Retailer conglomerate Aurora Fashions is pressing ahead with a series of initiatives around boosting its multichannel capability to respond to customer demands in a challenging business environment.
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Sales performance in UK high street retail hit a 14-month low in May, according to a survey by the Confederation of British Industry (CBI). Conversely, figures from the IMRG Capgemini e-Retail Sales Index suggest that UK online sales rose 14% in 2009, with 13% growth predicted for 2010.
The sector may not be over the worst in terms of financial challenges, but IT departments in retail must react to the needs of web-savvy consumers, said Aurora chief information officer John Bovill.
"We estimate that we will not see true UK economic growth until at least 2013, but we are keeping our eyes open to opportunities, because there are still lots of them around," Bovill told Computer Weekly.
"Despite the fact that we have already streamlined considerably as a function, we will continue to perfect ways to reduce costs in what is already a very lean operation. We hit the low-hanging fruit, but we know we can always get smarter as a business," he said.
"For example, there is still very healthy growth in areas such as the web, but the reality is that it [UK online retail] is maturing; hence you have to deliver a multichannel proposition."
Improving core systems
To meet these requirements, Aurora - owner of womenswear chains including Oasis, Karen Millen, Warehouse and Coast - has been standardising and improving its core systems, which include its Oracle-based merchandising platform, over the past year as part of a project dubbed 'Integrated Store', which is due to complete in 2011.
The plan also involves enhancements to Aurora's e-commerce platform provided by BT Expedite (BTE) and the roll-out of an improved in-store system across its branch network, as well as the replacement of till scanners and hardware, including chip and pin units.
Contactless is not being used for payments, but the technology is being considered to support loyalty schemes across brands. Similarly, Aurora is improving its customer relationship management (CRM) set-up to gain a single view of its customers.
Mobile is an important part of Aurora's IT proposition and mobile gift vouchers were introduced in December, in addition to ongoing initiatives in that space which include its Oasis iPhone app. Aurora is also trialling Digipos tablet computers using in-store wi-fi across a small number of shops to enable clients to order items that are not available in store over the web.
"The way our customers are interacting with us is changing and that is why our Integrated Store project is so important to bring our channels together and enable us to communicate more effectively with our customers, regardless of the device or method they decide to use," said Bovill.
"If we did not have commonality across our platforms that would be very difficult to achieve. Our set-up enables us to grow and develop our systems in a cost-effective, scalable way, and also remove risk, because standardisation means we can integrate a range of specialist systems solutions utilising the common systems platform," he said.
"I am not suggesting that you can just flick a switch and it is done - there is hard work involved to get us there, but we have the building blocks in place."
According to Bovill, collaboration with other retailers has worked as a way to reduce financial risks and also to share IT best practices. Aurora has been working with other retailers such as Thomas Pink, Pets at Home and Mothercare through a focus group run by BT Expedite, for different aspects of its Integrated Store plan.
"[Collaboration] makes it easier for everybody to manage risk. You can wrap IT in a halo and pretend that if someone found out about our technology platform it would have a major impact in our competitive advantage, but we are a product-led business and our product designs and development processes are critical to our competitiveness and are enabled by our common IT platform," said Bovill.
"My spend is 1% of the firm's turnover and I am also being asked to experiment more with IT, so I need to counteract that need for experimenting and minimise the risk of project overspend and potential failure," he said.
"BTE facilitates the relationships between us and ensures the appropriate structure and governance processes are in place. There can be no harm in collaborating with other like-minded people under such an arrangement, but it must deliver value to all stakeholders."
Potential to share IT
Also at the back-end, Aurora is looking at possibly using cloud computing for back-ups to cope with increasing requirements prompted by its international expansion.
|Top tips for IT leaders setting up a multichannel operation|
The firm currently manages approximately 150 servers housed in two datacentres. Shifting infrastructure management to a third-party has not been considered as a possible route to further savings, since Aurora has the in-house skills to manage the sites in a cost-effective manner.
"We could even offer IT shared services to other retailers, as we have a good team and mature practices. The only reason we haven't is because we have been preoccupied with our own business," said Bovill.
"There is much more competitiveness in the high street at the moment and niche retailers are moving into our space. While this helps us to be more competitive, they will eventually hit a ceiling in terms of their technology capability and that is where someone like us, through our IT shared services, can help," he said.
"We understand retail and what underpins the brands' ability to compete, so we can add value if we were to do something like that. At the moment, we are busy enabling our business to compete in a mature UK market and increasingly global business environment, but IT shared services could be considered as a future revenue generation opportunity."