Jakub Linkowski (Netto): FMCG and new technologies. What will the future bring?
First and foremost, it is important to remember that the customer expects not only the lowest price, but above all that they will be served with culture. Customer service is not only what happens at the cash register, but also what happens throughout the store space. And this is where we take care and do our part and want to deliver the best possible service in the store: accessible parking, accessible aisles.
Our colleagues from other retail chains will pinch different things on each other, we prefer to work and focus on quality. The FMCG retail market is a real arena where battles for consumer attention are fought every day - in the media space, but also on store shelves. The global value of the FMCG market in 2023 is as high as $12 trillion - a gigantic cake worth fighting for. There's plenty of room, but the competition is enormous, and everyone is trying to appropriate the biggest piece for themselves.
In today's episode of OccuTalks, we take a closer look at the challenges and questions that are shaping the FMCG industry. How are large corporations competing for the attention of different generations of customers? Which new technologies may soon change the way we shop, reaching popularity similar to self-service checkouts? What inspiration do companies draw from young consumers as well as employees of FMCG chains? Listen to an episode of the podcast with Jakub Linkowski, an expert in the area of operations support with 20 years of experience in FMCG retail. Hi. It's a great pleasure.
Hi, welcome to everyone. Jakub, how did it happen that you are in Netto today? It's a long story. It's been more than 20 years. I come from Lodz, there I graduated from the University of Lodz, Faculty of Law and Administration. Already during my studies I worked in various positions. I started with a position from a cashier salesman. Later - I worked in production. My position was a fuller.
What does it mean? This is such a position in a factory producing technical felt. Felt at a certain stage must undergo such beating with such large hammers. And this is the felter - that's the name of the machine that beats it, and the fuller is the one who drags this felt.
And so 2 years I worked there, pulling this felt. Then I went to AmRest for 5 years, there I started from the position of shifter - shift manager, that is, I was responsible for the shift in KFC restaurants. And then step by step I reached the position of restaurant manager. Starting in KFC
Which year was it? were the beginnings. In fact, in Lodz at that time there was one restaurant, another one was opening. It was the year 2005. So the old days. The beginnings of KFC and AmRest. It was also fun to watch how AmRest grew, how then more brands were added to this AmRest portfolio. It was nice
to watch just how Drew O'Malley, Olgierd Danielewicz created this company and looking at where it is today and what it looks like, it's really a piece of work. After a 5-year adventure at KFC, it was time for Biedronka. I spent 14 years there. I started as an area manager, then I was a district manager. Well, but I always liked to ask questions, look for new solutions, something inspired me, so I always deepened the questions to understand the reasons, at the same time I suggested some solutions, because I gave ideas. And this was also related a little bit to the passion for finding new solutions among technologies first of all.
And that's why I was offered to run projects, first smaller ones, then I got a department that dealt with projects, and so all sorts of projects I ran during that time. These were IT projects, these were operational projects, these were such projects regarding to finance and accounting, so a mass of knowledge a mass of experience, a lot of contacts with people from different levels of the organization, but also from different departments. So this allowed you to get to know the company really inside out, and it was a very valuable experience. Such the biggest project I did was the implementation of SAP for stores. A very large undertaking 3000 stores, each store at least 2 users, so you can count how big the challenge was. Later I was also responsible for the preparation of the concept and implementation of the ultra-mini store, that is, such smaller Biedronka stores than standard ones, well, and after this period I decided to change, refresh my experience, meet new people, new organization, new culture, and so for 1.5 years I have been in Netto,
where I manage the operations support department. And this is interesting to me, because at first glance such a name that does not say much, let me be honest. What does operations support actually do? This seems to be a very broad area? This is such an area that it's basically hard to define. If we wanted to draw our responsibilities on a slide, it would be a very long, unreadable slide. We actually work at the intersection of all departments and operations. We understand operations primarily as stores, these departments and the managers of the region, district.
And we are responsible for the communication of all departments in the company with the stores. And in the other direction. At the same time we manage, take care of the operational processes in the stores. And here we pay special attention to this, to make these processes as convenient as possible, as accessible as possible to the employees in the stores, to our colleagues who are working every day, doing this hard work.
