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Digital strategy & mobil payment

Magne SolbergCIO, Coop Norway

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• 29,2% market share

• 1,5 mill. members

• 28 000 employees

• 1200 stores

• 6 formats - groceries

• 4 non food formats

• Norways 11th largest

company

• 45 BNOK turnover

THE SHORT STORY

Everyday life for the consumer

TV in every home (room)

online replace physical media

Smart phone = revolution

Consumerisation of electronics

Always online

IoT

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So – what is the now & future for retail?

Omni-ChannelCustomers consume in multiple channels – always

MobileEnable distributed interaction & collaboration with less

infrastructure and fully integrated with back end solutions.

Big dataHuge amount of data enables new and more sophisticated analysis

and a more relevance individualized offering.

Predictive AnalyticsEnables more complexs and targeted planning. Multi source

information and multivariate algorithms.

3D printingNew cost efficient production technology with enable more local

and on demand manufacturing

Process automationAutomatiion of manual and semi manual processes – both white

and blue collor processes

RoboticsPhysical and virtual components configured to enable

multifunctional capabilities

IoT - Sencors and smart labels

RFID, bluetooth and other sensor technology enables

intelligent and self healing process support and traceability

Fintech disruption

Deregulations (PSD2) and disruptive technology create

new possibilities to increase loyalty and reduce cost.

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Give customers whatthey want when and where they need it

Digital vision

Exploit Coops unique customer insight

Develop unique insight about our customers & members based on online and offline behavior and exploit the insight in all relevant areas.

Exploit customer relevance in

its full potential to create growth

across chains, among chains

and channels, recruit new

customers and reduce churn

Increase share of wallet

Implement digital initiatives

that improves the customer

experience across channels

and streamlines in-store

processes

Offer a relevant and unique

customer experience that

engages the customers and

makes them come back for

more

Digitalization of marketing &

execution processes. Use

customer insight to optimize stock

value and visibility in the “value

chain” -> Continuous cost

reduction

Improve customer value Improve shopping experience Continuous process improvements

Coop Digital strategy = Customer first

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Improved shopping experience across channels

Shopping assistanceCustomers can utilize my usual's, explore new recipes, order physical assistance…..

EmployeesGet the store employees out on the floor… Create tools to enable employees with all relevant support. Supporting tools and collaboration solutions enabled mobile.

Digital signageUtilization of digital signage to create a customer centric communication on store. Beacons / geo-location used to ensure relevance.

Multichannel shoppingA broad range of offerings –non food and groceries to be offered.

Social Customers and other stakeholders meet us in Facebook & Instagram with store specific content and offerings. Glocal

capabilities needed.

Customer appsA range of Apps for customers and members, giving a smooth and interesting shopping experience across channels

Allways in the right context

Consistant across channels

Relevant for the customer

Multichannel communication

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Improved customer value

Value added Omni channel paymentDigital couponsRelevance

Enable omnichannel payment as foundation for creating more relevance in communication and membership programs.

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Continuous process improvements

• Digitalization of marketing processes..

• Utilizing customer insight to optimize stock value and visibility of stock in the “value chain”

• In store automation of price changes and automatic replenishment

• Continuous cost reduction through use of “tech” and consumer insight

Process automation

Automation of manual and semi manual processes – both

«white» and «blue color» processes

Predictive Analytics & artificial intelligence

Enables more complex's and targeted planning.

Multi source information and advanced algorithms.

IoT - Sensors and smart labels

RFID, Bluetooth and other sensor

technology enables intelligent and self

healing process support and traceability.

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Increase share of wallet

Tactic Examples

Increase

share of

wallet

• Make a “grocery only” customer become a grocery, DIY and Nonfood customer

• Influence “one Coop chain” customer (i.e. Discount format) to shop across several Coop formats (e.g. Discount, Supermarket and

Hypermarket)

• Increase “cross category shopping”

Reduce

churn

• Develop advanced machine learning algorithms to identify customers with a “change of shopping habits” to Coops disadvantage

• Execute advanced win back strategies based on unique customer insight using big data

• Develop and implement attractive “new customer introduction program” to avoid churn amongst new Coop members

Recruit

new

• Recruit “occasional” customers ands convert them to loyal Coop members

• Launch cross channel extensive recruitment program

• Utilize the customer bases of Coop Loyalty program partners to recruit new members

• Use marketing communication in Coops media channels to recruit new members

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Exploit Coops unique customer insight

The retailer that is most relevant

to its customers across channels

“wins the battle”

(“the battle of algorithms”)

«MY»

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Predictive Analytics

Enables more complexs and targeted planning. Multi

source information and multivariate algorithms.

