John Lewis' CIO - looking for retail's next multi-channel 'big idea'

John Spedan Lewis, the founder of British retailing group the John Lewis Partnership, was a radical innovator.

Believing that “it is all wrong to have millionnaires before you have ceased to have slums”, he instigated a co-ownership model at the company that is still in place today and sees its 91,000-plus employee-partners take a share each year in the company’s profits.

It seems likely then, that he’d have approved of a new initiative launched this week that will see the retailer launch a new technology incubator - JLab - to find the next ‘big thing’ in retail IT.

After all, after the happiness of the company’s workforce, John Spedan Lewis’s next priority was good service to customers - and it’s no secret that today’s technology-enabled, multi-channel customers are more demanding than ever.

The JLab initiative, launched as part of the retailer’s 150th anniversary, aims to tackle those two priorities head-on, says John Lewis CIO Paul Coby.

“It’s about inspiring customers, certainly,” he tells diginomica, “but it’s also about delivering technology to our partners that will revolutionise the ways they serve customers, both on the frontline and in the back office.”

The idea is to identify five start-up companies with great ideas and work with them between June and September this year, over two eight-week ‘sprints’, to explore how John Lewis can use technology to drive innovation and to trial new services.

During this time, each of the five start-ups will receive £12,500 in investment, along with a base at London’s Canary Wharf, and mentorship from Coby, British technology entrepreneur Stuart Marks and others from both inside and outside the John Lewis Partnership.

At the end of the process, the overall winner will receive a further £100,000 in investment, comprising £50,000 from John Lewis and £50,000 from Stuart Marks.

Coby is looking for ideas in three main areas:

• Customer experience
• The Internet of Things
• Big Data

In terms of customer experience, two-thirds of John Lewis customers shop across more than one of its three main channels: in-store, online and mobile. “They check out products online and buy them in-store, for example, or talk to our partners in-store and then buy online," says Coby and the target here is improving the way this “omni-customer” shops.

The second area focuses on the ‘Internet of Things’: as smart devices increasingly communicate with each other, customers will demand products that enable them to create a more connected home.

The third area is all about Big Data: “We want to know our customers better, to understand how we can drive real-time personalisation of online and in-store offers,” Coby says.

Here, in particular, Marks will have a great deal of insight to offer, as the man who spearheaded supermarket chain Sainsbury’s Reward Card, the forerunner of its current Nectar loyalty programme. (You should also check out Derek's excellent article on this same subject here.)

But Coby is open to other suggestions, too: “We could just as easily add a fourth category: ‘Surprise Us’,” he says. “There may be incredibly valuable ideas out there that don’t fit into these categories and we definitely still want to hear about them.”

How to handle the IP?

What’s less clear right now is how John Lewis will handle the intellectual property issues that will undoubtedly arise from working with hot new start-ups with ground-breaking technology. What’s to stop them from working with other companies in the highly competitive retail space?

“In terms of JLab’s terms and conditions, these will be nailed down nearer the time, because they will depend on what the innovative product turns out to be,” says John Lewis Partnership spokesperson Vikki Speed. “Until then, we can’t really say how that will work.”

Another question: doesn’t Paul Coby, as CIO of a company with annual revenues of over £10 billion, see a constant stream of retail technology hopefuls, vying to sell him their products?

“I see more than I can cope with,” he says. “In my job, there’s a lot of technology coming at you from small, medium and mega-large companies, but what you don’t always get is technology that’s smartly applied to retail challenges and retail opportunities.”

Alongside JLab’s Canary Wharf workspace, funding and access to mentors, he adds, “the really big advantage we’ll give the five companies that we pick is the chance to expose their products or applications to real-life stores and real-life customers.

"That’s what will make the difference. There’s an awful lot of technology out there, but the trick is to apply it and use it produce services that people will want and enjoy - things that will add value to our partners and customers.”

Last year, John Lewis scored a major hit with its animated 2013 Christmas advertising campaign, The Bear & The Hare, which to date has notched up almost 12.5 million hits on YouTube.

None UK readers - watch it with a tissue ready to wipe away the sentimental tears... then bear (pardon me) in mind that this ran on virtual loop on TV for weeks before Christmas last year!

For his part, Coby says that his favourite John Lewis ad, since he joined the retailer from British Airways in March 2011, was the ‘Never Knowingly Undersold’ campaign of 2012, which featured a love-struck couple, divided by decades, and the Paloma Faith version of the INXS hit, ‘Never Tear Us Apart’.

“For me, that ad was about how the core values of John Lewis persist, even in a retail world totally revolutionised by new technologies,” he says.

“It sums up what we’re trying to do with JLabs, taking the things that matter to customers and the things that they value about John Lewis - their experience, their trust in the brand, how they’re treated by partners - and then taking that into the modern world.”

The closing date for start-ups to enter the programme, via the jlab.co.uk website, is 17 April 2014.