Cooperation with X5 Retail Group will give startups the opportunity to implement their projects in thousands of stores - GoTech Innovation Cooperation with X5 Retail Group will give startups the opportunity to implement their projects in thousands of stores - GoTech Innovation
20.04.2020

Cooperation with X5 Retail Group will give startups the opportunity to implement their projects in thousands of stores

Retail Innovation Tech Alliance (RITA) continues its first selection of startups to launch joint pilots with leading Russian corporations; applications can be submitted on the website www.rita.vc until April 30. When participating in the selection of RITA, each technology company wants to receive a proposal for cooperation and launch a pilot project. Eugenia Barchenko, co-founder of GoTech Innovation, learned from Ivan Melnik, Innovations Director at X5 Retail Group, what new solutions the X5 Retail Group expects and how to successfully complete the pitch session. GoTech Innovation is the RITA selection operator in Russia and the CIS.

    – X5 Retail Group is a member of the RITA technology alliance. Why have corporations teamed up in order to search for startups?

RITA is a fundamentally new approach to finding innovation. This alliance is unprecedented not only for the Russian retail, but also for the market in general. We combine the efforts of our companies to carry out effective scouting around the world. This in itself is a very costly challenge, and we plan to share and increase the efficiency of our expenses. At this platform, we will freely exchange experience, assess solutions and implementation results.
Often, the problems of corporations are very similar, and we, individually, solve the similar ones: improving customer experience, enhancing the operational efficiency of business, logistics, and back office. Now, we often repeat the same stories – inoperative solutions, problems with scalability, problems with adaptation to existing business processes and integration with basic IT systems, etc. Exchange of experience will help us increase the efficiency of investments and speed up the process of implementing viable solutions. Indeed, often the key to the lock of success is about knowing its code, which consists of several elements: technology – team – business process – cost of ownership – integration. Success can be repeated, if you know the code.
Another goal of our platform is to give a clear signal to the market about where to go if you are a startup and are interested in working with retail. RITA represents a significantly greater purchasing power, becoming attractive to the best startups – not only Russian, but also worldwide.

    – What opportunities will startups have in collaboration with RITA?

The main advantage for a startup in working with RITA is multiplication by 4. Participation in the alliance will allow you to present and prove your technological solution for the four largest players in the Russian market. This is, without exaggeration, a unique opportunity.
In the current difficult economic situation, a startup can get access to the developed infrastructure of partners, to existing business solutions, supply chains, etc. This means that a startup’s technology will not only survive, but will be developed, scaled, and reach more consumers.
The format that we create will not work like a regular startup pitch for corporations or foundations for 3-5 minutes. Dealflow session involves a deep immersion and analysis of all aspects of the proposed solution, involving, among other things, business units from all companies. This helps to evaluate the technology from all sides, exchange views, develop possible ways to apply the technology and come out with agreements on specific pilots. RITA is a place for deals, not pitches.

  – Why startups do not always succeed in piloting with a corporation?

The main reasons why certain solutions do not pass to the implementation stage are quite obvious: the technology does not work as it should, the business hypothesis is not confirmed or the impact on the process is below our expectations, or the cost of technology at implementation is too high. For example, in terms of scaling risks or long payback periods (usually in infrastructure projects where a lot of hardware is required). If you decide to participate in RITA sessions, you must be prepared that the technology and solution will need to be brought to a working business case. That it will be a value for all members of the alliance, and that it will be replicated. This will require the investment, time and effort that both the corporation and the startup will bring to it.

– What opportunities will a startup get when starting a pilot with X5?

We consider technological solutions for several areas of retail: transport and logistics, consumer experience, operations in stores, e-commerce, quality of products, back office processes automation. Our main expectation from new solutions is to optimize our current business, increase the efficiency of business processes, reduce costs, improve customer experience, increase sales. When selecting startups, we will prioritize solutions that have a direct impact on P&L both in terms of costs (efficient staff scheduling for operations in stores, operating costs, logistics), and in terms of impact on the shopping basket (shelf availability, average purchase, number of items purchased, etc.).
At X5, we are looking for solutions for specific tasks and applications that allow us to get value for the business in the form of increased sales / traffic and an average purchase or in the form of cost reduction, for example: accessibility monitoring, process automation, quality and freshness control, enrichment of customer experience, queues reduction, automation of logistics processes, etc. We understand that none of the single solutions in the foreign market is born ready. For a high-quality result, a long and scrupulous process of testing and fitting the product to the actual conditions of use in the corporation is needed. We are ready to invest a lot of our efforts and funds in achieving such results on the basis of relevant effective approaches and solutions offered by startups. Even in the current difficult conditions and in a stagnating market.
Cooperation with X5 will give startups the opportunity to implement their projects in 16,658 stores and 42 distribution centers in 65 regions of presence in Russia. This means huge infrastructure opportunities and experience of the largest retail company in the country.

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