re:retail: Al Safi Danone CEO’su Tolga Sezer’le COVID-19 sonrası yeni çalışma modellerini konuştuk!

Hello, everybody.

This week's guest of
Vispera re:retail program,

which we developed to address
the changes in the fast-moving consumer

and retail industries
is Al Safi Danone Chairman Tolga Sezer.

Welcome, Mr. Tolga.

Thank you, Mr. Gökhan.

In the process of digital transformation,

there have been issues
on people's agenda for a long time.

Now everyone is going through
an accelerated period due to pandemic.

Can you share with us the decisive factors

for your company's success in this period?

Now, I'd like to talk about
this change first.

Yes, of course.

We're going through an incredible period.

We talked a little bit
before the recording started.

I've been managing 14 countries
as Dubai centered for three months.

Although the company
headquarters is Riyadh.

I have three screens
in front of me on a big table,

and I feel a little bit like a "trader,"

and I'm having very busy shifts.

It taught me a lot.

In fact, the most important
impact of this experience is

that it taught something to us all.

The first thing, you know,

particularly multinational companies,

large companies,
they always do a risk study,

they make a risk map.

I don't know if you ask
in your conversations:

"Was the pandemic on anyone's risk map?"

Well, it's a situation
that most people don't expect,

a little bit like a black swan,

that's generally possible
in finance systems,

but nobody thinks of it.

I know these risk maps
as "real" very well, the way they work.

I don't think any company sees this

in the 10 most probable
and influential risks.

Whoever says this, I'm sorry but

nobody has that much foresight.

We were all caught off guard.

We also talked about this;

we didn't even foresee it
when it was coming from east side.

It was an incident in China,
in a certain part of China.

And no one thought that
it would affect the world

and the way we do business,
the way we live.

Now, about health...

Actually, Mr. Tolga, I can say this:

Now, when the first virus
broke out in China, in Turkey,

we thought,
"Well, it probably won't come here."

Because there have been

similar scenarios before.

It was not something that

anyone thought,
personally or institutionally,

that it would turn into such
a big pandemic, an epidemic disease.

In short, the pandemic is real
and it has an enormous effect.

And we're probably going to talk
about the "new normal".

It's probably going to be
very decisive on "new normal."

Second point is health.

Health is so important now, in everything.

We'll talk about the effects of this.

Third, it has had this effect
on all of us:

we went into our shells.

We've been home for three months,
we've been working from homes,

and I guess that's also how you work.

Exactly, we've been home since March 13,
working from home.

Yes. I've been home since March 10,

and it has had this shell effect.

It's some kind of trauma.
And we'll see the impact in the future.

We see that authority is being redefined.

There's a very serious debate
right now all over the world.

There is a redefinition of authority

and we will see the effects of this.

And of course, the most important thing is

the digital transformation
that concerns both you and us.

I've spent a lot of time working,

of course, there's such a big operation,
and we've got 3,500 people working,

and we're going to
over 30,000 markets in 14 points.

In Riyadh, in the middle of the desert,

we have 55,000 Holstein cows.

We are also responsible for them.
We take care of them.

We have a mega production facility
and 27 lines on the same campus.

It's a big operation.
And of course, it's very complicated.

Of course, managing this
from a distance in this way has been...

-...a very interesting experience.
- Yes.

Now, while I was doing this,
I followed as much as I could.

As many of the world's leading
management consultants,

I'm guessing they had many spare times.

There were great and interesting programs.

Now, the most important COVID effect

that I've ascertained from these is

that COVID doesn't actually
create new trends.

COVID accelerates some existing trends.

This acceleration effect is
very interesting.

We were talking about digital.

Digital was, of course, on our agenda.

We did some simulations with you,

we did some tests,
we already started working.

But right now, as a result of
an incredible acceleration effect,

I think digital transformation

has become a requirement

For all organizations.

Now, it has a very important place,

of course,

on our agenda.

So, we say
digital transformation is essential.

And we have to put
a lot of effort into it.

Because for the company's success,
there are many changes,

many innovations.

For instance, you have to
look at your organization.

Old silo-style organizations
will no longer be effective

in "new normal."

Therefore, the organization
needs to change.

It is important that
a much more horizontal,

much more efficient organization emerges.

Why? Because you have to make
quick decisions.

The continuous crisis management

in the last three months showed us this.

If you cannot make a quick decision,

it is very difficult
to manage your business.

You will also find information faster

to make quick decisions.

You have to process
information very quickly

and you will come to a certain conclusion,
you will make a decision.

It's hard if you don't have that ability.

Absolutely.

In fact, all of the things
that you're saying now,

all of the concepts point
to a situation that I've noticed

during counseling
that I've done over the years.

For instance, we've always told
our customers, our stakeholders,

that digital conversion is very important.

And we were always between
what is digitization

and what is digital transformation?

Digitalization is the opening
of an application,

which can be a traditional application,

to users on a digital front face,
in digital environments.

