A TECHNOLOGY AND DATA DRIVEN RETAILER DIGITAL REPORT 2022
IN ASSOCIATION WITH:
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A TECH DATA DR
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MIGROS - GENOSSENSCHAFTS - BUND
HNOLOGY AND RIVEN RETAILER
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Martin Baschnagel, CTO and Group Chief Enterprise Architect at Migros, discusses the company’s data-driven approach to accelerating digital transformation
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t its core, Migros is a retail organisation committed to improving people’s quality of life in our society. “Our values are Community We are close; Responsibility - We do good; and Pioneering spirit - We create something new,” explains Martin Baschnagel, CTO and Group Chief Enterprise Architect at Migros. He adds: “We are the biggest private employer in Switzerland; our core business is in retail including its own production, but we are also very active in finance, travel, health and in the area of sustainability as well as social engagement”. Since our founding in 1925, Migros has grown into an ecosystem of 240 legal entities. After joining the company in February 2021, Baschnagel has consistently been involved in driving the digital transformation in all business areas. A data-driven approach to accelerating digital transformation Migros' ambition is to become a truly datadriven company. “Migros would like to offer its customer a first-class and fully consistent experience, which means that the data is used consistently and at the same time securely across our entire ecosystem in an ethical and safe way,” says Baschnagel. “We want to gain the maximum value from our data in order to improve our processes from the supply chain and procurement functions to our customer in-store” corporate.migros.ch
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MIGROS - GENOSSENSCHAFTS - BUND
1925
Year Founded
100,000
Number of Employees
28,932Mio.CHF Revenue
“ THE PANDEMIC KICK STARTED A MAJOR SHIFT TO ONLINE RETAIL CUSTOMERS AND THE DEMAND FOR A SEAMLESS EXPERIENCE BETWEEN ONLINE AND OFFLINE OPERATIONS” MARTIN BASCHNAGEL
CTO AND GROUP CHIEF ENTERPRISE ARCHITECT AT MIGROS
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Two use case examples for this field within Migros, are: Firstly, the M OPEX Tower, which provides visibility and a reduction of 70% carbon footprint on truck deliveries by 2030. Secondly, the ability to provide real-time individual recommendations for customers with an omnichannel experience. The organisation places importance on being open and honest. “At Migros, we attach great importance to providing full transparency towards our customers”. “An example of this is the sustainability of our products and our own production with formats like ‘M-Check’ or ‘V-Love’,” says Baschangel. A capability that its data-driven approach has helped them to achieve.
MIGROS - GENOSSENSCHAFTS - BUND
MARTIN BASCHNAGEL TITLE: CTO AND GROUP CHIEF ENTERPRISE ARCHITECT
From a modern data and analytics platform to a data-driven retailer Dedicated to its vision of ‘Systems of Insight’, Migros is laying down the foundations for becoming a data-driven retailer with a modern data and analytics platform. “This will harmonise our current heterogeneous DWH landscape and enable data democratisation,” explains Baschnagel. “Part of this platform includes the development of a data catalogue, which enables us to use the data in the Migros ecosystem efficiently and securely and to know in real-time where data is located, where it comes from and it’s quality.
EXECUTIVE BIO
LOCATION: ZURICH, SWITZERLAND An enthusiastic agile leader who deeply cares about architecture and technology to ensure it delivers appropriate value to business. Parallel to his job, Martin completed his studies in Computer Science and in Management, Technology and Economics at ETH. He started his career as a software developer. He then moved to Swisscom as an Enterprise Architect, where he was first responsible for the architecture of Mobile, then for CRM and Online, and finally took over responsibility for the entire architecture landscape. Since February 2021, Martin is responsible for technology and enterprise architecture at Migros. In this role, Martin drives the digital transformation with his team, working on the vision for Systems of Insight, the Journey to the Cloud, and the simplification of the IT landscape.
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retailsolutions: Digitalisation in retail with Migros Group Jörg Frisch, Co-Founder & General Manager, retailsolutions AG, reflects on the past, present and future of its long-standing partnership with Migros Group As one of the leading SAP retail consulting organisations in Europe, retailsolutions has, from the very beginning, specialised exclusively in the retail industry. “The retailsolutions family consists of more than 250 experienced IT experts and consultants in six European locations,” says Jörg Frisch, Co-Founder and General Manager of retailsolutions AG. “We place great value in personal contact with our customers at eye level. To achieve this, one of our managing directors is always personally involved in every project. retailsolutions AG offers solutions along the entire value chain from one single source – from strategic consulting to development, end-to-end from licence sales to subsequent support and maintenance of the solutions.
