UK convenience store Co-op brings cloud to the supply-chain

The UK convenience store is hoping SAP cloud can optimize its supply chain across its 4,000 stores.
15 August 2019

Co-op is going big with its digital transformation plans. Source: Shutterstock

The UK’s fifth biggest food retailer, convenience store retailer Co-op has over 4,000 food shops— more outlets than any other grocer in the country.

It’s blue and white livery is a common sight for any UK high street or street corner, but that ubiquitous success relies on a complex supply chain behind the scenes.

That vast network of stores is a lot to manage, and it speaks to the enormity of its Retail Business Transformation program, the “biggest transformation program” the convenience store retailer has ever undertaken.

The pilot program, launched at the end of last month, will support the Co-op’s continued growth strategy, but core to it is the introduction of new technology to improve stock holding, availability, and more accurate forecasting information.

Co-op’s cloud adoption

Co-op’s Chief Commercial Officer, Michael Fletcher, said the digital transformation was launched to “future proof the success of the business for years to come.” 

“Investing in new technology will allow us to grow the business, helping to deliver a stronger Co-op that will result in stronger communities.”

Core to this program is cloud technology. The retailer is trialing a cloud-based Supplier Collaboration portal, Co-op Connect, where the retailer and its suppliers— which include Coca Cola, Heineken, Agrial Fresh Produce Ltd, Bakkavor Pizza & Bread, and Kimberly Clark— can collaborate on fulfillment.

The new portal, which Fletcher said is already receiving “positive feedback”, is driven by SAP, specifically its retail ECC Suite on HANA which, as reported by CloudPro, is an integrated business process and data management platform aimed at streamlining retail operations.

By using this system, Co-op is better able to optimize its stock in reaction to customer demand across its stores, gain a better understanding of its customers’ needs, and target insights-based offers as a result to a specific stock, locations or individual stores.

Ultimately using data to make its operations more efficient and unified, and driving revenue as a result, Co-op’s SAP adoption will also facilitate better communication and simpler transactions between its suppliers in what today amounts to an incredibly complex retail supply chain.

Tech disruption in retail

While it may be the “biggest” transformation project its undertaken to date, the pilot isn’t the first time Co-op has turned to innovative technology to improve processes and help maintain its competitive edge. In 2018, for example, the firm launched pay-in-aisle”  contactless payment technology introduced in 2018, which is currently in-trial in some 30 of its stores around the UK. 

Co-op’s latest initiative is just one example of how the retail sector is looking to innovate in order to keep pace e-commerce, ultimately offering customers a more personalized in-store experience.

In a wider sense, offline retail is in a period of flux, seeing experimental initiatives launch like Samsung KX, a new experience space in King’s Cross (London) which showcases what the company believes to be the future of retail.

For Co-op, there’s no denying the challenges ahead, especially when it comes to migrating business processes into HANA. As noted in our previous coverage, more than two-thirds of existing users of SAP worry about migrating to the cloud-based S/4HANA due to claims that there’s inadequate support when issues arise.

Furthermore, migrating SAP software to Linux (which S/4HANA is based on) is a challenge as well if companies do not have the right people or a Linux-based operating system in place. Here, technical expertise would be needed, and technical training for staff would be crucial. 

For those that are ready to take on the commitment across the business, the benefits will be reaped. Co-op is proving itself ready for the challenge it looks to future-proof its business for continued street-corner success in the changing, tech-driven world ahead.