We try to help them by optimizing, by looking for new solutions, also looking for places where we can save some time, so that they have more time, more space to meet the customer's expectations. These few years that I have been working with retailers I have the opportunity to observe how standardized the FMCG industry is, however, when it comes to these processes.There really is still room for optimization in this dimension of store operations support? It is, because on the one hand there is technology, which provides us with a lot of solutions, and on the other hand the market is changing so much and so customer preferences are changing that they are even forcing themselves on us - from the assortment itself.
Who remembers retail from 10 to 15 years ago - there it was a shock to introduce something like sushi to the offer, single pieces that appeared in stores. And today we have a very large selection indeed. It's the same with the liquor segment - we're getting better and better, we're even able to satisfy such sophisticated tastes, so this market is changing, customer expectations are changing and we have to follow that. Of course the processes, the standards - they are of course. And this is a bit of a boundary that standards safety - this is food first and foremost, and we have to take care of this customer safety' first and foremost. So these standards are inviolable, but the others we are able to look for solutions so as to optimize this work. An example is self-service checkouts, which were not popular until a few years ago - primarily in discount stores.
They may have appeared somewhere in hypermarkets, but it was not a place that customers chose very willingly. Today, in principle, they are a standard, today a large part of customers already use them and even cannot imagine a store in the nearby neighborhood without self-service checkouts. Well, it's true. I even just now, being downstairs, using such a store, just not your chain, I was very happy that it is a self-service checkout, because the queue was long.
Exactly. Self-service checkouts are a win-win for everyone - on the one hand for the customer, on the other hand also for the employees in the stores. They quite quickly, but recently entered - these cash registers. As such an example maybe of the threads you have raised in terms of operations support. Actually in discount stores maybe a little longer. But I also noticed that the trends around them are changing. They were rather smaller
in the beginning, but now bigger and bigger cash registers are appearing, even some XXL formats that allow you to handle these baskets, which have not only this handle, but also wheels. You can drive up, fit in with larger purchases. That's right, these cash registers also have a lot of solutions. I remember a few years ago in Düsseldorf at a trade fair, one of the IT directors of a German chain told that these cash registers are actually able to accept a basket of up to €40. And indeed the ones they presented at the time, or the first ones that appeared in Polish discount chains, were able to handle somewhere this level of, say, 40 to 100 PLN. Later it was already such a pyramid built up of those products put away at the cash registers, and at the same time the scale became less and less sensitive. And so the search began. On the one hand,
enlarging the checkout table itself, then the ability to add up the scanned products, so this also somehow improved the service. Today, artificial intelligence systems are already in place or being implemented at the cash registers, which reduce the risk of error, or the risk of a wrong registration of a product bought by a customer. So you can see that this even small part of the store is developing a lot, and I think there is still a big future ahead.
Because so far, scanning tunnels, which could also improve this work, or various other forms of recording sales, such as carts that weigh and scan products at the same time, have not yet appeared in such mass production. Well, one could list a lot of ideas, which somewhere in the future will surely function. Today maybe they are too expensive, maybe we as customers are not yet so open to such solutions.
Well, yes, and on the other hand, it always makes me wonder if the return on investment on this last stage of the customer's journey through the store is actually that great? Because I imagine that you do just as much work, just as significant work in terms of supporting operations throughout the customer's journey through the store, that is, from the entrance through the product layout - what's on the so-called fronts of those long racks, etc.? I remember, we used to have such discussions about this at one of our clients, that if it were possible, most preferably all products should be at eye level, and preferably at the front of each rack in general, because then they would sell best. Generally looking at it and laughing that it is indeed so.
The important thing is that first impression can be made only once. So you know we care not only about how the customer leaves, how he feels, but also how he enters, so his whole stay must be pleasant. We have to satisfy his expectations, he walks into a grocery store and has the right to demand not only good quality products, but good quality service, cleanliness in the store and clear aisles, so that's what we place special emphasis on, and in fact every improvement we make for employees we also do from the customer's perspective. There can be no contradiction here, it must always be parallel. You mentioned a couple of aspects that have been coming up lately in the rather heated exchange of blows between Lidl and Biedronka: quality, width of aisles, cleanliness. These are all elements that consumers see,
that they pay attention to. How today do you, as Netto, find the giants in this discount market in such a battle? Above all, you have to remember that the customer expects not only the lowest price, but above all precisely that he will be served with culture, that customer service is not only what happens at the checkout, but what also happens throughout this store space. And this is where we take care and do our part.
