Loblaw Digital brings 100-years of retail tradition into the internet age

Director of Data Science, Richard Downe, came to Toronto from Silicon Valley to be “on the ground floor of something big.”

Though the task was large – taking Canada’s largest retailer with a century of business experience into the digital age – the team was small. “We started with about six people in Start-Up Alley,” Justin Watts, Engineering Director recalls. “From there we started a business a year for four years straight – JoeFresh.com, PC Express, Beauty Boutique and the Digital Pharmacy, growing 10x year over year.”

“In a few years, ecommerce went from being a curiosity to a major part of the business,” says Director of Data Science, Richard Downe. “The idea was if we were going to do ecommerce correctly, we would have to create an incubator with the freedom to explore,” he says. “We’re like a start-up within a big enterprise, but we can take on projects at a scale you can’t when you’re worried about stretching your seed capital.” Senior Project Manager Elvis Do adds “It’s the $45 billion start-up.”

From cardiographs to shopping carts

With a doctorate in computer science focused on cardiac imaging and interventional cardiology, Downe doesn’t have a typical retail business background. “The lesson I’ve learned from my PhD is that science is hard, and good science is very hard, but the payoff is enormous,” he explains.

Following a stint at the IBM research lab in San Jose, he helped create Casetext, a legal research startup, but returned to his interest in medical imaging joining Figure 1, a Canadian medical image sharing app. Considering his background in medtech, he didn’t expect to end up at Loblaws, “It was a hard sell originally. I thought, ‘I don’t want to work in retail.’ But I came to realize that the types of problems here are very interesting and the size of the data is enormous. 80% of Canadians shop at one of our stores each week, it’s a huge data set.”

To better understand the customers and their needs, Downe had to become one. “I was actually the customer that was difficult to convert,” Downe admits, “but I wanted to understand it. If you build a product you must use it, and I found it does save me time,” he says of the PC Express grocery pick-up service.

To keep coming up with innovative products, Loblaw Digital welcomes experimentation. In collaboration with Microsoft, Loblaw Digital held their first hackathon last year. The winner was a team that created a shopping cart that recognizes what customers purchase and suggests other items to pair with it. “A big part of grocery shopping is discovery,” Downe explains, “So we are always looking for ways to introduce shoppers to new products.”

Loblaws will soon launch a product to that helps customers save money, by suggesting substantially identical items at a lower price. “Technologically, it gives us an easy way to test a product similarity engine while still delivering immediate value to the customer”

“Toronto is the best place to get the American Dream”

Downe is just one of an increasing number of tech leaders who have chosen to leave Silicon Valley for Toronto, contributing to the region’s unprecedented “brain gain”. “I made a bet,” he says, “I had a sense that Toronto’s star was rising and there was an opportunity to be on the ground floor of something big. I was right.”

“Toronto is the peer of Silicon Valley now, especially in regard to machine learning and data science,” he says. “We’ve built a lot of intellectual capital there and become the centre of that industry.”

“I see people who would have gone to California stick around now,” Downe says. He thinks that Toronto’s comparable economic and cultural diversity is an advantage over Silicon Valley. “San Francisco became a monoculture around tech, but in Toronto it’s one of many industries. There’s a cultural diversity here too, and it’s a place where you can connect with people from all kinds of backgrounds.

“We’re the next big thing, all the big companies – Microsoft, Amazon, Google – are opening offices here because we have amazing talent,” Do chimes in. “Brain drain was a very big topic in Canada a decade ago, now that isn’t the case,” explains Do. “The people who stayed are the ones that built this, if they hadn’t stuck it out we wouldn’t be the tech hub we are now.” He also notes that there is a different work culture in Toronto, “The Valley has lost it’s loyalty, people jump around there while here we are more loyal.”

Do, Downe and Watts agree that while Toronto is the underdog compared to Silicon Valley, they thrive on competing against the big players. “There was some poetry in the Toronto Raptors defeating the Golden State Warriors in the NBA championships this year,” laughs Downe.

“There are always opportunities in the Valley, but we love this city. Toronto is the best place to get the American Dream,” says Watts.