UK grocer Asda is using cloud-based technology to help its category managers work more closely with the company's suppliers when it comes to monitoring own-label product quality and performance.

The supermarket is looking to drive improvements and product innovation across its private label range, and is using UK-based Solutions 4 Retail Brands' (S4RB) quality management system (QMS) to boost its engagement and relationships with own-brand suppliers.

Asda works with multiple supplier organisations to deliver its own label offer, which includes groceries, health and beauty products and household goods. Internal users of the QmS system can gain a detailed picture of how a product or range is performing in the market.

Suppliers can also tap into the software to access the information they may require to make product improvements.

Gail Paddy, senior product development director at Asda, commented: "QmS allows us to hold all of our quality data in one place, whether it is from our internal checks across Asda house or our depots, or from our external providers.

"It also allows us to be able to report more effectively so we can take any required actions to ensure that we are delivering a consistent quality experience for our customers."

S4RB lists Waitrose and Walgreens Boots Alliance among its other retail customers.

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Solutions 4 Retail Brands

Essential Retail caught up with Kevin Stadler, president and CEO of 4R Systems, at RBTE 2016. He explained how the US-based supply chain optimisation company – which has recently expanded into the European market – can help the retail community.

It is 18 months since Carpetright started arming its estimator field support team with iPads and giving head office and store staff access to a new centralised booking system, and the benefits are already being seen by senior management.

Speaking at RBTE on 9 March, Steve Johnson, head of central operations at the flooring retailer, said that a new centralised digital platform for booking estimator home visits is helping optimise sales, boost organisational efficiency and improve the customer experience. He described the latter as top of the company's agenda, at present.

Over the last two years all 460 Carpetright stores across the UK and Ireland have undergone a revamp, which includes the introduction of new hardware and upgrades on systems and performance measures. The new internal online booking service utilises tech company Kirona's range of field service solutions.

"That puts us in a much better place now," noted Johnson, who said it had been approximately eight years since the retailer had undergone significant tech investment, describing the previous situation as "a bit of a challenge" for the business.

Carpetright's decision to replace paper diary booking with Kirona's software suite is part of a wider customer-focused strategy developed under CEO Wilf Walsh, who took over the reins of the business in the summer of 2014 and has led a turnaround in profit and sales. The retailer uses Kirona's tools to centralise estimator bookings, send field workers relevant information about their home appointments and allow estimators to input details about their individual customer visits.

Kirona's Infosuite package is also used by head office to gather and monitor data, such as appointments made and kept, aborted and completed jobs, and the general performance of its estimators.

Showing RBTE delegates a slide that detailed examples of the company's previous estimator tracking process, which often involved scribbled notes on paper in view of store customers, Johnson quipped: "I feel as if I'm baring my soul here. The more I look at where we came from, the more I break into a colder sweat."

Reported benefits and direct actions since implementing the new technology include a 70% reduction in aborted visits, primarily due to the integrated text message reminder service for customers, and a 30% increase in rooms being measured without a significant hike in travel expenses.

There has also been a 13% headcount reduction at Carpetright over the last year, partly as a result of the business having a better understanding of how its field workers are utilised.

"The icing on the cake is the customer gets confirmation of the appointment straight away," Johnson remarked.

"We have seen enhanced customer service experience. Our customers receive a text confirmation, a reminder and they are able to book a one-hour slot. It's not am or pm or when we dictate it; they book an appointment slot that is suitable to them."

Johnson described the positive reaction of staff to the new system as the most refreshing consequence of changing the internal processes, but the key business benefit he identified was a 34% increase in estimated sales.

"We had been running a paper diary for 25 years and all of a sudden we stuck a tablet under the estimator's nose, we put an online diary booking system in the stores and we said to them 'that is the way of the world, take away your paper diary – that's how you manage it now'," he explained.

"I honestly thought we'd come up with a real big challenge, but luckily I was very disappointed from that perspective because the guys and the girls in the stores and the operational field team really embraced it. It was fantastic."

Johnson said the retailer is putting customer and staff feedback at the heart of its future strategy, and this could result in a number of internal and external changes to the business in the coming months.

The company is piloting a self-service customer booking system online, while Johnson and his team are looking at ways they can smooth out and centralise the appointment booking process for insurance policyholders.

He added: "Internally we're in discussions as to how we could manage an online fitting diary and we're looking to take some further analytical software from Kirona which will support and enhance the review of the workforce going forward."

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Kirona

One of the most enjoyable aspects of attending the RBTE in London (which has just completed its sixth successful year of operation) is that it's so easy to see in real life what it being talked about at the event.

London is a hotbed of very competitive retail shops. The city remains one of the world's top performers when it comes to retail sales, and the UK overall ranks among the top countries in internet sales (#1 in 2013). So if you want to see what is happening in retail, there is no better place to look than London. 

Another factor that makes retail in London so interesting is the high service profile that is in evidence in Oxford Street's stores. Of course this is driven by the fact that so many of those stores are fashion outlets, where service is important. Nonetheless, it's hard to go into one of the stores without taking notice of the great service being offered – not just by employees but with the help of technology too. It's not happenstance that the RBTE event is really three events in one, with a technology expo, a digital signage expo, and a store design expo. In London at least, it's easy to see all three of these at work on the shop floors, creating a visually exciting and information rich environment, all intended to create a compelling shopping experience for consumers.

In the end, of course, service is best demonstrated not by clever and flashy technology on the sales floor, but by engaged and engaging employees. The question for retailers today is how can they engage today's tech-savvy employees? Beyond the obvious "give employees the tools they need to help them help customers shop", it turns out that today's employees want the same thing that people have always wanted, to have a positive impact on their organisations.

