Digital transformation is not a one-time action for companies. It demands continuous effort and constant evolution. To be ready for this, companies need to have a strategy in place and a sound technology base, and most importantly, a partner that makes this possible. Using the example of a food service provider, we will show how companies can react quickly and flexibly to new situations.
A New Website is Not Digital Transformation
“Finally, the time has come. The new web store of the food services provider is ready to go live. It’s taken a long time to push this through, but now it’s done. We have achieved digital transformation! Right?”
Nope! Fictitious example, but a familiar situation.
What does a new e-commerce platform really have? Performance advantages – very likely. But has the digital transformation already been achieved? Certainly not. The next re-launch may already be on your mind. Not simply because technologies are developing faster and faster. Customer expectations are also changing and will continue to change.
A look at China, where the online and offline worlds are already merging completely, shows where the journey can take us. Consumers there can compile their purchases from real goods and virtual offerings in smaller stores while on the move and have them delivered to their homes, on time. Over here in Germany, food retailing may still be in its infancy, but food service providers must prepare themselves for far-reaching changes.
For some time now, large internet platforms and national retail giants have been building up structures. New business models are constantly emerging; delivery services are entering the market, and other criteria are suddenly becoming important alongside freshness and quality. Foodservice providers need to be able to adapt quickly to these rapid changes and challenges – and this is what perpetual digital transformation is all about.
Technology Platforms as Enablers
Modern e-commerce platforms are crucial for digital transformation, but they alone are not the solution. Think of it as a training center for a sports team: players can get in the best possible shape on state-of-the-art fitness equipment; but to win and play to their strengths, they also need the right tactics and team formation. In the world of foodservice providers, these prerequisites are a suitable technology platform, a proprietary strategy, and the right partner.
Companies will have to invest more in IT technology. And not investing may cost the company its existence. Meanwhile, a variety of e-commerce platforms are available that can be adapted and used at a moderate cost. Costs can also be reduced through digitization and automated processing. We recommend cloud platforms and microservices that can be flexibly integrated without interfering with the core system.
Forming the Game Plan: Strategy and Roadmap
So you have the best IT infrastructure and the latest applications. Have you achieved Digital Transformation? Not until you have a clear idea of what you want to do with the technology! What will your business model look like in two years, five years, or ten years?
The starting point for these considerations should be the company’s own customers. Whether you’re a food wholesaler supplying restaurants and catering services or a retailer supplying end customers, it’s always important to put yourself in your customers’ shoes. What information does a restaurant operator need for his order? When is the delivery needed? How will the products be used? The supplier that manages to fit its services seamlessly into the processes at the customer’s end will ultimately win more customers.
Exploiting the Advantages of the Niche
Data analysis helps understand end customers better. Not only can the customer experience be improved, complementary products or services can also be offered on the basis of order data. Small and medium-sized retailers in particular often have the advantage of the niche. They know their customers in a limited area very well, better than the large players ever could. This is something that must be exploited. Retailers in niche markets can present the products of both large producers and smaller suppliers, to specific customer target groups. And in return, they can ask for support for in-store advertising or online promotions.
Adapting Organization and Processes
Implementing new strategies is never easy. Management may not grasp the profound impact that digital transformation can have on the entire organization. For example, in the food industry, classically positioned companies will have to adapt their internal processes too. Creating a new e-commerce department and recruiting ambitious, well-qualified employees is not enough. The effort to provide customers with the best possible support at every point in their journey would fail if silo thinking of individual departments exists. Conventional rigid structures need to be torn down. The perspective of employees in sales and field service, who may fear for their position, also need to be considered, for them to be open to new ideas.
Now that you know the secret sauce, have a look at how we handled Digital transformation for a Dutch food wholesaler.
When Technology, Strategy, and Organization Interact
Bidfood, a food wholesaler with around 1,700 employees and a good 25,000 customers, knew that their age-old business model had to evolve with the changing times. They wanted to kick off the process in The Netherlands and extend it to their other markets. The crucial questions were: Which customer segment has the greatest potential in the future? What expectations do these customers have? How should processes be adapted to serve these expectations?
With Mindcuv’s help, the company gradually eased into a new business model. Instead of the previous large-volume deliveries with low margins, they started to focus more on small, independent restaurants. With a powerful e-commerce platform, the service was noticeably improved, and the range of products was expanded by integrating additional suppliers. When the loss of seemingly secure customer contracts resulted in the loss of almost 30 percent of sales, the company was able to react flexibly thanks to its new strategy. The plans to acquire new customers were implemented earlier, and the company succeeded in acquiring over a thousand new, smaller customers via online channels. The share of online sales increased from 65 to 98 percent.
Digitization eliminated a large part of the administrative workload. The account managers, who used to focus on sales organization and processing, could now concentrate completely on advising their customers in the new environment. The idea of opening up the company’s own platform to other suppliers was further developed into a marketplace and one-stop store. With a comprehensive product range, a network of suppliers, differentiated price and delivery models, integration of the latest trends, customers were offered genuine value addition. And the development did not stop there: Currently, the food provider is already working on a brand new project, a start-up.
What does your Future Look like with Digital Transformation?
Driven by accelerated technology development and changing customer expectations, your business environment will continue to change constantly. Perpetual digital transformation requires your willingness to question and change the status quo right from the start. Through this, your companies can react quickly and flexibly to new situations.
Author
Markus Tillmann
Executive Vice President
