Andrew Rafferty jokes that as IT and eCommerce director of UK grocer Booths – which doesn't currently operate an all-year-round online retail operation – he only has half a job.
The truth, of course, is somewhat different, especially as the 28-store northern supermarket chain faces up to the headwinds and digital transformation challenges impacting the wider grocery industry.
With continuing price deflation, ever-growing competition and organisational upheaval a stark reality for the majority of players in the food retailing sector in the UK, the job at hand for anyone sitting on a supermarket operating board cannot be underestimated. Nearly a year on from Booths' most extensive store opening period for some time, and some major damage that forced the temporary closure of a top-performing store in the 2015 storms, Rafferty and the senior team around him have had plenty to keep them occupied over the last two years.
Talking to Essential Retail, Rafferty explains that despite the pressures of the modern grocery industry and the challenges of keeping up with "some of the best retailers in the world" operating in Booths' space, it is an exciting time to be at the heart of it. And he explained there are significant opportunities for his technology team to help shape the future of the business and play a prominent role in the company's current growth strategy.
"What's always exciting and interesting at Booths is that you have to take those big guys on and beat them in certain areas, whether that's in tech or not," he explained.
"We're tiny in relation to their resources. The idea is to be better or at least as good – and ideally better or more innovative – than what other people can do with a greater resource. That's by no means a complaint – that's probably one of the best things about working here. It means we do fewer things, but what we hope to do is do the fewer things really, really well."
From the technology department's perspective, there are some major projects under way feeding into the retailer's company-wide 'best in town (BIT)' drive to improve five fundamental areas of the business's operations, relating to price, range & quality, availability, store environment and service.
Much of this work revolves around ramping up communication of internal information to help the business make better commercial decisions. Microsoft's corporate social media tool, Yammer, has recently been introduced to store and department managers, and after a successful deployment the plan is to roll it out to all staff.
The mobilisation of the workforce is central to Rafferty and his team's plans, with the company wanting to arm senior staff with tablets on which they can share business (BI) and management intelligence and use this data for commercial gain, in the moment.
"One of the things on our list to crack is how can we make that easily accessible to store managers, heads of department without giving them the BI layer of complexity," he remarked.
"How can we give them three big numbers that really mean something in a dynamic format – whether that's sales ratios or staffing ratios – but presented so they can glance at it on the shop floor and use it to make decisions? We are talking to existing partners about how we can extend that and it's proving quite challenging. I think we want something they don't have."
Rafferty is keen to introduce tools that do not impact the customer experience in store and he is aware of potential problems relating to shoppers seeing staff with their noses in technology instead of talking to consumers.
"It's a tool so they can be more accessible and help our customers, rather than just to look at information on a different screen."
The director reveals there is a quest to find a "killer app" to facilitate that distribution of information but, equally, the company's BIT strategy is not reliant on locating this technology. "If we can do 50 things a little bit better that's fine too," he says.
"It might not matter that we don't have a killer app because if we have loads of things that help customers and staff a little bit, the effect of all of it will hopefully be more substantial."
Highs and lows of tech vendor partnerships
Booths has been working with Finnish supply chain technology Relex to modernise its inventory management systems, and related forecasting and replenishment processes.
Working with Relex gives Booths the chance to flex its new strategy in this area, which includes ramping up the number of deliveries to stores and better analysis of inventory. "Like any tool, it's your setting priorities that allow you to be successful, but without Relex we wouldn't have the tool to make the changes."
For the central systems, Booths is typically a Microsoft house in that its servers are SQL-based and it uses Microsoft Dynamics in tills and back office finance. In terms of IT strategy, if something is going to be "really core" and amended in the future then Rafferty will seek technology with developer capability.
When it comes to more peripheral products and some other areas, he says he is "relaxed about buying that in and allowing them to run on their own". The company's electronic point of sale is all enhanced in house and the company has a developer dedicated to doing nothing but making improvements in that area.
