Analysis: Shop Direct, Tesco, John Lewis and Argos on how to work with tech start-ups

Bertrand Bodson is chief digital officer of Home Retail Group, which works with a range of start-ups. He says:

• “For us, I think it is vital that we set ourselves up to be able to work with some of the best start-ups around. There is huge opportunity but it is challenging to get it right.”
• “Start-ups can add a lot of energy and fresh ideas to our teams and they operate at speed and with incredible focus.”
•  “We have worked hard to identify the very best ones – the ones that have solutions that are most relevant for our customers.”
• “It’s also important that internal teams dedicate time to look outside and truly understand the best ones in areas where we want to achieve results.”
• “Being close to the community is key. That is why our digital hub is in London, not too far away from the ‘Silicon Roundabout’ and with the right set-up to host them.”
• “And very importantly, you need a leadership team that is naturally curious and with open eyes. One that can spot talent (worldwide) and can operate at the same rhythm as start-ups, jump on a Skype call with them whenever needed, be creative to quickly get tests rolling, and cut any potential red tape for them.”
• “The technology platform you are using needs to support their work too – being able to offer the right application programme interface is key.”

Andy Wolfe is chief information officer at Shop Direct, which has opened a user experience lab and works with Israeli start-ups. He comments:

• On testing: “We do up to 50 tests every month, and we spend more time talking about failures than successes. Typically, a third of our tests fail, a third succeed and a third have no impact either way. We go to the board and talk about the irony of something failing when we wouldn’t have expected it to, why it has done, and the difference it makes to the entire organisation.”
• On convincing the board: “You need to make it really easy to fail, which means you need to not spend too much money. Our view of success is how many tests we can run, not how few failures we can manage.”
• On the importance of failure: “You will get more failures, but you will also get more business success because the tests mean you understand what the consumer is looking for.”

Nick Lansley, head of open innovation at Tesco Labs, on how to listen to start-ups:

• “You need to help them describe their services to you. I have had the most horrendous presentations. You have to understand the idea despite them, not because of them.”

Julian Burnett , head of IT strategy at John Lewis, on what start-ups bring:

• “A start-up brings with them a passion and enthusiasm and energy because they love what they’ve done.”

Imogen Wethered, chief executive of customer management platform, Qudini

• “It is important for retailers not to impose their very strict payment terms and processes on a start-up when it is in the trial phases. Start-ups like to put all their energy into projects with big clients but sometimes the payment processes can make it hard.
• “I also think it’s really important for retailers to work with start-ups on how to best capture the KPIs for the trial projects as transparently as possible.”

Darren Hitchcock, UK managing director of personalisation service, Struq

• “Where a start-up has a brand’s weight behind its ongoing success strategy, the brand itself gains [distinct benefits].
• “This evolution from small to medium is critical for the success of the start-up. For retailers a respect for the development that has gone in and a fair representation of its value is needed.
• “Retailers should also respect the commercial sensitivity around sales and decision cycles and payment terms – while larger software companies can manage monies and processes easier, smaller start-ups are often living by their next deal. Supportive negotiation around these points is critical.
• “Retailers who offer [marketing support] are important for new start-ups and another opportunity for retailers in return is the ability to have an influence on [the start-up’s] future.”

Fergal Downey, chief executive of display advertising company BoscaBox

• “If you’re going to engage start-ups then give them licence to use the creative energy that they bring to look under the bonnet and come up with creative solutions.
• “Start-ups are more flexible and can adapt and customise quickly, so remove barriers which slow this down.”