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How Central England Co-operative is thinking digitally

Iceland and Marks & Spencer have this year joined the ranks of retailers working with innovation accelerators, as they look to fast-track a digital culture and new ideas into their organisations.

They follow schemes from the likes of John Lewis, which is running its fifth annual JLab programme in 2018, and the development of in-house labs and digital teams at companies such as Tesco, Sainsbury’s and Co-operative Group, where the primary aim is to seek out ‘the new’ and build it into wider business operations.

But Central England Co-operative, an independent society operating 260 convenience stores under The Co-operative brand, 125 funeral directors, and other specialist outlets that generates annual revenue of approximately £820 million, is doing things its way.

Since 11 June, a specialist Think:digital team has been in operation at Birmingham City University (BCU), with the aim of opening the society’s eyes to digital through start-up collaborations, BCU educational resources, and testing the art of the possible.

John Armstrong, head of IT at Central England Co-operative, is leading a multi-functional team of four – recruited from other society departments – to explore how technology can boost membership services, customer engagement, and internal operations.

Armstrong says he has a mandate from the executive board to explore what digital means for Central England Co-operative and he seeks funding from them on a quarterly basis. The early stages of the initiative have been focused on education and the exploration of what’s possible, but Armstrong knows the board ultimately wants to see tangible benefits from the team’s efforts.

Why now and targets?

“The likes of Amazon are trying to compete in the grocery space, and Uber Eats and Deliveroo, with these organisations creating potential for convenience to be delivered in a different way without bricks and mortar,” Armstrong explains.

“We want to take the currently convenient bricks and mortar model, and make it more convenient using technology.”

The IT director says everything the society would like to do in this space is aimed at making the convenience experience “as convenient as possible”, ideally wrapped up in the co-operative movement’s values of community and philanthropy.

“What could be more inconvenient than going to a convenience store to get something only to find it’s not stocked or available?"John Armstrong, head of IT, Central England Co-operative

By working with the education sector and the technology start-up community, there is a hope that compelling ideas can be turned into useful solutions that aid the organisation but also help fledgling business ideas come to fruition, while supporting local economies.

“We would like to share our customer journeys very openly with the academic community and with potential start-up organisations, and for them to come forward and say “we were thinking about…” before bringing that idea to the table,” Armstrong notes.

With the Think:digital team made up of a store manager, an IT architect and a digital capability builder, who all work alongside Armstrong, the co-operative has a model that it thinks allows ideas to be “baked in” quickly and tangibly. The set-up means any start-up can test their concept with real customers in a store environment, at speed.

“Tesco, Sainsbury’s and The Co-operative Group are setting up digital development practices with 100-200 people and they are getting value from that,” says Armstrong.

“But being a small team and a late entrant we can learn from what’s gone well at the others and then think very differently about how we use digital. We are seeking to be much more open about customer journeys – the more open we are, the richer the customer journeys become.”

If you're not covering your nearest blank wall in post-it notes, are you really a digital team?
If you're not covering your nearest blank wall in post-it notes, are you really a digital team?

Tangible benefits

To date, Think:digital’s endeavours have led to a small subset of The Co-operative stores listing inventories on Google, meaning online searches can confirm product availability for customers.

“What could be more inconvenient than going to a convenience store to get something only to find it’s not stocked or available, and being able to check in advance could lead into things such as alerting customers if they had expressed an interest in that product,” Armstrong says.

The IT director suggests membership, customer and community engagement are at the heart of the project, and he foresees ways, through an app, the society could make the member sign-up process more convenient, or allow members to skip queues.

“How could we do something like Amazon Go or the Sainsbury’s mobile checkout, but in a different way? We’re not looking to have a zero-colleague store or automated checkout, but we can use some of that type of technology to make shopping more convenient.”

Shout out to start-ups

Armstrong says Think:digital has reached out to start-ups which are effectively a solution looking for a problem, but he notes that his organisation is more like “a load of problems looking for a solution”.

“We either get lucky that one of those solutions matches, or we go to stage one or stage zero companies that might not have set up yet, and show them our customer journey information – it might lead to businesses being created.”

He wants start-ups to meet his team halfway, and talks up the BCU partnership for giving the project access to students, academic research, and big data on top of Central England Co-operative’s own customer journey information.  

BCU is focused on technology, Birmingham and the midlands region, with Armstrong suggesting that its students tend not to migrate outside the midlands after graduating, so it is seen as potential source of future talent for the society which covers a diamond-shaped region of England roughly defined as being from Dudley across to Lowestoft, and from Huddersfield down to Northampton.

“By partnering with BCU, we have that connection into some great academic research, a great pool of student talent, and we are grounding our digital development in a place where that source of talent is rich,” he notes.

“It’s also located near Innovation Birmingham, Aston Science Park and where quite a few of the start-ups in Birmingham are based. We’re trying to tap into an ecosystem and share our learnings.”

Central England Co-operative has its own website, which includes a store search function, in-store deals and product inspiration, but nothing yet from an eCommerce perspective.

If the Think:digital project is successful that will almost certainly change, and attention has now turned to the start-up community to see if there are people, partnerships or foundation businesses out there looking for a user case to test ideas. Reaching into the tech ecosystem is an important next phase for Armstrong and his team.

“We’re the most open, collaborative and welcoming organisation, and by working with us you can really do something positive,” he says. “Our door is open and the kettle is on.”

Start-ups interested in working with Central England Co-operative can contact Think:digital directly