IT and innovations
Х5 entered the innovation market in 2017: by July 2019, Х5 innovations had attracted over 800 start-ups. Four hundred solutions underwent thorough assessment by business experts, and some of them progressed to the business modelling phase. More than 100 start-ups advanced to the prototype/pilot phase, and 14 projects were implemented. Х5 considers technological solutions for four key retail spheres: customer experience, operations in stores, supply chain, and back office. Х5 is focusing particularly on smart shelving projects, flexible pricing systems, robotisation, automation of quality and freshness control for foodstuffs, and goods tracking.[72][73][74]
In June 2017, X5 Retail Group and the Internet Initiatives Development Fund (IIDF) launched a specialised retail accelerator, with the Petrovich and Sportmaster chains among its partners.[75][76][77] Start-up companies joining the IIDF accelerator programme are able not only to attract from RUB 2 mn to RUB 25 mn of investments from the fund, but also to get advice from X5 experts and test their business ideas on X5's anonymised database of over 3 bn purchases.
In May 2018, X5 and Innopolis University launched a joint initiative on scientific research projects, with a focus on a pilot store for the future project.[78] In March 2019, X5 became a resident of the Innopolis Special Economic Zone and opened an X5 Development Centre.[79]
In October 2018, Х5 Retail Group opened a laboratory store at a Pyaterochka proximity store for testing the possibility of introducing new technologies. At the store, technologies for ESL, video analysis, smart shelves, digital information panels, self-scanning and payment scenarios, and other smart store technologies are all being tested under "field conditions".[80] In November 2019, a second laboratory store was opened at a Perekrestok supermarket.[81]
In June 2019, X5 Retail Group, together with the Israel-Russia Chamber of Commerce (IRCC), launched the X5 Retail-Tech Challenge start-up competition.[82] In July 2019, X5 started selecting start-ups from Estonia, Latvia and Lithuania.[73] In October 2019, X5 Retail Group summed up the results of a competition of start-ups held jointly with the Spanish Institute for Foreign Trade (ICEX).[83]
In July 2019, the Sberbank venture fund, Fort Ross Ventures and X5 Retail Group signed an agreement on strategic partnership in innovation, exchange of technologies and looking for start-ups.[84] In December that year, X5 Retail Group and start-up accelerator Orange Fab started a joint programme for seeking and introducing innovations in Russia.[85][86]
In April 2019, X5 launched a digital parcel delivery platform. The solution utilized information systems to integrate postamats, sorting facilities, and warehouse equipment. For deliveries within Russia, online stores and marketplaces deliver to the X5 distribution centres, while the retailer picks up cross-border deliveries at the Customs. The platform has a capacity of up to one million dispatches a day.[87]
In November 2017, X5 introduced machine learning to bolster targeted marketing at the Perekrestok supermarket chain, and developed personalised offers for all members of the Perekrestok Club loyalty program.[88][89]
In December 2017, Mail.Ru Group and X5 launched a partnership in online advertising targeting and assessing its impact on offline sales in certain stores. MyTarget platform clients gain access to X5's anonymised data on consumer behaviour with a view to enhancing the accuracy of ad targeting and linking ad impression data with sales performance at the Pyaterochka, Perekrestok, and Karusel chains.[90][91]
In June 2018, X5 started implementing video analytics and computer vision technology based on neural networks and artificial intelligence. It speeds up control of store layouts and the number of products on shelves by a factor of ten, and reduces the number of people leaving the store without a purchase and shrinkage levels by 10% and 20%, respectively.[92][93]
In May 2018, X5 completed a large-scale project to automate the processes of demand and replenishment planning at both stores and at Perekrestok and Karusel distribution centres. To this end, the company redesigned its core logistics, marketing, and sales processes, and introduced an end-to-end system of supply chain management, boosting forecast accuracy by 17% and increasing on-shelf availability of products by 5%. The Company also reduced inventory levels by 13%.[94][95]
In May 2018, X5 introduced automated detailed planogramming for hypermarkets. It factors in store equipment characteristics, customer preferences, historical data on inventory turnover by product type, assortment by category, packaging size and type, etc. After three months of its use, the system boosted sales by up to 10.5% in some categories.[96][95]
In the summer of 2019, X5 Retail Group started producing self-service cash registers. The company developed the device and the software itself: the machines are equipped with a multi-touch screen, 2D barcode scanner, stereo speakers, a microphone for audio apps and voice services, and a 3D camera. At the second stage, X5 added a goods weighing platform and there are plans for a rapid payment system using QR codes and Face ID technology.[97]
In February 2018, X5 launched an online service that helps real estate owners calculate the average rent at any location where Pyaterochka has a presence. The service also enables landlords to offer premises or a property for lease or sale instantly, if the property meets all the criteria for store opening, or offer a land plot for building a store.[98]
