Discover how Microsoft AI improves shopping experiences
Most purchases take place in offline stores. So, it’s a major retail challenge to take AI to these physical, everyday spaces. Żabka’s story is a good example of how to succeed in this task.
The organization
Żabka Group is a grocery store company in Poland. They opened their first shop more than 20 years ago. Their dream was that most people living in urban areas had a Żabka physical store within a few minutes walking. Now, around 15.5 million customers live within 500 meters of a Żabka store. The organization recently opened their 9,000th store. They’re one of the most recognizable brands in Poland.
Żabka was a pioneer in offering innovative shopping experiences. They launched an early grocery shopping app and were one of the first companies to offer home delivery services.
The challenge
Grocery stores like Żabka are noticing that customer needs are changing in recent years. First, people want to spend less time getting groceries. Second, their buying habits are changing dramatically. Third, they need shopping to be easier. In short, they demand faster, easier shopping experiences. Żabka must respond to these customers’ needs.
The solution
Żabka is launching Nano stores, a new approach for autonomous, frictionless, unstaffed shopping. These stores don’t have checkout lines, clerks, or cash, and they’re open 24/7.
These new Nano stores incorporate AI features. They use Microsoft AI products for customer vision to track customer behavior and product selection. The result is what they call a “phygital” experience, which takes the benefits of digital AI to physical stores in real time.
In these unstaffed stores, the technology serves many of the services performed by clerks. For example, check-out is autonomous, and the system automatically communicates with customers via an app. These functionalities help with labor shortages.
Żabka implemented a tracking and fidelity system for their customers. It sends customized offers to regular customers who haven’t been to the stores in a while for them to come back. The AI solution also rewards those clients who return to the stores daily with free products and discounts.
Besides, Żabka uses Microsoft Cloud for Retail to manage data centralization, analytics, and scalability for their store network. This way, they track inventory, sales data, and operational metrics. They can also check the performance of individual stores and overall.
The results
This new generation of grocery stores is getting a very positive reception. Customers rate Nano stores with satisfaction scores 30 points higher than regular retail stores. The initiative is increasing foot traffic for the company.
Żabka is also benefiting from more efficient operations thanks to the insights provided by Microsoft Cloud for Retail. They achieved better management of the supply chain in real time, and can now avoid running out of stock by forecasting demand. In this way, the insights delivered by the solution enable more strategic decision making. The company is in a better position to anticipate and react to supply chain disruptions or market changes.
Improvements in operational management and less need for clerks result in cost savings. Żabka is investing them in benefits to their customers, such as the discounts and free products provided by the fidelity program.
Finally, Żabka benefits from the scalability of the Microsoft environment. It means that it’s easier and faster to open new Nano stores, even in nontraditional places such as gyms, hospitals, or bus stations. Żabka can continue expanding their retail network even farther.
To learn more, read Zabka Group launches autonomous Nano stores powered by AiFi and Microsoft Cloud for Retail, gains high customer ratings.
Next, let’s explore another way of improving customer experiences in retail thanks to AI, this time in online commerce.