“Technology must be functional for the customer experience”

In the Natives section, we learn from administrators of digital natives, organizations that have their origins in the digital age. This time Mark den Butter, Chief Operations Officer of the fully automated supermarket Ochama. “When evaluating data, pay attention to the quality of the same data.”

Ochama opened its stores in the Netherlands in January. In a regular supermarket, you put your groceries in the shopping basket, but at Ochama you order your groceries via an app and pick up your groceries at a pick-up point. At the collection point, the groceries come to you via robots after you have scanned a QR code that you received when you ordered online. The Chinese JD.com is the parent company of Ochama. That is, after Albibaba and Amazon, the third e-retailer in the world with 550 million active customers. Ochama is a fully automatic supermarket. “This means that both the distribution center in Berkel en Roderijs and the supermarkets in Leiden, Utrecht, Rotterdam and Diemen operate fully automatically,” explains Den Butter. “Food and non-food items are around 50/50.” The range varies from electronics and Lego to fruit and frozen products.

Lower costs

In the distribution center, Ochama pre-sorts the orders to the stores based on the customer’s online list. The customer can then pick up the groceries at a time of their choice. Van den Butter: “Our vision is that technology can help us reduce costs. For example, we do not have to fill boxes in stores, and we have a fully automated distribution center. That way we have no labor costs behind us. This in turn allows to invest on the front, our employees’ service to customers. ” According to Den Butter, it is unique that Ochama takes it this way. “We took the technology from the automotive industry and adapted it and used it in the retail trade. One robot makes turns and the other is able to grab products in straight sides. We started with a blank sheet of paper, where we could also lean on the logistics knowledge of our parent company JD.com, which is already highly automated, then we did a translation for retail with our engineers and technicians together with Van der Lande Industries “We have been running for a year and a half now and we really have that spirit as a startup. But one that is growing fast. We now have seventy employees in the operation and about sixty at the head office in Amstelveen.”

Mark den Butter: “I keep a close eye on the connection between technology and experience.” Photo: Dennis Wisse, Roel Dijkstra Photography

Open to innovations

The Butter emphasizes that this fully automated concept has not yet been installed anywhere in the world. “Not even in China.” JD.com therefore specifically chose the Netherlands. Why? Den Butter: “The Netherlands is a highly digitalized country. The Dutch are open to trying new innovations and the infrastructure is good. Think of the port of Rotterdam, the good roads and Schiphol airport. In addition, it is not only delivery that counts in supermarkets, but also pickup. It’s not fun in an existing supermarket to shop on Saturdays in all the hustle and bustle. You can pick up from us within two minutes of arrival. We store the groceries for you. You choose when it suits you to pick them up. The Netherlands is also a highly developed e-commerce market. So you have to do something innovative to break through in that market. Pick-up is our core strategy, on which we have not made any concessions. Also because delivery in our opinion is a too expensive business model. Pickup fees around better. All in all, we conclude that Holland is like New York: if you can achieve this, you can do it anywhere. “

Functional technology

How do Den Butter Ochama employees get involved in such a high level of innovation? “It is also new for them. Like for myself by the way. I have been in traditional retail for years, at Albert Heijn, Makro and Jumbo. This is completely different. We guide the employees and put them into the whole system from start to finish. And we explain the vision. That we want to make this scalable and expand across Europe. There is already interest in this concept from France and Germany. Especially because they have big supermarkets there that you drive to to get your groceries. ” It is expensive to invest in fully automated systems, the operations director acknowledges. “I can not talk about the exact costs, but they are significant. So you need to have a well-defined plan that outlines the beginning, middle and end. You need to think through that plan fully with your engineers and technicians. My challenge is to make the technology functional for the customer experience. So we do not implement technology that does not help the customer. I’m taking care of that. Also because a personal element must remain in the customer experience, no matter how automated we are. I keep a close eye on the connection between technology and experience. ”

“The initial costs are significant, but you will earn them back over time.”

Improvements every time

What tips does Den Butter have for executives undergoing a digital transformation with their organization? “Do not be fooled by the cost. The upfront costs are significant, but you will earn them back over time. Also provide a scalable model. You need to create the first store and the first distribution center perfectly. You regularly perform what they call sprints in agile terms. Improve every time. Better materials, better installations, better automation, better design of the buildings … This is also based on customer experiences, from which we continuously collect data. You can then pretty much copy the perfected model to create a scalable path. Keep that path in mind. “There is a pitfall in that development path,” Den Butter notes. “We are a startup with only a limited number of order unit data points. Based on this, you can, for example, decide which logical combinations are to be offered to the customer. However, because the data points are limited, it can create tunnel vision. So you can, for example, offer coffee based on the limited data while that campaign does not work in practice. In short, pay attention to the quality of the same data when evaluating data. This is especially important in the beginning. Also because you decide your purchase based on data, and that is the backbone of our organization. ”

have affinity

Instructors need to have an affinity with technology, Den Butter notes. “It does not mean that I have to become an engineer or a technician, but I have to be able to understand which way they want to go. Seen this way, I am a lateral actor in the tech world who fascinates me immensely. As I walk, I learn fast. For example, about determining the end-to-end process that we just talked about. A problem in the process and the technology no longer works. So that principle is leading. In addition, you need to be able to rely on the judgment of engineers and technicians. It really is a craft, I would say. You have to have that confidence, because as a director you can have an affinity with technology, but you can not continuously follow the latest trends in technology. I have colleagues for that who keep me updated. ”

Finally: what will the chief operating officer say to other directors? “Just come and have a look. We are open to showcasing the technology, also believing that this is the future of retail. The special thing about this is that we do not have a fixed path of development. We are now a retailer and we will “But in the future, we can also go into the consulting corner to help other companies set up this fully automated concept. There’s room for that, too, from JD.com.”

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