retailsolutions AG and its partnership with Migros Group One of retailsolutions earliest customers was Migros Group, a relationship in which Frisch has been personally involved since the beginning of the partnership. “We have a long-standing strategic partnership with Migros; both with the Migros Group and with the cooperatives and subsidiaries, such as
Migrol, Migrolino and Denner,” explains Frisch. “For many years, we have been able to contribute our core competencies to numerous projects in various areas such as retail, finance and petrol station retailing.” Recently, retailsolutions AG has been collaborating with Migros Group on its EIGER project, one of the largest transformation projects in Europe to date. Frisch explains further: “The project includes a complete business engineering, in which all business processes are optimised in the direction of standardisation, harmonisation and customer benefit. Our biggest challenge was to implement these complex processes with the latest technologies and cloud-based solutions in such a way that Migros Group was not only well equipped for the digital future, but can also fully benefit from the advantages of digitalisation in terms of productivity, flexibility and competitiveness.” Frisch concludes: “We are proud to be supporting Migros Group in the implementation of its strategic plan for the future and digitalisation.”
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Migros: A technological and data-driven retailer
“THE ONLY THING WE REALLY KNOW FOR SURE ABOUT THE FUTURE IS THAT IT WILL BE CONSTANTLY CHANGING” MARTIN BASCHNAGEL
CTO AND GROUP CHIEF ENTERPRISE ARCHITECT AT MIGROS
“Information flows and data architecture are essential and serve as enablers, which is the reason why we attach great importance to them and establish appropriate platforms for streaming and API management. Data governance completes this and ensures that the data we have is used securely and ethically, becoming part of the Migros DNA.” 10
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COVID-19 and its impact on digital transformation It is no secret that COVID-19 has caused waves of disruption throughout many organisations, with Baschnagel saying that “the pandemic kick-started a major shift to online retail customers and the demand for a seamless experience between online and offline operations”.
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He adds: “The pandemic also changed the working environment for employees to a hybrid model. This has become the new norm among many organisations that are focused on efficiency. We have also experienced a major digital and especially agile mindset shift among employees during the last 24 months.” It is this mindset that is fundamental to a successful transformation. “Digital transformation is only possible with modern and agile forms of cooperation and the appropriate mindset. Within Migros (especially in the Migros-GenossenschaftsBund), we use Scaled Agile Framework (SAFe) and have already established 8 agile release trains (ARTs), in which more than 1000 people work together in an agile way. The agile transformation and the digital
transformation go hand in hand at Migros and is the prerequisite in order to react to new business needs with the necessary flexibility and speed,” explains Baschnagel. “This way of working promotes good and close cooperation between business and IT, which we see as an essential success factor to reach our goals and to stay successful in the digital transformation at Migros. “The Enterprise Architecture Team, that I have the pleasure to lead, is right in the middle of all this and acts as a facilitator to accelerating digital transformation with the data-driven approach. Thereby we analyse business needs provide orientation, strive to ensure maximum value, ensure lean governance, and build out the technology base, all with a key focus in mind: transparency.” corporate.migros.ch
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NETCONOMY: How We Help Brands Transform into Market Leaders NETCONOMY’s Chief Customer Officer, Thomas Ziegler, talks about their 10-year-old partnership with Migros, resulting in experiences that delight An organisation with over 20 years of experience, NETCONOMY’s mission is to help global brands transform their digital ecosystems. The company focuses on creating innovative customer experience solutions via SAP’s Customer Experience portfolio and hyperscaler technology by Google Cloud Platform and Microsoft Azure. NETCONOMY values long-lasting relationships, so it’s no surprise that their partnership with Migros started over 10 years ago. Their goal is to fulfill Migros’ vision by developing a deep understanding of who their customers are and what they need. At the start of their collaboration, NETCONOMY developed online and mobile touch points as the first digital ones for Migros – enabling customers to engage with the brand wherever they are. Speaking on their progress, Ziegler said: “The NETCONOMY solutions support Migros in creating a 360-degree profile of the customer in real-time, based on their data. That means that they can understand how the customer interacts with the brand, as it’s happening.”
NETCONOMY has also been focused on building Migros’ response times when the customer needs immediate attention. “Together with Migros, we’ve achieved a strong connection between offline and online touch points, which helped create a seamless experience. Because seamless isn’t only about the technology; seamless also means that the customer always feels treated in the way they expect,” commented Ziegler. Looking to the future and what is next for their partnership, Ziegler said: “We will be working on extending the platform with the focus on supporting Migros with better understanding customer data – by knowing how customers interact with their brand, Migros will be able to engage with them in a relevant way and act in real-time on every touch point. At the same time, we will be working to make Migros even more flexible and agile, so that they can quickly react to the changing demands of customers, fully leverage customer data, and ensure that they are always one step ahead.” Ziegler concluded.
