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The importance of top-down technology innovation in retail

There is no doubt the impact of digital and technology is changing businesses of all shapes and sizes across the world.

Retail, like other industries, has had a difficult time adapting to the modern consumer with their smartphone constantly within hand's reach in their pocket.

But you could argue retailers have been some of the trail blazers when it comes to trying out new technologies, be that click & collect or the latest mobile application. In fact, IMRG recorded that 45% of online sales were made using a mobile device in the third quarter of this year, up from 0.9% in 2010.

But senior industry representatives who gathered in London for RBTE's 2016 steering committee meeting last month, noted that in order to drive technology innovation and keep up with the pace of digital change, the retail board has to support digital decisions for the business.

Jevern Partridge, interim CIO at Nisa, warned that retailers need to stop thinking about IT in isolation from the rest of the business. 

"Don't ever call yourself IT – you're part of the business," he said. "IT needs to ensure the hygiene factors of infrastructure and email work 24/7, but jointly, everyone has a responsibility to change how our business operates."

Partridge described how culture is incredibly important to driving technology change. "And this needs to start at the board and executive level and permeate throughout the business. Not every business is at this stage yet."

Laura Phillips, managing of digital delivery at Waitrose, agreed: "The traditional board needs to understand how digital and IT works."

The problem with retail boards without technology knowledge is that they only view technology – for instance a mobile app – from the same perspective as a consumer. But in fact there is a lot of work that needs to be done to tie the technology into existing systems and processes.

"The whizzy things still need infrastructure," added Phillips. "Third party software is never just plug-in-and-go, you do need skilled IT teams working closely with digital teams for successful integration."

But it not just the board. Julie Price, IT director at the White Stuff, said there is a worry that the people making the big technology decisions – irrelevant of their job title – do not have the right breadth of skills.

"For example, a content manager in the web team creating a digital product and not thinking about contact centres and how shops will use it; that will be a mistake that will take years to fix for some businesses," she said. "It is essential to look at how business process interacts with customers across the whole value chain.

"When businesses embrace their IT colleagues for the expertise they have and the options they can bring to delight the customer, you can have some business changing results."

The rise of digital

Over the last decade we have seen the birth of the iPhone which created user-friendly technology, a giant leap away from Commodore 64-style computers of the 80s. Now Deloitte statistics state that 76% of UK adults own a smartphone, opening up this digital technology to a wide range of customers – be that the silver surfers who were once frightened of the internet before smartphones, or emerging markets which use mobile for banking in countries where there historically has been a lack of access to computers.

Some may argue this has been the digital decade where IT and technology became "cool".

"IT function is a name for people who used to do the interesting stuff, people didn’t understand it then, now everyone has a mobile phone it's called digital and I still don't think people truly understand it," suggested Price.

As digital became more commonplace in everyday life, in retail, technology was not restrained to just "keeping the lights on" in a business, but developers have been drafted in to create mobile apps, responsive websites and to even experiment with in-store tablets and beacons.

Digital directors have risen up in a number of businesses to support this new digital subset of IT. If adopted by a retailer, they tend to sit on a similar level to the CIO – like in the case of Argos – and are responsible for the "whizzy" technology mentioned by Phillips above.

Kieron Smith is one of these digital directors for Blackwells, and he told Essential Retail he believes digital is a synonym for change, guiding businesses through this noisy generation of so many digital distractions.

"If Blackwells still has a digital director in three year's time, we've done something wrong as the business should have digital in its blood by then," said Smith.

Agile working

And in order to engrain digital into a business, the company needs to embrace the new way of working – namely using agile methods.

Nisa's Partridge explained that using test and learn techniques helps the retailer to think and act like a lean start-up. To 'fail fast' is the term used in the technology industry, in other words, implement an idea as quickly as possible, test it on real users, gather feedback and if it doesn't work, move on to the next project.

"There's no need to make big investments [in technology] until you know how it works," he said. "In the old days we'd call it a pilot, but we'd have already spent most of the budget and if the pilot was troublesome, most systems were rolled out anyway. But now we should spend as little money as we can and if it goes wrong, accept that. But also learn from it. Throwing away the rule book of what you would have done in the past. Business’ should invest less initially and learn quickly."

But Jamie Korda, retail enterprise architect, at Asda, said it is important to still think through how technology will be used to avoid buying costly systems.

"The business may say 'I want one of those', instead of 'I have this problem' – we should always be clear on the business problem we're trying to fix."

Korda explained how Asda's approach a few years ago was to have technology visible all over the stores, but now it is trying to make technology invisible or utilise a customer's mobile device.

Simplification

One example of how technology is disrupting retail is the extension of the self-checkout and how some retailers are imagining a future where customers use their mobiles to scan and pay for products, walking out of the store without interacting with any employees or point of sale systems.

"We want customers to be able walk in and walk out, using technology to make it completely seamless for the customer," explained Korda. "It's now about simplification – at the end of the day customers want a hassle free experience."

But before this becomes commonplace, customers will be to adjust to the idea of not paying for an item in the way they have been conditioned to do so via a till. And it is not just the customers who will need to shift their mentalities, when it comes to the future of technology the entire business needs to understand why a certain solution is being adopted.

As CIO, Partridge concluded: "We're responsible as IT to educate our peers on that journey – how can we make change as simple as possible for everyone?"

Many of the themes raised during the discussions will appear as part of the RBTE 2016 speaker programme. Europe’s largest retail solutions show will take place on 9-10 March 2016 at London’s Olympia.

Click here to register for your free event ticket

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