by Divina Paredes

CIO50 2019 #12: Shane Lenton, Cue Clothing

Mar 28, 2019
Artificial IntelligenceBusiness ContinuityBusiness Intelligence

“From a ‘fast follower’ of retail trends a few years ago, we are now a leader in retail innovation,” says Shane Lenton, CIO at Cue Clothing.

He says the company’s transformation programme began with ‘stabilising’ core systems to improve existing IT performance, followed by ‘optimisation’ innovations to improve employees’ work.

“Today, we’re focused on ‘disruptive’ innovations that are accelerating business agility and competitive advantage,” says Lenton.

He says with its unified commerce platform and use of APIs, it’s now easy for the company to partner with startups and tech companies to take advantage of new capabilities and deliver results at a speed and scale that would be unachievable within a traditional omnichannel model.

“By using our 240-plus stores across New Zealand and Australia to create a competitive advantage, we’re taking on global online leaders and changing the way our customers shop.

“Adding new channels and services is no longer a case of ‘how?’,” he says. “Instead we think ‘what’s next?’”

Building the foundation for transformation

He explains the transformation programme provided Cue the foundation to deliver a raft of innovative offerings to customers and build a disruptive competitive advantage.

Cue, he says, was the first brand in the world to launch Afterpay’s ‘buy now, pay later’ option in stores, and one of the first brands to launch Afterpay online.

Its store-to-door uses the store network to deliver items direct to customers at their preferred location on the same day via the fastest route at the lowest cost.

He says Cue is one of New Zealand’s first fashion retailers to launch an ‘endless aisle’ solution that allows customers to shop the entire range at any touch-point in real-time. Its 30 minute click–collect is one of the fastest online fulfilment options in New Zealand.

Cue is also the first New Zealand company to have couriers accept receipts printed on POS printers as shipping labels, making store-to-door fulfilment less costly. Doing this has enabled a 30 per cent saving in shipping costs, he adds.

AI plays a critical role in providing a more personalised customer experience, both online and in store.

On the websites and via email and social media, Cue provides individual product recommendations based on a combination of the customer behaviour, CRM data and AI.

He says customers receive personalised e-receipts for store purchases, which use AI to include targeted product recommendations.

“We are one of the first fashion labels to give customers a tool to search for styles one the website by uploading images of looks from their phone,” says Lenton.

This AI technology was developed with Alibaba Cloud. StyleFinder uses machine learning to improve results and better product matches over time.

They were also one of the first to introduce an integrated Paypal refund solution in stores, he explains.

Lenton says having a flat organisational structure creates a remarkable opportunity for staff to develop and share good ideas and innovative thinking. All of these translate to their customer focused programmes that are enabled by technology.

Lenton augments these by intensive market research.

“By studying the market, we can introduce fresh and innovative ways of thinking. We research consumer behavior, foster relationships with industry leaders and innovators, and attend/speak at industry events and conferences,” he says.

The customer-focused innovations have delivered enormous value to the business.

Lenton says the raft of business innovations over the past two years meant the company is on track to increase annual sales by over 18 per cent.

Online sales have increased over 300 per cent since the launch of the localised website for New Zealand 12 months ago with endless aisle filling orders from stores, he says.

Meanwhile, 20 per cent of click-and-collect customers buy an additional item when collecting orders. Customers using new payment options are spending more and shopping more frequently, with 30 per cent of online payments now via Afterpay, says Lenton.

Cancelling ‘channel conflict’

Lenton says he worked to eliminate structural and operational barriers and cultural behaviours that would discourage innovative thinking.

A key example is the way they manage the ‘buy anywhere, fulfil anywhere’ initiatives.

“First, we had to eliminate channel conflict for instore staff to see the benefits of ecommerce sales and support tight turnarounds on orders. Second, it was important to provide the visibility and tools to monitor and manage the end-to-end process to ensure the best outcome for our customers.

“We devised elegant solutions to achieve these goals without any additional staff or overheads,” he says.

All the teams involved in the sale received incentives. The store and the individual filling the order are rewarded with the sale so there’s an incentive for instore teams to action orders as soon as possible.

Strict SLAs (service level agreements) were enforced. A reporting dashboard enables the office to oversee store fulfilment. They receive an alert if a click–collect order is not acknowledged within 10 minutes and they contact the store to action the order.

Cue offered easy returns. “We push refunds and exchanges back to the original sale location, so stores no longer have a negative impact from online returns.”

With the introduction of the “endless aisle” solution and enabling our customer care team to be able to utilise this offering, he says, the customer care team is now a profit centre.

Lenton stresses that all these successes is as much about people and processes as it is about the technology.

“Helping my team manage their careers, build new skills and gain success is a top priority,” he says.

Lenton leads a diverse team, whose age ranges from teens through to mid-40s, and they come from five different ethnicities. Sixty five per cent of team members are female.

Lenton ensures his team have the opportunities and access to a range of courses, including certifications, video-based training, correspondence and offsite courses and hands-on development.

His focus on the people side of digital transformation is brought by his belief that the CIO’s role is not just about managing IT, but also driving a culture of innovation.

The 50-year survival plan

“To ensure that our business can survive and thrive over the next 50 years, I have described our digital goals and approach to innovation in a Digital Plan,” he explains.

He shares this plan internally and also externally so that the teams understand their mission and strategy, and how technology is creating new levels of innovation and creativity to create the seamless experiences that customers now demand.

Thus, when asked his most important leadership lesson, he says it was how to motivate people through organisational change.

“When you are introducing change, challenging entrenched processes or disrupting established routines, it’s critical to get buy-in from all the people involved,” he says.

He notes how most people prefer stability and can be reluctant to learn new skills or change their day-to-day habits. This can make change a difficult and daunting process with a high risk of failure, he adds.

When Lenton joined Cue 10 years ago, the company had a legacy system to manage the production of garments, from design through to manufacture.

“It was in dire need of replacement. The hardware and software was unsupported, and most areas of the business still used manual processes and spreadsheets,” he says.

He knew managing a large-scale transformation and the needs of a very diverse group of stakeholders with different views and personalities was going to be a challenge.

Many of the staff had worked in the business for some time and were very comfortable with how things then worked.

“With a business our size, we couldn’t just create a dedicated project team. Everyone still had their day jobs,” he explains.

“However, while there was a big risk from making the change, there was an even bigger risk from no change at all. I knew that for the project to succeed, we needed to take a holistic approach.”

He and his team worked closely with the key stakeholders to ensure a deep understanding of their requirements and how they worked, and that decisions were driven by known needs and not assumptions.

“We mapped out the business processes so it was easier for everyone to understand how everyone worked, and we found opportunities to streamline and optimise end-to-end processes,” he explains.

“Armed with a detailed set of business requirements, we went to market, selected a new platform and successfully deployed it across the business,” says Lenton.

“We’re now regarded as a leader in quality fast fashion – we can go from design floor to store in only four weeks.”

“For me, the critical factor was taking the time to talk to users and include them throughout the process. If you don’t fully engage your stakeholders, then you’ll just encounter resistance and your initiative is likely to fail.”