CIO update: Paul Coby’s impressions of John Lewis

See also: CIO Summit 2010,Paul Coby keynote speech

Paul Coby will appear as a speaker at the CIO Summit 2011 on the 1st of November at the St Pancras Hotel, London

If anyone thought that Paul Coby’s move from CIO of BA to IT director at John Lewis Department Stores was a slow-down for him, they are sorely mistaken. If anything, the pace has just speeded up for one of the CIO community’s most well-known practitioners.

Meeting him at the retailer’s headquarters in London’s Victoria, it is easy to see how much he is enjoying the new role he has had for around six months. He talks with enthusiasm about the culture and business model he has had to become familiar with in that time.

This is Coby’s first foray into retail and he relishes having to learn new terms that are associated with the retail industry.

He says: “The airline industry reacts quickly, but the pace of the retail business is much faster. It has peaks. Everyone is aware of revenue. It’s all about newness in the assortment.”

There are similarities between air travel and shopping. Both are highly reactive to consumer demand.

They both rely on number crunching to set up an attractive proposition to customers, but whereas BA can stick to a schedule and associated pricing for twelve months, John Lewis — which is never knowingly undersold — has to react to changes in consumer demand and the behaviour of competitors almost instantly.

Coby is one director at John Lewis amongst a management team including MD Andy Street, an operations director Dino Rocos, who focuses on distribution, a retail director Andrew murphy with responsibility for the stores, commercial director Andrea O’donnell in charge of the retailer’s direct and multichannel operations, the financial director Rachel Osborne and HR director Laura Whyte.

Coby says all of the roles he has been introduced to are familiar to him, except for the head of buying. This department procures the retailer’s product line. Every retailer has buyers, but as Coby observes, it’s a role not found outside vertical sector.

He says, “They are key to the business. They are the people who have the sensing and vision of marketeers with the analytical skills of a CFO.”

One of the most exciting product lines for John Lewis at the moment is its fashion offering, which is growing in online sales, even though the retailer isn’t known as a leader in this area. Fashion now accounts for 27 per cent of online sales, says Coby.

He says. “We’ve got some fantastic fashion brands now. Having the teams that know where that’s going is key.”

This illustrates the relationship Coby has had to foster with the buying teams as the retailer’s website becomes an ever more important sales channel.

It’s also an extreme example of the cultural mix he has seen between retail intuition and a commitment to hard numbers that runs through the whole organisation, right to the shop-floor he has found.

Only a few days after he started, Coby was invited to attend a Partner Council for the store. He observed the staff, or partners as they are called because each employee has a shareholding of the company, were at least as concerned about profit as the managers.

The council discussed the adoption of a new no-quibble returns policy which some partners felt was a little too generous and may impact on the company’s bottom line.

As their yearly bonus, which was 18 per cent across the board for the last tranche, is directly linked to that, it’s not surprising that employees are so interested the company’s financial performance.

Coby says the questions asked of the board were direct and the board gave back direct answers. This event illustrates the sort of culture he has to deal with when delivering new IT systems and it may not just be his peers that he has to justify investment decisions to.

Soon after talking with CIO UK, Coby was due to report to another partner council about his impressions and ideas, so he was making sure he was prepared for some hard questions.

In a way, it will be a bit of a baptism of fire into the company, something all of his senior manager colleagues have to face.

Coby has a great respect for his peers and notes the close working relationship they all have together.

He says: “Combination of flair and touch with the ability to react to numbers. Technology has to provide decision support so people can take the numbers.”

The IT strategy Coby is following at John Lewis is around what he calls all-channel retail. It’s the next stage in the development of retailing falling into just one category of high street, direct or online.

Now many leading retailers operate over more than one channel, but the majority are still distinct entities.

All channel retailing makes those channels seamless, so that a sale could be assisted by shop staff, using the internet instore over a mobile phone, or a customer can buy a product online, but pick it up at a store.

Coby is working on systems that have allowed the retailer to offer next day or even same day home deliveries. The 30 or so John Lewis stores which offer click-and-collect services will be joined by around 60 Waitrose stores.

Parents will be able to buy school uniforms online or through a kiosk in the store.

With this in mind, Coby is planning on rolling out a new web platform in 2012 and a point of sale (POS) refresh throughout the estate.

He says: “The existing POS system is literally ancient. It was last refreshed in the 1990s, so it’s well due for a replacement.”

To support this in the back-end, Coby is also looking at integrating the distribution centres (DCs) more fully with store systems.

Coby talks with enthusiasm about John Lewis’s distribution network. The automated systems within the DCs are a train-set to die for, he says and won’t need replacing, but they do need integrating more fully with the stores and the other DCs.

He says: “As the business grows, it will become more complex. We need to deploy the technology to support that.”