And that turned out to be a topic of discussion during the RBTE 2016 conference sessions!

Engaging employees

For example, Chris Hewerston, the CTO of GLH Hotels, gave a presentation in which he talked about how GLH made its decisions about the cloud-based solution portfolio to be used by all four of its hotel brands.

Instead of dictating the solutions, Chris and his team set up a competition where the hotels would choose which systems they would use in their daily work. The technology team developed the design criteria (open APIs, modular SaaS architecture, "mobile-led" interfaces, a viable business case, and an intuitive UI), and reviewed the recommendations for compliance to the criteria.

One of the outcomes of that process is that the people operating the hotels understand their systems. A measure of that acceptance and understanding is that of all the calls the support centre gets, less than 20% are about the technology (the rest being about the best way to accomplish a task). 

Another excellent presentation about employee empowerment was offered by James Wintle, the global director of digital & technology at All Saints, a London-based international fashion retailer. James talked about how his company fosters a "social mentality to communicate our brand value". He pointed out that All Saints is "all in-house", where the employees have input on store design, fixtures and store layouts, and the source and manufacturer of the fashions they sell. To promote social communication both inside the company and with consumers (and "to kill the email culture", said Wintle), the company partnered with Google to implement Google+ for all communications.

"Google+ behaves like a social platform", said the retail technologist. "And it's a rich experience. We can embed video into our communications." – for example, to show how a display should be set up.

"It just works… like a consumer product," exclaimed Wintle.

The point of All Saints' pursuit of a collaborative environment is to convert its employees into brand ambassadors.

RBTE conference

As the RBTE event has grown, it has expanded its conference schedule, bringing in speakers like Hewerston and Wintle to discuss how their companies face the same issues that retailers everywhere must deal with.

In the cases highlighted here, the subject was about how to engage employees, in the belief that engaged employees make good brand ambassadors, and ultimately that serves both the customer and the company better than a bare-bones self-service shopping experience.

As I visited the stores on Oxford Street later in the evening after the conference, I could see that the speakers were right – when retail employees are not just selling the brand, but actually are a part of the brand, shopping is actually fun!

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RBTE

RSR Research

German airline Lufthansa has this week committed to replacing its legacy Unisys-based crew management solutions with a new package from aviation, transport and logistics tech company, IBS Software.

After 30 years using the same system, the airline has opted to modernise its internal IT structure, which will see over 40 inbound/outbound interfaces built to help manage crew rostering, crew scheduling, crew check-in and crew hotel and transport.

Global airlines – like retailers – are facing a number of cost pressures in a competitive market, and are looking to technology to aid their workforce management strategies. Dutch general merchandise retailer, Hema, and UK-based floorings retailer, Carpetright, are recent examples of companies that have made investments in software tools to organise their staff operations – utilising solutions from JDA and Kirona, respectively.

Meanwhile, speaking at RBTE 2016 in March, Tony Sanders, senior project manager at Costa Coffee, revealed how his company has revamped staff scheduling by working alongside Rethink Productivity Consultancy.

The multi-million euro deal between Lufthansa and IBS to embed the iFlight Crew software solution into the airline's operations was formally signed this week by Lufthansa CIO Dr Roland Schütz and IBS Group chairman VK Mathews.

Mathews commented: "We have a long standing successful relationship with Lufthansa and there is nothing more gratifying than being called upon by an existing customer to cement this association even further.

"With this deal we have indeed become a strategic technology partner of Lufthansa through which we will add substantial business value to them in their pursuit of increased operational efficiencies and growth."

Using iFlight Crew, Lufthansa will look to determine the most cost-effective use of airline crew at various stages of their operations. It is a technology package used by a number of the world's largest airlines, including Emirates, British Airways, KLM, Jet Airways and Virgin Atlantic.

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IBS Software

Unisys

JDA Software

Kirona

ReThink Productivity

Restaurant chain Pizza Hut is apparently "reaping the benefits of improved service" following an IT investment made back in 2014.

Tech support from Nottingham-based company, Retail Assist, is utilised in Pizza Hut's  270 restaurant locations across the UK, with the chain now able to access 24-hour assistance seven days a week.

Staff at the restaurants can contact the support service as and when issues arise, which has reportedly been particularly relevant for Pizza Hut outlets that trade late into the night to service online orders. Having anytime-support provision has also allowed restaurant managers to report less critical issues once they have finished trading for the evening.

Explaining Pizza Hut's requirements, service delivery manager Bill Parker said: "We were looking for a one-stop shop where our Huts could report and have resolved any IT-related issues and queries that they experienced; a single point of contact where we could log all calls, who could then fix the issues where possible and manage through to resolution those calls which had to be dealt with by the internal Pizza Hut Restaurants IT team or escalated to third-parties."

He added that working with Retail Assist "has resulted in us reaping the benefits of improved service to our operations and reduced disruption to customer service".

Meanwhile, this week saw Pizza Hut Restaurants' parent company Yum! Brands sign a deal with recruitment software provider, TribePad, to use the vendor's technology when sourcing new staff.

Sister brands KFC and Pizza Hut Delivery will also use the applicant tracking and talent management software as part of their wider recruitment practices.

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Retail Assist

TribePad

Menswear and suits retailer Moss Bros reported encouraging growth in its retail, hire and online businesses in the year to 30 January 2016, according to a preliminary results statement published by the company on Tuesday.

Group revenue was up by 5.5% year on year to reach £121.1 million, with underlying pre-tax profit jumping 23.1% to £5.9 million. Comparative sales for Retail and Hire grew by 7.6% and 11.7% respectively, while online trading was up by 36.3% and now represents 10% of total sales.

