Fostering a tradition of digital innovation shouldn’t disrupt the established order, Mirko Saul, senior vp of innovation at Schwarz Digital, tells Stephen Wynne-Jones. This text first appeared in ESM’s July/August 2025 version.
Since taking over the position of senior vice-president of innovation at Schwarz Digital – the digital innovation arm of Lidl and Kaufland guardian Schwarz Group – in 2020, Mirko Saul has spearheaded quite a lot of technological transformation initiatives on the German retail big, serving to to outline its digital path ahead.
Saul is a greater than 20-year veteran at Schwarz Group, having joined Lidl as head of digital expertise again in February 2003, earlier than taking over quite a lot of different tech roles forward of the institution of Schwarz Digital in 2018.
As he tells ESM, balancing the demand for innovation in an organization like Schwarz Group – with long-defined working buildings – requires a “multifaceted strategy. It’s about strategically integrating new concepts and applied sciences with out disrupting the core enterprise and leveraging the strengths of each. The core enterprise all the time comes first.”
As a retailer, Schwarz Group prides itself on its vertically built-in construction – with management over its meals manufacturing and logistics operations – and that is equally the case in the case of expertise, with the group bringing its cloud infrastructure, cybersecurity techniques, and AI capabilities in home.
“This precept of sovereignty guides the technique at Schwarz Digital by prioritising the event and deployment of in-house options for essential digital infrastructure and safety,” Saul explains.
“This doesn’t essentially imply constructing all the pieces from scratch, however, moderately, strategically deciding on areas the place inner management and experience present vital benefits.”
In 2023, the German operator established a brand new ‘ecosystem’ – Schwarz Digits – which encompasses Schwarz Digital, Schwarz IT, cloud operator STACKIT, XM Cyber, Kaufland’s and Lidl’s e-commerce operations, retail media supplier Schwarz Media, and full-service digital company mmmake, consolidating its cloud, cybersecurity, e-commerce and retail media beneath one roof.
Inside this construction, Schwarz Digital acts as a platform to determine and take a look at rising applied sciences earlier than scaling them for roll-out within the group’s retailer property, guaranteeing that options are both scaled or shelved, relying on enterprise feasibility.
The Position of AI
With this in thoughts, AI is enjoying an more and more vital position in each establishing and defining the success of those improvements.
One instance is the usage of AI-powered chatbots to ship roundthe-clock multilingual buyer assist in 30 nations – one thing that wasn’t beforehand an choice, because of the price and scale concerned.
“We’re implementing and utilizing AI throughout Schwarz Group,” Saul explains, including that profitable implementations embody “laptop imaginative and prescient for fruit and vegetable recognition and loss prevention”, in addition to generative AI for customer support and content material era.
In time, he expects autonomous transport options to additionally type a part of Schwarz Group’s AI-powered providers, “[although] it is going to take some years till we see autonomous vehicles on European roads in each day operation.”
Elsewhere, Schwarz Group is endeavor a venture that can see the retailer create ‘digital twins’ of each product in its assortment – together with components and packaging info – which can facilitate higher inventory evaluation and shelf-monitoring.
This venture may additionally play a task within the growth of autonomous shops, ought to the retailer determine to maneuver on this course.
These digital twins – “digital representations of bodily property, processes or techniques,” as Saul explains – have quite a few sensible functions.
“Creating digital twins permits for real-time monitoring, simulation of various situations, and optimisation of all the provide chain,” he provides, “for instance, simulating the impression of a climate occasion on supply schedules.”
Making The Grade
Schwarz Digital operates a structured strategy in the case of the roll-out of technological improvements, that are initially examined in a handful of shops, with KPIs predefined to watch the success of a specific pilot, earlier than being built-in into the retailer’s infrastructure and scaled, the place applicable.
Encouraging a tradition of experimentation in a big organisation akin to Schwarz Group with out impacting each day operations requires a “delicate steadiness,” as Saul explains.
“Clearly speaking the targets and bounds of experimentation initiatives helps handle expectations and ensures that staff perceive how these actions relate to their each day work.”
The operational funding required to scale options throughout the group’s total retailer property – encompassing round 12,000 Lidl and a couple of,000 Kaufland retailers – is substantial, which means that Schwarz Group must be thorough in its analysis course of, forward of any innovation roll-out.
“Introducing new applied sciences typically requires vital adjustments in processes and workflows – and guaranteeing consumer adoption throughout a big and numerous workforce might be difficult,” he provides.
“Balancing the necessity for standardisation to realize economies of scale with the necessity for customisation to fulfill the particular necessities of various divisions is a continuing problem.”
A profitable instance of a venture that has come to fruition is the Lidl Plus loyalty app, now accessible in an growing variety of markets, whereas RFID for checkout did not make the grade.
“Technically, it labored, however as of at this time, it’s nonetheless too costly for grocery,” Saul explains. “To be clear: there are related use instances for RFID in meals retail, however not for checkout as of now.”
Individuals Energy
A component of Schwarz Group’s dive into digital that might not be as broadly mentioned is the necessity to make sure that it brings its workforce ‘on the journey’ with it.
In addition to offering coaching by recognising and rewarding staff for his or her concepts and contributions, whether or not or not they’re profitable, it seeks to encourage a optimistic mindset.
“Introducing new applied sciences can generally result in friction throughout the workforce,” says Saul. “Schwarz Digital addresses these challenges by way of a number of methods. Speaking the rationale and advantages of latest applied sciences early within the course of and involving staff within the planning and testing phases might help deal with considerations and foster a way of possession.
“Additionally, offering sufficient coaching and ongoing assist ensures that staff have the abilities and confidence to make use of new applied sciences successfully. This may embody workshops, on-line assets, and devoted assist groups.”
Allied to this, Schwarz Digital’s innovation-friendly atmosphere is interesting to a brand new era of tech expertise, looking forward to future-focused alternatives.
“We’re competing not solely with different retailers, but additionally with sturdy manufacturing firms, in addition to tech firms,” he notes.
“Due to this fact, we want a powerful model and popularity to draw the correct kind of expertise. Giving your staff accountability, attention-grabbing challenges, and the correct instruments helps to retain tech expertise.”
This tradition of steady innovation additionally ensures that Saul and his staff can steadiness short-term monetary outcomes with funding within the longterm benefits of expertise.
As for the long run? “I believe we’ll see rather more automation within the provide chain, and in addition within the retailer, like totally different sorts of robots,” he says. “That’s the reason we intently comply with the market.”
