Supermarkets are facing challenging times ahead of them. Sales are dropping as low-cost no-frills supermarkets like Lidl and Aldi competitively secure a bigger share of the market, while customers are also moving more towards online and convenience store shopping.
But one of the most recognisable UK supermarket brand is investing more time and money into its customer-facing technology to improve shopping journeys.
Jon Rudoe heads up IT as the digital and technology director at Sainsbury’s, and he believes these two responsibilities coming together create exciting propositions for Sainsbury’s customers.
“If you go back 10-15 years, technology was obviously very important to retailers, but it wasn’t technology touched directly by consumers,” says Rudoe. “It had a huge part to play in the tills and systems that put stock on the shelves, and while those things are hugely influencing customers, they’re not directly touched by them.”
Rudoe continues to explain that in recent years the biggest thing that has changed the retail industry – and many other industries – is the move towards digital technology for customers.
“That probably started with self-service checkouts and online retail, but now it’s the mobile space with applications, but even things like CRM technology interacts very closely with customers.” And this is the reason more and more companies are beginning to fuse their digital and technology teams.
“When you talk about our company strategy about being there for our customers, that’s not just physically, but it also means being there for them on their phones and able to deliver the brand and business where they are – in their pocket.”
More on Sainsbury’s:
In order to create those customer-centric technologies Sainsbury’s has had to harness the necessary skills through in-house development as well as contractors, suppliers and startups. But it is currently looking for people to join its technology and digital team which varies from people with very traditional big infrastructure service roles, to user experience and the entertainment team.
“The industry has evolved, so it’s increasingly hard to separate those two things,” he says.
Rudoe heads up a team of hundreds whose jobs touch on technology in some way.
“Technology is very embedded, and perhaps one of the reasons we haven’t talked about how exciting that technology is, is because it’s quite normal for us.”
Rudoe was promoted to the role of head of digital and technology in February, after helping to build up Sainsbury’s online presence. And before that he spent five years working for online supermarket Ocado.
“I remember coming home to a BBC Micro as a kid – that’s one of my first memories,” says Rudoe, who has since shaped out a career in how technology and analytics affects business. “It’s not just thinking about it as being systems with lights on, but about being technology that makes a business impact.”
And one of the technologies Rudoe hopes will make a business impact is Sainsbury’s mobile shopping application which is currently being trailed. The app will allow customers to create shopping lists which can be used to navigate the shop and to scan goods as they are placed in the basket. It will also enable the device to be used to pay for goods to avoid checkout queues.
At the time of the interview, Rudoe says his team was in a store in South London trying out the application.
“Now we’ve actually been working on that for a while, we started with a mobile scan-and-go product which enabled you to go around the store and scan products, pay on the phone, get a receipt and walk out,” he says. “Now the next iteration is to create a list wherever you are, searching for products on the phone, or scanning products in your kitchen – real digitising shopping.”
Rudoe explains that once the shopping list is created you can take your smartphone into a store and shop from the list on the app, which deletes off items as you scan them into your basket.
“Something like 60% of our customers create a shopping list before they go to the supermarket,” he says. “So we’re not working on something on the periphery of our business – we’re digitising the heart of the journey.”
Rudoe says the team has taken an agile approach to developing the app, iterating as they go along. “It’s not the kind of product you can write on a piece of paper and predict everything because it’s not really something that’s been done in that form before,” he says.
The app, which was created through a mix of in-house skills and outside development, will be tested with Nectar cardholders sometime after Christmas and will continue to evolve. “We’ll release it, we’ll iterate it and we’re release it some more,” he says.
“Across an organisation as diverse and big as us, we’re going to have a wide variety of ways in which we want to do things,” he says. “Some areas we will want to buy a system that already exists and do nothing more than plug it in, but in this area there aren’t a lot of known solutions out there, so we’ve taken the approach that we want to be much more involved with the development of that product, which is why we want to build more of an in-house development capability.”
The other digital development Rudoe is proud of is the recent Christmas pre-ordering site, which is an HTML5 responsive website allowings customers to pre-order their Christmas produce. “It’s only taken us a few months to develop and it’s a very simple site,” he says.
More on retail IT:
And Rudoe believes it the creations like this which makes Sainsbury’s a great brand to work for. He says when you think of the dinner party conversation, there are a lot of places you can develop code or mine data, “but actually doing it in the context of something – everybody buys and eats food – that’s a really motivating thing.”
“And to be blunt – everyone’s heard of Sainsbury’s,” he adds.
The Nectar opportunity
And the supermarket is certainly no stranger to data mining – it launched XXXXXX as founding partner in 2002….
“Data is hugely embedded in the way we go about doing our business,” explains Rudoe, who says Sainsbury’s buying and customer teams use the data mined from Nectar and internal sources to inform a large number of decisions.
“We really do understand who is shopping in each store and each region,” he says. “We do a huge amount of mining to understand which kinds of customers are buying which kinds of products, as well as our product development decisions all the way to the obvious things around marketing and rewards.”
As well as the Nectar coalition it uses Oracle and Teradata platforms in its estate. “And I’m not the monopoly of analytics – it’s use all across the business, hence why the data is quite pervasive.”
It also helps to have a technology-savvy CEO backing the team. Mike Coupe, who took up the role in July 2014 used to be an IT director. Rudoe says his physicist education and the fact he was responsible for launching Asda’s online shopping proposition makes him very engaged with Sainsbury’s technology function.
“He’s been really pushing for paperless ways of working in the office, and he’s the chair of the digital steering group,” says Rudoe.
And in a challenging time for supermarkets, Sainsbury’s digital roadmap is encouraging. Rudoe says the company uses an evolutionary strategy. “We’re a good business operating in a difficult market, would be one way of putting it. And the digital and technology department continues to play a role in that.”
“When you think of Sainsbury’s you immediately think of shops, and that’s fundamentally what our business is built around,” he says. “But increasingly great products and services – that means a very broad technology landscape.”