Enterprise Mobility at John Lewis, 50 years after IT Investment
John Lewis first invested in IT in 1963 - 50 years later, they face the challenge of integrating legacy systems and replacing some old with new, which is enabling them to build great new customer facing systems, online, mobile, on the phone.
As the retail world has been turned upside down by the advent of online technology, it;s an key element of competitiveness these days and Paul Coby, IT Director at John Lewis is keen to point out that online is supporting the store experience and not taking away from it.
He explains how the CIO and CMO roles are converging and that the solution to offering a true omnichannel experience includes; 'working, innovating to see what possible solutions will be, and of course critically, listening to your customers and getting their feedback on what they will like, what works and what doesn't work is going to be the key.'
Enterprise Mobility (EME): How has mobile technology helped John Lewis achieve best in breed customer service, increased operational efficiency and productivity?
Paul Coby: Well, our strategy is omnichannel. What do we mean by omnichannel? By omnichannel, we mean a lot more than multi-channel, so multi-channel was adding different channels together, so you had shops and then you had an online proposition, and you might have a smart phone mobile proposition as well.
Omnichannel is about how you bring the channels together, how you serve customers seamlessly, between and across channels, so our aim is to integrate the proposition for customers, because sometimes you want to go into a store, get advice from one of our expert partners. Sometimes you want to buy things online, sometimes you want to research things online, sometimes you're on the train, and you want to see what John Lewis has got available, and sometimes of course, you want a warning, when your click and collect parcel is about to arrive, so it's about how you join all these things up, and that's what we've been trying to do.
EME: What would you say has been your greatest achievement at John Lewis to date and why?
Paul: Gosh, that's an interesting and challenging question. I hope it's been to put IT technology at the heart of our retail revolution strategy, so we call it the retail revolution, because retail in the UK has been turned upside down by the advent of online, by technology. I think that's self evident to everybody by now, and so technology really matters. It's an absolutely key element of your competitiveness these days.
So, my task, and I guess it hasn't been that difficult, because my colleagues on the board are very receptive to this, has been to put technology, how we invest in technology, how we use technology to help us transform our business operations and our business model, has been really to put IT at the heart of all that.
EME: What are your three biggest challenges, moving into 2013, and what will you do to overcome these challenges?
Paul: I think the first big challenge we've got is to get around the thoughts of 'I wouldn't start here if I was you challenge,' so like most retailers in the UK, we've got a load of legacy IT investment, and you know, that's good. These systems have served us very well, so John Lewis Partnership first invested in IT in 1963, so we're in our 50th anniversary year, and there's a great picture of our partners in 60s gear, pushing a very large IBM mainframe down a rather steep slope, as the new, advanced, white hot heat of the technology revolution arrived for us.
But, as a result of which, in order to deliver omnichannel strategy, we have to join it all up, and joining up all these legacy systems means replacing some completely, and we're doing that in terms of our order management system. We're doing it in our supply chain. It also means building a technical infrastructure that joins all these legacy systems up, and enables us to build all the great new customer facing systems, online, mobile, on the phone, so that's big challenge number one.
The second big challenge we've got is supporting our partners in how they serve our customers, so because we've got all this legacy investment, it actually is quite hard for our partners to serve our customers in this modern world, where we have omnichannel retailing, so one of the things I'm doing is rolling out major amounts of investment, so whether they are a new electronic point of sale system, that's now in 12 stores. We are replacing 70% of the tills, so the new system runs well. We're replacing 40% of the PCs across our shop estate, and you know, we're installing new wireless handsets for our partners.
All quite basic stuff, but all incredibly important in enabling our partners to serve our customers, which of course is the absolute key thing that differentiates us, so a real focus on our partners, and because we're John Lewis, we're doing this through our democracy. I presented to the John Lewis Council, which is a democratically elected body from across the business, about all these things that we're doing, and I've set up an IT user group, again within our democracy, so partners have the ability to feedback what their issues are, what the concerns are, where they want to see the investment.
Thirdly, because we're doing all this investment in technology, we're recruiting, and so we have about 300 John Lewis IT partners at the moment, and we're looking to increase to about 400, so that's an increase of one third, during the course of 2013.
So, that's a fantastic opportunity. We're looking to recruit ten graduates, five apprentices for IT, but also across a wide variety of disciplines, like project managers, business analysts, systems architects, database experts, so and of course, ecommerce, so that's the sort of challenge that you really like to have, so it's a very exciting time at the moment.
EME: What advice would you give to your fellow IT Directors, looking to engage senior executives across the business, for example, the Chief Marketing Officer, in implementing mobile solutions?
Paul: Well, talk to them. That's probably a good start. Have a listen to what they want. My colleague, who is CMO, Peter Lewis, recently said to me, Paul, 'these days, you know, we talk to the same sort of people. You're talking to Google, I'm talking to Google. And, we're talking to people about mobile apps, you're talking to people about mobile apps.' So, the CMO job and the CI job are coming together, the only real difference is everybody in IT has a bad haircut and bad clothes, and we're in marketing. Cruel but I don't deny it, but I think there's a great overlap these days, and it's a great question because of that, so I think it's like all areas of the business really.
If you want to engage people, get on their agenda. Don't try and dictate to them what they should have, recognise that the IT that has been provided in the past is legacy and because the world is changing so quickly, it may not be or almost certainly isn't giving them everything they need, and recognise that they have a very important agenda that's going to be delivered by technology, so you know, get close to them, talk to them, understand their needs, and try to meet them as best you can.
