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Hello, this is the Co-op Digital newsletter - it looks at what's happening in the internet/digital world and how it's relevant to the Co-op, to retail businesses, and most importantly to people, communities and society. Thank you for reading - send ideas and feedback to @rod on Twitter. Please tell a friend about it!

Where to put your warehouse

A simplistic model of logistics is something like “work out how to deliver things quickly and efficiently by putting the complexity in the right places”. It’s a balancing act: people, warehouses, delivery vehicles, routes, systems. In a perfect world, you’d deliver from the factory directly to a customer’s address - this is called “point to point”. But the problem is that it makes planning journeys really complex, and you need loads of vehicles, and the roads are busy etc (the network maths is here if you like formulae). 

So these days the dominant model in logistics is “hub and spoke”. You move the goods from one large fulfilment hub to another that’s closeish to the customer, and from there you send a vehicle to deliver many packages on a route that goes from customer to customer. (This is why delivery notifications say “the package will be delivered today between 11:38am and 4:15pm.”) The complexity is in the warehouse, and you enjoy some economies of scale. The journey planning is much simpler than it would be in point to point: you make fewer journeys, but packages travel more miles and they might take longer to get to the customer.

It makes sense to put warehousing closer to customers if you can keep the complexity under control and make sure you still have the economies of scale. Which is why Amazon plans to put 1,000 warehouses in suburban neighborhoods. (See also micro fulfilment, Nov 2019.)

But who’s closer to customers than that? Convenience stores and other local retail. If you can get the warehouses close enough to the customers, perhaps point to point delivery becomes possible. If retailers could use their very local footprint to make their stores act as delivery hubs, then speedy, simple, point-to-point delivery becomes more efficient. Your stock systems and store operations teams would need to be strong, but it is doable.

But who’s even closer to customers than local retail? The customer’s home itself, so it might work to have the customer homes as a distributed, atomised “warehouse”. Perhaps Amazon would give you free Prime if its delivery robots could use your garage as a local nano-warehouse.


Online first: John Lewis, Next, Nike

The John Lewis half-yearly results say that the virus is a massive catalyst for shopping behaviour change:

The pandemic has brought forward changes in consumer shopping habits which might have taken five years into five months. [...] Online now accounts for more than 60% of sales, from 40% before the pandemic. As a result of this pronounced shift to digital we had to reassess how much shops contribute to whether our customers buy online with us or not. 

Before the crisis we believed that shops contributed around £6 of every £10 spent online. We now think that figure is, on average, around £3. This has the effect of reducing the book value of John Lewis shops by about £470m”

(Perhaps accounts will put an increased book value on software for the same reason.) The other interesting thing is that JLP is planning to convert shop space into office space at Oxford Street in London.

Elsewhere in retail: 

However, if shopping increasingly moves online, the impact on jobs is unclear. Do those retail jobs neatly become online marketing and warehouse fulfilment jobs?

Related: interesting reading on retail from ustwo.


Supermarket news 

Tesco and Morrisons have started rationing flour, dried pasta and toilet paper.

Aldi “missed out on the huge boom in online sales and increase in convenience store sales. Now Aldi's dipping its toe into the online food market, trialling several new concepts, including a Deliveroo rapid delivery service and a click and collect service.”

Tesco to work with sharing app Olio in bid to drive down food waste. Olio will redistribute edible surplus food for free for all Tesco branches in the UK.

Covid test and trace apps and helpful websites

After a few bumps along the way, the UK’s covid trace and trace apps are up and running. They use privacy and notification controls built by Apple and Google/Android - the privacy is ok. You should use the one in your country. For the UK:

Not made by gov, but good: Local Lockdown Lookup tells you if there are currently any nationally-imposed local restrictions. This simple service is useful because rules are changing quickly and vary from location to location.


Various things

Microsoft’s underwater server experiment resurfaces after two years. Keep data centres in the sea is a good idea! Previously, Jun 2018.

Gig economy company launches Uber, but for evicting people. A company called Civvl says evicting people is the "FASTEST GROWING MONEY MAKING GIG DUE TO COVID-19." - desperately disappointing that this isn’t a parody.

The Government Digital Service truly was once world-beating. What happened? - “Even in its pomp, GDS was not universally loved; senior civil servants described the kids in jeans as an “insurgency”. But the real problem was the challenge it presented to the sovereign power of Whitehall departments. Changing government was not on their agenda, nor in their interests. Common components took away control.”

Coalition for App Fairness - an industry coalition calling for Apple’s app store to be opened up so it is fairer to developers. (However, you could reach a different conclusions: that the app store should remain closed because that gatekeeping delivers a genuine benefit to users - you don’t have to worry about security, payment safety etc - but that Apple should no longer charge developers 30% now it’s quite big and successful.)

(Amazon) Ring’s Always Home Camera is a cctv security drone that flies around inside your house. If Amazon is going to be surveilling your own front room, maybe it could also helpfully scan your belongings and tell you which have potential resale value.

It’s not often you see a story that shows you how we live in a fizzing bath of electric and radio signal. Old TV caused village broadband outages for 18 months.


Co-op Digital news and events

Co-op Group’s interim results:

“The Co-op Difference and Covid-19 Response

  • Co-op supported nation through Covid-19 crisis with outstanding contribution from Co-op colleagues on the frontline: 7,000 temporary posts filled to manage increased demand. £13m paid to colleagues, recognising crucial frontline work.
  • Co-operate launched – new and innovative online platform, linking volunteers and those in need - visited more than 103,500 times in H1
  • Member Pioneers supported more than 20,000 vulnerable people a month in communities; sourced volunteers, secured funding for urgent projects and established support groups”

National Inclusion Week has just started, 28 Sep-4 Oct. And Black History month is about to start, Oct 2020.

Free of charge events at Federation house (and elsewhere): 

Paid for events:

More detail on Federation House’s events.


Thank you for reading

Thank you friends, readers and contributors. Please continue to send ideas, questions, corrections, improvements, etc to @rod on Twitter. If you have enjoyed reading, please tell a friend! If you want to find out more about Co-op Digital, follow us @CoopDigital on Twitter and read the Co-op Digital Blog. Previous newsletters.

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