Better Life Supermarket: Digital Transformation through Distributed Empowerment

This case introduces the digital transformation of Better Life Supermarket and its challenges, which were shared by many traditional retailers in China. The case also emphasizes the importance of well-coordinated incentive mechanisms for the smooth digital transformation of a traditional business. Better Life as a local supermarket chain initiated its digital transformation in 2017. It started by addressing the pain points of offline stores through digital approaches. Its operating efficiency would be boosted if employees used the mobile store management system developed by the company. However, store employees were unwilling to cooperate and adopt digital tools, so the performance of the piloted stores didn't improve. To motivate employees in the digital transformation, Better Life introduced incentive mechanisms. Its Partnership Scheme 3.0 incentivized frontline staff by offering them commissions and bonuses and applying digital tools that enabled dynamic employment. The Partnership Scheme 4.0 went a step further to motivate store managers by introducing co-investment. These coordinated incentive mechanisms facilitated Better Life's digital transformation and boosted the profits at the piloted stores. Yet the company still faced multiple challenges such as changes in the retail environment, and complaints from the middle and back office about the profit-sharing scheme for front office staff. How should Better Life deal with these challenges?