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IREU Top500 The Customer Report: 2018

IREU Top500 The Customer Report: 2018

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GUEST COMMENT Retail technology: it’s not all about the front-of-house

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M&S is, and always has been, a stalwart of the UK retail industry since it began in 1884. Yet times have changed significantly since then, no more revolutionary than in the past decade. Online shopping may have begun in the '90s, but it was the middle of the '00s that saw it explode. Broadband brought shop fronts into every home in the UK and retailers were forced to adapt. Now, mobile technology can be found in the pockets of every customer walking through shops on the high street, signalling another step change in the retail world. Customers can price check on the move, creating a highly competitive environment that brick & mortar stores are furiously trying to keep pace with.

It is this background that M&S has been pictured against in recent years, with analysts and reports a-plenty highlighting its lack of investment in these technologies. One can forgive it, given the sheer scale of the job at hand; the transformation of a shop-front experience across a UK-wide chain is no mean feat. Buying and installing the technology – touch screens, in-store wifi, augmented reality – as well as training staff in their use is a major undertaking. And this is just what the customer sees and experiences. M&S is putting a lot of manpower behind the front-of-shop experience with 150 software developers being taken on and one hopes that the same amount of attention is being paid to the technology behind the scenes.

The promises made by a highly engaging, involving in-store experience can be high, and so customers will expect the same level of service across the online platform. M&S is clearly working on this with its influx of developers, but they will mostly look at the website, the app, the overall customer journey through these portals.

Yet increasingly this is not where the most important impression is made. These technologies have been around long enough that most retailers have high quality online shops. It is the physical delivery that is now the major battle ground; in the end, if a retailer can't get a product to a customer quickly and easily, the entire online experience will be tainted. It is the back room technology that facilitates this which is the major battleground in retail, so M&S must bolster this area of the business in tandem with its customer experience drive.

The essence of this is understanding exactly where your stock is at all times. Without this basic knowledge, it is nigh on impossible to have a working logistics model. The technology available today allows for an almost 'smart' logistics model, one that operates in real time and allows great flexibility in moving stock around the country. For example, if one shop records high sales in a particular item, the system allows the retailer to promptly get more stock to that location, helping drive sales and react to customer demand.

The same can also be applied to delivery assets. Knowing where the thousands of couriers, vans and lorries are across Britain's road network allows for smart planning of the fastest routes to customers for delivery, depots for product pick-up and shops for product drop-off. While for many retailers this isn't a consideration due to use of logistics partners (apart from when understanding how your partner operates), this does apply to M&S. Its food division is reliant upon efficient delivery of items, so there is a real argument here for not just implementing a smart system for product tracking throughout the warehouse and depot system, but across its delivery network. This allows efficient delivery, which in turn can save a significant sum of money.

The time wasted due to a 'non-smart' logistics solution is costly not just in terms of lost sales due to poor customer satisfaction. It costs money to build a supply chain and pay the staff to run it. If that chain is not being used to its full efficiency, or the staff are not using their time economically, the spend to build up the assets required to run that chain will have been in vain. There is no sense in creating an infrastructure if it is not used to its fullest.

And this brings us back to what should be front of mind for Darrell Stein, IT director at M&S and man in charge of its current revitalisation. His plans for the retailer are well and truly in the here and now, bringing innovation to a historic shop in a way that, if implemented properly, should hope to secure its future. One hopes that he is not dazzled by the bright lights of tablets in shop fronts and touch screen interfaces in every department, and that instead he is looking at the smart logistics in the back of the shop, required to achieve the success such a transformation promises. With smart logistics playing a supporting role in creating a modern customer experience, M&S will retain its position as one of the giants of the UK retail industry.

Stuart Miller is co-founder and CEO of ByBox

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