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Sainsbury’s journey of digital transformation

2 May 2019 / By: Malcolm Pinkerton

Sainsbury’s has unveiled its digital transformation roadmap as it looks to accelerate growth and future proof its business. Success will require serving customers seamlessly online and/or offline through an agile and fully-connected retail ecosystem. Here, we take an initial look at how Sainsbury’s is achieving this.

Creating the ultimate in-store experience - connected, easy, fast, friction-free

A clear statement of intent is a three-month experiment in a London convenience store, where Sainsbury’s is trialling the UK’s first checkout-free grocery store, which opened to the public on 29 April. Customers can scan and pay for their groceries using the SmartShop Scan, Pay & Go app. So, what is the store like to shop?

Firstly, the app is easy to install. One barrier is the requirement for a Nectar loyalty account to complete registration. This, however, is quick and easy to do. Given the importance of gaining a holistic view of customers beyond Sainsbury’s ecosystem, this is a crucial step. This step is not onerous, and for the 16 million active Nectar holders who regularly use Sainsbury’s, even easier, as it can be completed by scanning the loyalty card. The app only works when in a SmartShop store, and requires activating Google Pay or Apple Pay.

The trial is well publicised, both outside and inside the store, with clear signage to guide the shopper through the process

The app is used to scan each item and, once done, you simply pay via Google/Apple Pay, before finally scanning a special QR code. Scanning items and the “checkout” process was extremely easy. I was impressed by the simplicity and the fact it literally was scan, pay, go. The entire process was impressively simple and honestly friction free.

Optimised for speed and convenience

The system costs less to set up than Amazon Go as it is not reliant on sophisticated tracking technology and can be implemented in existing stores at much lower investment. The focus is clearly on speed and convenience, with those products that consume time at checkout through requiring age verification, such as alcohol and tobacco, removed.

Guidance through the process from the app itself is easy to follow and attempts to remove as much friction as possible.

The assortment has been optimised to cater for convenience-focused shopping missions, such as food-to-go and meal solutions. All this helps create as frictionless an experience as possible and by harnessing the data gathered through the app, the assortment can subsequently be tailored to best meet the needs of the store’s catchment area.

Mobile-centric

This is an indication of Sainsbury’s strategy to create a complete retail ecosystem, joining all its digital properties together so customers only need one way of accessing everything, from the weekly shop to financial services. Essentially, Sainsbury’s is looking to create a super app, a complete operating system, providing the ultimate lifestyle companion for the mobile-first generation.

Data-centric

Sainsbury’s is looking to gain a truly holistic view of customers across all channels, which is essential if it is to really deliver the fully connected, seamless, personalised, experience demanded of them. The digital overhaul of its Nectar loyalty scheme will certainly help. Embedding this within SmartShop will help Sainsbury’s join up customers’ online/offline behaviour, while providing insights wherever a customer interacts with the Nectar ecosystem.

Consumer-centric

Creating true customer-centricity requires breaking down operational siloes. Sainsbury’s is creating cross-functional teams, who have adopted agile ways of working to deliver customer-focused solutions. Moreover, it has appointed a chief digital officer, with the primary objective of creating a seamless experience across its Sainsbury’s, Argos, Nectar and Sainsbury’s Bank divisions. Meanwhile a chief customer officer, with responsibility for customer data across the entire organisation, will help ensure data-empowered strategic decisions. Importantly, Sainsbury’s is also partnering with technology providers and fulfilment specialists to achieve its objectives.

Kantar POV

  • Next-generation retail requires seamlessly integrating online, offline, logistics and data across the entire value chain. Success depends on upgrading commercial operating systems with new insights, new ways of working, new capabilities, and new metrics. Sainsbury’s, in adopting a mobile-led and digital-first approach, building an ecosystem, and breaking down operational siloes, is well placed to make significant strides on its digital transformation journey.

Malcolm Pinkerton

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