John Lewis: IT integration takes flight

Paul Coby is a well-known name in the IT industry. He is an active participant in the debate on the industry’s notorious skills gap, and a frequent speaker on the importance of linking IT to the business. The last year has been a big change for him – after 10 years in the airline industry during which he launched BA.com and oversaw the company’s shift to multichannel trading, he joined John Lewis in March 2011 and has been working on the retailer’s technology offer ever since.

Coby says: “The difference between the two industries is that retail is much faster moving than airlines. It’s highly competitive. At 12.20am every night we get to see the sales figures for the day, and how we’re doing against the budget. Our clearance website was launched on Christmas Eve and took £2m in the first three hours. It’s a good example of how real-time retail really is.”

The pace is unlikely to ease in the near future. Every retailer is realigning itself along multichannel lines, and John Lewis is no exception. The department store business is planning a big investment in technology over the next couple of years – starting with a new electronic point-of-sale system from PCMS, which it is rolling out now, and continuing with a new web platform this year. Other new platforms are planned, but Coby is biding his time on where the money will go next.

“I’m looking to incrementally take areas of the business and put them on the modern platforms that will integrate much more easily with each other,” he says. While John Lewis already has a strong multichannel offer, staff have to use different sets of systems to perform functions such as click and collect. By joining everything up, it will be easier to see stock across the whole business and to provide useful services.

“The big challenge in retail is most retailers have been developed in incremental pieces in different functional areas,” says Coby. “Shops are run in one way and online as a separate thing. Now we have to join it up and technology is the glue that pulls it all together.”

This means more resources are needed – John Lewis is looking for 50 new IT recruits to add to its 280-strong department, and Coby aims to fill positions at a variety of levels. He works with the John Lewis corporate team on the company’s IT, and the positions will all focus on different areas of the business. Coby says: “We have got a great IT department that’s delivered all this online growth, and we see IT as a strategic asset that’s going to be increasingly important. We are also investing in developing the partners we have got, and in recruiting up to 50.”

On the frontline

It’s a big year for technology in the retail industry and as an IT director at one of the UK’s largest retailers, Coby will be one of those leading the way. It’s not an easy challenge. Technology has become crucial for competitive advantage in retail, and traditional retailers who don’t stay on their toes will inevitably face challenges from up-and-coming new businesses – Amazon, Asos and Apple are just a few that have kept the retail industry on its toes in the past decade and this pressure from innovative thinkers is not going away. Retail leaders are now starting to acknowledge the strategic importance of technology, Coby says, with excitement building around the subject, and part of his response is to set up an internal group to focus on new ways to use mobile technology and social networks. “In some ways it’s a bit like the dotcom bubble, but the thing to remember is there are 20 times more people online now than there were in 2001. This is not a bubble, it’s a revolutionary change in how people interact.”

This step change in people’s attitudes is making it easier to communicate the role of IT to the board, he says. “Everyone is very aware that the world is being changed by technology. Everybody sees its power and gets how it is changing the world. The job of the IT director is to explain what it can do and with the business ensure that we get the right strategy.”

John Lewis is about to unveil its new business strategy to staff, with technology being a core part of how it plans to move forward. Coby says: “What’s happening in the retail world now is that everyone has the vision of multichannel. It’s the competitive battleground for retail.”

What’s helpful for him, he says, is that airlines got there a bit earlier – sales in the air industry are now about 50% online, compared with the 20% or so at most retailers. “My experience in that world is helpful in being able to see around corners and understand what’s happening to us. The retail experience is being revolutionised by technology. The world has changed and customers demand the ability to shop in any channel.”

Leading an IT department is one of the more interesting jobs in retail at the moment – there’s so much change happening, and technology is what’s making it happen. Coby’s role is particularly interesting because, with John Lewis being one of the few consistently good performers in a difficult economic environment, he has more resources than most to make things happen.

But what’s most crucial for a technology leader, he says, is that senior management understands multichannel retailing, and it’s important that they are capable of communicating this to the rest of the staff. John Lewis’ democratic business model means those in senior positions face regular questioning on their strategy – and for any successful multichannel retailer, Coby says, what matters most are your staff.

“At company updates staff ask very fair but very difficult questions,” he says. “The desire to make the company a success runs right through the company. Multichannel retailing is actually a lot of work for our partners, because of services like click and collect. Staff want information and it’s important that they understand what’s going on in terms of that dynamic. We spend a lot of time talking to them.”

It often comes down to changing policies to reflect the new environment – online sales that happen within a store’s catchment area are added to the store’s sales total, for instance, which still doesn’t happen at every retailer.

With technology changing all the time, it looks set to be another challenging year for Coby. And for the rest of the industry.