CIO interview: “Stores still very much part of Argos IT strategy”

Argos combines wants to deliver a shopping model as compelling for online and mobile as it is for traditional channels

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At a time when online retailing is threatening bricks-and-mortar shops, 1970s-founded brand Argos has built up an impressive geographical footprint. Most people in Britain live within 10 miles of an Argos store, 70% of the UK population shop there at least once a year, and it is one of the biggest retailers on the high street with over 700 physical stores.

“We see stores as a huge advantage,” IT director Mike Sackman tells Computer Weekly. “The store being used as part of the normal customer journey – or as a pick-up point for things ordered online – is fundamental.”

Argos is now known almost as well for its ‘check and reserve’ shopping option as for its huge catalogue. Allowing shoppers to reserve products online to pick up in-store is an important part of its customer offering.

Argos is one of the few retailers that has absolute accuracy about its stock in all of its stores, distribution centres and online at any time. Sackman says it is a “pretty difficult” system to replicate.

“It’s a core part of how we’ve always done business,” he says. “The stores offer convenience to customers in a way a purely online retailer just can’t do.”

Sackman says that, thanks to its underlying single sales platform, stock accuracy allows it to deliver more products, leading to more “fast-moving products” in store that go out of stock less often.

Argos can move out-of-stock products to a customer’s local store within four hours. If a customer reserves the product by midday, the retailer will have it in the local store by 4pm. “It’s about moving the product to where the customer is, which is pretty compelling for the customer,” he says.

Sackman says the company already has a single platform to manage all sales transactions, but is increasingly moving towards a single order management system to give customers complete visibility of the products they want and how quickly they can get them.

“It’s not just about online channels,” says Sackman. “But also the supply chain.”

“IT is part of the business”

Before Sackman joined the company from Mitchells & Butlers in April 2012, there was no IT director role at Argos, only a group IT director that was more of a support function than an integral part of the company. “I joined Argos because it was on the cusp of a serious review of its strategy, and on the cusp of transformational change.”

Now his role as IT director means he is accountable for all things technology, and he works closely with the chief digital officer. Sackman also sits on the executive board, so he is closely involved in the company’s business strategy. He ensures the technology strategy is always developed alongside the business strategy rather than treated as an afterthought.

“It wasn’t about developing a business strategy and responding with an IT strategy, it was about developing the whole strategy at the same time,” he says. “Clearly technology has a role to play from customer-facing end – mobile phones and tablets – all the way through to distribution line. It’s an end-to-end technology strategy that covers the whole business.”

He says that in some companies the IT function sits outside the rest of the business and waits until the business articulates the strategy before responding. “For me, that’s wrong. IT is part of the business; in particular, Argos’s IT is an integral part.

“The rest of the board would expect me to have a point of view about all aspects of the strategy, whether it has technology in it or not. Think of it as business IT, not just IT.”

Digital leader

A big part of Argos’s recent strategy has been to position itself as a digital leader, by becoming omni-channel, recruiting talent for a digital innovation hub and opening a number of digital concept stores.

The rest of the board would expect me to have a point of view about all aspects of the strategy, whether it has technology in it or not. Think of it as business IT, not just IT

Mike Sackman

To become omni-channel Sackman says that Argos has had to merge its in-store, catalogue, online and mobile channels to offer the same experience to the customer – “irrespective of how they interact with Argos”.

He adds: “Our intent is that it looks and feels the same and you get the same experience and offers.” 

Interestingly, the strategy has also resulted in a repositioning of the channels. “Typically it was the catalogue and the stores that led,” he says. “But as customers moved more online, we wanted to trade much more dynamically online than we previously did.”

Now 50% of the retailer’s business starts online. He says a lot of this growth has come from mobile, and that he sees people buying tablets – often from Argos – and then using them to shop online. “We need to respond to the massive customer demand to shop differently.”

The digital concept stores are where Argos will be trialling the use of different technologies in-store. At the moment, it has six such stores, four of them in London.

The retailer launched the digital concept stores with iPads earlier this year, which will replace the traditional Argos catalogues by allowing customers to swipe and select products using the tablet devices. But there is no decision on which devices may be used on roll-out, so Argos’s own-branded tablet could be a contender.

But the store will still have traditional paper catalogues to hand for those who prefer them. And there will be an area where customers can ask specifically for help on using the new in-store technology, as well as staff roaming around with individual iPads to help customers. These members of staff will have specially designed applications on their iPads incorporating Google for price comparisons, support for “chatter” communication with other stores, and information about new products and hot product trends to educate staff.

But one of the digital stores’ key innovations will be to allow customers to reserve online and 60 seconds later come into the store and pick up their item.

And Sackman says the retailer is not short of further ideas. “It’s not about working out what’s the next idea, it’s about working out which ideas we are and we aren’t doing. There are very few of our ideas that do not have some technology component, which is a great place to be.”

Meanwhile, Argos has invested in a new digital hub above its store in London Victoria which will be used as a satellite for teams working on major infrastructure projects, and will encourage more agile and flexible ways of working.

The retailer’s parent company Home Retail Group, which includes Homebase, has a group IT team of around 300 people that shares infrastructure services and service management with Argos. Argos also has a partnership with Accenture to help deliver some of the big transformation projects.

Sackman says that both Argos and Homebase try and share ideas and have lots of discussions about technology, but adds that they have to be careful balancing what they can learn from each other and making sure they don’t “reinvent the same wheel”.

Sackman and the IT team work very closely with the chief digital officer and the marketing teams. He says it was important to build a personal relationship with the CDO, Bertrand Bodson. “We say we’re like brothers,” he adds. “It’s really important that the personal relationship is strong because there’s clearly ambiguity between the roles, and there will be.”  

The Argos IT and marketing teams also need to understand how to work together without constantly thinking about the boundaries between the departments. “It’s really important we’re able to blend the creativity with the reality of the industrial strength.”

Sackman says Argos is on the look-out for talent, particularly for people who want to work in transformational change and in retail, rather than just IT. “To work in Argos, you have to be up for change, and you have to want to be part of retail transformation,” he says. “There are very few boring day-jobs we have available.”

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