We want to deliver the best possible service in the store - accessible parking lots, accessible aisles. Of course, our colleagues from other chains will present themselves with various pinches, we prefer to work and focus on quality. An interesting aspect of such work on improving the customer experience is, of course, the availability of the assortment.
This is a topic that is very close to me personally, because this is what we deal with on a daily basis. From the perspective of conversations I've had not only with retailers in the FMCG industry, but also with manufacturers, often such a theme raised by them is the aspect of sharing sales forecasts, demand forecasts precisely with suppliers. So that this volume available is appropriate - this is probably not directly related to your area of responsibility, but I'm curious if in this dimension of supporting stores, people working in stores, improving precisely the customer experience, are there any other threads of cooperation between the retail chain and suppliers that affect your work later, directly on the frontline? I mean, it's hard for me to answer this question, because I have never worked directly with suppliers and I don't work with them either, so this estimation or forecasting of sales in general, or sales of a specific product or demand for a specific product is done here at our local company level, and here in this area, of course, we cooperate with supply chain departments and exchange our insights, experiences and here somewhere we parameterize some orders. However, how the data exchange with suppliers looks like is hard for me to say. I think they also have their analytics good enough to be able to predict a lot of behavior.
This is increasingly the case. This is not only in retail itself but also in HoReCa - in fact, today everyone knows very well when a Burger DrwalaBurger will appear at McDonald's. (Burger Drwala - The Lumberjack Burger - a seasonal sandwich (available in Winter) exclusive to the Polish Hamburglar menu). That's a fact, that's a fact. What do you see as the biggest challenges facing the FMCG industry, a little bit aside from your situation personally at Netto, your function, also where you position yourself in terms of competitive advantages, but in general: the FMCG industry and its challenges. Well here are certainly a few challenges.
On the one hand, all the time rising costs. It is known - somewhere we have to maintain a balance between price, and quality, and costs, and to keep it all nicely in balance - well, controlling costs is a big challenge. And the situation and the market, and the legal situation, and what is emerging, this is a challenge for the whole industry. On the other hand, new needs of customers, new demands for other products - such as the search for more eco or sustainable products.
This is, on the one hand, a big opportunity, and indeed customers are asking for it, but all the time it doesn't represent a large volume, so getting the volume under control versus being able to provide the customer with the widest possible range of such products is also a challenge. I certainly think that this offline and online sector will intersect and they will intersect somewhere. And this e-commerce, the kind that is typically just FMCG - there are few players and you can see that probably not quite one independent player will emerge on his own to lead. Only somewhere he will always have a big
colleague behind his back, who is this offline giant, and it seems to me that here this exchange will also take place. For sure, the implementation of new technologies is also a challenge, because it has to be adapted all the time to the current conditions, to what we have, so you have to properly format your plans, properly format your budgets in order to implement it well, and probably the biggest challenge for the whole retail especially the one in FMCG - saying this in the third quarter in 2024, is the implementation of the deposit system, which should arrive in Poland in January 2025. Should it? It should - I am speaking as the Ministry actually communicates today and what we expect. Yet there is still a lot there, there is still an amendment that we all look forward to, so work and preparations are ongoing. We are all working, all the chains are preparing for this coming year, but nevertheless somewhere in the back of our minds we have to remember that something may change, we have to control it.
And there is a lot of work. This is work that basically occupies all departments of the company, it involves everyone in some form, so it's a very interesting project, very much so engaging, learning, but also time-consuming. It's going to be a big challenge, I can imagine. I remember when I was in Norway, when I flew there to give lectures, in fact, it was already several years after the establishment of this deposit system in that country. A different scale altogether, well, because necessarily 5 million people - fewer people, fewer stores, less waste necessarily or packaging that needs to be recycled.
I'm really curious how this will work out in our Polish realities. There are a lot of different questions here and still a lack of awareness of people. So far we have been taught to crush PET bottles for example, from January 1 this will no longer be a trend but we have to throw PET bottles full of air into RVM machines. Of course, somehow collect it at home, because I can't imagine everyone running around with one bottle and into the machine to throw it.
