M&S: Navigating retail technology’s shifting sands
Photography: Enno Kapitza
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M&S: Navigating retail technology’s shifting sands

Jim Mortleman & Clare Simmons — February 2016

Matt Horwood, CTO of UK retail giant Marks & Spencer, outlines the challenges of building a road map in a sector where digital change is running wild.

As a company that’s been in business for more than 130 years, Marks & Spencer knows a thing or two about adapting to change. At the recent Fujitsu Forum, M&S CTO Matt Horwood outlined a slew of disruptive technology trends that are set to revolutionize retail as we know it – from mobility, the cloud and big data to the Internet of Things (IoT), artificial intelligence and augmented reality.

Image: Reuters 

“We’ve spent a couple of months building out road maps for everything within the technology area, understanding where we’re investing now and where that investment will take us over the next two to three years and beyond. I’ve got my best architect working on it, I’ve got engagement from the business heads and I’ve got engagement from our most senior IT people,” he said.

And while he noted that the sheer pace and breadth of change meant it was impossible to predict precisely how this combination of trends would shape the retail business over the coming years, it was vital to be as well prepared as possible. “Ultimately we’re planning our strategy now around how can we react to change, not just how we invoke change ourselves.”
New horizons

The IT megatrends of big data, cloud computing and mobility are already embedded in the company’s thinking and IT investment. “They’re just part of our IT landscape now — health and hygiene factors,” he said. “If we cannot capture data, if we cannot invest in solutions in the cloud and if we cannot deliver solutions on mobile devices, then we’ll be prevented from adding value to the business.”

Ensuring that M&S is in a position to realize that added value means paying close attention to other technology trends that until recently would have sat in the box marked ‘blue sky’ — artificial intelligence (AI), for instance. “We’re generating all this information, and the only way we can start processing data at these kinds of volumes effectively is through the application of AI,” he says.

Smart, voice-controlled assistants are also on the company's radar. By 2020, Horwood noted, analysts predict that these will be the primary means of searching for information. “Voice recognition is moving to the point where it can now understand people and isolate individual voices, even in a crowded environment such as a busy store,” he said. That opens up opportunities for things like smart help points that could understand voice requests, put in an API call to a back-end system to analyze and answer the query, then relay it to the customer on screen or even answer them verbally. “That presents some interesting challenges for retailers, such as to how to optimize your content for voice search,” he said.

“Augmented reality offers fantastic visual merchandising opportunities.”

Then there’s augmented reality, a technology already familiar to smartphone game-players and Google Glass-wearers, where virtual imagery or information is combined with a real-time representation of the user’s environment. Horwood believes, for example, that technologies such as Microsoft’s Hololens — a transparent visor that superimposes 3D images onto the wearer’s field of vision with which he or she can interact — offer “fantastic visual merchandising opportunities.” He said: “Being able to visualize something you would previously never have been able to see in 3D from all angles makes a massive difference when we think about what a store looks like and how it will be operated.”

The company has already invested in ‘smart mirrors,’ which allow shoppers to see an image of how they looked when wearing an item a few seconds earlier. “That sounds boring but when you're in a changing room and want to see what a dress looks like from the back it's actually quite useful,” he said. When smart mirrors are combined with augmented reality, they will become even more powerful, allowing people to try on clothes ‘virtually.’

“Until fabric modelling is sufficiently high definition you can't really see how an item of clothing ‘flows,’ but we’re pretty certain the technology’s going to get there in another couple of generations. The real inflection point for us will be when it becomes commoditized — then smart mirrors will start to make a real difference to the way consumers shop,” said Horwood.

No fixed road maps

As well as revolutionizing how people shop, new technology is also bringing big changes to the way in which retailers manage their back-end operations. For instance, M&S is already the UK’s biggest retail user of RFID tagging technology, with 98% of its general merchandise now tagged. While that speeds up stocktaking and inventory management, more advanced tags will in future become part of an M&S Internet of Things, which will offer even greater operational efficiencies (no more walking around to scan tags, for instance). It will also open up more opportunities on the customer side. For example, providing data that allows M&S to improve the placement and movement of goods. “The data could tell us how the distribution of our products around the organization could be optimized in real time to meet the needs of pending or active orders,” he said.

Horwood said M&S has also looked at potential opportunities to exploit other emerging technologies, such as systems that allow consumers to personalize and customize products, wearable computing, beacons, and 3D printing and scanning. He also noted that the technology road maps will undoubtedly change as the retail landscape evolves at an ever-greater pace. “We know [our road maps] will erode not just in months but increasingly in weeks,” he said. That’s why, he explained, his focus today was on preparing M&S to be ready for all likely eventualities.

“All our systems must be able to be migrated across hybrid cloud platforms. They must be elastic — able to move, stretch and scale.”

“It is about making sure we have an absolute focus on building out our big data analytics capabilities; that our ERP systems don’t hold us back; that we have an agile engineering capability; that we can treat all computing needs as a utility; that we can deploy our systems on any mobile platform; and that our integration capabilities, API capabilities and service capabilities can expose our data wherever and whenever we need to expose it. As well as that, everything has to connect and be appropriately secured,” he said. The latter point was one of the things that “keeps me awake at night,” he confided, particularly since big retailers seem to be facing increasingly hostile hack-attacks.

M&S is also working to ensure its systems are fully scalable and open: “We’re currently implementing our hybrid cloud and are building a catalog of different cloud providers. All our systems must be able to be migrated across those different platforms. And they must be elastic — able to move, stretch and scale.

• Matt Horwood was speaking at Fujitsu Forum 2015 in Munich.

First published February 2016
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