Archive black and white image with text on it: Now's the time to enter new markets

As part of our Stronger Co-op, Stronger Communities ambition, one of our goals is to explore new business opportunities – reaching out to more customers in new areas to put our Co-op difference into markets that are broken or failing consumers.

Tim Davies, Director of Co-op Ventures, explains more about this and the way the team is working in his ‘Why it’s time to enter new markets’ blog.

Venture’s work is about digital opportunities – looking to try things and learn quickly whether to carry on with them or to move onto something new. This is about investing in our future – diversifying our range of businesses, but in a ‘capital light’ (ie, relatively cheap) way – making sure we use our members’ money where we think it can do the most good.

Join the conversation! 21 Comments

  1. Completely agree with Josh! Why not make an ethical and fair Co-Op letting agency which is fair to both tenant and landlord, you only need to look at the current housing situation across the UK to see the need for it. Would really fit in with Co-op ethic and community feel.

  2. There is an explosion of new venture companies in the drinks market, would it be possible to link the new gin distillers or artisan breweries with a distribution company and web site we already have the trucks, the expertise from buyers etc. although some specialist items may be required if you link to wine sales and offer home delivery via a recognised carrier Post Office/Yodel with a centralised distribution warehouse maybe a former large store as per Lancaster or some other it mean that start up costs are minimal. Just a thought.

    • Hi John. Sounds like an interesting opportunity. Why not pitch your idea to our Wine and Spirts team?

  3. I’m glad we’re looking at other new things. If we just focus on what we currently do, especially food, then we’re in danger of becoming complacent and being suddenly hit by external events (you only need to look at Asda/JS for that!). We need innovation and new things, and we need to do it in the expanding market area, digitally (again, you only need to look at struggling retailers on the high street to see this).
    I recall the story about Kodak actually inventing the digital camera, but their bosses saying ‘no – keep it quiet else we won’t sell as much paper/film’. Just because some of the ‘new’ areas may be similar to what we did before, does that matter if we’re doing it in the new way? Why not use our historical experience and our new digital approaches to create something wonderful. Bank, Pharmacy, Crems – they all had physical buildings with the overheads that go with them when we did them last time. If we did something in those areas digitally now, then maybe we’ll be meeting that need and helping grow Co-op.
    Let’s let these venturing folk inspire us in new areas. I for one am all for this. Go for it.

  4. lots of customers have ask if the coop could offer online shopping and home delivery for food

    • This has been mentioned more times than I can remember. However, it is more complex than simply setting up a website. The website has to generate volume sales across the entire UK. What do most customers use us for? Top-up shops. It would not be economical to deliver, for example, a loaf and 2 pints of milk.

      And the infrastructure has to be there. There’s two models we could copy. Tesco uses its stores as fulfilment centres. We couldn’t do this. We don’t have the sqft-age that Tesco do in every corner of the UK. Many of our stores are sub-2000sqft. It would be a nightmare to tailor the website to each area of the UK depending on the range stocked there. Morrisons use a central fulfilment centre (run by Ocado I believe) which we COULD copy, BUT it would cost a fortune to set up – I’m still not sure if Morrisons are making any money on their operation. Vans to buy, Staff to hire, you’d need major volume going through the centre and out in the vans – as I said above it wouldn’t be any good for topup shops. And those topup shops are done on impulse – nobody plans a topup shop, it is done as and when required.

      Many of our stores that currently have the Iceland-style home delivery service are having it removed as it delivers little value to the store’s bottom line, in many cases it is a loss making service.

      • Well said Steve. Our success story and profitability is about ranging the correct products into the correct stores in the correct quantities, taking into account local demographics, at the right price and lining up staff in store when the role cages land and customers come through the doors. Sounds easy…..It’s not… Lets concentrate on where we can really make a difference. Get the above correct and triple the size of the wholesale operation and our world really opens up.

    • Hi Kyle. We’re exploring e-commerce and marketplace business models as part of our work in New Economies. Our Food business is also exploring convenient delivery models such as existing platforms like Deliveroo and new technology. Watch this space!

  5. How about a Co-op letting agency that is fair to tenants, rather than being money makers for landlords?

    • Interesting. Why would landlords use it?

      • I should have probably said make it fair for all parties!

        I’d make fees competitive and simple (you only have to look here https://www.prospect.co.uk/landlord-fees to see how crazy it is) – charge a simple % rate against a property and thats it) – we can link into insurance (for insurance) and our property team for maintenance and management) optimise economies of scale.

        The easiest step is manage our residential property in a portfolio in house and offer a members offer of long term lets.

        • Hi Josh.
          Nice idea. For now Ventures is only exploring Health, New Economies and Financial Wellbeing. Why not pitch your idea to the Property team?

      • Indeed. Ethical landlords are few and far between and in general they are in it purely for squeezing as much out of a property as possible. It would be much better to support housing co-operatives which have seen some success around the world but haven’t really been tried significantly in the UK. Providing fairly priced homes for local communities would be a very worthwhile project.

  6. I wonder if there are more opportunities to link up electronically with Coop friendly groups in terms of ones with similar beliefs and values to the Coop. I feel this could included targeted charities including ones like https://www.enhamtrust.org.uk/ , the National Trust and also certain targeted retirement homes who are noted as particularly caring for their residents? I feel that the Coop could negotiate having Coop existing business opportunities included into their websites and magazines to promote our existing products and potentially giving them certain discounts when they use our services? Also there might be additional links available between Coop colleagues supporting their events and organisations.

  7. Maybe we could enter the banking, farming, pharmacy or non-food markets!

  8. New ventures which are not our core business? we had this with the NOMA, but have walked away from that.

  9. Still really unsure about this “Fast Failure” approach to new business ventures. As long as we are being open and honest with Members on the cost of these fast failures. For instance how much was invested in “Paperless”, How much was Invested in “Community Energy”. I am no luddite. I was coding in Ada, Cobol before many of our current Digital communities were born. Prototyping “Agile” has always been in place in application development for 30 years. Lots of re-inventing the wheel. Also can we be open about the cost / revenue of Federation. In times of Fuel for Growth, we need profitable new ventures that align with our co-operative values and principles but I fear we are not being honest about the cash.

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Stronger Co-op, Stronger Communities, Ventures

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