Retail is an interesting industry for IT professionals as companies move to digital channels in line with changing consumer habits, says Petteri Naulapää, CIO at Finland-based Stockmann.
But it is also a high-pressure sector for IT departments, he adds. “The pressure on us to move quickly is greater than in many other industries.”
The reason for this is that consumers choose between different retailers every day, says Naulapää.
Stockmann focuses on retail brands Stockmann and Lindex, and has 500 stores in 18 countries. It also has two online stores, the first of which opened five years ago.
“We started with digitisation a bit late – we did not understand early enough that we had to look at the complete customer experience, not just different channels,” he says.
Last spring, Stockmann launched a new strategy, says Naulapää. “An important part of that is that we are now creating an omnichannel experience for customers. It means that regardless of the channel or how the customer approaches us, they will experience the same services and can then use any other channel – that is the vision.”
Many steps are needed to make this a reality, says Naulapää. “We are creating a new logistics centre, which will make us quicker, and we are also looking at our processes in customer services. Then we will look at what technology changes we need to make.”
For example, Stockmann is implementing a new e-commerce system. “It will give us more ways to serve customers,” says Naulapää. “Among other things, our sales people have a mobile tool so they can look up whether a requested product is available in other stores.”
The company still uses a lot of legacy systems, but most systems in customer-facing areas are now being replaced, says Naulapää. “We have to look at the whole customer journey with omnichannel, and that means that the systems have to be linked together and share information, including customers’ details. The architecture we had did not support this. Omnichannel also has real-time requirements that are hard to serve with legacy systems.”
The new architecture is designed to be flexible, says Naulapää. “We do not know what kind of services we will want in two years’ time. We are using some standard systems and some things we are building ourselves, mostly in the cloud.”
Stockmann is also switching to a more agile way of working. “Earlier, you could define a project goal and, one or two years later, you might be very happy with the result,” he says. “Today we cannot do that, and that is a big challenge to manage organisationally.”
Working with suppliers with agile experience is one way to incorporate the new way of working, says Naulapää.
Naulapää was previously CIO of Finnish manufacturing company Vaisala, and when he was about to become CIO at Stockmann, he was told the company had been growing for years. “But then sales declined and it made a loss,” he says. “So we have to change things to serve customers better, in order to increase sales. Happy customers are more likely to come back again, and that is the reason we are going omnichannel.
“So we have the big picture of where we are heading, but because the changes today are happening so quickly, we know we have to constantly update the vision. We test and rethink.
“For example, we get customer feedback on the development of a new mobile app. They let us know what they are not interested in, and what they would be really interested in.”
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Another important part of Stockmann’s new strategy is to increase its overall efficiency. “In IT, we are not just about improving the customer experience, we are also putting a lot of effort into increasing efficiency,” says Naulapää. “A big thing is that we have to be smarter about how we get the products to the stores and to online customers.”
Stockmann has a 100-strong IT department, and the biggest challenge Naulapää has faced so far is to make the best use of limited resources. “We have a fixed amount of people and money, and we are doing so many things at the same time,” he says. “We have to make sure we are doing the right things, and that we learn as we go. The most important thing is to get better each day.”
Another challenge is to get the company to realise that technology is playing an increasingly important role in the business, says Naulapää. “The role of IT is not just changing in Stockmann, it is changing in all companies,” he adds.
A big part of this is to become more data-driven when it comes to understanding customers, says the CIO. “And that is a cultural change for us, as well as for many other companies. We cannot do everything we want to do with data at the moment.”