Anton Mironenkov of X5 Group – Technology Innovation Center for Retail

RTIH: What were your strengths in terms of technological deployment in 2021?

AM: In 2021, we identified several key lines of work for ourselves and tried to pursue those goals.

The pace of growth of X5 requires the creation and maintenance of a flexible technical platform.

From a technological point of view, it must guarantee a very reliable and highly secure system (cyberthreats are today one of the biggest challenges for any company) and allow the development of our internal cloud (dynamic infrastructure), ‘data accessibility and automation (reducing the possibility of human error).

Technologies related to dynamic real-world management, demand forecasting, pricing, traffic management, and epidemiological risk forecasting in crowded areas are becoming increasingly important.

As an example of an effective combination of technology and commercial product for customers, I would cite the launch of our subscription pilot this year.

The MVP of the project was completed in September this year and showed an increase in turnover and retail traffic in our retail chains, and it also contributed to an influx of new customers.

We have now moved on to the pilot, where we will test three formats.

The combined subscription, tentatively referred to as the “Package”, combines item discounts at checkout, enriched loyalty programs, free services and gifts from various group companies – retail chains, online formats, services logistics – as well as offers from our partners.

Unlike other subscriptions, our offer aims to cover the essentials: food, safety, comfort, daily life, key purchases.

RTIH: Can you tell us more about X5’s decision to develop the technology in-house?

AM: We divide all our developments into two main areas: raw materials and high potential projects make us more competitive.

And the key factor in decision-making – whether we go with our own development or involve a supplier – is precisely this division, at the basis of which is process efficiency.

If it is a commodity, then we are ready to buy a commercially available solution and integrate it quickly. But if we are talking about a product that is to become the basis of a competitive advantage for us, then we are looking at our own internal development.

It took us a long time to get to this point. The majority of the solutions that we develop ourselves are not on the market in a turnkey form; these are unique products, and they allow the business to be much more efficient and speed up time to market.

Today, already more than 70% of our solutions are the result of our internal efforts. We have over 1,000 developers on staff and we’re betting on lots of new ideas.

These are not just solutions for our offline formats and digital platforms; they also include, for example, solutions for the digitization of transport, such as for shipping between different parts of the business.

The scope of our developments includes projects such as an A / B testing platform; Dialog X5, a multifunctional tool for suppliers and partners; algorithms and smart products based on big data for pricing; and operations involving product mixes, promotions and purchases.

In the coming year, we will be faced with the difficult task of launching our own cloud.

In general, working with data is a very sensitive area; it is not always appropriate to give full access to entrepreneurs.

We also understand that solutions integrate very quickly into the industry; with our in-house expertise, we can dramatically increase the speed of change. You can’t take a data-driven approach if you’re outsourcing.

RTIH: Can you also tell us about how you monetize internal solutions in the global market?

AM: X5 has definitely accumulated unique experience through its own R&D, which has aroused interest and demand not only from Russian market players but also from international companies.

This applies not only to hardware solutions – checkouts, digital tablets and smart scales with AI under the hood – but also to software, including digital delivery platforms, self-service systems, special algorithms. , etc.

From a data work perspective, our multifunctional Dialog platform is currently our best performing product.

It is a unique tool that uses the accumulated information on sales and customer behavior. It allows each supplier to receive almost real-time analytical reports and to structure their activity more efficiently with X5.

Dialog X5 already includes analytical and logistics reports, targeted advertising and a tendering platform. More than 100 suppliers used our tools in 2021, and we have already created around 22,000 analysis reports for our partners.

We have developed an A / B testing platform on which we rely, both to increase the efficiency of internal processes and for potential commercial promotion in the open market. The expertise we have acquired in the field of data allows us to do this.

RTIH: What can we expect from a technological standpoint from X5 over the next few months?

AM: Our main goal is to continue to provide effective business support by introducing advanced technologies and innovations, and to accelerate the time to market.

We plan to speed up operations in our offline network. In particular, we are talking about a transition from a monolithic point of sale system to a flexible microservices infrastructure.

In 2022, we will announce the launch of our own internal cloud. We decided to go ahead with our own development because we could not find acceptable solutions in the market.

This will increase efficiency, allow us to update our solutions faster, while speeding time to market. X5 Cloud will bring us speed, mobility and a new level of security and data protection.

We will continue to develop innovative solutions for our customers. We’re betting on scaling up our proven cutting-edge technologies – payments using biometrics, self-checkout, express scan, and more.

As part of our Subscription project, we have started the pilot phase for all of our customers, and we expect a considerable increase in the number of users in 2022.

For us, proprietary development will remain a priority in 2022. We are developing our expertise internally to be able to respond quickly to any external challenges that may arise, the main one being the security of our customers’ data, which is our priority.

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