Supermarkets are facing challenging times. Sales are dropping as low-cost, no-frills supermarkets such as Lidl and Aldi carve out a bigger share of the market, and customers move towards online shopping.
But one of the most recognisable UK supermarket brands is investing in customer-facing technology to improve the shopper's experience.
Jon Rudoe heads IT as the digital and technology director at Sainsbury’s. He believes bringing together the twin responsibilities of digital and technology – a vanguard move in an industry where many companies' structures still separate the two – creates 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 explains that, in recent years, the biggest change in the retail industry – among many others – is customers' move to digital technology.
“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, says Rudoe, is the reason more companies are beginning to fuse their digital and technology teams.
Read more about Sainsbury’s:
“When you talk about our company strategy, about being there for our customers, that’s not just physically. It also means being there for them on their phones and able to deliver the brand and business where they are – in their pocket.”
Sainsbury’s has harnessed the necessary skills to create customer-facing technologies through in-house development as well as contractors, suppliers and startups. The company is currently looking for people to join its technology and digital team, an organisation which varies from those with traditional big infrastructure service roles to staff employed to manage the user-experience and the entertainment team.
“The industry has evolved, so it’s increasingly hard to separate those two things,” Rudoe says.
Every one of his team of hundreds has a job that touches on technology in one way or another.
“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 2014, after helping to build up Sainsbury’s online presence. Before that, he spent five years working for online supermarket distributor Ocado.
“I remember coming home to a BBC Micro as a kid – that’s one of my first memories,” says Rudoe, describing how he has shaped a career in pressing technology into the service of business. “It’s not just thinking about it as being systems with lights on, but about technology that makes a business impact.”
Digitised shopping list
One of the technologies Rudoe hopes will make an impact on the business is Sainsbury’s mobile shopping application, currently under trial. The app allows customers to create shopping lists which can be used to navigate the shop and scan goods as they are placed in the basket. It also enables the device to pay for goods, allowing the user 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 digitised 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 ticks 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 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, predicting everything – it’s not really something that’s been done in that form before,” he says.
The app was created through a mix of in-house skills and outside development. Rudoe aims to test it with Nectar cardholders some time after Christmas 2014. He predicts it 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 as big as us, we’re going to have a wide variety of ways in which we want to do things. In 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, an HTML5 responsive website allowing 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.
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Rudoe believes it creations such as this that make Sainsbury’s a great company to work for. He says that, when you think of the dinner party conversation – "And what do you do for a living?" – there are a lot of jobs where 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,” he says.
“And to be blunt – everyone’s heard of Sainsbury’s.”
The Nectar opportunity
The supermarket is no stranger to data mining. In 2002 it became a partner company with the UK’s largest loyalty card scheme, Nectar – which has 19 million customers, with 24 cards swiped every second.
“Data is hugely embedded in the way we go about doing our business,” explains Rudoe, adding that 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 membership of the Nectar coalition, Sainsbury’s uses Oracle and Teradata platforms in its estate. “And I’m not the monopoly in analytics – it’s used 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 chief's role in July 2014, used to be an IT director. Rudoe says Coupe's physicist education, and experience in launching Asda’s online shopping proposition, puts him in a prime position to engage 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.
During 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. But it's increasingly about great products and services as well – and that means a very broad technology landscape.”