As it moves closer to completing its acquisition of Argos, Sainsbury’s is underlining its commitment to multichannel fulfilment with the addition of 150 specialist digital and technology staff.
Sitting within Sainsbury’s existing store support team in Manchester, the new roles will include agile coaches, software developers and DevOps engineers.
In a statement issued earlier today, Jon Rudoe, digital and technology director at Sainsbury’s, said: “The world is changing rapidly. Our vision is for Sainsbury’s to have a world-class digital and technology function to ensure that we can deliver great services for our customers whenever and wherever they want to shop with us.
“It’s a great time to be working in retail. This fast-paced, exciting sector is giving rise to the most innovative practices.”
Sainsbury’s has more than doubled the size of its digital and technology team over the last year, partly fending off competition from Amazon, and partly ensuring it is able to keep pace with changing customer expectations.
Last month, Next – historically one of the strongest multichannel players according to the IRUK Top500 from our colleagues at InternetRetailing – cited the failure to develop a strong mobile proposition as one reason it under-performed in its last financial year.
Reporting for InternetRetailing, m-retailing editor Paul Skeldon, said: “Back in 2010 95% of Next’s orders, by value, were placed on desktop. By 2015, just 37% of orders were placed on PCs, with the balance via tablets and phones. However, conversion rates on mobile still lag desktop. Next says it is improving mobile sites to boost this, but it seems that its still not clear how to do that.”
The smartphone is now the dominant player in ecommerce, according to the IMRG Capgemini eRetail Sales Index, which states there was a 101% increase in transactions-via-phone in March.
Tina Spooner, CIO at the IMRG said: “Smartphone is the fastest growing channel in the UK online retail market – conversion rates were 50% higher in Q1 than the same period last year and average online transaction values reached a record high of £85 during March.
“Not surprisingly, many retailers are placing a significant focus on their mobile strategy as consumers shift towards handheld devices when purchasing online.”
John Pincott, European MD at Kibo Commerce, an ecommerce and omnichannel platform, said the Sainsbury’s appointments were an indication that online and off-line divisions were breaking down. “Sainsbury’s move to grow its digital team in order to better compete with online retailers could not have come at a better time for the supermarket giant. Research shows that 80% of consumers prefer to buy on-line and ship-to-home, with two-thirds less likely to buy from retailers unable to confirm product availability online and another third from retailers unable to offer click-and-collect. It is therefore without a doubt that today’s most competitive retailers are those that offer multi-channel services and cater to the needs of the digitally demanding consumer.
“With the rise and popularity of services such as speedy delivery, click-and-collect and mobile points of commerce, the divide between online and offline retailing is not only blurring but is disappearing altogether. As such, in order to remain competitive and meet the expectations of today’s connected consumer, retailers must offer an integrated omnichannel strategy that delivers a seamless retail experience regardless of where or how consumers choose to shop. This is particularly critical for Sainsbury’s if they are to improve consumer loyalty and effectively compete with or seek to surpass Tesco and other online giants.”
The eDelivery view:
Having consistently performed well in comparison with its main rivals in the grocery space in the last few months, Sainsbury’s is clearly determined not to lose the momentum – especially as it starts limbering up in readiness to swallow Argos.
Much of the retail sector goes about its business in the shadow of Amazon; after all, everyone is chasing the same shoppers, often selling the very same products, and frequently with no real difference in price. Suddenly it is those things that were, not long ago, considered peripheral that are winning the war for customers’ hearts, minds, and wallets.
Delivery, and collection are two important parts of that. But so are things like dynamic stock visibility, data analytics, and the ability to quickly develop new services and roll them out rapidly. The agile mindset of a startup or of a company that is as intrinsically linked to the philosophy of disruption as Amazon, is as hard to replicate as it is to compete with if you are an established business with legacy systems and processes.
Yet throwing your hands in the air in the face of difficulty will never be a winning strategy, and rather than fret about Amazon, Sainsbury’s seems to be doing all the right things to ensure it is able to go about its business in the way it chooses. The addition of Argos opens up new avenues – from the obvious non-food, to the less obvious, such as what will happen now to the Argos/eBay relationship, will Sainsbury’s turn that to its advantage. And, of course, there is the near-legendary dynamic stock view and class-leading delivery network Argos has to offer.
The changing room is now your home. The decision to buy (IE, keep rather than return) is often made after delivery. Retail space is now just as much cyberspace as it is floorspace in a store. If you’re not able to operate effectively wherever customers expect you to be, and if the services you offer – from product and price through to delivery, collection, and return – aren’t able to at least match those of your rivals, you will be forever playing catch-up. And that doesn’t look like something Sainsbury’s is about to content itself with any time soon.