Verdict Retail analyst, Andrew Hall, said the retailer has been able to cope with a competitive environment, through measures such as exerting tighter control on promotional activity and stock levels. He suggested that Moss Bros has "astutely handled an evolving store portfolio over FY 2015/16, refitting a number of stores".

"The retailer's well-prepared multichannel offer also enabled it to prosper during the challenging Black Friday period," Hall added.

Essential Retail has picked out five key pillars of Moss Bros's multichannel strategy, which appear to be helping the business stay relevant and fit for modern retailing.

1. People power

Not only has Moss Bros appointed ex-Direct Line HR boss Sara Gomez as its new people director, a role that involves leading the roll-out of a set of customer- and multichannel-focused staff values known as the 'Moss Bros Way', but two other senior appointments have been made with a nod to future digital investment.

Chief operating officer, Paula Minowa, has been brought in from German retailer Strauss Innovation with the specific task of accelerating the development of the retailer's multichannel and international aspirations, while Tony Bennett will join as group finance director no later than August 2016 from Moss Bros's competitor, Charles Tyrwhitt.

He has been recruited to take the place of the retiring Robin Piggott, and brings with him a deep commercial background in online, multi-site and international consumer businesses from his time at businesses such as premium department store chain, Selfridges.

In this week's results statement, CEO Brian Brick said that further resourcing is expected in the year ahead.

"The adoption of Moss Bros as the master brand, supported by complementary sub brands and introduction of carefully targeted marketing activity has proved very successful," he commented.

"In order to maximise this opportunity, and with the increasing role that digital has to play in marketing, we are adding resource and capability in 2016 to support our multichannel proposition."

2. Changing the role of stores

The last financial year saw Moss Bros open four new stores in the UK while closing ten. A further four stores were relocated into larger sites in perceived better locations, and at year end, 81 of its 124 outlets were trading in a new format with a fresh brand image.

Brick believes his company's real estate portfolio offers flexibility to move with the times, with the average lease length across the store portfolio at 59 months and new terms being negotiated.

Moss Bros's former eCommerce director, Neil Sansom, who left to become CEO of Wool Overs last year, told Essential Retail in 2014 that the menswear retailer was investigating the possibility of opening showrooming stores where limited product ranges are stocked but where customers could still engage with the brand and order items.

He oversaw the introduction of click & collect in all Moss Bros stores, which is said to work well for a Moss Bros customer who may want to order online but try the outfit on before committing to a purchase. From Brick's comments this week, it looks as if the business is still considering new types of store for a digital age.

"The underpinning of [the] hire [business] and the demand for eCommerce click & collect and click & return points, together with advantageous lease deals, means there is an opportunity to expand our store footprint on a selective and cost effective basis, with good returns," he noted.

3. CRM commitment

Moss Bros has been talking about developing its customer relationship management (CRM) techniques for a number of years now, and has gradually been adding data from its separate departments – starting with the Hire business – to a central customer information database founded on software from OpenText-owned Cordys.

By integrating it with e-receipts for customers and other CRM tools, the business is confident that it is moving towards gaining a single view of its customers, no matter which channel they shop on. Brick even alluded to the fact that there is work to do to ensure more of the retailer's Hire customers actually know that Moss Bros operates a retail arm where products can be purchased on a permanent basis.

"Continuity of brand presentation and pricing across all our channels is paramount in ensuring excellent customer service and therefore customer experience," explained Brick.

"The introduction of customer relationship management and a customer services database will enhance the customer experience and perceptions of the brand."

4. Catching up on eCommerce

By Brick's own recognition, Moss Bros has been playing catch up in eCommerce – and that is one reason the growth it reported in this area, on Tuesday, is significantly above the wider retail industry average.

The work driven by Sansom in looking after eCommerce at Moss Bros, including venturing into new international territories and launching a new retail website and a dedicated transactional Hire site with the help of web agency, Remarkable, in 2013, is now led by Matt Henton, the former online boss at My-Wardrobe.

Expansion into international markets has been refocused to concentrate on local currency sites for the Republic of Ireland, Australia and the US, while eCommerce has reportedly proven to be an efficient way of clearing end-of-line stock with faster sell through rates and an improvement in prices achieved. Based on customer feedback, Moss Bros is set to make a few improvements to the sites in 2016 to boost conversion rates.

Henton is looking to add to his team in the coming months, with Brick saying: "We plan to exploit further growth opportunities both in the UK and overseas by strengthening our eCommerce team and building on our success and leveraging the advantages that full multichannel capability will bring, including CRM."

5. Eyeing up the back-end

Moss Bros's in-depth and time-consuming store refit programme over the last five years has not distracted the company from making investments in infrastructure.

Central costs are anticipated to increase in line with turnover in 2016/17 as the investment in multichannel capability continues – CAPEX is estimated at £9 million, including £3.3 million for 20 store refits and £2 million for hire stock – but this comes after the business successfully upgraded point of sale and eCommerce pick, pack and despatch systems in 2015.

Since 2014 all its main IT systems have been upgraded, and there are plans to continue to invest in this area as appropriate – although attention in 2016 has turned to the distribution centre (DC).

"With the introduction of multichannel, growth of eCommerce and shortening of product lead times, the efficiency of the DC is central to our ability to serve our customers," explained Brick.

"Following the investment made in IT in 2014/15 and 2015/16 we are currently reconfiguring space within the DC to increase capacity and capability to support business growth."

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Remarkable

OpenText

Womenswear retailer Bonmarché has added technology expertise to its boardroom, with the appointment of Unilever's global vice president for IT, Mark McClennon.

The new recruit has become an independent non-executive director with immediate effect, and he will serve on the audit, remuneration and nomination committees. At Unilever he has been leading the IT operation on a global scale, covering marketing, eCommerce, R&D and sustainability.

