Says Anna Grabowska, Chief Commercial Officer, Vice President of the Management Board at Żabka Polska, who spoke with Beata Szcześniak, CEO of Spark Foundry.
Beata Szcześniak: Last week, you received the Grand Prix and the EFFIE Gold statuette in Long Term Marketing Excellence – the most important category of this prestigious competition for the long-term “Żabka.Mały Wielki Sklep” [Small Big Shop] campaign. What changes in your business model was the business platform introduced five years ago to support?
Anna Grabowska: The changes we introduced included not only the modernization of 4 thousand stores, a complete change of their visual identity and the opening of more than 2.5 thousand new outlets, but also the transformation and enrichment of the product range with unique private label lines, new layout and furnishings. This was a great change for Żabka. The “Żabka. Mały Wielki Sklep” platform supported it and introduced our communication network into the world of convenience. Now Żabka is close to the needs of its customers and their everyday life, and Poles have simply fallen in love with shopping in small, big stores.
BSz: Have your original assumptions about the new communication platform and format changed during its operation?
AG: The communication assumptions of the campaign did not change, but the specific solutions and the platform itself have evolved. New threads, new actors, a new manner of implementation and a modern design were introduced. The developed scheme guarantees us great flexibility, so we can adapt agilely to reality. This can be seen, for example, in the last Szamamm spot, where a girl comes to buy lunch while working remotely – dressed in a blouse and jacket and pyjama pants. Flexibility also gives us comfort and confidence that we are able to react quickly to current needs – it took us 1 day to create this spot, from idea to completion.
BSz: The “Mały wielki sklep” platform has been in existence for 5 years. How do you reconcile the consistency of the platform with the various consumer challenges and business goals that appear in such a long time period? What was your priority – business or communication consistency – and how did you deal with these most difficult situations?
AG: The communication supported and supports our business goal, which was the repositioning of the Żabka brand. For almost the last 5 years we have consistently changed Żabka for the customer in many dimensions, and the communication allowed us to tell the customers about it and change our image. The platform talks about everyday life in an unconventional and funny way, and it stole the hearts of Poles who have had enough of the mundane routine and everyday problems. We add some fun and humor to our life. We are credible, close, because we rely on real situations, which evoke a smile. From the very beginning we have consistently relied on this form of communication. As a result our communication is recognizable.
BSz: Does working on such a long-term format require a specific approach and force unusual work processes?
AG: Running a long-term and such a demanding campaign would not be possible without the maximum commitment of the entire team, which looks after every detail, puts its heart and soul into the work and sometimes even does the impossible. Together we have managed to accomplish something really great, and this award is the culmination of our common, sometimes demanding cooperation.
BSz: What are the key challenges did you face in the subsequent stages of your work?
AG: It was very important to maintain the unique nature of such a long-term campaign. We had to make sure to adapt it to the changing realities and new implementation opportunities, without losing the unique undertones of our messages. For years our recipients have become used to and loved the way we communicate with them. And the language of our communication has become recognizable on the market.
BSz: What major innovations and transformation processes in your company supported the change of the business model and how did they affect communication?
AG: As of 2016, we have modernized more than 4,000 stores and opened 2,500 new locations. We have made key changes not only in the visual identity of our stores, but also in the product range, layout and furnishings. Following the new logo, the visual identification inside the stores has also changed – the decor has become brighter and more modern, and navigation in the store has become easier and more intuitive. The modernized stores, in addition to the well-known product range, have gained an extended offer of snacks, hot and cold take-away beverages and ready meals. We have also developed a package of additional services allowing us to carry out other everyday duties while shopping, for exampling paying bills. In the following years we focused on making the product and service offer of all the stores more coherent and matching it to consumer trends. These activities resulted in numerous product innovations for the convenience format, the development of a shelf for fresh products and the Quick Meal Solutions category, as well as new services, such as the possibility of collecting parcels in Żabka stores.
In turn, the year 2018 was a time of investment in the digital transformation of Żabka. In cooperation with technological partners, such as Microsoft, we presented technological innovations to facilitate shopping and store management. These included: smart shelves, self-service checkouts, one-second checkouts, electronic price lists, etc. These tools, using, among others, data analysis and artificial intelligence, enable minimizing the time of customer service, a more convenient and friendly communication of the offer, better adjustment of the assortment to the expectations of buyers and an improvement of logistics. During this period we also implemented the żappka mobile application, which allows for even better presentation of the offer, involving communication with customers and easier use of additional services.
In parallel, the transformation of responsibility was taking place in our network. We undertook many initiatives aimed, among others, at building pro-ecological habits among our customers. For example, we were the first in Poland to introduce innovative bottles made of 100% recycled material for beverages of our own brands Foodini, Wycisk, S! and OD NOWA water.
As a result of these multifaceted activities, we have achieved a new format, open to change, which attracted 20% more new customers and allowed us to respond even faster to consumer needs. Today, the Żabka store combines the advantages of traditional trade, satisfying the need for proximity and personal contact between the buyer and the seller, with a modern convenience format that meets the needs of a modern, fast living customer.
BSz: Would you agree with the statement that marketing has a key role to play in building business today if we look at CMOs as the conductor who manages all the experiences of people with a brand throughout the entire purchasing path?