Digital transformation, on the other hand,

is the reconstruction of everything
with its organization

and operation model
and designing it in a truly digital way.

These two are different.

There is a difference
between digitalization

and digital transformation.

And that was one of the things that
we've been talking about for many years,

as I said, with our stakeholders,
with our customers.

On top of that,
digitalization is not enough,

digital transformation is required,

and you have to do it quickly.

Whatever you do, you no longer have time

to do a two-year
digital transformation project.

You have to design this
and launch it within a few months,

and then improve it in an iterative way.

The concept of "new normal"
entered our lives

through the COVID-19 process.

What do you think "new normal" is?

What are your predictions for
the technologies that will support your

business processes during this period?

Mr. Gökhan, that's very accurate.

I don't think many companies have fully
understood the digital transformation.

Right.

Therefore, it is essential
to make a great effort.

Now, our chance was this;
I'm already here at Al Safi Danone

to manage transformation and change.

So before the crisis,

we had already started a transformation
and change program.

And instead, I created
a new leadership team, and of course

we had a new vision, new goals,
a roadmap, with this leadership team.

In fact, we shared this new roadmap

and this new growth map

with the whole organization
just before the crisis.

However, before the crisis, it was perhaps
50-60 percent of the organization

that truly and wholeheartedly believed

in this change and transformation.

After the COVID, three months later,

I'm guessing everybody believes it.

Right.

So again, we've had
a serious acceleration effect.

What's "new normal" gonna be like?

First of all, business and office life
will not continue as we know it.

That's clear.

Of course, not in the field,
not in the "frontline,"

but in the form of "back Office,"
headquarters and so on,

a number of support departments
worked in a "remote" format

for three months.

And I think that's generally efficient.

We handled it well.

We had a certain infrastructure,
we used it well.

And we're thinking about
going on like this.

Of course, we're not going to do it
all the way from a distance,

we're going to do it as a hybrid,

but I certainly don't see it
very efficient for companies

to go back to the office
and continue working as before.

Considering the new precautions,

we need maybe three times the office space

because of these new regulations,
social distance and so on.

It's clearly not feasible.

So office life needs to change,

and I like the definition here; "hybrid".

It's all remote management,
not remotely working.

Not exactly office life like old times.

But I think there will be
an optimum point of this.

And of course infrastructure is
very important here.

We use Microsoft Teams,

and we don’t even use
10 percent of its talent.

We discovered that the system is
much more talented.

This period of crisis taught us this.

The channels will be completely different.

I mean, sales channels are an e-commerce.

Again, we're all talking,
e-commerce has been on our agenda.

But let's face it, it wasn't our priority.

Now there's been
such a growth in e-commerce

that,

in chain stores, which are our clients,

we're working with them,

even on the e-commerce
platforms of chain stores,

our "listing" wasn't done,

our prices were false,
our product visuals were out of date.

We faced such a fact.

So again, in a very accelerated effort,

these were corrected,
the lists were completed.

But other than that, it's only
a certain part of the e-commerce.

Other aggregators,

different models, new systems,

maybe direct consumer access;

this channel is now
a very different level.

And again, it requires

a serious focus.

So we need to look at new business models.

So what we've done is that the group
that we're in contact with has some

venture capital companies,

where we're thinking of building
an incubator with them.

Because again, I think it's going to be
a very important part of change.

I think it's very unlikely that any of
these large companies, the big ones,

will be able to actually run these
exchange projects individually.

So we want to build this structure
and follow not a few,

but more of the projects.

This is going to be
an interesting opening for us.

Definitely.

Life on the field will change.
Why?

We talked a little bit
about this with you.

Everyone on the field is waiting
for maximum efficiency.

The consumer wants to go in
and out very quickly.

Of course, there's a lot of pressure
that comes from this.

Why?

If you don’t have the merchandising
exhibits in the right place,

then the consumer is unlikely
to choose you anymore.

We also expect our field team

to work highly

and efficiently at the minimum time.

Because there's a risk factor again.

Especially in
massive operations like ours,

if you think about
a Saudi Arabian market,

we have over 550 roots.

Yes, it's a big country.

Of course, we have over 550 roots.

These are all cold-distribution,

milk and dairy products are hard,

very fast, the fastest transformation
of the industry.

-And here...
-It's very critical for you

because you have a shelf life product

that requires you to have a plan

to visit the most frequently
sold points at root first.

And you have to do this dynamically,
this optimization,

this planning in the current conditions.

So that the maximum product
should be kept in the display.

Maximum sales before
the shelf life is completed.

-It is vital for us.
-Yes.

It is vital for us.

For instance, before we started
this transformation program,

we saw that
the return rates were very high.

It was one of the serious problems
of the company,

and we had problems in many fields.

But the return and the natural damage

that came out of this was extremely high.

And that's all about
how you run the operation in the field.

Therefore, I think

it is a very important focus area.

And here, of course, we need to use
all kinds and efficient of technology.

It's true.

We saw the benefits of this very clearly
in our simulation with you.