Commenting on McClennon's arrival, Bonmarché chairman John Coleman said: "His experience gained over more than 20 years within Unilever will bring to the board skills and knowledge which will be especially valuable given the developing business change agenda within Bonmarché's strategy."

Changes to the boardroom come as total sales increased by 5.3% for the year ended 26 March 2016, while like-for-like trading was up by 1% including online.

Bonmarché said that trading conditions have been challenging since Christmas and the company expects that profit before tax for the year ended 26 March 2016 will be at the lower end of the guidance outlined in December. Full-year results are set to be released on 10 June.

CEO Beth Butterwick, who will be leaving her role later this year to take the helm at Karen Millen, said: "Overall, consumer confidence does not appear buoyant and, given that context, I believe that the provisional results represent a creditable performance.

"Our financial position continues to remain healthy and our final autumn/winter terminal stock position has ended better than expected, and lower than last year. Our expectation is that trading conditions will remain challenging, and therefore our outlook for the FY17 result is cautious."

Butterwick will be replaced as CEO by Helen Connolly, who is currently senior buying director for George at Asda, where she is responsible for all women's clothing, non-clothing and male and female essentials. She has previously worked in senior roles at Next and Dorothy Perkins.

A recent study by JDA Software and PwC placed returns as the second highest cost factor for omnichannel fulfilment. Surveying over 300 CEOs from large retailers, 63% of them placed returns as one of the top three cost factors. Yet, the same report didn't identify returns as an area for investment – with only 2% selecting an unidentified 'other'.

One way to deal with the rising costs related to returns is to charge for them. The same study found that 24% of CEOs were considering this option. But the immediate question is how realistic is this? Especially when consumers value free returns, with a UPS study finding that 55% of consumers would not complete a transaction when faced with a shipping cost for returns.

The situation

A return by its nature starts with the customer. And the customer doesn't have systems in place to manage a logistics process – they don't even have a methodology, they go with what seems easiest and most convenient at the time. The resources to start the process are dependent on whatever the retailer provides them with.

In most instances the customer will receive a label and some instructions with their product that will outline how they can return the product. Generally this would be by organising a courier to collect it, taking it to a drop-off point or returning it to store. With all these options at the customer's discretion it's difficult for a retailer to manage the costs, let alone know what products are being returned.

Once a return is with the (third party) parcel carrier, the return will then be transported to a retailer's central hub. This part of the journey is critical in the customer's perception of the process. Consumers value transparency about when their return parcel has arrived with the retailer and when it has been processed – and thereby releasing their refund.

For the retailer, when the return turns up it's often the first time they realise it's coming. This means it can often be difficult to effectively plan resources for processing returns, with the exception of peak periods – for example the first week of January, which includes what Royal Mail this year dubbed 'mail back Monday', the busiest returns day of the year.

So how's that process working for the consumer? Not great to be honest, 51% of them find returning items to be complicated and 30% find it difficult, according to Metapack.

And for the retailer? Apart from the fact it costs too much, Gartner research shows that only 48% of the stock gets back on sale to be sold at full price.

How can we improve?

By adding some structure we can make the process more consistent, more transparent and better control costs.

After a series of workshops including leading retailers and logistics suppliers, GS1 UK has devised two key areas that would greatly improve the reverse logistics process.

• Returns Management Authorisation (RMA)

The first difference, which is already in use by some retailers but would benefit from some standardisation, is the use of an RMA process. With a consistent portal for consumers to use, retailers can reduce the level of confusion that consumers currently face.

An RMA process allows consumers to notify the retailer that they're returning something and how they are returning it. Through the portal, the retailer then could guide and incentivise shoppers to use more cost effective and appropriate returns' routes. And with a couple of days' notice, better plan their resource allocation for dealing with the returns on their arrival.

With resources more effectively allocated and visibility of what's coming in, retailers can be better placed to get stock assessed and ready for sale – ensuring they can maximise the resale value of their items.

Consumers would also benefit, as retailers could give preference to the priority customers or those who exhibited good returns' behaviour previously. This could be in the form of a quicker or even instant refund – the ultimate crowd pleaser.

• Universal tracking code

The most efficient way of working across channels with transparency is to remove the barriers. So to ensure that items can be tracked across the various channels, using a single tracking code that can operate across all channels and across international borders provides significant advantage.

GS1's core business is unique identification, and retailers have long used Serial Shipping Container Codes to track shipments in their supply chain. Essentially this is a number that tracks a shipment of grouped or unitised products. This existing industry standard can be applied to help retailer's better track the reverse logistics process and keep their customers informed of the various key milestones throughout the journey.

Try a better way

Following on from the workshops that GS1 UK has hosted, we are now looking for retailers that are considering better and more cost effective ways to manage their returns process to get in touch. If you'd be interested in being part of our proof of concept please contact apparel@gs1uk.org to find out more information.

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GS1 UK

Frozen food retailer Iceland is ramping up its category management strategy in stores with an investment in a new suite of technology.

This month will see the retailer start implementing a range of JDA Software's planning, assortment and planogram solutions, as it looks to offer its customers a product range better matched to local sales patterns.

Iceland is looking to use the technology to produce store-specific planograms and tailored customer assortments, which it hopes will increase sales and margins across its 860+ store estate in the UK and Ireland. Essential Retail understands that the decision to upgrade technology in this area came straight from the top, with Iceland CEO Malcolm Walker looking at ways to drive the business's competitiveness in the grocery market.

Localising product assortment in stores is a process the larger supermarkets in the UK have been undertaking for a number of years.

Neil Hayes, merchandising and format development director at Iceland, commented: "As competition increases, Iceland continues to differentiate itself by recognising and meeting localised consumer preferences better than other retailers."