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“ OUR CLOUD-FIRST APPROACH IS AN IMPORTANT PRINCIPLE FOR A TECHNOLOGY DRIVEN MIGROS” MARTIN BASCHNAGEL
CTO AND GROUP CHIEF ENTERPRISE ARCHITECT AT MIGROS
“In order to stay ahead of the increasing customer expectations, we need to constantly optimise our IT landscape. This optimisation is only possible with full transparency of the architecture in place” says Baschnagel. A significant tech driver for Migros is cloud technology. “Our cloud-first approach is a very important principle for Migros. Thereby it is important that we take a holistic view of the digital transformation and of the ‘journey to the cloud’ and take the opportunity to not only modernise the IT landscape but also to simplify it, consolidate it and decommission legacy systems, where possible,” continues Baschnagel. Based on that approach Migros has defined a Cloud Operating Model to optimise and evolve more than 2,700 group applications. “We have already been able to successfully transform over 550 applications into the cloud and benefit from the cloud advantages such as access to innovation, improved security, optimised elasticity, new resilience concepts and finally cost flexibility,” says Baschnagel. “Cloud is one of our biggest drivers.” “To predict the future is very hard. The only thing we really know for sure is that 14
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MIGROS AND ITS PARTNERSHIPS Over the years, Migros has made some key strategic partners along the way, many of which are involved in its large-scale initiatives to drive its digital transformation, from both a technological and business point of view. “One of the big programmes we are currently working on is EIGER and has the goal to harmonise and digitalise our processes as well as modernise our application landscape in the retail sector. There we are working closely with partners like RetailSolutions, IBM or NetConomy,” says Baschnagel. “For me, it is essential, that we have trustful relationships that allow us to offer faster and better solutions to our customers alongside our partners”
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What if →
you were a gigantic snack food maker and you had to wrestle a massively complex supply chain to satisfy cravings from Tokyo to Toledo? So you partner with IBM Consulting to bring together data and workflows so that every truck driver and merchandiser can serve up jalapeño, sesame, and chocolate-covered goodness with real-time, data-driven precision. So that everyone says...
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IBM supports Migros to build the foundation for merging online and offline channels ↷ IBM and Swiss retailer Migros are building a new business process platform that helps unifying the customer experience across all channels. While e-commerce had dramatically changed the retail business in many areas over the past decade, grocery shopping was long regarded as a pure offline domain – until the outbreak of a global pandemic in 2020. Since then grocery retailers are confronted with a significant change of their business model, not only due to the growing online demand, but also through other megatrends like sustainability and a frictionless shopping experience. ‘The large retailers – such as Migros in Switzerland – are beginning to embrace innovation and change at a pace and a magnitude that probably was not known in grocery stores since the invention of the supermarket’, says Florian Melchert. He is Associate Partner with IBM Consulting in Zurich, which was chosen by Migros as an implementation partner for one of the largest transformation programmes in its history in order to address this tremendous change. Melchert and his team are determined to support Migros, harmonise and streamline
core business processes and implement a single state-of-the-art application platform, that will allow the seamless integration of traditional and online shopping and that is attractive to consumers.’ Why? Because the positive aspects of both models can be blended into one unified shopping experience. Melchert calls this approach ‘No-Line Commerce’. He is convinced that this is the future in an ever-changing retail market, in which the consumer does not really care or need to care where products and services are purchased or even returned to. Consumers can switch the channels as they like. And this No-line idea will not stop at the traditional supermarket assortment: ‘Customers are getting more and more used to combining assortments, leverage multiple channels, and switch their buying behaviour frequently. And it is in these conditions large retailers like Migros need to offer services as solutions, in order to retain and even extend their market position.’
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“ DIGITAL TRANSFORMATION IS ONLY POSSIBLE WITH MODERN AND AGILE FORMS OF COOPERATION AND THE APPROPRIATE MINDSET” MARTIN BASCHNAGEL
CTO AND GROUP CHIEF ENTERPRISE ARCHITECT AT MIGROS
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the needs will be constantly changing, so we will need to be able to effectively adapt to new requirements. Therefore we are adopting principles of "evolutionary architecture" which brings us lower risk and provide orientation with important technology and business strategy visions,” highlights Baschnagel. "In addition, the cloud journey will bring simplification and help us adopt a datadriven approach to our architecture. It will be these elements – embedded into our ecosystem – that will help us to drive the next steps of our digital transformation strategy over the next 12 to 18 months.”
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