘Antifragile: Things That Gain from Disorder’), which requires those taking part in the race to take that spare tyre with them. Every country, every sector of the economy and every business ought to have a safety net in case of such crises like the current pandemic. This is because there always have been and always will be crises, so being adequately prepared for them is essential.

Another condition is to have the right legislation in place, which is the responsibility of the state. Current laws are ill-suited to the digital world and thus pose a barrier to progress. Out-moded legal regulations can lead to economic losses, including to state budgets, which in turn can have damaging social consequences. The difficulties faced in levying digital taxes and making global online giants like Facebook and Google actually pay them is just one example of what needs to be remedied.

What you need to do to survive and not become uncompetitive is to adapt to the market’s latest requirements and embrace modern technology. The government has been ensuring that stores are closed on certain days, so they now have to offer a wider range of goods and services online. Sunday trading has been banned, so some have been opening in petrol stations, which are allowed to operate all week, 24 hours a day. A full retail ban would also prohibit deliveries, but we can still go online to do our shopping or order a meal from a restaurant – on non-trading Sundays and even when both shops and restaurants are closed.

That’s why it’s important to be able to combine new management systems with traditional forms of running a business as well as with modern and digital technology, while also working from home. This is both possible and profitable, as many companies have already discovered for themselves – and these also include small firms, particularly in the retail and restaurant sectors as well as those in the real estate sector.