Ahead of Retail Week’s Tech & Ecomm conference, we talk to one of the speakers about the challenges he faces, cyber security and Apple Pay

Boots has revealed it will revive its staff bonus scheme

What is the biggest challenge you face in your role as chief information officer?

The biggest challenge is very similar to the one we faced when Boots and Alliance UniChem came together in 2006. It’s about creating a common ‘One IT’ culture across the organisation, so that we can truly leverage all the skills and capabilities in the divisions and the businesses and harness them into a powerful IT team that can help transform our organisation.

What is Walgreens Boots Alliance (WBA) doing around personalisation?

We have great ambitions in both our largest retail organisations in terms of personalisation. We are developing personalised health and beauty solutions that combine our digital and healthcare capabilities.

The aim is to deliver innovative services and care to our customers – you can see this in the Walgreens digital space already and some of it is coming to Boots very soon. And personalisation is not limited to our customers. We can also use personalisation technologies to improve internal communications with our colleagues.

Are there plans to increase what WBA does around loyalty?  

We can always do more and better but, to be fair, we are starting from a pretty strong place. Boots and Walgreens already have two of the best loyalty programmes in the world. In the UK, almost everyone knows the Boots Advantage Card. In the US, Walgreens has a loyalty scheme call Balance Rewards card. Between them, we have more than 100 million active members. 

We very much value the relationships we have built up with customers who signed up for the programmes and we intend to continue strengthen our connections with them. Our retail pharmacy businesses have been around for so long, and customers are very familiar with them, so we have a lot of trust to rely on but also we are keen to meet the high expectations that come with the territory.

We work hard to give them the best and most personal services, and promotions in our stores and on-line, and this is a constant focus for us.

How is data handled at WBA? How do you approach the issue of security?

You will not be surprised to hear me say that we really go to great lengths to ensure the personal data that our customers entrust to us is handled, stored and managed securely. It is a hot topic in the news for a number of companies around the world. 

Cyber security risks affect all organisations and it is a top priority for retailers that hold a significant amount of customer and transactional details. There have been some very high-profile breaches – particular in the US – and our paramount aim is, of course, to protect the personal data we hold.

What are your thoughts on the rise of contactless payments? How is Apple Pay performing for Boots? Will Android Pay be adopted?

Convenience and personalisation are key strategic priorities for Boots and Walgreens and we are strong supporters of all technologies that support this. We want to make it as quick and easy as possible for customers to shop with us across devices and store formats. It says a lot about our approach that we were in fact the first company to trial contactless payments in the UK.

We will continue to work with any technology partners that can enable convenient secure shopping and we are very open to new solutions in this space. Our goal is to provide customers with choice and follow their lead in terms of adoption, so I can’t say today whether we will implement one specific solution or another. We will make sure that our in-house technology is well prepared to integrate contact payment solutions as consumer adoption grows.

Apple Pay has got off to a great start since its launch in mid-July, with almost 40,000 transactions at our tills in Boots across the UK. Customer feedback has been positive so far, and we are pleased to have been one of the first retailers to offer this payment option. We also have Apple Pay across the Walgreens network in the US. Customers have embraced it there too, and we have seen ‘near field communication’ payments (where electronic devices are used to pay at the till) double in our stores since the launch of Apple Pay.

In both cases, Apple Pay still accounts for a limited percentage of our overall transactions but it’s early days and we expect it to keep growing.

Do you work with start-ups or is it all done in-house?

Start-ups are exciting environments – I know as I was chief technology officer for one during the first dotcom revolution. At WBA we are interested in new working with tech companies that can support our strategy and recently have tended to partner more with more established companies, such as WebMD and Qualcomm. We also have significant internal development capability in-house.

This is particularly true in pharmacy and healthcare, where we are technology leaders and see this as a competitive advantage. Plus we have our own in-house innovation lab, ‘BetaLab’, combining design, innovation, and technology to create and help test experiences with customers

Where is the highest proportion of your department’s spend going?

I have a feeling that probably any chief information officer would give you the same answer here. We have significant spend in legacy technology and maintenance as a large company with a long history and also a track record of M&A growth. 

But where we project much of our future spend is in the new platforms and systems we need to support our continued growth. For Walgreens Boots Alliance you can say it is in technology infrastructure and support for healthcare, retail and our global brands.

How are store staff and managers taught to engage with technology?  

Colleague engagement is absolutely crucial to the successful adoption of any new technology we roll out to stores. The most important thing to focus on when we’re encouraging colleagues to work with any new technology is building their confidence to use it. We work to demystify the technology and focus on the benefits it can bring to both them and the customers.

That way colleagues are better positioned to embrace it. Our approach aims to make people understand how the technology works, but also focuses on the behaviours they should display whie using it. At the end of the day, it is about the customers. They need to be wowed through technology, not with the technology.

For example, when we rolled out iPads to our stores, as well as learning about the basics of using the device, we also asked our colleagues to think about how the device could enhance the customer conversations. How it could be an enabler to deliver an even better customer proposition.

What have you taken from your learnings in your previous roles (PepsiCo, UPS) that you have applied to WBA?

Well, that was quite some time ago. The technologies that were used at those companies when I worked there have changed a lot. As well as PepsiCo and UPS, I also worked in a start-up and for a non-governmental organisation, which has actually given me a lot of very varied experiences. If I were to pick the one common thing I’ve learnt across those experiences, and perhaps the most important of all, is that it’s fundamental to understand the culture you are working in. You need to be able to take people along with you and lead transformational change. The goal may be the same in many companies but the route to success is very different in each of them.

What differences are there in your role for handling Boots and WBA’s US business?  

Walgreens Boots Alliance is a highly diverse organisation and it is important to understand and respect the different cultures we have. My goal is to create a ‘One IT’ team across our diverse business spanning 25 countries. But to do this you have to recognise first of all that we are providing services to customers who are very different in all the markets where we operate.

Even the US and UK retail businesses, which on the surface may all seem to be similar pharmacy businesses, have more than a century of developing services to their customers in parallel. Recognising the differences but building on the similarities creates a ‘best of both’, which creates value for our customers and our shareholders alike.

Why is the role of chief information officer important in retail?    

The chief information officer is important in every business. But yes, very much so in retail companies. I believe the CIO is as much a key business partner for the executive team as being the go-to person for technology. Personally, I think it is vital that the ecommerce and digital part of the CIO’s role remains closely connected with the management and strategy for of core IT systems.

Splitting these responsibilities may seem attractive in the short term, but can create longer-term structural issues for organisations. I certainly believe that the modern CIO is well up to the challenge of delivering on both.