EME: What is the greatest challenges retailers face today, in delivering a true omnichannel experience, and what do you believe are the solutions?
Paul: That's another great question. You've obviously thought hard about these, I think the real challenge is what's omnichannel? I don't think anybody really knows clearly and for certain what retail in the UK in 2015 looks like.
Every consultancy I talk to in London or the UK has the same presentation, I mean it's got different logos on, and different artwork, but it's the same presentation. It's all about mobile devices, all about social media, and so forth. I don't think anybody really knows how it will come together.
I think one of the very exciting things about working in retail in 2013 is how fast moving it is, and how changeable it is, and how new devices are coming forward, so you know, I'm an enormous Apple fan, and can't pass an Apple store without going in and wanting to buy something, but they were at a point last year, the largest company on the face of the globe by market cap, and things have moved on.
Now, personally I believe there will be some really fascinating Apple devices coming out in 2013, who knows? I don't, but Samsung are doing really, really well, so IOS and iPhones have a great market share, but Samsung and the Galaxy Tablet and Android also have a large following and large market share as well, and of course Windows 8 has now launched and we'll see how that will develop, so it's actually the things that are coming in, in terms of the technology and how technology is used is changing very, very fast.
I think the trick is how you put them together, and how you put them together to provide great customer service in an omnichannel way, and we've gone some way down the road on this, but in no sense would we pretend that we've got the answer.
We opened our Exeter Store in November last year. It's about half the size of one of our normal stores, but we have pretty much the same assortment as we do in a large store. How have we done that? You know, we've got information screens, we've got self service terminals, we've got pilot of shelf age labelling pricing, we've got the wall of glass, and the wall of plates, so instead of having a very large display of plates with every size of plate in every design, we've just got a wall of them, and you go and say, I like that, I like the Kath Kidson one, and you talk to our partner.
They go over to their terminal, where you go and look on johnlewis.com, and we show you what the range is, you choose that, and you can then pick that up yourself, if you want to pick it up, or you can have it delivered, or you can use click and collect, so it's not immensely inventive, but it's a really good integration of the online and the store experience.
I think we're going to see a lot of things tested like that, as we go into the future, and I don't think anybody has got all the answers, so I think working, innovating to see what possible solutions will be, and of course critically, listening to your customers and getting their feedback on what they will like, what works and what doesn'twork is going to be the key.
EME: How important will technology be to John Lewis and other leading retailers over the coming five years, with regards to increasing customer loyalty and share of wallet?
Paul: Well, a customer loyalty programme or system, which many are expensively sold does not create customer loyalty. I think, and we are, I must stress this, in no sense are we complacent about this, we have very loyal customers. The reason they're loyal is the values that we've had since the 1920s, so never knowingly undersold, our returns policy, the passion that our partners have in the shops for serving our customers, and their real interest in the things that they look after and they sell. Value assortment, service and trust were the key values that we had before the Second World War and those are absolutely key values we have going forward.
So, that's how you get customer loyalty. Now, systems can help you with that, absolutely, and one of the things that we're looking at, and one of the things we're investing in is a customer database, data warehouse.
Our colleagues in Waitrose have launched My Waitrose, which has been extraordinarily successful, and we're looking at how we can support genuine customer loyalty with systems, and how we can use technology to serve our customers better and understand their needs, but I don't think buying a system is a viable substitute to real customer service.
EME: How have the recent innovations such as click and collect and the in-store kiosks for accessing the internet improved the shopper experience and the relationship with your customers?
Paul: As I said, the heart of omnichannel is seamlessness across channels, and that's why click and collect has been such a fantastic success. It's almost doubled over the past year, that's in large part due to the popularity of the service through Waitrose branches, so we're now in 194 Waitrose branches, which people love. I love it.
And, I think people love click and collect, because it puts you in control. We've got the flexibility there, and we love it, because you come to our shops, which is fabulous, so that's a great example of breaking down the barriers.
In store kiosks display a much wider assortment than you can have in the store, so I talked about the example in our new store in Exeter, that's absolutely about being able to broaden that choice, which people like as well.
So, I think, we don't know what omnichannel will look like in the future, but I think it's important to recognise that omnichannel is with us in the here and now, because we all do it, so I think I always get these stats the wrong way around, but two thirds of our customers, do research online and then buy in the store, and because people like to have a good understanding of what they're buying, understand what the competition is and understand what the prices are. They want to check that, and we know about a third of our customers who buy online, have researched in the store, so if you're going to buy a very large wide screen television, or you're buying a mattress, you probably want to bounce on it in the store and see. You may go home, check prices, and then find that John Lewis is good value, is never knowingly undersold, so you order online, and get it delivered to your home.
So, in many ways, the online figures understate how people use it, and indeed, I think one of the silliest things is to say, or we think the silliest thing is to say that online is destroying the shop experience, because actually how we like it to be, it supports it, so we see this as mutual reinforcement.
So, finding the things at omnichannel that people like and really go for, is really important, so click and collect has been a fantastic experience for our customers.
EME: What do you think the solution for community enterprise mobility and beyond can do to help you address your challenges?
Paul: Well, it would be a bit cheeky to provide solutions. That would be good, and competitive prices, that's what they're supposed to do. So, it's like the whole thing that we have to do is listen to our customers in the stores, so the best possible advice I can give any solution provider, or anybody trying to sell us systems is to listen to what we say we want, and that's what it's all about.
EME: Thanks Paul.