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Tech talk with Loblaw Digital’s Herman Paek

SVP discusses the impact of COVID on the grocer’s e-commerce business and how technology allows Loblaw to better serve its customers

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Change has come to Canada’s grocery industry.

While COVID-19–and a subsequent shift in consumer expectations around in-store and online experiences–accelerated some of that change, earlier adoption of technology and capturing of customer data helped lay the groundwork.

From personalized offers to anticipating shoppers’ needs and making the in-store experience safer and more convenient, technology improves productivity and can give grocers an edge over the competition.

We asked Loblaw Digital SVP Herman Paek how technology has helped the grocer better serve its customers, and what impact COVID had on its e-grocery business.

Here’s what he had to say:

How has the digital grocery retail landscape changed since you started with Loblaw Digital in 2018?

Loblaw Digital began in 2013 with six colleagues. Since that time, it’s grown to a team of more than 400 people, representing $1 billion in sales in 2019. That growth is really an indication of the evolution of online grocery shopping in Canada.

Our customers understand the convenience of online shopping, and over the years have pushed us to provide new options – shorter pick up windows (from next day to two hours), more convenient locations, like locker pick up on public transit lines, and home delivery.

We know that globally Canadians have trailed in online grocery shopping, so we continue to look around the world at best practices to ensure we can provide the best possible shopping experience here, first.

In which areas are you spending tech investment dollars, and where do you see that investment headed over the next few years?

We will continue to invest in our current infrastructure and grow our capacity. An example of this would be the Micro Fulfilment Centre we introduced earlier this year, which leverages our strong store network and enables us to fulfill customer orders faster.

There has been some concern that automation/retail tech will result in job losses. How do you ensure tools and technology make associates feel more connected and engaged, and allow them to work more closely with shoppers?

The intention is never to take away, but to grow the business in more efficient ways that allow us to service our customers better. New technologies allow us to invest in our colleagues further and give them opportunities to work on other areas of the business

How has tech enabled you to learn more about your customers? And how has this benefitted your customers?

By understanding our customers, we can better serve them. Our PC Optimum program is based entirely on personalization and the idea that by knowing our customer, we can provide the most value to them. During the pandemic, we saw significant growth on our e-commerce platforms. Through our technology, we were able to better predict busy times, and appropriately scale our services. In some cases, this involved us building new capabilities from scratch within weeks.

Technology was already changing how Canadians purchase their groceries and the immediacy in which they expect their orders to be delivered. How has COVID shaped the way Canadians approach e-grocery? How has it shaped your e-grocery business in the last few months?

When the pandemic materialized in mid-March capacity was our focus. This is both in terms of our capacity to accept the increase demand for orders, as well as our ability to fulfill these orders based on the products in our stores. The demand for online groceries grew to levels we didn’t expect for years to come.

The business reacted quickly in order to serve more people, faster, which included scaling up our e-commerce infrastructure, deploying many new features to make shopping easier for our customers, hiring hundreds of new personal shoppers, continually adding more slots every week, deploying new infrastructure and algorithms to accommodate the increase in personal shoppers and slots, and the introduction of new technology, like the Micro Fulfillment Centre, to meet the order volume. Additionally, a large portion of orders are fulfilled same day, helping to further meet the needs of our customers.

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