Iceland and JDA have been working alongside each other for 20 years for various warehousing and space planning projects, but the retailer is currently putting significant investment into its back-end systems and logistics.

The supermarket recently finalised a five-year deal with XPO Logistics that will see its dedicated network aligned with the supply chain company's own shared-user facilities. XPO will manage Iceland's distribution centres in Warrington, Enfield, Livingston and Swindon, with responsibilities including warehousing activities such as product receipt and nationwide store distribution.

All 1,900 workers at the four sites are in the process of moving over to XPO as part of a phased Transfer of Undertaking Protection of Employment (TUPE) operation.

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JDA Software

XPO Logistics

Hear what a host of retail execs, including Screwfix CEO, Andrew Livingston, Hotel Chocolat co-founder, Angus Thirlwell, and Maplin managing director, Oliver Meakin, had to say about their visit to this year's RBTE.

The 2016 event at London Olympia attracted more than 15,000 visitors from the industry, and the comments captured in the video suggest the expo is growing in importance each year.

Every year, retailers make millions of small and infrequent purchases that are outside of their core spend areas. The final 20% of spend, or the 'long tail', may not represent the majority of a retailer's spend, but it often covers 80% of the suppliers', who often generate most of the supply chain 'noise' and consume significant working capital.

While retailers invest heavily in managing their core spend areas, they tend to neglect this tail spend. The trend is that the tail is getting longer, so neglecting to manage tail spend can potentially lead to mounting waste, every day, across the business. On the other hand, managing it more effectively can deliver significant cost savings and free-up precious time and resources for retailers.

What drives the long tail?

Long tail originally occurred in online retailers such as Amazon, whose environments were less affected by the physical constraints of manufacturing, production, and distribution. Today, most retailers, online and bricks-and-mortar alike, operate in long-tail environments.

A main driver of long tail is customer demand, which is increasingly scattered geographically, is in smaller quantities, and requires more specialised products. Other drivers include product proliferation, shortened product life spans and omnichannel sales. These all contribute to an increase in demand for items that are not particularly predictable nor do they have high volumes, but are still important to the business.

What problems does the tail cause?

Managing the tail is much more challenging than the core spend area. In a single retailer the tail spend may include tens of thousands of items across a daunting range of categories. These items are fragmented and can involve hundreds of different suppliers. Each individual purchase may be of a fairly low value, with the purchasing patterns often erratic and infrequent.

The sheer numbers of suppliers and the lack of visibility into the purchases make it difficult to forecast and manage inventory accurately. As a result, inventory mixes in a long-tail environment become misaligned. Some products are over-stocked, others under-stocked, and both impact the top and bottom lines. The tail consumes significant working capital, without delivering the desired level of results.

How can the tail be managed?

Despite the challenges, it is possible for retailers to make the most of this long-tail environment – and even to succeed if the supply chain, its composition and management are enabled in particular ways. There are three key measures that retailers can take:

1. Consolidate the supplier base

This should begin with a full review of all suppliers to gain a proper understanding of the existing supply chain. Small spend areas or small suppliers should then be aggregated into larger contracts or particular categories so a list of preferred suppliers can be used in the future with confidence.

By reducing the number of suppliers and spend areas, retailers can become more transparent and efficient, reduce invoice numbers and have clearer visibility around spend.

2. Simplify process & technology

Given the infrequent and unpredictable nature of long tail demand, it is crucial to adopt accurate demand and inventory models to support reliable service levels and good inventory management.  

Processes that enable clear, end-to-end visibility around spend is also essential. This process should take into account the industry and category right down to the line-item level. This will help procurement teams identify inactive and duplicate supplier accounts and other efficiency opportunities.

3. Outsource to a partner

Another option is to sub-contract the whole tail spend to a single or a smaller number of suppliers. The logistics of the tail supply chain can then be self-contained and managed by the outsource partner.

As retailers look for ways to relieve margin pressures, achieving efficiency and transparency in tail end spend can be easier and require fewer resources than generally believed, with the returns much higher if the right measures are adopted.

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Chartered Institute of Procurement & Supply

UK grocer Sainsbury's has announced it is creating 150 new digital and technology jobs in Manchester over the next 18 months.

Building a strong in-house digital and technology team is a core part of the retailer's current strategy, and the decision to bring 150 new jobs to its Store Support Centre in Manchester's Arndale Centre comes after it created 480 digital and technology jobs in London and Coventry over the past year.

Sainsbury's is on the search for agile coaches, software developers and software development managers, as well as DevOps engineers. The new recruits will work as part of the grocer's 900 strong digital and technology team on a wide range of projects, including development of websites and apps and monitoring of infrastructure and core business systems.

Jon Rudoe, digital & technology director at Sainsbury's, commented: "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.

"This announcement demonstrates our commitment to that goal and to attracting the best talent in this ever developing sector. As Manchester is the UK's second largest technology hub, it's a natural step for us to recruit here."

Although Sainsbury's has this week announced the creation of jobs it has also been overseeing hundreds of job losses in its head office and across its operations, in recent months. The business is looking to reduce running costs and boost its bottom line, while at the same time battling strong competition in the sector.

Earlier this month, the grocer said it was removing the "store trainer" role, which is currently held by 870 employees. In its place, Sainsbury's is creating 280 more senior "learning and development" jobs, which effectively puts around 600 jobs at risk.

Plans are being made to re-deploy staff, but the move – much like today's announcement about the Manchester jobs – is indicative of how fast-changing customer preferences are driving retailers to reshape their workforces.

