Mapping out Halfords digital transformation road trip - a lengthy journey through e-commerce, data integration, cloud telephony and ERP

Best known as a provider of car parts, tools and cycle equipment, UK firm Halfords was deemed an essential retailer from day one when the country first went into lockdown last March, meaning its shops could stay open for those wanting to purchase product. Even so, with people cautious about leaving their homes in the early days of the pandemic, the company was to see its online sales figures jump from 20% to 80% of total overnight.

Back in 2018, the organization had expanded its business strategy to evolve into a consumer and B2B services-focused business, with a greater emphasis on motoring and motoring services. By early 2020, the 128-year-old firm  was already underway with a major digital transformation project to support this shift. A key part of this involved bridging Halfords’s physical assets - 440 stores, 367 garages and 120 vans - and the digital elements into one end-to-end, consistent customer experience.

First thing on the route map was a new group website, replacing different sites for different parts of the business and consolidating down to a single user experience. A formal selection process checked out Magento, SAP, Oracle, Salesforce and the incumbent IBM, before eventually opting for Salesforce Commerce Cloud due to its Software-as-a-Service (SaaS) credentials. CIO Neil Holden explains:

We really wanted to go SaaS, so [we’d have] no more upgrades and that's exactly how it works - and it's pretty much the only platform that can do that.  The others have a SaaS offering, but it's very much Platform-as-a-Service rather than Software-as-a-Service.

What we were trying to avoid with the website was spending the nine months it took us (which is a pretty good timescale to do it all in ), getting to the end of the implementation process and then having to go straight into a major upgrade, because that’s really resource-intensive.”

Cloud telephony

Halfords rolled out the  new website in February 2020, fortuitous timing in light of the online sales boost a month later. On top of that, the company had also completed implementation of a cloud-based telephony system from 8x8 for 4,700 employees and contact center staff. This meant that contact center staff were quickly able to start working from home when COVID struck, helping customers with enquiries, even as the company’s online sales surged. Says Gareth Brophy, head of customer support at Halfords:

I’m going to be honest, it was incredibly lucky - or impeccable timing! The new website had launched, cloud telephony was in place, and it meant we had the backbone so scalability was there. We brought in around 200 extra advisors during that first lockdown and we were able to pull the trigger on that really quickly.

One year earlier, the company’s telephony systems could never have supported that kind of agility, he says, as the different parts of the Halfords business were each using their own legacy technologies.

The integrated cloud communications technology from 8x8 was chosen largely off the back of its intuitive user interface as well as its close integration with Salesforce and the Calabrio Teleopti workforce management system.

As well as enabling Halfords to open up a remote contact center team of agents in South Africa to support the digital retail operation, staff from all across the business were able to muck in from home, says Brophy:

I was very fortunate, really, as a contact center head to be able to rely on the resource of colleagues who are really knowledgeable about particular products, so that my usual core team could concentrate on the standard questions like, ‘Where is my order?’, which was crucial in a period of widespread disruption in the UK. It meant we could manage customer expectations around orders they’d placed, following conversations with a much larger team of knowledgeable colleagues about specific products and services.

At the same time, employees were also able to directly take credit card payments, using PCI-compliant 8x8 Secure Pay, which is provided through partnership with secure payments provider PCI Pal. Says Brophy:

That meant that customers could phone us up and we could place an order on the website on their behalf, take their payment securely and then either have that order sent straight to their home address or to their nearest store for click and collect. So customers weren’t having to go inside stores and they weren’t having to queue, so as well as being part of a valuable service and experience to offer to customers, it was also part of our effort to reduce physical interaction at our stores and keep our customers and colleagues safe.

Service Cloud upgrade

As well as Commerce Cloud, Halfords uses Salesforce’s Sales Cloud and Service Cloud. The next project is to update its current 11 year old Service Cloud implementation to Lightning and then do a re-implementation of the product, which Holden says will be a game changer based on how the technology integrates with the other clouds.

The internal team of around 80 to 100 customer service agents, plus around 400 people based in South Africa, currently have to jump between different screens to find out different bits of information, explains Holden:

We're getting into SAP over here and maybe it's the back end till system and then various different screens in Service Cloud, because it's not set up correctly. With Lightning, all of that is going to go away.

