This year’s technology summit touched on everything from legacy systems to today’s most exciting start-ups, highlighting just how challenging a chief information officer’s job has become.
John Lewis IT boss Paul Coby summed it up when he spoke of the work going into ripping out legacy systems at the department store.
He said: “You can’t just be about a lovely new website and some nice gadgets in the shops. If you are going to deliver across all the channels the back end systems have to be modernised
That is the big challenge for many retailers at the moment - 20-year-old systems that are stopping them moving as quickly as they’d like. Not that retailers aren’t doing something about it - Coby detailed John Lewis’s efforts, describing the job of ripping out 50 or 60 legacy systems as ‘comprehensive slum redevelopment’.
He said: “We are building a technology infrastructure that will link the different systems. We’re not there yet. We are rolling out a new EPoS, a new web platform, and we’re starting on a new order management system. We are fundamentally engaged in architecting what an omnichannel business will look like.”
Retailers are clearly working hard to get where they want to be, and will no doubt achieve it - as long as another technology doesn’t come along to change things once again.
But while legacy systems are a major headache for most, at the other end of the technology spectrum there’s the exciting world of start-ups and the new opportunities they bring. Tesco head of research and development Nick Lansley has launched a speed dating-style event in a bid to harness some of the ideas coming out of start-up networks (see box), and he said Tesco is continuing to try and become more innovative in its approach to IT.
He said: “The word simplify is really important. Things become so complicated and as an industry we don’t always do that enough in IT.” He added it is important to look beyond the innovation and IT teams as the source of new ideas to external parties or business colleagues. “We are not the sole owners of new ideas, but should be looking to people who have those ideas.”
A panel of venture capitalists provided evidence that ideas are certainly not running short in the technology start-up world. Smarter CRM systems are gaining traction, the panel said, and there is of course lots of interest in mobile services. But Harry Briggs, principal at Balderton Capital, added: “The difference between the state-of-the-art mobile sites and the vast majority of them is vast.”
There is lots of activity in the payment services sector, including more of them that are retail-centric - many of the most successful payment companies of the past few years, such as Monetise, have been designed primarily around banks. Now, more services are coming through that are aimed directly at retailers themselves.
More retailers are publishing increasing amounts of editorial content and ideas are springing up around this as well. Tagstar, for instance, helps retailers monetise images and Quill is a service that enables retailers to outsource content.
Unfortunately for aspiring retail entrepreneurs, the panel said that the sort of etail start-ups that took the sector by storm a decade ago, such as Asos, Not on the High Street and Net-a-Porter, have had their time. Julie Meyer, founder of Ariadne Capital, said it would be extremely unlikely for a new etailer to gain the amount of ground these early dot-com pioneers managed. “The chance of a company today becoming an ecommerce business with 100 million customers is very low. It is the digital enablers that will do best,” she said. Which means it is the business focused start-upsproviding mobile, payments or content-related services that are getting investment.
It is these start-ups that will help retailers to survive in the coming decade, according to the summit’s keynote speaker Wired UK editor-in-chief David Rowan. He advised retailers to work closely with small, agile businesses that can change direction quickly in the event of another new technology changing retailers’ business models once more.
He added retailers must not underestimate the effects new technologies can have on the way people interact, saying it is often difficult to predict how big a new technology will be: “You can’t always predict how big a new technology is going to be and sometimes we’re a bit conservative because of the way we’ve been living. You need to step back and think through the possibilities.”
Rowan added there are several trends impacting retail at the moment, including 3D printing and its implications for anyone anywhere being able to manufacture their own products. Plus, he added, the barriers to entry have fallen so far in retail that competition can come from almost anywhere - from YouTube make-up stars who are selling the products they show viewers how to use, to popstars such as Will.i.am selling a range of cameras in Selfridges.
He added we are only at the beginning of the growth of ecommerce and related digital technologies. “Software is eating the world, it’s eating every industry. The question you need to ask is where can you add value to the internet. For retailers it’s providing experiences, making us feel special and that are fun.”
Technologists in retail must simultaneously deal with a collection of 20-year-old legacy systems at the same time as helping to think about how their business will fit into an increasingly digital world. While technical know-how remains crucial, chief information officers and IT bosses will need more creative in their approach to retail technology than ever before.
Tesco’s date with tech
Tesco has launched a speed dating-style event for start-ups in a bid to help introduce more new ideas to the business.
Tesco head of research and development Nick Lansley and head of mobile centre of excellence Ben Martin have set up T Jam, a quarterly event where 12 start-ups pitch their ideas to 12 senior Tesco technologists, spending five minutes with
Lansley said at the Retail Week Technology Summit: “We wanted
to really get to know some of the start-ups. We were doing it informally but there was no formal place they could speak to Tesco.”
The first T Jam was held in September and subsequent events will be held every quarter. Lansley and his team contacted the venture capital and angel investor community in London and asked for start-ups
to apply, and received around 30 applications.
The event is two to three hours and has a particular topic or theme - the first event was called ‘Come and inspire us’ and Lansley said Tesco is following up several ideas that were pitched during the evening. “Part of the magic was that we hadn’t thought of some of their ideas,” he said.
Future events are likely to focus on questions Tesco’s technology team would like answered. Lansley said the speed-dating format is more popular than Dragons’ Den-style presentations, as it means a start-up’s business model can remain confidential if they wish.
The ideas pitched to Tesco can be ready to be rolled out, or they can be at the conceptual stage - Lansley said he wants to hear from everyone.
“It means we reach people who may not have the ‘sexiest’ app but whose idea could be really important to the company. Some of these ideas tend to get lost in the blizzard of super-social apps everywhere,”