Coop has a declared goal of having Denmark's most satisfied customers in the grocery trade – among other things, this will be realized with the help of innovative digital solutions developed by Coop's digital unit. The solutions are now so popular that they can be sold to other grocery chains around the world.
Every week, more than half a million Danes use the Coop App to order dinner, skip the queue with Scan & Pay, or monitor the CO2 footprint of their purchases. And if CIO Morten Holm Christiansen and his colleagues at the newly established software company Lobyco have their way, consumers in many other countries will soon be able to do the same. Coop has invested in developing strong digital retail solutions to such an extent that they can be added to the product range alongside wholemeal flour, washing powder and organic fruit – and 3 foreign supermarket chains have already bought solutions from Lobyco.
– In reality, Coop is selling its own experience under the slogan ‘For retailers by retailers’. This was not the intention to begin with, we just managed to develop some really great solutions that no one else really has, says Morten Holm Christiansen.
The primary purpose of the Coop App and the other digital initiatives is to equip Coop for the tough battle for customers in the domestic market.
– Coronavirus has meant that the supermarket sector has experienced an increase in demand because the pattern of everyday life has pulled people in the direction of the home. We believe that we will soon return to the previous pattern, and we are prepared for some very tough competition, where having satisfied customers will be the way to victory. Therefore, we will continue to strengthen the digital channel so that we can provide a much higher level of service in various formats, both online and in the supermarket.
From The Farm to the checkout
The majority of the new digital solutions were conceived in the development unit that Coop established four years ago. The innovation unit, known as ‘The Farm’ because it is housed in an old farmhouse, is the driving force behind Coop's digital innovation. But Morten Holm Christiansen is mindful of getting both the operational staff and the front staff aboard the express train.
– ‘The Farm’ plays a central role in our digital success. It is necessary to be able to drive innovation quickly and develop new cloud-based solutions that are not burdened by historical ties to our own infrastructure. It works, but it can only be called a success when it can be scaled. So it is crucial to find the right balance between creativity and operational stability, Morten Holm Christiansen says.
Coop also invests a lot of energy in training store and logistics staff. Not only in relation to the customer-facing solutions, but also in connection with a large ERP implementation of SAP s4/HANA. Once the SAP implementation is fully complete, it will make the work of the store staff easier, which will help to ensure a high degree of acceptance of the changes. In addition, the stores have received new equipment for conducting Teams meetings, as well as new scanners that provide an overview and the opportunity to order directly when an employee is out among the shelves.
The shopping cart must match the digital solution
Coop's digital ambitions reach far and wide and cover many different businesses, including banking and membership benefits in insurance. Morten Holm Christiansen emphasizes the importance of working the context into the solutions and focusing on the customers' overall needs, because this is where the greatest opportunities lie. This also applies to the meeting point between digital solutions and physical procurement. For example, the design of the stores' shopping carts is a barrier for Scan & Pay:
– If baskets and carts had been designed for Scan & Pay, they would be more suitable for packing the goods directly in bags. In Sweden, 60 percent of customers scan their goods themselves. We can reach that number in Denmark if we integrate the context into the customer journey and do not focus on independent technical solutions.
Check the climate footprint at the display freezer
The holistic focus of the digital solutions gives Coop more opportunities to stand out to customers by making their everyday life and main priorities the starting point. For example, the Coop app can tell you the CO2 imprint of your purchases.
– We calculated the CO2 footprint of all the items in our stores, which makes it possible to compare the climate consequences of choosing between e.g. chicken and beef for dinner. This creates loyalty, especially if we can make it something that the family can participate in together. When you get an overview and are able to monitor your development over time, it is easy to shop in a climate-friendly way, says Morten Holm.
Digital facts about Coop
- Scanning a single Coop item activates 43 different IT systems, some of which are located in the cloud while others are found in the operations center. It takes an enormously complex integration effort to make it all work together.
- The new software company Lobyco is an official Microsoft ISV Partner, providing access to Microsoft's global network of retail customers, and the solutions were part of Microsoft's attractions at the world's largest trade fair for retail technology in New York in 2020.
Morten Holm Christiansen's best tips for the well-prepared CIO
- Always start with the end customer. Ultimately, it is all about customer satisfaction, everything else is just steps to get there. Therefore, always remember to ask how an initiative helps with customer satisfaction.
- Take advantage of the opportunities for digital innovation in a way that can be scaled. In this respect, it can be advantageous to have both creative brains and experienced operations specialists on the team.
- If your ambitious digital strategy is to succeed, your employees must be both skilled and committed. If you can create a very high level of employee satisfaction, then you have already come a long way.