New datacentric and customercentric digital hub ShopriteX paves the way for technological innovation in the retail space

First published in the Daily Maverick 168 weekly newspaper.

ShopriteX is the new digital hub that is trialling and developing innovations for the Shoprite retail giant. DM168 spoke to the head of strategy about how the sector might evolve through a focus on data and customer needs.

“We think about the future of digital and retail in terms of personalisation, and personalisation is the business word for removing friction for customers,” says Neil Schreuder, chief of strategy and innovation.

The ShopriteX team comprises 250 people across disciplines such as data science, e-commerce and software development, and purposefully sits in the same building as the Shoprite technology team. “So it looks more like a tech start-up and we’re actually Africa’s biggest retailer and a very large corporate with 40 years of legacy, but we think that we can combine the best of our operational efficiencies with the new way of doing digital retail, and the two of them together fuse in what we call a bionic company.”

The business unit has been working for over a year and came up with initiatives such as the Xtra Savings rewards programme and the Checkers Sixty60 on-demand grocery delivery service.

Most recently it has been trialling Checkers Rush, a concept store that uses artificial intelligence to allow customers to walk out of the store without checking out in a traditional way by monitoring what is being taken off shelves and billing bank cards on exit.

It is currently open only to employees at the ShopriteX offices with just 40 products.  Schreuder admits he pops in, sometimes several times a day, to pick things up purely because of the experience.

“Checkers Rush is one of hundreds of experiments our teams are busy with now and they are thinking about the store where you remove the biggest friction point for physical retail, which is the queue.” This is being explored globally, such as with Amazon Go, but the SA market may pose unique challenges.

He explains that this model could be applied in certain settings, particularly those needing 24-hour convenience. But the experiment is more about innovation in general, not necessarily about transplanting the idea as is into the real retail space.

Checkers Rush is a foray into applying machine learning or artificial intelligence in general. “The way we approach these retail challenges in ShopriteX is that we don’t try [to] predict the end, we only know where we’re starting and so we think that ultimately machine vision or cameras in the store could have use, cases like identifying out-of- stocks in real time.

“It’s been us looking globally at the future of retail and realising that it’s increasingly digital and data-led and you have to always think about new ways of doing things for customers in a world where they are armed with smartphones and technology is just moving at such a rapid pace,” says Schreuder. “So ShopriteX is our investment in talent and blending that with technology and data to solve customer problems quicker and faster than any of our competitors can.”

While it does look internationally and may be playing with concepts that seem difficult to implement here, Schreuder insists that all their innovations are focused on the South African market and its needs. Sixty60, for instance, was particularly focused on being a mobile-first offer for this reason.

Datacentric business may seem fancy, but Schreuder assures that these innovations are grounded in the idea of making shopping affordable for a wide market. For instance, about 20 million people have signed up for the XtraSavings programme and it collects the data of about 450 swipes a minute, influencing with promotions on which the brand focuses.

“The most customercentric company over time wins because customers keep coming back and it has to be a win-win.”

This extends to using e-commerce innovations to create more jobs, not lose them.

Schreuder says not a single job has been scrapped because of innovations like Sixty60 but about 2,900 positions were created by the programme for pickers, drivers and technology team members. “We are always proud to be South Africa’s biggest private employer,” he says. “ShopriteX is 250 new digital data-science jobs in the retail game, so we are very pro-job creation alongside our technology innovation.” DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.