One recent significant investment centred on Wincor Nixdorf's self-service tills in stores, and around a quarter of Booths customers are now using this equipment in the shopping journey. They have been introduced where without them there would only be two traditional checkouts, so the retailer expects it will improve the experience for some of its customers and help them get out of the store quicker than before.
Working with third-parties and creating software and solutions in-house provides wider opportunities for the business, which Rafferty says is a selling point for working in IT in today's retail world.
"I'm sure all our business functions can add benefits or improvements to the stores, but I think IT is really well placed to do that mixture of saving costs, efficiencies and improving processes, as well as the more joined up thinking and automated systems.
"We can help the rest of the teams make better decisions and improve customer services."
Rafferty does not mention any names, but he says that his limited experience working with big technology companies at Booths has not always been favourable. His comments should make interesting reading for any tech company looking to pitch their wares at the northern grocer any time soon.
"When you're at the sharper end of a inflexible output from them we'd normally expect a reasonable chat and some give and take; perhaps it's less forthcoming because they are not geared up for that," he remarked.
"It's hard for a company of Booths' size to be treated by very large vendors. We are always concerned we wouldn't get the support or interest we are normally getting from most of our vendors because typically we use modest, medium-sized vendors or smaller ones because you can have a closer relationship and in general you're more significant to them."
He added: "At times we've had to be patient to deal with the large bureaucracy. We get frustrated with processes for big vendors which seem simple to us because we're used to dealing with a handful of people in a company."
Grocery's great challenge
Although the 18-month rapid store opening programme, which ended last year and saw five new stores opened, was a sign of Booths' intent to bring its offering to more customers and grow the business, it created significant challenges for an organisation that typically opened one store per year. That and the widely documented grocery headwinds, supermarket price war and other factors relating to the storm – which saw the Booths in Keswick close for a number of months and replaced by a pop-up to serve the local community – played their part in eating away at the bottom line.
Widespread flooding affected much of the Booths heartlands, with the Keswick shop closing just before the critically important Christmas season. Two other Booths stores were flooded at that time, in what was a difficult period for the business and the local community it serves. Tourism numbers in Cumbria are still down this summer as the region continues the process of recovery, highlighting the far-reaching impact of the floods.
Meanwhile, like the big four UK grocers Booths has not been able to avoid job losses, with around 100 management roles cut back in the spring of 2015 as part of an operational reorganisation in reaction to market forces.
"We're not isolated from the changes going on in the grocery market," Rafferty commented, reflecting on how the rapid roll-out of Aldi and Lidl stores in the UK over the last few years has significantly changed the grocery market dynamics in the country.
"If you look at the big four over the last 18 months they are all up and down – and more down than up to a large degree – we are not exempt from that.
"The influences of the substantial branch opening programme of Aldi and Lidl affects us. There are some sites where they've opened next door or half a mile down the road. Any competitor of any shape or size opening will impact you, just like when we opened our five new stores that would have affected someone else."
Rafferty added: "That rough and tumble of retail impacts us just like it does the rest. When you have someone coming in with a different offer to Booths and they are good at what they do and it isn't all about the lowest common denominator then that's an impact.
"From a corporate business view, you have to think hard about what our offer is. This is underpinning the set of projects we're following. We need to focus on delighting our customers – it's the best way of ensuring we grow."
To sell online or not?
For now, the only eCommerce being offered at Booths is around the Christmas and new-year period, which comprises national home delivery and click & collect for the retailer's full Christmas range, including hampers. A "full-fat" online retailing operation, as Rafferty labels it, is not yet on the agenda, but the annual festive eCommerce offering – which in 2016 runs for the third successive year – is helping the organisation learn about what e-tailing entails.
"We are not saying "never" but what it turns out to be is yet to be decided – even Lidl is getting into it with wine and you get the feeling they are doing it to learn.
"A lot of companies have gone full fat eCommerce and got their fingers severely burnt. It comes down to our core proposition and what people really like about Booths. Provenance, touch, taste, smell and colleague engagement – all of which is impossible to replicate online. If we do it, it has to be a different proposition.
"If something isn't going to help our customers we shouldn't be talking about it."
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