Customer focus, carbon footprints and career paths topped the technology agenda at this year’s Retail Solutions conference. Joanna Perry attended to find out who’s doing what
Using technology to drive down tesco’s carbon footprint

Tesco’s IT operations account for only 4 per cent of the retailer’s carbon footprint at most, so the primary role technology will play will be to help reduce the other 96 per cent, according to Tesco group technology and architecture director Mike Yorwerth.

“I could shave maybe 1 percentage point off my 4 per cent, but could take maybe 20 per cent off Tesco’s overall footprint with technology,” he explained.

The grocer has spent a considerable amount of time and money working out its carbon footprint and Yorwerth was not short of data on how IT can make a difference to those numbers.

Tesco is implementing a videoconferencing system from Cisco to help reduce business travel, especially among its international executives (Retail Week, June 6). But business travel accounts for just 1 per cent of the company’s carbon footprint. To make more significant inroads into its figure of 4.1 million tonnes of CO2 the company emits each year, the IT department is starting to think bigger.

Yorwerth is big on energy facts. For instance, it takes less power to read a document for 20 minutes on a computer screen than it does to manufacture a single sheet of paper. Printing on a piece of paper uses 10 per cent of the energy that is required to produce the sheet. So Yorwerth’s message is to think before you print and, if you must print, always print on both sides.

He said that Tesco uses telematics and transport routing systems already, but it could shave another 1 to 2 per cent off its carbon footprint with improved use. Homeworking could reduce the figure by a further 1 per cent.

But the big target in the near term is minimising the use of energy in buildings. Tesco is working towards choosing a supplier for a centralised building management system, which Yorwerth estimates could reduce the company’s carbon footprint by 8 to 16 per cent.

Changes are also being made within the IT department. Three quarters of the IT carbon footprint is generated by equipment in stores, so Tesco is piloting tills that turn themselves off when not in use and looking at how it can turn off its Tesco TV screens when stores are closed.

Within its data centres, it is using virtualisation for its industry-standard servers to consolidate the number of machines, as they use almost the same power whether they are running at 6 per cent or 60 per cent capacity. Servers used for development and testing are being turned off overnight and the methods used to control temperature in its data centres are also being addressed.

Finally, Yorwerth noted that it takes twice as much energy to manufacture a PC as it does to run it for three years. So the company is considering extending its PC replacement cycle to five or even seven years.

Overall, Yorwerth concluded that the mindset of the IT department has changed. CO2 emission levels are considered a non-functional requirement when new technology is being procured and suppliers are being challenged on their green credentials.

But most of all, the IT department is actively seeking projects that can reduce the company’s carbon footprint and acting as the catalyst for their delivery.

Online: keeping up with customers

In the multichannel panel session, Asos chief executive Nick Robertson, Kurt Geiger head of e-commerce Tom Lodge and John Lewis head of web selling David Walmsley demonstrated that while different retailers are at very different stages in the online journey, they share the same goal of putting the customer at the heart of what they do.

For Robertson, this has meant focusing on core retail principles rather than flashy technology.

He said: “The functionality on the site has not changed that much over the past two years. The IT department has been the last to get investment, but that has been a bit of a blessing. The things that change conversion are product and price – the other things are faffing around at the edges.”

He continued: “Our rough rule is that anything that faces the customer we do ourselves and anything else – such as the warehouse management or buying and merchandising system – we go for best of breed.

“It has been a massive benefit having no legacy. In this new world, if you are not very good you get outed – especially with a customer base that is as fickle as you like.”

Walmsley said he is amazed how many times he has been proven wrong over what will enhance the customer experience. For example, he said conversion rates went up when the retailer took out a line of text on the checkout page that said John Lewis would not store customer details.

Walmsley added that it is crucial to get a policy of test and learn embedded in the business so it has the ability to innovate rapidly.

“Fashion retailers in the UK are creating a lead in the online experience. If you turn your back for a few months, it is amazing how quickly some sites move on,” he said.

He promised that John Lewis would be making more changes online throughout the summer and said it has given more of a “magazine feel” to its category pages already.

At Kurt Geiger, Lodge admits that there is still work to be done. “We haven’t yet cracked how to match a sales assistant explaining why one product is better than another. We rely on imagery, but we need to come up with some smarter ways,” he explained.

Robertson is now going for the ultimate goal of making the experience of online fashion shopping as good as, if not better, than going to stores.

He pointed out, for example, that Asos added a sunglasses tool to its site, which allows a customer to upload their picture and view themselves wearing different glasses. Robertson said: “It is actually creating a better experience than in stores.”

Groom staff to keep a tight control on costs

Carphone Warehouse director of IT service and operations Peter Schofield has 15 per cent less operational budget to play with this year than he did the year before.

The company runs a lean operation already – only 35 per cent of its overall budget is spent on keeping the lights on, compared with a 65 per cent benchmark.

Schofield said that, when it comes to costs and service, one of the biggest variables within an IT department is its people.

He explained that the company has embarked on a programme to help IT staff move into management positions – an initiative that has helped to identify staff with high potential and give them an idea of what they could become. There have been 48 applications for 12 places so far on the programme and eight out of the 12 taking part were promoted within 12 months.

Schofield said that not only do such schemes save on recruitment costs, but they also make the promotion process transparent and give staff something to strive for.

The initiative is helping Carphone Warehouse’s IT department to maintain a figure of three quarters of senior staff having been promoted to their positions and a staff churn rate of less than 15 per cent.

The company is also using third parties to fill skills gaps, including Indian outsourcers. Schofield explained: “We did sourcing not to save cash, but to become much more responsive. I can’t suddenly find 35 Java developers in North Acton, where we are based. But partners in other parts of the world can do that.”

Know your customer

The volume of customer data that Harvey Nichols holds has doubled since it implemented a customer relationship management (CRM) system in 2007.

Harvey Nichols IT and logistics director Martin Schofield said that the company wants 85 per cent of sales to be generated by known customers. At its Birmingham store – which has been live with the CRM system for the longest – the figure now stands at 81 per cent.

The system is deployed at all till points and has been made a part of the transaction process, with staff encouraged to use the system so that as many sales can be linked to individual customers as possible.

Schofield admitted that it is hard to know for sure what impact the system is having on sales. However, the data is used to market the retailer’s special events and its recent Summer Party events achieved revenues up 25 per cent.

Schofield said that the company is now examining how to replace manual processes for inter-branch transfers with a system that will tie stock movements to individual customers.

By doing this, Harvey Nichols will be able to work out whether customers end up buying stock that they have transferred, so decide whether it is cost-effective to move stock between stores.