Essential Retail's View from the Top is a regular series of interviews with executives operating at the heart of the retail technology industry. This week, the focus of the feature is Neil Ashworth, CEO of third-party click & collect network, CollectPlus.

Shopping centres could become the delivery hubs of the future but the UK retail property sector and the wider industry must shift their way of thinking to open up further trading opportunities that meet today's customers' requirements.

That is the view of Neil Ashworth, one of the founding fathers of Tesco Direct and current CEO of third-party click & collect network CollectPlus, who says the typical retailing model comprising a workshop at the front and a stock room at the back has not really evolved much over the last 350 years. He told Essential Retail that one of the limiting factors to today's shopping experience is logistics capability, and suggested more can be done to use the UK's major shopping destinations as part of the retail fulfilment network.

"Shopping centres by their very nature are great for access and great for getting deliveries in and out – they have extensive footprints and they could become local delivery hubs of the future," Ashworth argued.

"What if we moved all the stock rooms in shopping centres to a single place adjacent to the car park so the customer could browse the stores, try on products and get things delivered to their car? All of the inventory can be used for immediate fulfilment or [online] customers living locally who want a quick delivery."

Some of Ashworth's comments are meant as a provocation to the UK retail property industry, in an attempt to insert some new thinking into British retailing strategy, in particular the high footfall areas such as shopping centres and out-of-town destination retail hubs. Ashworth, who took over from John Lewis-bound Mark Lewis as CEO of CollectPlus three years ago, says the property industry is often so focused on yields and the general economics of the shopping complex that it can lose sight of end-customers' needs.

"In my opinion they don't spend enough time thinking about what consumers are doing, where they are going, how they are living their lives, how they are behaving and, therefore, considering if the existing model the most appropriate model for the future?

"We've operated with the same model for several hundred years, and maybe it's time for a change."

Such a move would be driven by the mounting challenge retailers are facing regarding the economics of online retail. It is no secret that serving customers with a home delivery proposition can have a seriously negative impact on bottom-line figures, but with a growing number of people now opting to choose eCommerce as part of their shopping journey retailers need to assess how they can serve customers in a suitable – but profitable – manner.

As a result, a trend towards distributed order management and serving online sales with store stock is occurring across the different sectors of retail. This publication often speaks to retailers who cite creating a single view of stock inventory as a key pillar of their next stage of development, and some businesses are making progress in reaching these targets.

Ashworth predicts this will continue to be a central strategy in coming years.

"Retailers are very efficient at getting product to store, so why don't we use that to fulfil online demand?"

"There will be a significant change and growth in the number of retailers who are actually deploying their in-store inventory to online sales over the course of the next five years to really get a grip on the economics of this."

CollectPlus itself is creating a presence in a greater number of shopping centres, which represents a step change from the business's original strategy when it first arrived on the scene in 2009. Operating service desks for online order collection and returns in these high footfall locations around the UK is viewed as an important part of the business's aim to fit in with shoppers' daily lives.

Having launched as a third-party click & collect service, allowing customers to pick up their online orders from a range of retailers at local newsagents, garages and convenience stores, CollectPlus now has a network of over 6,000 pick-up and drop-off points throughout the country, including more than 30 shopping centres.

It is attracting new users, too, with more than 400,000 people using the service for the first time in the final quarter and busiest shopping period of 2015. Last December's CollectPlus usage alone was up by 15% year on year, buoyed by consumers' increasing willingness to shop this way and a raft of new retailer partners joining the network.

Recent work by the CollectPlus team to evolve its proposition centres on the development of IT solutions, and this has resulted in mobile barcodes replacing the paperwork previously required when collecting goods. In fact, the business has developed a range of mobile applications to remove other paperwork in the process.

In beta test mode at the moment is the option for shoppers to print labels at CollectPlus points around the country, and Ashworth cites eBay sellers as a target market for this type of service as "not everyone has a printer these days – particularly the younger seller".

"If the customer gets a good fulfilment experience they are more likely to shop with that retailer again," he added.

CollectPlus requests customer feedback every time its service is used, and this helps the company monitor the levels of customer experience by store. Ashworth suggested that some of this internal data may even be shared publically in the future if they can devise the right format. This would potentially expose the store ratings on the main CollectPlus website and give customers more transparency into previous shoppers' experiences of the service.

Ashworth acknowledged that the customer fulfilment part of retail is attracting a lot of attention right now, in terms of the new options available for picking up and dropping off products and the fact many retailers are placing it at the forefront of their improvement planning. This area of retail even has its own acronym, PUDO, or the pick-up, drop-off sector.

The CollectPlus CEO suggested, in the early days of online retailing, companies involved in eCommerce put the majority of their focus on developing very strong front-end capabilities, getting the descriptions right and creating hierarchy taxonomies, arguably at the expense of establishing a robust back-end.

"Customers took control of the front end and now they've taken control of the back end – they want a service that is suited to their lifestyle needs," he explained.

"I think what we are seeing in the market is a natural progression. Retailers set up their own click & collect operations – it's not a new idea but it is something that's accelerated as people's lifestyles have changed and people have become busier and need a range of options to fit those lifestyles."

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CollectPlus

Mothercare has recruited The Body Shop's global head of customer relationship management (CRM), Glyn Birchall, to run its loyalty and insights operations.

Under the title of global director of CRM, loyalty & insight, Birchall will be looking at ways of boosting customer loyalty and engagement at the UK's largest parent and baby products retailer.

Mothercare has over 2.5 million active members on its customer database while its 'My Mothercare' loyalty programme is used by a significant proportion of expectant parents in the UK.

Offering an indication of why he took the role, Birchall said: "Becoming a parent for the first time is one of the most personal and memorable moments in people's lives and creating a personalised customer experience for parents is a unique and rewarding opportunity.