Maybe it wasn't much up there before
during the moment of importance,

but it's become essential now.

Of course reporting and data,
we've talked about this.

Now, there is also some in Turkey, too,
although Turkey is ahead,

there is a lot of manual reporting
in the Middle East.

Even though we have a system,

reporting is still more manual,

there are still many reports
that are being done through Excel.

These need to change.

You can no longer expect someone

to prepare an Excel report
for you to get to "data" quickly,

to get to information quickly,

to process fast, and to make decisions.

Therefore, I think that
system reports should become

much more "effective".

Absolutely.
I'm going to say a few things now.

One of them is, of course, everyone is
trying to be an "insight driven company".

Which is very important to be
managing the company with the data,

and it is a point that
everyone wants to go to.

Now when I think about
the solutions Vispera provides,

what do you do, in fact,

you take a picture of the shelf
and get some information about it.

Is the product visible, on the shelf,
compatible with the planogram,

price label on the same place
as the product, correct?

You can control all this.
That's a good thing.

It actually dramatically increases
your time in the field,

the time and efficiency
of your field team.

Of course, when you combine this
with your sales data

or combine it with other data sets,

you have the opportunity
to do a lot of analysis.

That's an important point.

The technologies
we've developed are often around

issues like "intelligence"

and "computer vision."

I would like to ask a question
in this context.

Considering that there are issues
such as "artificial intelligence",

"artificial vision", "internet of things"
and "blockchain" in the new era,

what are the opportunities
these new generation technologies

can provide to your industry and you?

Now, the most important opportunity is

again, for me, the merchandising
and display is vital.

In such a short period of time, it is very
important for me to be in the right place

with the right product in the right time.

First and foremost,

this system will affect
our efficiency at this point.

And again,
this was an issue of efficiency,

and it's become a vital issue right now.

At the same time, the consumer
wants to spend minimum time,

and my sales team still
needs to spend minimum time.

He's got to keep an eye on
hygiene and sanitation there.

So in this new normal, again,

I think this tool will be vital to us.

Second,

now, considering this interesting process,

if you remember,
consumers first ran to chain stores.

Of course, there was a rush of shopping.

And long shelf-life products were bought.

There was an explosion
in the first supermarkets.

E-commerce failed.

E-commerce could not deliver orders.

So here, -very famous
but let's not give names-

the big chain stores
have gone over two weeks.

Think about it, you order from e-commerce,

and its estimated delivery is
two weeks later.

That's no good.

Orders were shipped wrong.
They had big problems.

Of course, they had inventory problems.

For instance, you order it,

as if it is in the stock,
but the product does not arrive.

Why?

In fact, there may be a result here,

such as the inability to monitor stock
and track inventory instantly.

Yes, well, it turns out
there's a serious systemic weakness.

Now, that was the beginning
of the process.

And then, of course,
we got to an interesting point.

This time, he discovered
the proximity channel,

the curfews, the restrictions

and so on, and suddenly they discovered
the grocery store in their neighborhoods.

-Discovered it again.
-Discovered it again.

So, of course,

the merchandising
and availability at those points

also became very important.

Therefore, if we look at this balance,

the effective use of these tools
will be crucial for availability

and merchandising displays

at these points.

We are going to many points
in terms of the structure of the business.

And if we do not have
a solution at these points,

it will not be possible
to use these points effectively.

Again, an essential situation.

Right.

So again, it was an interesting project.

But I didn't, for example,

get feedback from my team
that this was essential

to our operation,

and it was a very important solution.

But right now, I assure you,

the team is fiercely demanding
this solution.

Because first of all, again,

we have a certain workforce,
a certain team.

We have, of course, done a lot of work,

to keep the workforce,
to keep an eye on it,

and to make sure that they do
business in the framework

of the new hygiene and safety procedures.

So these kinds of solutions,

they're going to be very helpful to us.

There was those display staff
in the old times...

That man comes in, goes to the shelves,
and touches everything.

So for example, in "new normal,"
that also became very limited.

Of course.

Notice that many markets,

many chains, are trying to minimize this.

Yes, that's right.

Mr. Tolga, thank you very much

for your time at re:retail.

So, as you mentioned,

the business community is having
a very serious transformation,

which we've all seen together.

So, thank you again.

Thank you, Mr. Gökhan.

These subjects are interesting,
of course, multi-dimensional subjects,

they have very interesting explanations.

I repeat, again, an important teaching:

Wherever we are,
in whatever position we are,

no matter how old we are,
we need to learn all the time.

And I think this process
has shown us the importance again,

and that's why I'm interested
in these new technology openings

and solutions that I find very important

and I'm personally interested in.

So I'd like to see
the cooperation with you

develop and go to other places.

Great, thank you again.

Thank you.

Dear viewers,

we'll be here again next week
with a different guest.

But during that time,
you can always reach us

on our LinkedIn account.

Until the next episode, goodbye.

Take care of yourself and stay healthy.

See you.