How are co-ops dealing with AI and the retail revolution?

We speak to analyst Emma Howard – of Co-operatives UK, East of England Co-op, and Open Data Services

A retail revolution is under way as AI increasingly drives our daily shopping habits. Loyalty cards are linked to algorithms, predictive analysis tells stores which products to buy, warehouse robots sort out online orders, and everything from stock replenishment to store inventories are becoming increasingly automated. 

The UK’s Co-op Group has already joined forces with Starship Technologies to offer an online delivery service, using robots to drop off shopping door to door in trial areas. Face-recognition technology has also been used in several areas, including 18 shops operated by Southern Co-operative, in an effort to reduce shoplifting and abuse against staff. The now commonplace use of face technology means millions of people already pay at the check-out using smartphones and other devices. 

The ever-increasing use of AI has transformed our lives in many ways for the better but also raises widespread concerns about civil liberties and data protection. 

Related: Platform co-op looks to show a better way forward on AI

Data and policy analyst Emma Howard, who was appointed vice-chair of Co-operatives UK this summer, acknowledges the issues around safeguarding but says it’s time for the co-op movement to fully take on board the opportunities AI offers to improve its retail offer in a positive way, to help empower communities and organisations. 

Howard is a member of Manchester-based worker co-op Open Data Services, which since 2015 has delivered data-based AI initiatives for a raft of clients across the world – many in the co-op sector. 

Also a board member of East of England Co-op, she started her working life on the shop floor. “I began as a customer service assistant in the Felixstowe supermarket,” she says, “and built my career from there, moving on to the cash office, looking after the payroll and then, over the next 10 years, taking on various roles in
the finance department and undergoing a lot of training. 

Emma Howard

“I spent nine years at head office in Ipswich by which time I had moved from pure accounting to business and data analysis. Eighteen months ago I took on this new role.

 Open Data Services says it uses technical know-how, data tools and customised software to create IT initiatives that are collaborative, ethical and sustainable as well as commercially successful. A lot of the co-op’s work is with NGOs and one of its latest tasks is working as a new technology delivery partner for the International Aid Transparency Initiative (IATI) — a global data project to improve the transparency of development and humanitarian resources to address poverty and crises. 

Related: Co-ops, generative AI and the creative industries

When it comes to the co-op retail sector, Howard is convinced it can be a force for good. 

 “We have got a really great opportunity to show there is a better way to use data to give control to our members and benefit them, along with our employees and other consumers – and to show there is an alternative. 

“We have such great values and principles and should be applying them to data use and remind people it’s not just about selling more stuff, it can be used to benefit their lives.” 

She adds: “We hear the horror stories of the big internet companies and how they purposely abuse and manipulate people’s data. We hear less often of the smaller organisations that have used data and also got things wrong – reinforcing stereotypes and causing harm instead of good. 

“It’s important we learn from others’ mistakes and ensure we safeguard our members’ data, build the right culture when working with the data, and keep inequality and discrimination, intentional or not, to the minimum.” 

The co-op movement, she accepts, is still a bit behind the curve when it comes to using of AI. “It is a still emerging technology. I think the movement is aware of the potential problems and is understandably wary. At East of England we are not yet at the stage of using it. Some of the systems are very opaque and it’s often hard to understand how they have drawn the conclusions they do. The world is also full of unconscious bias when it comes to racism and sexism and AI can perpetuate those attitudes if we are not careful.” 

In retail, perpetuation can also apply to products, she says. “Unless a system is thoughtfully designed, all you will get is feedback and the same products being continually replenished. That’s not meeting bigger needs or realising the potential for different products which are not currently available. The system won’t know a particular product would sell if it isn’t there. It will just reconfirm what sells best in that store based on the items that are already being sold. This means if we’re not selling products that appeal to different customers, we’re always going to attract the same base – which may be shrinking as our communities diversify. This is where it’s important to get that new data, whether through more product trials or softer methods such as surveys of non-customers. It’s about understanding the inputs and outputs.”

Howard firmly believes in the “need to be aware of the things that have scared us about using AI – but avoid using that as an excuse not to use it”.

She adds: “Obviously there are challenges. However, we need to focus on addressing them. We should be taking the opportunity and diving in rather than waiting for other companies to solve all AI-related teething problems.

“We can use AI to improve how the co-op movement helps the community, becoming more targeted, noting the gaps and having a look at whatever initiatives co-ops could support. However, co-ops have to be particularly careful because we are seen as ethical and trying to be really decent – so if we get anything wrong, the impact is harsher.

“Better data from AI could help us understand where we can make more impact. We could be the beacon of good ethical AI use and show people how it can be used properly for their benefit. We would be able to unlock a lot of potential in all kinds of areas – for example growing the market in Fairtrade.”

Although traditional companies outside of the movement may use AI purely for efficiency and profit, Howard thinks co-operatives are in a genuine position to show “we can make people’s lives better”. 

“I believe data use doesn’t have to remain as it is currently, with big tech at the helm and people as the product,” she says.

“Co-operation is the perfect way to address this – we can bring data back under control of those individuals who should own it and ensure it’s used ethically and with integrity.”