WHAT DRIVES REWE GROUP?
In this interview Lionel Souque, CEO of REWE Group, talks about the “questions of the future” motivating REWE Group. He also explains what drives the company and its employees in every area and at all levels.
The title of this Annual Report is “A Question of the Future”. What is decisive for the future of REWE Group in your view?
Lionel Souque: We are a leading European trade and tourism company that is currently engaged in an extensive transformation process. I am convinced that the digitalisation of all areas of the economy and life is still in its infancy. Those who believe that we at REWE are already way out in front with digitalisation through our delivery and pick-up service are vastly mistaken; this is just the start. The decisive question of the future for us is how well we will succeed in combining the old with the new.
What does it mean concretely to combine the old with the new?
Lionel Souque: Let’s stay with the topic of digitalisation. Up to now, all the forecasts for the market share of e-commerce in the overall German grocery store market have been pretty misleading. Depending upon what you count, right now in Germany we are at one percent or a little more. Even so, it is clear that this share will continue to rise; the question is merely how fast. So we have to invest in e-commerce with groceries and, at the same time, in stationary stores and structures. That is a two-fold challenge that we did not have in this form 15 years ago. We see something similar happening in tourism, by the way: Travel agencies, which were long regarded as obsolete, are undergoing an astonishing renaissance – at least as far as our DER Touristik travel agencies are concerned. 2017 was an economically outstanding year for them. At the same time, the expansion of e-commerce in tourism continues to be at the top of our agenda.
“The decisive question of the future for us is how well we will succeed in combining the old with the new.”Lionel Souque, CEO of REWE Group
So is the combination of the old with the new mainly a question of investment, as investments are necessary in both stationary and digital structures?
Lionel Souque: It’s not quite as simple as that. On the one hand, it is true that we have to keep our investments at a higher level over the medium and long term than we have in the past 10 to 15 years. On the other hand, we also have to change our thinking here at REWE Group: Especially in food retail, we have to see and position ourselves more strongly as a logistics and technology company. Logistics and technology are key factors in our future success – that is, for the efficiency, cost management and profitability of our business. That is why we are working very intensely on topics such as automation, artificial intelligence, big data, voice systems, augmented reality and augmented virtuality.
That sounds as though the future is still very far from the daily work environment and experiences of the hundreds of thousands of employees in the REWE Group’s stores and warehouses.
Lionel Souque: No, it isn’t far away from reality in our company at all. We are already testing a number of future applications in our warehouses and stores. And anyone who looks at our merchandise management systems or the way goods are ordered for our stores by our employees, or the tools that are used for this, for instance, understands that the digital transformation process is underway full steam. Its integration into practice at our company is ongoing. The most recent example is our highly automated technologised warehouse for REWE’s delivery service in Cologne.
Is it then also a consequence of this development that technology is becoming more important and the value of employees in administration, warehouses, stores and travel agencies is diminishing?
Lionel Souque: People who think that have not understood the situation well at all, and are making a serious mistake. I am convinced that one benefit of digitalisation is that the significance of people in companies is more likely to grow than decline. Food retail and tourism need competent employees who are very enthusiastic about their business and their company. It is precisely that – this passion and enthusiasm – that makes the difference in competition, and customers sense that and reward it.
What makes you optimistic when you think about the coming five to ten years at REWE Group?
Lionel Souque: We are very well positioned nationally and internationally in both trade and tourism. Our revenue growth is good in all areas, as we have already invested very heavily in modernising our sales networks over the last few years. At the same time, we are the industry pioneer in e-commerce with groceries and are driving forward the digitalisation of all our business models through high levels of investment. In particular, however, we have high-performing, committed retailers, managers and employees in every area of our company and at all levels. And that is the most important thing: We have a team with the courage to shape the future and a hunger for success.