Technology occupies centre stage at Shop Direct as the retail giant pursues its goal of becoming a "world-class digital retailer."
The company behind brands such as Littlewoods.com and Very.co.uk is driving a three-year IT transformation process that began in January 2013, with the appointment of CIO Andy Wolfe.
Wolfe, who previously headed a digital transformation programme at mobile giant O2, was tasked to address some of the technology-related issues of the business and create a path to support its online ambitions.
The company's digital progress has already generated tangible results, with a pre-tax profit of £6.6m in 2013 – its first in 10 years. The previously underperforming online channel now represents the majority of sales, while mobile revenue is also on the rise.
“We have a huge ambition and challenge for IT at Shop Direct, which is all about the modernisation of the infrastructure as well as actually creating value through technology, while increasing the pace of technology-driven change,” Wolfe tells Computer Weekly.
Clearing the decks for IT transformation
As soon as he joined, Wolfe had to get moving with the transformation fast. He says the solution for Shop Direct’s problems at the time was “pretty straightforward.”
“It was a case of clearing the decks, stopping some stuff and starting some stuff, as well as compartmentalising changes,” he says.
“It was very clear to me from the start that to make some very important changes we would have to put some new things in place, such as information technology infrastructure library (ITIL) service management principles, and also a proper enterprise and service architecture setup.”
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A good example of a core project Wolfe started was the re-architecture of the company's front-end Oracle ATG e-commerce platform to the Amazon Web Service (AWS) public cloud. This was key to enhancing customer experience across Shop Direct’s retail websites, with availability the main area of focus.
The retailer’s entire e-commerce infrastructure now sits on the cloud – including ATG and Oracle’s enterprise data discovery platform Endeca, as well as the AWS-provided Elastic Load Balancing and Relational Database services, which now support Shop Direct’s database.
“The migration was a good example of that drive to get service under control, and since our shop is always open, availability is critical to us and therefore the first thing to tackle,” says Wolfe.
“Since we started on that, the team has done a great job in supporting the business, which was the result of a great deal of hard work. In 2012, during our peak quarter availability was 57% across our sites and in 2013 it was 100% in the same period, plus we have seen a massive uplift in business volume,” he adds.
“That was my priority: first – to get stability. Then, increase efficiency in project and programme management, focusing on areas such as personalisation in the e-commerce platform, increasingly placing IT as a differentiator.”
Shop Direct is one of the largest implementations of AWS in the world and something Wolfe is “very proud of.”
“That’s because it has enabled a faster pace of change, as well as the ability to respond very fast to market demands in a sustainable and low-cost way – software as a service (SaaS) is critical to making that possible,” he says.
Keeping up with IT trends to become a multichannel business
Thanks to the increase in availability and improvements in the IT supporting the business, Shop Direct has managed to shift from its previous catalogue sales focus to being a fully-fledged digital retailer – but the change programme is far from finished.
Now the foundations are in place, the company wants to move towards being a true multichannel business with more work across web, social and big data analytics, says Wolfe.
“We have big brands and aggressive targets that IT has to support, so we needed a sustainable plan to get IT in the forefront of the business and also get the business more aware of trends in the marketplace,” he says.
One such trend is personalisation, which he says is massive in retail right now. This body of work, which is geared towards offering certain products and distinct experiences across the sites, is closely related to what the company does in data analytics.
“We have to focus on personalisation, so the customers can keep coming back to us. We have a huge amount of data of our own and also data from our financial services arm. When combined, these two sets of data can provide us with some interesting insights about customers as they shop around,” says Wolfe.
“The aim is to use technology to get these insights in a way that doesn’t generate latency for the customer and doesn’t interrupt the experience online. The big challenges are around what data do we have and what value we get from it, and whether it gives us a better view of the customer lifecycle.”
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Wolfe says the IT team is working on data schematics for that project, as well as working out what data sets will be fed into the algorithm.
“It takes a lot of prep work. We have to scan through the data associated to the challenges we want to address, spot any potential holes and include mechanisms to fill them. That’s when people make lots of mistakes – you have to make it all small and focused, and also be clear on the data and the outcomes you desire,” he says.
As well as upcoming improvements in its mobile app, which will introduce more features in customer accounts, another important piece of work in Shop Direct’s evolving e-commerce strategy is decisioning – encouraging customers to make a purchase decision – which will go live in 2015.
According to Wolfe, decisioning will work in the background, leveraging the company’s internal data and unstructured information from external sources such as interactions on social networking websites like Twitter and Facebook.
“Algorithms we’re developing internally will be run continuously against that data and will serve up to the customer everything from personalised promotions and product recommendations to service interventions, such as a call from one of our contact centres to discuss a statement or a product the customer may have added to basket but didn't purchase,” says Wolfe.
“We will obviously be leveraging lots of technology to achieve this, like at-rest analytics, decisioning, the latest in-memory processing capabilities, Hadoop and Hive, and so on. These are just a few of the technologies we’re using to achieve our goal of offering a more personalised and relevant experience to our customer,” he adds.
The IT team bounces back
Wolfe recalls when he joined Shop Direct, the IT team’s morale was “pretty low,” with scores in internal engagement surveys reaching the low 60s in 2012 – to boost that result to nearly 80 in 2014, action had to be taken.
“The team didn’t have a structured way of working and were wondering whether the next move was going to be to outsource everything. In three months, we made sure people understood their role in the grand scheme of things and how to get involved," says Wolfe.
“We got culture change under everyone’s skin. We started discussing collectively what tech stuff we should be doing and what we shouldn’t be doing – this had an almost overnight effect on everyone.”
The job of technology professionals is not just to collect demands from other departments – everyone should be able to talk about what technology can do for them, that shouldn’t be just an IT job
Andy Wolfe, Shop Direct
Shop Direct outsources all its IT services to IBM and, according to Wolfe, there are “no plans to outsource anything beyond that.” The 200-strong in-house team handles applications and, under the CIO’s leadership, architecture, programme and project management skills were boosted.
“We want to make Shop Direct a great place to work, a destination workplace that attracts equally great talent. In order to do that, we need a solid tech strategy,” he says.
“Now, we as IT talk a lot more about technology to the business than ever before. I also want to get to a point where everyone in the business is confident to talk about technology and that my team is confident to talk about the business aspects of what people across the organisation do.
“The job of technology professionals is not just to collect demands from other departments – everyone should be able to talk about what technology can do for them, that shouldn’t be just an IT job,” he adds.
Going forward, one of Wolfe’s team management priorities is to introduce a career development framework across IT, enabling people to take control of their careers through the alignment of their skills and experience with the training and development required to reach their potential.
Meanwhile, Shop Direct has to get its house in order ahead of its busiest season – the team has 30 IT-related changes that must be delivered in the next few weeks, before everything is locked down for Christmas.
“Changes are broadly split across those things that are required to continuously improve the level of service, speed and stability across our systems stack as the traffic profile increases, as the way customers browse and shop our sites changes during the golden quarter,” says Wolfe.
“That’s along with the introduction of new capabilities such as multi-select – which enables our customer to quickly navigate to the products most relevant to them – and our new mobile app, which will give our customer a better shopping and account management experience,” he adds.
Once the big projects of personalisation and decisioning are out of the way and now the company’s availability challenge is mainly addressed, there will still be plenty more to do.
“There is never a shortage of ideas for us to work on, but growing our mobile capabilities and developing further the service-oriented architecture (SOA) infrastructure to improve the volume and velocity of change we can provide to the business will be just a couple of our priorities,” Wolfe concludes.