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CIO interview: Retail’s past a poor guide to future, says Paul Coby of John Lewis

Paul Coby, IT director at John Lewis, believes retailers will need to move with changing customer patterns and demands to survive the omni-channel shift

There are very few moments of downtime for a retailer. At the back-end of last year, for example, John Lewis quickly shifted from Black Friday to Christmas and then on to a sharp focus on the New Year.

While the department store retailer experienced a successful Black Friday in 2015, which wasn’t as “bonkers” as the same period in 2014, IT director Paul Coby believes 2016 will be different again, and holds digital up as the driver and the tool for change.

“What we are seeing is how we shop is changing, but one of the exciting things – and why I love this job – is that digital is changing how we live, so that impacts how we shop,” he tells Computer Weekly.

“Yes, understanding shopping patterns is really important, understanding what’s happened is really important, but actually the past of retail is going to be a very poor guide to the future.”

Online traffic for John Lewis has increased by 4% every year for the last seven years, and Coby points out that each individual consumer is different – some will shop online only, some will shop in-store only, while others will want a mixture of both depending on the occasion.

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Catering to both the in-store and offline preferences of customers is a “challenge”. Coby says it’s why the joined-up nature of omni-channel is so important.

“When people just look at the online figure they’re missing the point because they’re just not thinking about how radically the way we all shop has changed,” he says.

“Your relationship with John Lewis used to be about doing your Christmas shopping or turning up before children went back to school and buying school things. Hopefully that still happens, but now it’s about buying a lot of things online, interacting on our mobile app. It’s a much more interactive omni-channel experience.”

Invisible channels

This joined up experience is not only important when customers are browsing and buying, but also when trying to return goods. A good omni-channel experience is one where the channels are “invisible” to customers.

Coby cites fashion as a common indicator of this behaviour. Customers ordering clothes online are very likely to want to return some products to a store, or order through click-and-collect.

Although 40% of the retailer’s custom comes through its online channel, Coby believes around 75% of customers will cross channels during their interaction with the brand.

“Clearly, making the whole process easier for customers is really, really important. One of the things I’m passionate about is that people just don’t think of online or omni-channel as just having a nice website,” he says.

“We try to make it look and feel like a digital version of our store.”

More mobile and clicks

Coby says mobile traffic is growing substantially for John Lewis, with more than half of traffic coming from tablets and smartphones.

“The way we all shop needs to make sure that the site is able to cope with any device that we use – from the small screen on a smartphone, up to the new iPads, up to a massive screen,” he says.

To cater to customers who want to use their mobile as part of an in-store experience, the retailer launched its MyJohnLewis application, which now has 1.6 million members.

Coby says: “We know that the offer of a coffee and a cake with the app is fantastically popular – people love coming in.”

As part of the application, John Lewis is developing a “find similar” function for menswear, womenswear and beauty, allowing customers to search for John Lewis products similar to those they are already looking at.

The mobile push has also led to John Lewis working on in-store connectivity. It’s something that Coby believes customers expect.

“They need wireless and they’re going to do price comparisons,” he says.

Click and collect

To develop the customer experience, John Lewis has been working with previous Jlab winner Localz on a click-and-collect trial, focusing first on enabling store staff to serve the customer better.

When a customer arrives at a location for goods pickup, the store gets a message asking for it to get the product ready for the customer. When the trial ended, store staff begged to keep using the technology.

“It’s very simple location-based technology, but again a great use of these guys who won the first Jlab and something we can build on,” Coby says.

The retailer will continue to run Jlab alongside further IT investment to think about innovation and how to move more quickly to adapt to the customer.

Coby says: “You’ve got to do the big fundamental stuff, but actually you can have the fun of doing innovation and change.”

Ensuring customer trust

John Lewis famously releases heart-warming adverts during its Christmas marketing push, and Coby admits his favourite features the tag line “what’s important doesn’t change” because it reflects the brand’s values of “carefully chosen” and “good value” products at a good price.

But the omni-channel world can sometimes alienate customers by focusing too much on the collection and use of customer data.

“You have to be absolutely so careful about how you interact with customers,” Coby says. “Society is changing and attitudes are changing. A lot of our customers – who we will always respect – would be very concerned if they thought we were tracking them.”

He emphasises that customers want a personalised experience without the retailer “stalking” them. Some are willing to give data for this purpose while others want to be left alone.

“You must never betray the customer’s trust”
Paul Coby, John Lewis

“They expect people to understand them,” Coby says. “It’s an area to be very aware of always. You must never betray the customer’s trust. But it’s easily solved by trying to be straight and clear about how people’s data is used.”

Although it is important for retailers to understand how customers are moving, browsing and purchasing in-store, it is also important to understand the online habits of these same customers. And it’s clear that customers are moving towards omni-channel shopping.

“We live in an era of dynamic change,” Coby says. “That’s why it’s exciting and why you need to be flexible and agile – respond to what customers want.

“You just have to be very open and upfront about things, and give people the opportunity of not participating if they don’t want to.”

Tightening up distribution

To make its channels seem seamless to customers, John Lewis invested heavily in its distribution centres systems to support offerings such as click-and-collect.

The retailer’s goods are hosted in two warehouses in Milton Keynes with highly automated mechanical handling systems. Coby jokes that they are often featured on television during the busy Christmas period.

For the click-and-collect service, John Lewis’s retail systems will pass the order to the warehouse, which picks the package, delivers to the appropriate location and ensures the customer gets a text message when the order is ready.

“That’s quite a thing at the volume we’re going through,” Coby says.

“It’s a lot of parcels. In order to provide that level of customer service, that’s about all the distribution systems, all the back-office systems, all the order management systems, all the customer communication systems.”

John Lewis has invested in an end-to-end process, which sees orders move from the customer to the warehouse and back again.

“Foundational investment”

In spring 2015, the retailer implemented a new infrastructure for its order management system, which Coby labels a “foundational investment” in the supply chain.

The company plans to invest half a billion pounds across the whole of IT over the next five years for a “top to bottom” replacement of its end-to-end processes, and renewing the whole supply chain.

Part of this development will be moving its Oracle e-commerce platform from version nine to version 11.

“That will give us some useful new functionality, and we’re also looking at replatforming that onto the new technology in order to cope for the growth,” Coby says.

Coby says the Oracle 11 platform will help John Lewis “plan ahead and cope for the future volumes” of website traffic, and ultimately ensure more purchases.

“If you think about the complexity of how we all shop, what we now expect from a website is very advanced search, which requires handling massive amounts of products and data at very high speed. If you do analysis of transaction times, you find that if your transaction times go up your conversion goes down,” he explains.

“The increase in terms of the traffic going through the website is going up, and we expect that to continue as the business grows as well.”

Omni-channel future

For John Lewis, Coby admits the future is “definitely omni-channel” but is unsure whether pure play companies will have to delve into the online or offline space to survive – it depends what their customers want.

“You constantly hear about whether pure plays are thinking about getting stores or getting delivery points, and at the other end store retailers all need some kind of online proposition,” Coby says.

“Everybody builds their business plans for 2020. Just think where we were in 2010!”

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