The servitization of innovation in the retail grocery sector: The case of Mercadona

This research aims to show how innovation, implemented as servitization activities, can facilitate retail organizations to generate, capture, and deliver value in the long run throughout their value chain. On the one hand, it offers a new perspective on servitization in the retail industry, an area where there is scarce published literature. On the other hand, it offers a new outlook of innovation servitization in the retail supply chain. Again, this is a research gap in the body of knowledge. For this purpose, we study an interesting case study of a relevant grocery retail store in Spain and Portugal. We adopt a multi-actor approach, analysing how a leading retail company in the grocery sector, Mercadona, has based its growth, international expansion, and competitiveness on developing servitization by introducing innovative services into its value chain. This development, conducted with its suppliers, employees, and customers, signifies an exceptional case of worldwide co-innovation with customers and suppliers. Mercadona has forged a co-innovation program based on a robust, total-quality culture that has transformed its value chain and expanded its business internationally. Its strategy is based on its customers’ emotional loyalty, underpinned by social media networks and a strong brand image. Its approach has enabled the development and growth of numerous SME suppliers, creating an excellent capacity for innovation. We conclude how this process drives a significant driver effect which affects the entire supply chain, given that these SME suppliers frequently outsource their innovation activities. In parallel, there is scarce literature on servitization in the retail sector, especially in the food and supermarket sector, and how a retailer can push the manufacturer to add value to its servitization process through co-innovation.