Shop Direct: building a digital-first business

When it comes to digital innovation, Shop Direct is at the forefront of the field. From its catalogue roots as Littlewoods, the brand has redefined its proposition for the online generation, and is now reaping the rewards of technology investment.

Retail Connections spoke exclusively with Geoff Scully, Managing Director of Shop Direct Ireland (Littlewoods Ireland), about the company’s current tech strategy – and where it will be investing next.

Tell us more about your role at Shop Direct

As Managing Director of Shop Direct Ireland, my role is to set the vision for the business, and to develop our leaders and colleagues. Culture building is really important for us because we have transformed into a more agile business, and we need to ensure we have that same nimble mindset in order to keep serving our customers better.

What does a nimble mindset mean for your business?

The organisation is 38 years old in Ireland and 100 years old in the UK, and so everything was set up to deal with paper. Becoming a digital-first business has been a great challenge not just in terms of the technology we need to be truly real-time, but shaping the way our company works to meet the demands of the digital consumer.

Our infrastructure transition and people transformation started in 2007, and the benefits are really starting to come to fruition now. While at group level we have had to break down a lot of siloes to create the right culture, in the Ireland part of the business the biggest challenge has been making sure the customer is the centre of everything.

To achieve this, we have created the opportunity for our workforce to receive a higher grading based on their participation in our CSR, social media and content activities. This really helps to onboard people with our business strategy, so they understand why we are doing what we’re doing.

You recently reported an increase in full-year pre-tax profits, attributing much of that success to technology. What are your tech priorities now, and what benefits have you seen from the technology you have already invested in?

There is an absolute focus on making the experience easier for our customers. A lot of that will be driving personalisation; offering the best experience every time they visit our website, and showing them content that is relevant to them.

We’re also investing in our customer service offering, using technology when people come to us with a query. Some of this means going down the self-serve route, and some means giving staff the technology to give smarter answers. It’s about combining machine learning with human skills.

62% of your sales now come from mobile. How has that shaped your strategy, and how will it continue to shape your strategy?

Mobile is the first consideration for us – it actually accounts for a higher proportion of sales in Ireland, around 68%. We have really embedded mobile into our organisational culture in Ireland, particularly within our design and creative teams.

We have customers who do nothing but shop with us on their phones, and that is part of the reason we are following in the footsteps of the UK and launching an app in Ireland early next year. We hope it will result in more frequent customer engagement.

Looking ahead to 2017, what market influences will shape the retail sector?

Clearly Brexit will be an ongoing topic for discussion, and there are positives and negatives for businesses in Ireland. Around 40% of our exports are to the UK, which will have a significant impact on margins, but the currency is good for Irish consumers.

What kind of Brexit we have will really determine how things develop in the medium-term, so we need to see how things play out over the coming months.

We will also see growth in the online shopping market in Ireland, which is less mature than the UK. This will inevitably attract more competitors, but that’s not something we are afraid of. We are the market leaders in digital-first commerce, we’ve already been on the journey those other businesses are embarking on, so we see the market getting bigger for us locally.

What will Shop Direct’s business priorities be for 2017, and how will this impact the technology you are investing in?

It’s too early for us to comment on specifics, but machine learning, AI, AR and VR are all on our radar at group level. As for Ireland, we need to continue building audiences. Great content is becoming increasingly important for engaging with potential and existing customers, and we need to make sure we can deliver this in the channel that suits them, not just the channel that suits us. That is how we continue to make sure our brand is relevant.

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