Sainsbury’s CIO restocks retailer’s data abilities

Profile picture for user Mark Chillingworth By Mark Chillingworth October 23, 2020
Summary:
Group CIO Phil Jordan explains how a data-centric approach enabled the UK supermarket chain to respond to the global pandemic

Image of a Sainsbury’s store
(Image sourced via Sainsbury’s website)

The change in the business in the last six months has unblocked everything, a new culture has emerged for us. That was demonstrated in how we swarmed over the business problems presented by the COVID-19 pandemic and dealt with them.

Phil Jordan, Group CIO of J Sainsbury's, the UK's second largest supermarket operator and also the owner of Argos, formerly a catalogue based store, has been at the forefront of changing the retailer as it responds to new customer behaviours, which also helped deal with the pandemic. Jordan explains that during 2020 Sainsbury's has doubled the size of its online grocery business as customers chose delivery and click and collect options over the traditional shop visit, in response to Coronavirus spreading through the UK.  

Our business has to be incredibly sensitive to what we do and how it impacts the customer, if we change the price of a product or move something, we get immediate feedback. 27 million people choose to shop with Sainsbury's every week, and the vast majority still do their shop in our stores.

Jordan says major change is how data and digital technology stroll the aisles of stores, online platforms and its complex supply chain and impact everything the business does at every level. The CIO, who joined the retail sector from a long stint in telecoms, says this change is not to be under-estimated in a business like Sainsbury's, which has become extremely broad - providing financial services, groceries, general merchandise (Argos) and a data-oriented loyalty company (Nectar).  

My job is to execute, but my role is to collaborate on the ideas and differentiate our business. The role of technology has changed, it is here to positively disrupt the business and the sector.

Jordan says Sainsbury's has a strong culture of collaboration, from the shop floor to the boardroom and that technology is well placed within the retailer to be central to new initiatives.  

Check out data

Throughout the retail sector, as well as marketing leadership, every conversation leads to personalisation. The levels of data about each and every consumer have created a new paradigm of tailored shopping and therefore selling. With 27 million Brits crossing the Sainsbury's threshold physically or digitally (and in all likelihood both), Sainsbury's has a wealth of data about dining, cleaning and the health status of its customers.  

Knowing our customer better than anyone else; we can really personalise the shopping experience, offering relevant personalised product, nutrition, allergens advice or prices, for example.

Jordan says that as a result, data science and analytics is changing the nature and role of technology and technology leadership at Sainsbury's.  

Today, in an era of data-driven insight, our role is far more disruptive. It is a classic 80 - 20 set up; 80% of my time is focused on how we disrupt the business, market and competition, and 20% is on the running of the business technology.

We have had to rebuild the infrastructure and enable a new data culture in the business around owning, capturing, cleaning, curating and linking data, and that has been a huge cultural change. Sainsbury's has always been a Big Data firm, but it is also full of retailers who are very intuitive and think about what we are going to sell. Making that data driven, and re-engineering decisions, is the challenge for technology leaders today.

Jordan has done this by building and demonstrating the art of the possible, which has brought along those retailers that honed their skills in a pre-data led world.  

Now we join the data up in ways we were never able to before. We can then add views about anything, the weather, demographics, labour costs or products so that we can look at the business in multiple different dimensions.

Jordan says the key has been having both a strong cadre of data skilled people, data technologists and most importantly, a vision of what being a data business is in the digital world

There is a lot of data engineering and science that goes on, and the sweet spot is combining that with people who are analytical, highly business literate and experts in visualisation

We recognised that a lot of the data was locked up in source systems and we had to liberate that data from where it sat, as we couldn't connect and democratise it. You can do that with a large scale system transformation, but we needed to be quicker, so we invested in a new data ecosystem and moved the data to that so that we had a multi-brand connected set of data assets, while we continue with the heavy lifting of process and system change.

As a result, Jordan and Sainsbury's has been restocking its data abilities, the Group CIO says, building up capabilities in data science, data engineering and the relationships across the business to ensure there is good awareness.  

Jordan's data focus comes from his time in Telecoms. From 2000 to 2018 he worked at two giants of telecoms, Vodafone, and Telefonica, owners of O2, beginning as a manager of enterprise systems and moving up to CIO and then Group CIO at Spain's Telefonica. During that time he played a part in the rise of mobility and then witnessed the network operators get close to disintermediation by the arrival of the iPhone, and the smartphones that swiftly followed in its wake. Data replaced voice, and it was Apple that recognised the value of the data and capitalised on it, forcing network operators to drastically modernise their business and technology strategies.  As the first non-Spaniard to head technology at Telefonica, Jordan had to lead a global Digital business transformation and develop a data-centric tech strategy for the telco giant.

If another business comes in and gets in the way of your relationship with the customer, then you will struggle to grow.

He says telcos allowed a handset maker to get in the way of their relationship with the customer. Arguably some networks have never recovered that association with the bill payer.  

We spend an awful lot of time trying to understand our customers and how they shop. You have to invest in the people and the technology in order to really understand the customer in order to be able to personalise or offer services that are specific in value to them.

Pandemic impact

In the weeks before the UK government called a lockdown, all supermarket operators in the UK were hit with panic buying by the public, and as Jordan reveals, it placed a major strain on the stores and the operations that underpin them.

We were the first to use our data insights and understanding to really understand who were elderly, disabled or vulnerable so that we could protect their access to groceries when they needed it most.

Retail is a very complex and physical distribution system, so we had to scale that in just a few weeks. Our colleagues in Commercial, Supply Chain, our depots, logistics networks and stores have done a great job and I am very proud of how Sainsbury's Tech has supported and enabled the effort. 

Although a physical business, it was also the online stores and eCommerce that had to cope with a significant surge in demand as there was a material channel shift towards online.

The shift to online during the pandemic has been massive. The main shopping trend ahead of the pandemic was an increase in frequency and smaller baskets, people moved to shopping for missions, be it lunch or a snack.  Covid led to a move back to less frequent and bigger shops with lots of people pivoting to online. In the stores, our self-scan and payment services have grown dramatically. The Hygiene factor of Self-Scanning was not something we had really considered but it has certainly been the right capability for the time.

Jordan doesn't believe many of those who have adopted online and self-service in 2020 will return to former patterns of behaviour.  

Covid has been a massive change catalyst. A lot of things that we would have experimented with for years have been delivered.

Transforming retail

Despite the sudden shift in consuming behaviour heralded by the pandemic, Jordan is conscious that retail has to constantly strike a balance between being at the forefront of technology development, but also considerate of customers that are not riding the digital wave.  

When you are delivering customer experience enhancements for a nation, and across the broadest customer base, you have to be careful that you don't get too far ahead of yourselves and that you are bringing all your customers on a journey.

Coronavirus not only changed the way consumers shop, but also the way people and organisations work.  Sainsbury's office based staff packed their roles into a basket and took it home during the lockdown, and Jordan believes this has led to fantastic productivity, greater colleague engagement and will lead to improvements in diversity and retention for many areas of the business.

The opportunities to use this new way of working for talent acquisition is exciting. We have all been fishing in the same pool of talent and geography is no longer the barrier it was.

My take

In April last year a proposed merger between Sainsbury's and US-owned Asda was blocked by regulators, meaning opportunities for consolidation were lost, according to Sainsbury's. But the events of 2020 have reminded many in society of just how valuable supermarkets and their staff are. The pandemic also demonstrated that the technology and data estates of retailers have to be well nourished in order to meet sudden changes in customer demand and behaviour.