AG: The role of marketing is to sense people’s unmet needs and create new, attractive solutions. The epidemic posed completely new challenges for marketers. They had to look anew at the needs and expectations of their customers. It was an important test for companies all over the world, verifying if they can adapt quickly and effectively to the changing environment. For many companies, due to the dynamic development of e-commerce, new possibilities of communication opened up, however, the speed of reaction and taking action were crucial. The effectiveness of marketing activities is influenced by the agility of the organization and the ability to adapt to the new environment. The faster the company is able to react and respond to the needs of its customers, the greater this effectiveness.
BSz: We are still in the extremely demanding period of the pandemic and social crisis, what have you learned during this time?
AG: In a pandemic, it has become crucial to skillfully use your own channels and campaigns to establish a closer relationship with your customers. And also finding answers to the real needs of consumers and ensuring the safety of your organization. This is what we did at Żabka. We almost immediately introduced new rules for the sanitary regime in stores, provided disinfectants, masks and visors to our franchisees and sellers. On the other hand, we have secured the logistic sequence so that our customers do not have any problems with buying food products during this difficult time, we have enriched our product offer with e.g. bread for baking at home or frozen meat, so that they can make purchases close to home, in their Żabka. In order for our customers to find out about this, we needed effective communication.
An important aspect of this time has also become corporate social responsibility and commitment to help medical services, providing disinfectants available to customers. An example of such an activity can be the action organized by us in the Żappka application, involving our customers in the transfer of żapps, i.e. loyalty points, for the benefit of hospitals treating COVID-19 patients. Each donated amount was doubled and together we collected as much as PLN 3 million.
Thanks to a quick reaction and full support, as much as 86% of our franchisees positively evaluated the support provided by Żabka during the pandemic, including securing the stores with protective measures. Also, among our customers, we were the brand most strongly associated with activities related to the fight against COVID in the category of retail grocery in Poland, indicated by 40% of Poles.
We have found that thanks to quick decisions, technological advancement and people’s commitment we are able to cope with the crisis, even as big as a pandemic, while not slowing down the pace of development. It was in the year of the pandemic that we achieved historical results for us – we have already opened over 650 new stores (more than in all of last year), increased the number of franchisees to 5,000 (compared to 4.2 thousand at the end of last year), we have also made the largest investments in modern logistics.
BSz: What changes observed in recent months will have a permanent impact on consumer behavior?
We expect that stationary stores will continue to prefer solutions that facilitate shopping in a fast and safe manner, including the use of contactless forms of payment. Customers are paying more and more attention to safety, so all actions for its benefit give a sense of comfort while shopping. It will be important to provide customers with various forms of making safe purchases, both in store and online. This is the purpose of the “Zamów i odbierz” [Order and pick up] and “Żabka do domu” [Żabka to go] services introduced by us, realized in cooperation with Uber Eats.
The pandemic has also intensified the trend of time to reach the store and to make the most complex purchases at one point. Our activities are aimed at increasing the satisfaction of customers who value Żabka for its proximity, accessibility and convenience. The solution that fits new customer needs is for example Żappka Pay or Żappka Post, which functions within the Żappka application. Thanks to this service, shopping in Żabka has become even easier and the visit to the store is reduced to a minimum.
BSz: What experience from working on such a campaign appreciated by the industry would you like to share?
AG: A long-term campaign can only be effective and efficient if it is authentic and credible for customers. We have achieved this because over the years we have actually changed as a company, which our customers have tangibly experienced. As a result, we have contuniously maintained consistency in achieving business and communication goals.
BSz: What role does Żabka want to play as a brand in times of crisis?
AG: As a brand we want to be associated with modernity, comfort, but also responsibility. Since the beginning of the pandemic, we have been doing everything we can to ensure a sense of security for our employees, franchisees, and customers alike. To this end, we have reorganized the functioning of our headquarters, offices and stores. We guarantee our franchisees, of which we already have 5000, stability in these difficult times. Many entrepreneurs, appreciating our confident and proven business model right now, in the crisis, have decided to start cooperation with Żabka. At the same time, we are aware that especially in such difficult times we can support and positively influence the social environment in which we operate. Therefore, without a moment’s hesitation, we have joined in helping the Polish health service, supporting both the central activities of the health ministry and helping local health institutions in cooperation with our franchisees. We have also become involved in supporting regional infectious diseases hospitals of the users of our Žappka application, as a result of which PLN 3 million have been donated to the institutions’ accounts to fight against COVID-19. This proves to us that it is right to use mobile technologies not only for marketing and sales support, but also for CSR activities.
BSz: What sustainable changes do you anticipate in post-covid marketing?
AG: The time of the pandemic introduced us to the so-called “new reality”, in which customers more often shop fast, in small stores, close to home. They are also more willing to use touchless forms of payment, they use the services of having their purchases delivered to their home or collecting parcels in facilities such as Żabka. The development of services has undoubtedly accelerated and this trend will continue. There have also been changes in the product offer – for example, the category of ready-made dishes is developing very well. Digital communication, maximally personalized, will also be a permanent change.
BSz: Thank you for this conversation.