Automation, technology and convenience. How Central England Co-operative bring them together.

An interview with John Armstrong, Head of IT, Central England Co-operative, on how technology and innovation helps support a differentiated offer in the high-growth and competitive UK convenience sector.

John Armstrong

Interview by Symphony RetailAI’s Paul Hoffman. John Armstrong presented at Xcelerate 2017 on how technology is helping Central England Co-operative differentiate its offer in the convenience sector. Throughout this article Symphony GOLD is referenced. Symphony GOLD is the Retail Solutions Division of Symphony RetailAI.

As a leader in IT, and overall in grocery, what do you see as the biggest shift in the last five or ten years, and how is this change impacting what you and your team do in your work?

We’re phasing into some really significant changes in automation. We’ve got Amazon coming into the market, for example. These changes are disrupting how a store would work, thinking about the automation around the standard food retail store.

The second thing that’s coming in and hitting us, which is a big impact, is the rapid growth of the discounters. Particularly Aldi and Lidl in the UK, and that’s disrupted the grocery sector entirely. From being a large store operator, we’re moving towards being a convenience store operator. The large food retailers in the UK have moved quite a bit of their business online or to Click and Collect services, and we’ve seen that affect our business in our larger stores and our strategy is absolutely, therefore, towards convenience retailing. We are actively rethinking what convenience means.

Consider the convenience retailing from the point of view of the level of automation that you can have in a store these days, and self-checkout—selling no weighted products, all sorts of things, and then contactless payments, there’s a real opportunity for us about how we design the convenience store of the future. That’s how it’s shaping up from a change point of view.

Then that’s affecting us in IT because of the new configurations of the hardware that’s in store. Tills, scales, chip and pin devices, hand-held devices that use the stock counts for reduce-to-clear. There are other requirements coming through for new things in there, and we’re having to think about our software strategy in order to enable those things to happen. Which is why we’re, at the minute, in the middle of our GOLD update program.

Please give us your view on the near future, the next two/three/five years as it relates to grocery. What’s the next big thing?

The UK is a very competitive grocery market, and I see that competition intensifying, but I also see the market become increasingly diverse from a shopper point of view. I see there being more online purchases.

I’d expect the growth of Amazon and Wholefoods to impact the grocery market. Almost look at it as a new entry, but it’s a new entry with a completely different proposition, some of which could be very automated, potentially. I see that coming up. I see the battle continuing in grocery as a whole, and then I see ongoing diversification. Large and online, and automated, and small and convenient. We’re actually about small and convenient.

Why did you agree to speak at this year’s Xcelerate Retail Forum?

A couple of reasons, really. First, I think with the size of retailer that we are—about £850 million in retail sales, we’re kind of a mid-size player in the UK—we need to be partnering really deeply with our key providers to drive the kind of innovation we need. I’ve been in the Society (a merger of Midlands Co-operative Society and Anglia Co-operative) 16 or 17 months now, and that’s absolutely the strategy we follow.

We look at who’s really adding value in the Society from an IT service provider point of view, and based on that value-add and good service, we’ve chosen to partner up deeply with some organizations. The absolute core of that is the GOLD solution suite from Symphony RetailAI. Our objective then, through that partnering relationship, is to effectively punch above our weight as a customer of yours.

I’ll take one specific example. If you look at the Store Mobility solution you’ve built, that is a fantastic innovation of which we want to take advantage. Committing to Symphony as a partner (we’re in our upgrade project), we’re investing in that as a platform, including implementation of space planning. This is a platform partnership with Symphony, and then we’ll see the benefits of that coming through when we add the Store Mobility solution onto our upgraded platform. We’re committed to this partnership and investing in the Symphony RetailAI Customer Advisory Board, so that we can share our learnings to help some of your other customers benefit from the projects that we’ve been through.

That’s the investment we’re making. It’s more than money, it’s about emotional and commercial connections, and a partnership over the long term, to really help us drive the innovation that’s going to drive our performance.

For those who weren’t at Xcelerate, please summarize the main themes of your presentation.

It was mainly about how we partner, and then how we experienced your Easy Migration approach. I presented on our progress on the upgrade, what learnings we’ve taken. What I see and have seen… and shared with other people who are going through this same path that we’re going through.

Also the level of support we’ve had based on this partnership system. The benefits and how we tried to improve the discipline of communication between ourselves and the Symphony RetailAI team. How we prioritized, escalation process, proper account management… that sort of thing. That’s really what the presentation covered.

Learn more about Xcelerate Retail Forum

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