"I want the millions of mums and dads who interact with us on a daily basis to know that we really understand their needs and are with them every step of the way on their parenting journey."

At The Body Shop, Birchall designed, launched, ran and optimised the retailer's CRM programme across company-owned, franchise and sub-franchise markets. Prior to joining the beauty and wellbeing retailer, he worked for retailers and major brands such as Adidas, Barclaycard and Ikea.

Rent-to-own retail business Brighthouse is looking to further its investment in software to help connect its staff to a central system, even when they are out visiting customers.

The retailer is looking to reduce the amount of paperwork used by its field-based staff and centralise information to enable the wider organisation to access a real-time view of business operations, and is working with tech firm Kirona to boost efficiencies in this area.

A current arrangement that sees Brighthouse use Kirona's Job Manager and InfoSuite software could soon extend to the implementation of new tools to help staff better analyse sales information and manage resourcing.

Alasdair Skeoch, head of credit operations at the retailer, said using this form of technology ensures its customer agent advisers have the latest account information, credit agreements and customer data on one central portal when dealing with shoppers away from the store.

He added: "We are delighted with the initial implementation of the software and are looking for continual enhancements including implementing Kirona's Dynamic Resource Scheduler, their analytics tool to gain further actionable insights as well as applying the software to wider areas of the business."

Delegates at the recent RBTE conference in London, where Kirona was an exhibitor, were able to hear how Kirona's suite of software has helped Carpetright centralise its customer booking process. The flooring retailer's head of central operations, Steve Johnson, said replacing a paper-based booking system for its estimators has generated multiple business benefits.

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Kirona

BHS collapsed into administration today (Monday 25 April), putting around 11,000 jobs at risk.

Insolvency firm Duff & Phelps is handling the administration after weekend negotiations by Retail Acquisitions, the consortium which owned the 164-store clothing and homeware retail chain, failed to result in sought-after funding or a company sale.

Reports suggest that BHS's multimillion pound pension deficit was a key factor in a trade sale not being secured, and today's news will add to the uncertainty for staff who have been paying into company pension schemes. The pension deficit, which is part of an overall debt of around £1.3 billion, was inherited when Retail Acquisitions bought BHS from the Philip Green family-led Arcadia Group, for £1, one year ago.

Neil Saunders, CEO of retail research analyst organisation Conlumino, said that BHS has lost relevance over the last decade, falling behind value retailers such as Primark and TK Maxx, as well as the mid-market players such as Debenhams and Marks & Spencer (M&S). A limited digital presence may well have curtailed any attempts to attract new, younger shoppers to engage with the brand and enter its stores.

"Today's failure of BHS brings to a close a long period of decline which has seen the chain fall out of favour with British shoppers thanks to its failure to respond to changing tastes and the intensification of competition on the high street," he commented.

"In 2000, BHS attracted some 13.4% of all clothing shoppers through its doors. Although not all of these visitors would use BHS as their main store, many would buy one or two products – helping BHS attain a respectable 2.3% share of the clothing market. Last year BHS pulled in just 8.2% of all clothing shoppers with a 1.4% share of the clothing market."

Retailers such as the aforementioned Debenhams and M&S, which are themselves facing stronger market competition in the fashion space and have been prompted to reconsider their strategies in an increasingly digital world, are evidently making moves to evolve their respective propositions in order to meet modern consumer demands. BHS, it seems, did not do enough in this area.

"A firm that lacks relevance but has a sound financial footing has a chance of reinvention," noted Saunders.

"A firm that has relevance but lacks a sound financial footing has a chance of attracting investment. Sadly, BHS has neither. It is a firm that is out of step with modern consumer tastes, which lacks the finances to enact the major changes required. As such, it is now a retailer that is out of time."

The analyst also labelled stores outside of its flagship shops, "tired and dull", which he argued was a reason for declining footfall despite their position in prominent locations across the UK. While many retailers have been quick to update their property estates with new systems and customer-facing technology, BHS has seemingly lacked widespread investment in this field.

Jason Shorrock, EMEA vice president for retail industry strategy at tech business JDA, said that there could be further casualties on the high street if retailers do not adapt their operations to meet the needs of today's consumers. He suggested that a combination of fragile economic conditions and "the disruptive force of online retailing" will continue to have an impact.

He commented: "The questions facing retailers are tough: as online continues to cannibalise store sales, how do they deal with a decline in store profitability due to fixed occupancy costs?

"How do retailers address the additional costs associated with an online business without killing their profit margins?"

Shorrock added: "As BHS falling into administration shows, retailers cannot afford to stand still; being able to fulfil customer demand in an intelligent and profitable way is now an imperative.

"Indeed perhaps the toughest question retailers need to ask themselves is: are we changing fast enough to survive?"

Duff & Phelps said today that it is looking to sell BHS and confirmed that the business will continue to trade while a buyer is found. It also indicated that all online orders will be processed as usual.

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Conlumino

JDA Software

Fashion and homewares retailer The White Company says it hopes to have added agility to its inventory management capability following a recent investment in its systems.

The UK-based retailer has upgraded to Belgian tech firm Zetes' latest in-store management solution, which it says allows managers faster access to real-time stock information than before.

The cloud-based technology is used for wall-to-wall stock auditing, with information immediately made available via The White Company's ERP system once store staff have scanned an item. The ZetesAthena tech is used for receiving goods, stock checking, price management, inventory management, click & collect and returns management.

Colin Blake, head of loss prevention at The White Company, commented: "As a growing retailer we required the latest stock management solution that would give us real-time visibility on our stock levels."

He also suggested that the retailer will be looking to add new functionality over time, and credited the system with having the agility to cater for this process in the months ahead.