So we definitely have to teach something new to our customers, . and we have to learn ourselves, too. So a big challenge, big opportunities for more manufacturers too. Already today you can see movement in interest, in other areas, in other market segments, which are really a response also to what will be in the deposit system. True, well the deposit system imposes certain kinds of technological solutions. And we will certainly
be watching how they develop in the coming months and years. But I'm also curious, in terms of supporting operations, is such technology maybe more mundane, or maybe I'll call it more utilitarian, are you using? I'm not talking about big machines now, something new that needs to be created, that will be difficult and not easy to adopt because it's just entering the market, but something that works at your place, that you have proven, that you know is something you can't do without? That is, it is known that all the systems that support us today, on which we work. This is the whole ERP, without it basically no chain today can manage anymore, it is impossible to imagine life and everyday life without such tools. But you don't even have to look far. It used to be said that technologies should be snatched from the military, because they are that driver of change.
And today it seems to me that it is enough sometimes to walk into a teenager's room and there are a lot of these ideas that can make our lives easier. Here I am thinking, for example, of VR. Who would have thought a few years ago that with the use of VR it is possible to do training, that this can be implemented by people at no cost, without the risk of mistakes, losses.
And this has been done before somewhere on productions they tested, some repairs in VR, car services taught their service technicians, but it works just as well here in retail too. So it seems to me that this segment - let's look for solutions in our children's rooms for the future, because on the other hand they will be our customers too. Well, that's true. It's a common trait in terms of family size. And it's an interesting case, admittedly a slightly different generation, but actually when I think about it, I'm also surprised by my sons, who are literally just a few years old, how familiar they are with technology, how many things are natural - the fact that on the TV you can't move the channel by swiping your finger - it's unintuitive even.
Strange, isn't it? Yes. I, in general, love young people. Well, it is known that I haven't had the opportunity to work with our children's generation yet, but I also once gave a lecture about this generational change that is here in the professional environment. These are incredibly inspiring people, this is such a group of world citizens in general. I also once participated in recruitment and potential candidates for Management Trainee came. I was in awe of these people - they were some, of course, cool universities graduated from all over the world, fluent in three, four languages, but on the other hand, even those who worked here locally - in how many foundations they cooperated, some projects they led within the university.
Amazing opportunities they have for development in general. They have a completely different perspective, which is why I find it ultra-inspiring to work with young people. And this generation of our children, who will enter the market in a moment, they can indeed revolutionize with this very shifting of channels. Well what a simple solution it is. How many such solutions could be made - for example at the cash register. Checkout stations as you can downsize, regular cashier basically hand-scroll. Of course, I remember my son once
a bathroom scale was just trying to change the screen with his finger too, because for them it was already natural and they're basically born with this scrolling reflex. So this is really a very inspiring generation. You have to listen to them, because they will be our customers and our colleagues at work in a moment. It's true. Going back a bit to your experience, one that is perhaps more personal.
What was your most memorable day at work in the FMCG industry? I mean for me, any interesting day is always one in which I have the opportunity to talk to people and derive something. And often, when I give lectures, I say - it's a two-way relationship must be. I have something for you, I say something, but I also want to get something from you, so even when I give a lecture I also try to engage the listeners. But of such recent interesting things that happened to me, a month ago, maybe a month and a half ago we invited selected store managers and conducted workshops with them about how their daily work should be, what bothers them today, how we can improve this daily work, make it easier for them on the one hand or optimize or meet customer expectations.
Because they are really the ones the customer meets, to whom they first tell their feelings. A very inspiring time, eight hours of discussion, debate. Really I was impressed with how passionately these people talked about their daily work, their daily routines, and with what patience they explained the little things that often bother them. It often seems to us from the position of the office that we want to change big things, and there sometimes it is enough to move something 5 cm to the side and the work will look completely different. And this is often this search for optimization, and not making projects for many millions of zlotys, just the simplest actions that can make things easier - a differently constructed report and you already work differently, faster. So yes - it was one of my most joyful and such edifying days.
It's interesting, because it's in the context and what you said about the generations of young people who are entering the market and our children and now about your colleagues at work, it lays out in such a coherent whole to me that, however, what's probably the coolest thing for you in this job people. Definitely. I really enjoy and meeting people. We have been conducting interdepartmental projects, I learn something new. On the other hand, going to stores, where often to places that in the first such thought I would not be able to point out on a map - you meet wonderful people, those who have both their passion and their hobbies, and with a lot of such attention can talk about what they do, what they like. This is amazing and it is not always necessary to have this experience.
