Digital Innovations Disrupting the food retail industry: The case of Auchan Retail Italia

Abstract

The thesis focuses on modern supply chains, that should be considered as vast ecosystems, world-wide interconnected supply-and-demand networks with profound interdependence rather than traditional networks of OEMs and suppliers. The global marketplace is indeed dominated by companies operating all over the world. This requires efficiency and coordination and, not surprisingly, nearly all the most important organizations run computerized ERP and supply chain management software. Digital innovations are disrupting global businesses’ operations: think to the use of IoT, RFID, cloud computing and artificial intelligence. Supply chains are becoming more and more dynamic and the old point-to-point messaging systems associated with highly vertically integrated firms seem not to be working in many cases. One of the latest trends is the use of blockchain, with which companies can rebuild their approach to supply chain management at the ecosystem level and develop new business and trust models, able to support multiparty collaboration around shared, trusted data and process automation across organizational boundaries. In Italy, the diffusion of digital innovations, especially those supporting the shopping experience at the store level, is significantly increasing; however, this transformation is still slow. According to the Polytechnic of Milan, only 42% of big retailers see digital innovation as a key factor to success and incorporate a well-defined digital strategy. Nonetheless, a path toward the awareness of the huge potential of technology has been promoted, driven in particular by the integration of innovation-oriented professionals at the top management level. The differences among industries are significant: while in IT, electronics and apparel more than 80% of retailers make use of digital channels for their sales, in the food industry only 30% of top retailers actively use their website for e-commerce Not only the major players but also small retailers and startups are contributing to the digitalization of food retailing in Italy with many different initiatives and technologies. The country is still behind its global counterparts, but the growth and attention to industry 4.0 is substantial. A focus on customer experience will remain a key factor in companies’ strategy, but with a constantly increased digital approach. The thesis will explore the case of Auchan Italia, which is collaborating intensively with startups. For instance, the company is working with Take My Thing, which uses cargo bikes and electric scooters. Thanks to this partnership, Auchan boasts a delivery service in Bergamo, through which customers can shop online and get their products at home within one hour. Other collaborations include the one with RetApps for the development of a mobile payment app Auchan Speedy and InVRsion for the virtual reality projects. In addition, after the success of the experimentation in Vietnam, Auchan developed the blockchain at the international level. In Italy, thanks to a collaboration with Te-Food, a German startup, this technology is applied to meat and fruit and vegetables supply chains starting from the first semester of 2019: information about all the stages of the product’s lifecycle is available with complete transparency.