Big dataStore datamengder muliggjør mer sofistikerte analyser og et mer

individtilpasset tilbud

MobileMuliggjør distribuerte systemerer uten store krav til infrastruktur

Integrert styringssystemer (apps, front office – backend systems)

Omni-ChannelForbrukere benytter flere fysiske og digitale kanaler

Fintech in retail – established Retail Payment AS -

JV with competitor NG: Mobile payment for retail

3D printingNy produksjonsteknologi med lavere kostnad muliggjør mer

desentral produksjon av deler og komponenter

Prosess automationAutomatisering av manuelle prosesser ved hjelp av teknologi

RoboticsFysiske og virtuelle verktøy som kobler ulike løsningskomponenter

sammen

Sensors and smart labelsRFID og andre sensorteknologier som muliggjør intelligent

overvåking, kontrollering og sporbarhet

Fintech disruption

Deregulations (PSD2) and disruptive technology create

new possibilities to increase loyalty and reduce cost.

RetailPayment

Payment an event Payment a non-event

The way consumer's pay is undergoing a fundamental change

Retail Payment Confidential 14

The way to pay

- has gone from being an event to be a non-event

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Today – one simple, efficient and customer friendly

solution

RetailPayment

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What was upcoming; chaos for customers

and stores / retailers / merchants… Retail

Payment

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Conclusion: retailers need to cooperate to cope with

finance innovation

Objective: ease of use and

availability for customers

Banks

Infrastructure

Stores /

merchants

RetailPayment

RetailPayment

We aim for a consumer friendly, efficient and low cost payment solution – based on to be tech

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Today Norway has one of the most efficient payment ecosystems in the world, measured in transaction costs share of GDP (Gross domestic product) – 0,49%. Leveraged by the Norwegian retail banks who built a common payment infrastructure through BankAxept – a national low cost card payment network.

Today

Retail Payment Confidential

Tomorrow

RetailPayment

Retail Payment Confidential 19

Customer-id

RetailPayment

the Merchant Digital Acceptance Platform

Retail Payment provides an open OMNI-Channel platform for payment, the Merchant Digital Acceptance Platform

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Leveraging the NEXT generations of payment terminalsbased on open standards and API’s securing identification

(Loyalty), cost effective and frictionless Payment and Reconciliation.

The aim is to manage todays and tomorrows «de facto standard» offering

customer friendly, cost effective and unified payment solutions in the stores

Retail Payment Confidential

RetailPayment

the Merchant Digital Acceptance Platform scale with our merchant customers growth and presence in the market

Retail Payment provides an open OMNI-Channel platform for payment, the Merchant Digital Acceptance Platform

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Leveraging the NEXT generations of payment terminals based on open standards and API’s securing identification (Loyalty), cost effective and frictionless Payment and Reconciliation.

The aim is to manage todays and tomorrows «de facto standard» offering

customer friendly, cost effective and unified payment solutions in the stores

Retail Payment Confidential

?

RetailPayment Short and long term roll out

Retail Payment Confidential 22

• Pilot: BankAxept Chip & PIN, Contactless NFC and Mobile NFC

• Phase 1: BankAxept Chip & PIN, Contactless NFC, Mobile NFC and Mobile+

• Long-term Target solution: BankAxept and Credit Cards Chip & PIN and Contactless and Mobile NFC and Mobile++Nordics & Europe

Week 45 - 2016

Q2 - 2017

RetailPayment Film – Retail Payment…

Retail Payment Confidential 23

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So – how & what summarized

• The fintech transformation = new opportunities

• Banks & finance processes will change

• Wallets, applepay`s, credit providers, banks… – our customers & members relationship are at stake

• Global players vs local banks – who will win?

• Relevance must also be tied to transactions

• Coop solve this with our major competitor – and engage in a fintech start up - unusual…

New financial value chains & offerings must be

integrated in our offerings – agile digital strategy!

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It is not the strongest of the species that

survives but the most adaptable.

Charles Darwin

Thank you for your time!

magne.solberg@coop.no+4792016805