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32 I Cover story bne November 2020
Photo: X5 Retail Group
a country as vast as Russia. X5 had set up “dark stores” all over the inner city
in Moscow – essentially mini warehouses inside the inner city – and so was well placed to meet the increase in orders.
“Before corona we were making 1,000 deliveries a day. Now we are making 23,000 deliveries a day and it is still growing. We were already projecting 70% growth in digital retail before corona hit. Now the virus is still here and the e-grocery market might double or treble this year. It is hard to say exactly how it will play out, as every month things change,” says Salakhutdinov.
In food, and many other kinds of retail, e-commerce is not a disruptor but
a complementary business, as it turns out that X5’s network of 17,000 outlets is a boon, not a hindrance. That network needs the same logistical support, which Salakhutdinov says is now on
a par with the Russian Post Office’s system. And having a store brings added opportunities in terms of pick-up services and additional selling opportunities.
Efficiency
But how to grow the business from here is not obvious. However, all of Russia’s leading retailers seem to have come to the same conclusion: increasingly sophisticated digitisation and standardised, automated processes are the way forward.
All the retail companies bne IntelliNews has interviewed recently have emphasised the huge importance
of IT and have invested heavily in expensive and powerful systems.
X5 already has 150 people working on dozens of big data projects and
a total of 1,000 technicians in-house. But the company doesn't have an IT department. The technicians are an integral part of the various product group teams and answer to the product owner in the company, as IT solutions are now an integral part of the sales and marketing process.
“You can’t create this intellectually. You must try the concept and observe its impact. It also affects the way we
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