I for the SAP project remember looking for 30 coordinators. I looked for them all over Poland, not limiting myself to Warsaw, and to this day I can't name the towns or villages they came from, but these were people with such passion, these were people with absolutely no experience in IT, and today I know that a large part of them stayed somewhere in IT or work somewhere around IT. So it was that inspiring - and a group so mixed, and age-wise gender-wise, and everything you can mix - it was such a mix that they managed to come together and really create a team that still keeps in touch with each other today. That was cool So now - the most difficult day in FMCG work. And this will also be such a flip answer, because this most difficult day of work was the day of my vacation it was 2018 I think.
Vacation, 8 am, Rewal. Lidl then announced that “well sorry, we didn't go with SAP, we won't implement it, we spent X million euros and we're not going any further". And we at that point were just before such test implementation on three selected stores. Imagine what was happening with my phone, I came back from training at that time, I went in and tried to always keep quiet so that the kids and the wife would still sleep, but it didn't work, because it was the sound of text messages and WhatsApp it was one continuous sound basically. After nine o'clock the phone calls already started, and so the whole day passed, well, because they actually had great experts, big money stood, and we in such a somewhat discount way.
A bit like such guerrillas we jumped out and said that we would implement this, and confidence in the project and in the whole team at that point dropped, and the worst thing was that I was on vacation, not even too much to gather them and at least so motivate them internally. But well it wasn't an interesting day, it was really the kind of day that spoiled my mood, but on the other hand at the end of that day I knew that “yes it has to work” it was already too many words there at that time for it not to work. It motivated me a lot and for that I thank them for failing our German colleagues. You just said about trust, but I'm curious - is it about trust in the organization or trust in your own abilities? I trusted my abilities and I trusted my people a lot, the organization as such also behaved OK, because they did not say “dude, we are closing the project”, but individuals in the organization already had doubts. It is known that every project is not like that, you do a project, even a very cool one, and you have 100% support and everyone is a fan of the solution, there is never and will never be like that.
Well, those who were not those fans became even bigger anti-fans. And it was such a bit of grist for the mill, but well it motivated us all the more, it was such a kick just that it had to succeed. Whatever we would do, we would write these codes with our own hands, not knowing how to do it, but I knew we would prove it, and it was done. Well interesting experience. I remember, at that time I had also been in this working relationship with Lidl for quite a long time - it was the kind of news that actually shook up the IT market quite a bit, especially the one that involved cooperation with retail somewhere.
It was so from the side looking, a project doomed to success. Having everything and a large team indeed, and money. Well some thoughts of our own we have, you know, I was not in the middle, so I do not know what mistakes they made, I am not a typical person from the IT environment either, but well it was a very big surprise.
It surprised me at the time. And the way they announced it as well. From the perspective of your plans and career growth at Netto, I think a lot of people can be inspired by how you talk about your colleagues, about the team, about the people. Tell, please, for those people, where can you be found, is it possible to join your team, how can it be done? That is, the easiest way to find me is on LinkedIn, because there I actually and publish and share my knowledge there, in general I am present on social media, with the fact that I have tried to divide these social networks and so LinkedIn let's say typically professional, Instagram more I present my hobbies or what I do somewhere after hours. So I would suggest
starting with a contact on LinkedIn. I'm not currently recruiting, but I can't say how it will develop further in the near future. In any case, I encourage you to follow me, I also happen to give some lectures, which I also invite you to attend, and I can also share my experience then, and I often refer to examples from everyday life like this, or from those projects we ran, just telling some anecdotes or specific cases and analysis we did at the time. Great. Jakub, sincere thanks for the conversation.
Thanks a lot. I wish you all the best in your future life and professional and family life. Thanks, to you as well. Good luck to you. Thank you for listening to our podcast. I believe you enjoyed today's conversation. If you want to stay up to date with future episodes, we encourage you to subscribe to OccuTalks on streaming platforms and follow our social media. You can also find more information
about Occubee on our website occubee.com. To be heard in the next episode.
2024-11-03 18:07
