As technology continues to change the way we shop, retail co-operatives are exploring different channels to engage with their customers. In an interview with Co-operative News, Darragh Fanning, founder and managing director of Celtech Software, explains the main trends facing the retail sector – and how co-ops can respond…
Celtech is a Dublin-based technology company that works with retailers to help them implement their real-time retail solutions. This solution, ab-initio, is gaining interest from retail co-operatives, who are exploring how its real-time information about sales, stock and cash across different outlets can translate into benefits for members.
Mr Fanning thinks that the solution can be looked at from two perspectives – the software perspective and the service perspective. In terms of software, he sees that initiatives depend on the accuracy and quality of the core data they collect and the processes that feed and update that information.
“For any of those initiatives, data trends are generated, and the critical thing is that you are able to act on those trends to improve the outcome. For example, co-operatives targeting specific types of members with certain types of coupons to increase basket spend.
“To do this effectively, you need the ability to execute and monitor in real-time across the estate. It’s not just about gathering solid data, but also taking decisions that arise from it. This enables you to either fix a problem or to react to an opportunity. Our whole strategy is centred on providing true real-time visibility so that you can instantly see what’s happening in the business and react to something, fix something or generally capitalise on the opportunity as it presents itself.”
Regarding service, he thinks that two essential components are infrastructure and interpreting the data gathered and exposed through the software.
The integration of online is absolutely critical even down to dividends. As a customer, I want to know how many points I get, I want an electronic receipt, I want to go online and spend my dividend
“When retailers start the move to centralised real-time, they don’t always know how to extract the benefits from it. We help them change processes to maximise efficiency and reduce duplication,” says the managing director.
A key concern for co-operatives remains engaging with members and increasing democratic participation. Mr Fanning says co-op retailers need a multi-channel strategy that takes into account all demographics. “The consumer today expects to be able to interface in so many different ways,” he explains. Customers like to have the option to check stock online, reserve products or choose delivery options.
“The integration of online is absolutely critical even down to dividends. As a customer, I want to know how many points I get, I want an electronic receipt, I want to go online and spend my dividend.
If I am able to spend my dividend online via an electronic wallet, this can increase spending of that money back into the co-op. I don’t need a cheque to cash it somewhere else. All that plays into having an online presence.”
“For co-operatives, engaging with members is critical,” he says, “but the first thing we do, as a solution provider, is provide complete transparency.
“For example, if I am a member, then I’m instantly recognised as a loyal member as I walk into a store. We automatically accumulate your points, and after a reward is issued, you can instantly redeem that either online or in store – you can also see your transactions and have a full history online.”
One of the big trends of the industry in general is to outsource and delegate responsibility […] A move away from owning the systems themselves to having them provided as a service
Celtech pioneered real-time and centralised retail technology in 1999. This is now a pre-requisite for multi- channel retailing. Asked whether he expected similar developments to influence retailers in the future, Mr Fanning says many retailers had yet to use the technology.
“The challenge for retailers is the pace of change across so many areas. It’s becoming increasingly difficult for retailers to keep up. One of the big trends of the industry in general is to outsource and delegate responsibility for the provision and management of core systems. A move away from owning the systems themselves to having them provided as a service. Having companies providing that service is going to help retailers cope with that demand over time. But the first step is to have the centralised real-time model – that’s the foundation.”
He adds: “More and more we are starting to bring co-ops together to share ideas.
“The ab-initio application is developed in such a way that changes and improvements are made available to all retailers.
“Celtech has facilitated conversations between co-ops, too, bringing them together, sharing ideas and exploring options for the future in a collaborative, co-operative mind-set.”
Celtech has worked with a number of retailers from the UK and across the world. It was able to do so by maintaining a single core product.“Our core strategy was that we would always have one version of our solution for all of our customers. It also meant that if we introduced a new concept for stock management, all of our customers would enjoy the benefits of it. Also, if there’s an issue, we only have to fix it once.”
With the UK due to vote on its membership of the EU, Celtech is exploring what this could mean for the business.
Mr Fanning says a potential exit would not affect ab-initio, which has been built to be used internationally, incorporating all potential variations related to currency, regulatory requirements and tax. However, he expects that a Brexit would impact on all organisations in the UK and Ireland by posing extra administration burdens.
“It’s not necessarily the devaluation of the pound or increased product prices. The real issue is going to be the overhead on our businesses trying to figure out what does it mean, how to change pricings, looking at supply chains and border control impacts.