X5 Relies on Digital to Stay on Top of Russia’s Retail Market

In an effort to stay ahead of changes in Russia’s food retail market brought on by digitalization, the country’s top retailer X5 Group is increasingly turning to technology, bne Intellinews writes.

E-commerce is thriving in Russia and beginning to eat into traditional retail, carrying with itself a do or die moment for market players, the report says. Relying on economies of scale to hone efficiency isn’t enough, says X5’s Head of Strategy Vladimir Salakhutdinov. Russia’s largest retailer by revenue must maintain a relentless focus on innovation and adopting cutting-edge retail tech across every aspect of its business if it is going to remain Russia’s number one, Salakhutdinov says.

“Our goal is to make all of our decisions data-driven and to automate more of our processes,’’ said Salakhutdinov. “This approach can help us achieve greater efficiency in everything we do, from centralized monitoring electricity use at our stores to ensuring our produce shelves are properly stocked with fruits and vegetables or that queues at the checkout tills don’t get too long.’’

X5 uses data to pinpoint areas where the food retailer can become more efficient and sustainable. The company has already set up its own in-house tech team to develop bespoke solutions and it has a global startup scouting program to unearth new retail tech solutions to problems, which are then adapted to X5’s business by the in-house team.

One of the most recent examples was a combination of video monitoring and artificial intelligence to watch produce sections and automatically inform store staff if a certain product runs low, or if an employee needs to tidy up the section.

“We are testing this tech to see whether it can tell if cucumbers are about to run out, or if apples and oranges have been mixed together,” says Salakhutdinov who adds the technology should improve the in-store experience for the customer while freeing up staff to take care of other tasks.

“We test innovations by piloting them in select stores and making the necessary adjustments before rolling them out across our entire network of over 15,700 stores,’’ Salakhutdinov said. “As a publicly-traded company, it’s important for us to be cost-conscious. We adopt innovations and roll them out across our stores only when it makes sense from the financial perspective.’’

Salakhutdinov says that X5’s goal is not to remove the human element from stores completely but to free up staff time to focus on helping customers on the shop floor, which the company believes is becoming increasingly important to Russian consumers.