It will be really succinct in terms of agents being able to serve customer queries straight away, have all the right details upfront of who they are, what they've been looking at, what their activity is online, their order history, everything in their accounts. It will provide a much better level of service. And on the Lightning platform, a lot of the integrations through to Commerce Cloud are already just there, so out of the box, it will work.

Azure too

The transformation project also has a major data and integration angle, with Halfords using Microsoft Azure to underpin its new centralized group data platform and its API strategy. This is a huge program of work with massive benefits on offer, according to Holden. The data the company holds as a group around vehicles, bikes and customers offers great value and granularity, but at present, the information from retail shops, customer details, vehicle details and bikes is all sitting in separate systems and in  different places:

The group data platform is there to sit in the middle of all of that. We've started to ingest and hydrate a data lake with all of these data sources. We just turned the taps on and we're just going to leave it running. That's now populating more and more, [with] internal data, such as vehicle data, parts data, bikes, customer orders, locations, and then taking in external data, such as geography, weather, customer sentiment, social inputs as well.

That’s a big load of data, but when you actually layer that up in terms of the insights, it's going to feed our loyalty proposition, which is just kicking off at the moment, and it's going to feed any customer apps that we're considering.”

Part of these plans includes developing a ‘digital garage’ for customers, which will contain information about all their vehicles and bikes, when Halfords last saw their cars, and the age, model, colour and parts of their vehicles, says Holden:

Multiply that by 30 million customers, which is what we've got in our customer database, and we can then layer that up and say, ‘We know you drive a 2000 Ford Fiesta and we know with all the 2000 Ford Fiestas we've ever seen, the predictability of a component part in your car failing is this’. If you're signed up to us and are a part of that motoring club, which is going to be our loyalty proposition going forward, we can tell you this information.

While the firm sees huge potential for this aspect of the Azure rollout, things are still at the very early stages with just a few use cases at present to demonstrate the potential and power of the platform. Halfords hasn’t yet touched any customer data as part of the data lake project, and instead started with stock data, and then vehicle and location data, explains Holden:

We've done real-time dashboards for stock availability and for warehouse productivity because we know that the data there is clean, and there are processes that will de-dupe and clean the data as it comes in anyway. But when we get to customer data, we've got different systems that deal with customers in the group. There's not a unique identifier of a customer, so there's going to be some manipulation and translation needed to be done there. That's next on the list, but the Azure platform has a lot of this stuff built in and we are exploiting that functionality.

SAP stays

Although Halfords is underway with this major technology modernization project, the firm has no plans to rip out and replace all its existing legacy systems, including its SAP ERP platform, says Holden:

SAP is a market leader there. It's just our instance of SAP is on-premise, it's old, the agreements are old and it's not really been looked at more recently. Over a number of years, functionality has been built in, it's been customized and it's crept into different areas, but it's not fit for purpose in those areas, because it wasn't designed to do that in the first place.

We've been very open with SAP about this, and our intention is to exploit SAP for what it’s good at. For finance and accounting, it is absolutely perfect. So our intention is that we take true ownership over the landscape and keep SAP where it needs to be, we look at migrating it to the cloud, and then we look at upgrading it from there to the version that it should be with the right agreement around it.”

Halfords’s Azure-based micro-service and API platform will sit around this updated version of SAP, which then gives SAP the information it needs, and only the information it needs, to avoid overwhelming the system. This was a challenge the business faced in the early stages of lockdown in 2020, with the sudden jump in online sales:

We had issues, more in the back end than the front. The website, even with record trade - it was like having Black Friday every day! - didn't break a sweat and cruised through. In the back end around customer ordering and fulfilment, we saw more problems there. That's purely because our implementation of SAP essentially doesn't even know about the website; it’s more built around bricks-and-mortar. To have that volume coming through the different modules of SAP, that really stressed SAP to its limit.

Halfords still faces some big challenges, but these are not unusual for a retailer and service organization of its size, according to Holden:

We've got big legacy systems to face into, we've got a lot of technical debt, we've got the quandary of build versus buy, cloud adoption, all these very typical things, but they're real, they're not just buzz words in the industry. It's easy to focus in terms of transformation on some apps and a lovely, shiny website, but it's not just about the look and feel, it's about the customer proposition and convenience and fulfilment. All of that relies on your ERP, on your integration strategy and around your fulfilment systems.