London's Fortnum & Mason department store is steeped in heritage. Enter from Duke Street, and you are greeted by two statues of footmen holding elaborate candlesticks - the origin story of the store. Head up to the third floor, and there is a subtle blend of the store's history and wafer-thin digital screens flanking event areas and a cooking studio with 4K video cameras in the ceiling. About turn, and you are faced with wicker hamper baskets.
Combining 18th Century splendour with online digital services has been the responsibility of Jon Weg, Chief Transformation Officer at Fortnum & Mason since October 2020. In 2020, retail was dealing with a pandemic and its resulting shift to online shopping and supply chain issues. It was clear that digital would play an increased role in retail, but that role had to reflect the nature and experience of the retailer. For Fortnum & Mason, the physical store is arguably more important than for other retailers.
The luxury retailer was founded in 1707 by William Fortnum, a footman to Queen Anne, with the backing of Fortnum's landlord Hugh Mason. Weg says of his organization:
We're the world's best corner shop and it feels very much like being part of the family when you work here.
It's a corner shop that invented the Scotch Egg in 1838 and stocks high-end luxury foods at its stores in Picadilly, Royal Exchange in the city, the St Pancras Eurostar European rail station, Heathrow airport and another store with a restaurant overlooking the harbour in Hong Kong. A visit to Fortnum & Mason, especially for afternoon tea, is one of London's unique cultural and retail experiences for shoppers, tourists and foodies. Its Piccadilly store is the jewel in the Fortnum & Mason crown, which houses the new food and drink studio, a gin distillery and the 3’6 bar, serving that Scotch Egg. These combine to create the hallowed omni-channel experience that retail strives for in the 2020s. None of the tradition is lost, but technology is available everywhere; Weg says:
My role has been to transform this business as our future becomes more digital to meet the needs of our customers, who themselves are more digitally savvy and connected. To ensure their experience is as frictionless as possible whether they are buying our wonderful products, dining in our restaurants or attending one of our engaging events.
Weg joined Fortnum & Mason with a wealth of experience from retailers and luxury goods firms that have, and continue to walk the tightrope of balancing in-store and digital services. Before joining Fortnum & Mason, he was CIO for The Body Shop for two and a half years and spent 12 years with Burberry prior to that. He says of that experience:
Most of my career has been about improving the customer experience, through leveraging technology, and that was also important to Fortnum & Mason, in appointing me.
Online sales account for over 30% of revenue for Fortnum & Mason, and the business is investing in the digital offering. Weg says:
Online is an increasingly important part of our mix, with customers often searching for products online before coming into the store, even if they don’t purchase online. Plus they may well be attracted to book one of our Food & Drink Studio experiences while they are looking at our website.
Customers can now use an online hamper finder to select the right gift hamper, and a customer service chatbot supports channels such as Whatsapp and Facebook Messenger, or directs a customer to a human agent when needed.
Ruby and tigers
These subtle digitizations are the latest results from Programme Ruby, named after ruby chocolate, another culinary achievement in the history of the store. Programme Ruby set out to deal with pain points that impacted the customer. As Weg joined during the pandemic, inevitably, Programme Ruby dealt with online related customer pain points, he says:
At times during the pandemic, almost half of our revenue was online, and during Christmas 2020, it had been difficult to fulfil customers' online orders, especially for our fresh products with short shelf lives.
Programme Ruby occupied nearly 100 people across the business at one point, which was the equivalent of nearly half of the number of employees in the corporate office at that time. This focus on resolving customer pain points, helped ensure a successful 2021 Christmas:
We tackled online, supply chain, retail and financial issues through joining up the dots in the business. A tokenization project means that a customer transaction can be completed on any channel, whether that is on the phone, online or in-store. That improved the customer experience and enabled a more profitable Christmas.
Not only did Programme Ruby fix gaps in the services, but Weg introduced clear business ownership of projects and products. This has led to a change in the nature of the relationship between business lines and the technology team. Weg says:
A more profitable Christmas and a better experience made all of us realize that we had to work differently.
Now we have Tiger Teams that work alongside their business colleagues in a specific function such as brand or merchandising, to understand and support their needs.
We are now in year three, and we have evolved, and the Tiger Teams are getting much more strongly ingrained in the business. There are three teams focusing on our technology: digital platforms, business system platforms such as our ERP; and infrastructure / cyber security.
A new website front end has been delivered, providing more responsiveness to customers as well as enabling best of breed solutions such as the Chatbot to be relatively easily plugged into the architecture. From a backend perspective, Fortnum’s have been upgrading their Microsoft Dynamics ERP and Store Commerce POS system, increasingly adopting vanilla wherever feasible. Next up is a membership programme, currently in beta. Weg says:
This provides us a great opportunity to test and learn. We are already seeing really high engagement from customers on the initial test programme.
Alongside responsibility for digital transformation, Weg heads up the diversity and inclusion agenda for the retailer. On making inclusivity more than just a target statement with no plan or actions, Weg says:
Fortnum’s is a really inclusive company. We have a belonging network made up of people from right across the organization. It’s more than just a safe space, we celebrate our diversity. As an example, we hold a monthly ‘Breaking Bread’ before the store opens, where someone talks about their religion, nationality or background and our chefs make delicious relevant food that celebrates this and is often extended to a takeover of the employee canteen for lunch later that day.
Retail remains in a fluid state, especially at the diametrically different ends of luxury and bargain retail. If retailers are to deliver experiences as well as goods, then digital will increasingly become part of the shop floor. Fortnum & Mason's history is the result of its founder understanding the customer and how to reach them - that story continues.