It all Comes Together in Retail. In a World of Possibilities, Where to Start?

By Simon Kennedy, CIO, The Warehouse Group

Simon Kennedy, CIO, The Warehouse Group

It’s easy to predict the future, but just impossible to predict it correctly. A few years from now, the first interstellar visitors arrive on Earth. Straight after they’ve cleared border control (hey, we’re talking intelligent life forms – they understand how things work) the first thing they want to do is some shopping.

A few seconds later they are extra-terrestrially angry because nothing they want has turned up yet. What kind of service is that! It dawns on them that telepathic ordering and molecular level delivery hasn’t arrived here yet, so they give up and head off in search of somewhere more suitable.

Something I know about the present though is that there’s nowhere more exciting to be in technology than in retail. Ok, I’m biased, but here’s why: Those trends we’vebeen talking about these last few years, they converge more clearly and more powerfully in retail than in any other industry i.e. Cloud, social, mobility, data. The democratisation of technology, ubiquitous mobile devices, the ability to mass-personalise, the role of social in purchase decisions, the blurring between home-life and work-life – these trends are all super-relevant to retail.

And with opportunity comes challenge. Not least that while all the new stuff in retail is going on, not much of the old stuff is going away. Bricks and clicks – “omni channel”- seems well set as the winning formula for customers, and so for retailers too. It is critical to build digital capability, but would be foolish to neglect the customer experience in the traditional store space, with or without a smart device in hand. How best to balance these competing priorities?

As the largest retail group in New Zealand, we feel the prioritisation challenge keenly. In a country of 4.5 million, our addressable domestic market would fit in a single city in many other geographies. We operate the same processes, support the same services and run the same systems footprint as retailers elsewhere with 10, 20 or even 100 times the volume. To say we have to keep things lean is an understatement. In our favour is a strong tradition of Kiwi ingenuity and resourcefulness – finding ways to achieve a lot with a comparative little – and a fast-adopting population, ready to embrace new products, services and operating models that add value.

So,if we want to convert the opportunities of those mega trends but within these constraints, what has been our approach at The Warehouse Group?I’ll pick out three examples, important to the journey so far and as we look ahead.

First would be quality of dialogue across business teams. In retail, we’ll create the best outcomes for customers when we work together to achieve them – across functions, across organisational layers, across locations. Attitudes change slower than technology. The preconceptions that “business people” don’t understand technology is false. The preconception that “IT people” can’t think like a customer is also false.

Yes, I’m one of those people who get irritated when I hear ITconference-talk about “the business”. It’s 2015 and we should be so over that. What’s needed is for technology workers to maximise the value they can add to the business they are part of. They share an overlap in skillet and knowledge base with their colleagues in other areas, and should recognise that technology ideas are not a monopoly of the IT team. My other pet-peeve at the moment is the concept of “Shadow IT”. Why not the positively-framed “business-led IT”?

Meanwhile, what about those “business” folk coming up with the business-led IT ideas? They will get the best results by engaging positively with their technology support, recognising the value that comes with deep expertise and that, even in the age of “I’ll just download this software I found on Google”, there’s a role for design, standards and a spot of architectural planning now and then.

Second of three: Prioritise platform improvements and modular approaches. In retail, our customers have no barrier to exit. If they find something better in the market today, then that’s where they’ll be tomorrow. This drives an imperative for fast innovation and speed to market, with much of this burden lying at technology’s door. In pushing for pace, the tendency is to target fast delivery of complete solutions, designed from the ground up to achieve the target outcome. The unintended consequence can be a series of big bets, with success dependent on a roll of the dice on whether the concept – and the technology - works.

Better instead to consider what can be built into platform enablers and modular components, from which endless customer experiences can be pieced together along the lines of agile development. Maximise opportunities for re-use and recombining existing components into new value-adding solutions, while always looking to add to that base platform of components. This sounds obvious, but in practice is dependent on business leadership having the patience to allow this longer game to play out –reinforcing that need for quality of dialogue.

Third, and most importantly: Adhere to a framework for leading change. Right across The Warehouse Group we recognise the value of clear purpose, defined principles and agreed priorities. With those in place, the rest is largely detail.

For technology, this means being clear that the purpose is to support customer-led business strategies; holding true to our principles relating to a modular business architecture approach;driving an organisational dynamic that encourages business-ownership and technology expertise.

So how are we going? Making progress for sure, whether it’s on-line experience, Click ‘n Collect, in-store wifi services, our ‘endless aisles’ capability, electronic receipts,in-aisle devices for store teams or any number of other advances across our various brands. Not bad for a lean operation, but far to go and we’ll need to stay true to our principles to succeed whichstill won’t mean we can predict the future of retail, but we might just help to shape it.