Last year saw The White Company launch a website in the US, and it is understood that stores across the Atlantic will follow in due course if suitable locations can be found. The business operates over 50 shops in the UK.

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Zetes

Sofology is putting technology at the heart of its supply chain and distribution network, which it says has helped improve the visibility and flexibility of its delivery operation.

The sofa retailer – until recently known as Sofaworks – shifted from a centralised planning system which did not allow customisation of delivery routes to take into account local knowledge or real-time incidents. Working with telematics provider, Communicate Better, the business chose and invested in a customisable system that links with its existing technology and is expected, in time, to reduce operational costs and improve customer service.  

The tool chosen by Sofology was the Maxoptra platform, which is part of fleet software group, Magenta Technology. It is now deployed at each of the company's regional depots and is used to schedule and route all deliveries, while its integration with TomTom telematics Webfleet means specific jobs or routes can be automatically allocated and dispatched to drivers according to a range of operational requirements.

Ian Millard, group transport manager at Sofology, remarked: "We chose Maxoptra as it was very cost effective yet offered us the flexibility to increase and decrease our fleet as necessary to take into account seasonal fluctuations in service demand."

He added that the new technology allows the retailer to share real-time information using a 'track and trace' screen, which gives other departments visibility of how each vehicle or team is performing.

Sofology operates a fleet of more than 70 commercial vehicles from six distribution centres around the UK. It completes over 500 deliveries daily and more than 3,000 deliveries each week.

Earlier this month, meanwhile, furniture and floorings retailer SCS announced that one of the operational highlights from its first half of trading was the successful implementation of route planning and central arranging initiatives, which it claims has improved efficiencies in distribution. The company did not name the technology provider it is working alongside.

SCS gross sales for the 26 weeks to 23 January 2016 were up by 10.2% year on year to £145.4 million, while the organisation's operating loss of £3.4 million was an improvement on the £5.3 million loss from one year before.

The retailer also cited a positive partnership with department store chain, House of Fraser, where concession gross sales were up by 18.1% year on year. The retailer's eCommerce platform saw sales rise by 17.3% to £4.3 million.

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Maxoptra

Communicate Better

Fashion retailer Topshop is working with innovation incubator group, L Marks, to try and unearth new wearable fashion technology concepts.

The Arcadia Group brand has established the 'Top Pitch' initiative, which will encourage pre-retail entrepreneurs and start-ups from around the world to develop a new product that is "in demand with the Top Shop customer".

Entries are open now and will close on 22 May 2016, with the scheme fast-tracking people who have the best ideas in fashion tech to enter a month-long, bootcamp-style programme involving coaching on how to bring products to market. In addition, successful applicants will gain access to workshops covering subjects such as how to grow a business and how to develop hardware, while they will also be able to frequent desk space in a dedicated Top Pitch hub based in central London.

L Marks already works alongside department store chain, John Lewis, for its JLAB tech innovation scheme, which looks to support the development of new ideas, drive innovation in retail and, potentially, identify a solution that the retailer can implement into its existing operations.

Whereas start-ups participating in JLAB will have access to a dedicated micro-fund of £200,000 attached to the programme, in exchange for equity in their company, there is no formal prize money on offer for those involved in Top Pitch. However, with Topshop's move into wearable fashion tech, which recently saw it partner with Barclaycard's bPay to make a number of its accessories ranges available to use for contactless payment transactions, it is clear the retailer is on the search for new ways it can insert technology into its fashion offering, which could pave the way for future opportunities for successful concepts.

Sonia Wieser, programme manager at L Marks, told Essential Retail: "What L Marks is doing with Topshop is quite different from other corporate innovation programmes: rather than being an open call for innovation, Top Pitch is specifically looking for fashion forward wearable tech products.

"What's special about this programme is the approach we're taking, as the successful teams participate in a one-month long bootcamp programme that not only helps them develop their product further, but prepares them for their unique pitch opportunity by introducing them to key Topshop executives and helping them with hardware support and fashion industry insight."

Applicants who make it on to the scheme will be able to tap into the expertise of key figures in the industry, with mentors including fashion, business and technology journalist, Rachel Arthur, Topshop fashion director, Maddy Evans, and Technology Will Save Us founder, Bethany Koby.

The teams will also be given exclusive access to Topshop's executive board, including chairman Sir Philip Green.

News of the Top Pitch initiative comes at the end of a turbulent week for Green, who has been at the centre of a row surrounding the fall-out from BHS's slip into administration on Monday. The company, which failed after mounting annual losses and a pension deficit of £571 million, was last year sold by the Arcadia boss to Retail Acquisitions for £1.

Green is set to face a cross-party parliamentary probe into what part he played in allowing the pension deficit to grow as the business moved towards collapse.

The new innovation initiative offers Arcadia some positive public relations material after a week of wide criticism for its leader.

Commenting on the launch of Top Pitch, Stuart Marks, chairman of L Marks, described it as "a great opportunity for entrepreneurs working on a wearable technology product"

"When presenting to buyers, it is always better to know them really well," he added.

"What better way is there to learn about Topshop than work in collaboration with them for four weeks, developing your brand and strategy as well as the direction your product will take. I'm excited to see who can make the most out of this opportunity."

Meanwhile, in the US, the country's largest retailer, Walmart, is also on the hunt for innovative tech suppliers that may be able to help move its business forward.

In October, the grocer is holding its 'Technology Innovation Open Call', which will see its leadership team meet with companies creating the latest technology for retail, logistics, big data, security and social media. These firms will have an opportunity to pitch their innovations to Walmart, with the potential to become part of one of the word's largest retail operations.

The submission deadline for potential selection in the programme is 22 July 2016, or the first 250 submissions.