Tech. Cast: Ed Connolly, Strategy Director of JLP on creating a culture of innovation

27 Aug 2019

Tech. Cast: Ed Connolly, Strategy Director of JLP on creating a culture of innovation

We sat down with John Lewis Partnership's Strategy Director, Ed Connolly.


 


TRANSCRIPT:
 

Poppie Mickleburgh  0:07  
Hello, and welcome to this week's Tech. Cast. I am Tech.'s Event Director Poppie Mickleburgh, and I'm delighted to be joined this week by Ed Connolly, Strategy Director and Director of Ventures for John Lewis Partnerships and one of Tech.'s Retail Partners. Welcome Ed! 

Ed Connolly  0:19  
Thank you. 

Poppie Mickleburgh  0:20  
So to start with, can you tell us a little bit about bit more about Ventures, and how you guys work with the overall Partnership?

Ed Connolly  0:26  
Yeah, sure. Ventures was set up three years ago, as a discrete business unit for John Lewis Partnership. So working away from Waitrose and John Lewis Trading divisions, but on their behalf to develop new propositions and business models for the partnership. So what they're looking to do in Ventures is test the next big thing for customers and work out exactly how customers are going to be interacting with us in the future. So what we're trying to do is always look, one step ahead of where we are today, and basically test three things as we're looking at new propositions for customers. So what we're trying to do is test firstly, the feasibility of a new proposition. As in, can we get the thing done. Second is the desirability, so whether customers will engage with it and what the appetite for these new propositions might be. And then we've got the sort of commerce behind it. So the viability of the proposition so in doing that, we work out where the root value is. So what we've done so far, we launched five different new propositions, since ventures was set up. Things like Cook Well, which was recipe box. So we got that live a couple of years ago. We do Home Solutions, which is on demand for tradespeople. So we set we set that up again, about two years ago. We got a Rapid live, which is the fast delivery of our grocery proposition. So that's going extremely well. And the most recent one is While You're Away, which is delivering groceries into the customers fridge while they're not home, so use a smart lock to access customers homes and put their stuff away while they're away.

Poppie Mickleburgh  2:03  
How's that gone down? How have customers found it?

Ed Connolly  2:06  
Incredibly well, actually. It's very limited at the moment. We've got 50 customers live on the proposition, but they're all absolutely loving it. They're all using it pretty much every week. And the average order is it's actually much higher than the average order for our normal econm unit. And the NPS score is well into the 90s. So it's going really well.

Poppie Mickleburgh  2:31  
Incredible. I might be one of your future customers of that. So can you tell us a little bit about what are your key focuses when it comes to digital transformation across the partnership?

Ed Connolly  2:40  
Yeah, I think we feel quite transformed already digitally. In John Lewis, you know, we, we, we've had 20 years of almost 20 years of digital transformation. We launched the platform in 2001, johnlewis.com, so 20 years worth of learning and evolving, and almost 40% of our sales now come through that platform. So in John Lewis in particular, we feel pretty transformed already. On the Waitrose side, as well, in the last few years has been a major focus for us. So we've invested really heavily in tools, in people, warehousing, things like that in waitrose.com. And starting to show the the fruits of that as well. So last year, it was up 14% way ahead of the market. And I guess we feel like digital is really a major part of what we're doing in JLP.

Poppie Mickleburgh  3:27  
And we've seen a lot of, I guess, traditional retailers, High Street retailers not really stay ahead of the market. We've seen quite a few casualties in the last few years. What do you think it is that retailers need to be doing to stay ahead and to really kind of be further ahead of their digital transformation journeys?

Ed Connolly  3:46  
I think the first thing is they've got to have the right mindset for innovation. You know, if they get anchored into the old ways of doing things, and they get too hooked on, on legacy assets and servicing those, those old assets that they'll never get into that space of constant transformation, either financially so that the resource will be ploughed into stuff that they don't really want now. And their mindset won't be there so that their ways of working will be geared around the old retail rather than the retail. So I think those are the two major "watch-outs" for retailers as we go into this period of constant transformation.

Poppie Mickleburgh  4:19  
And how do you think retailers can shift that mindset? There's a lot of talk I guess of, if you need to have that agile way of working, is there things in particular that you guys have learned about how to shift that mindset? And I guess what kind of role has Ventures played in that change for John Lewis?

Ed Connolly  4:34  
I don't know what the the absolute answer is. But for us, it's about developing a culture of innovation, and a learning culture as well. So accepting that, never being happy with what you've got, and being restless and trying to find the next big thing. So the culture of experimentation and testing new things has got to be at the centre of what retailers are all about. Otherwise, they will get stuck in the past.

Poppie Mickleburgh  4:59  
Absolutely. I think at Tech. this year, we're focusing a lot on introducing brands to Tech. as well as retailers. I think, you know, we've seen tech and digital break down those barriers to entry in terms of going direct to consumer and having that relationship with consumers. What's your thoughts on kind of how the retail space and the consumer space is going to look in the next five years?

Ed Connolly  5:21  
Yeah, well, it's it's going to be very different in't it,  it's moving so fast. And the high street in particular, will look very different in another five years, as it has done, you know, five, five years ago. I think that really, we're a sector in transformation. We're sector which is changing so quickly, I think that the high street in the future will probably have even fewer physical outlets in the traditional shop sense of the word as it has been in the past. So I think the high street will be transformed again. I think it will be very experience led. I think you'll see the workplace come into into the high street. And I think what you'll see from experience and shops is that those experiences for customers look very different to how they did in the past. Those things will come together. And the blurring of physical and digital will really happen, you know, and it will be much faster, it will really speed up.

Poppie Mickleburgh  6:14  
So what do you think is the future of the store? I know it's a bit of a buzz word. And certainly one of the themes for for Tech. But, what's really your view on what the future of the store is?

Ed Connolly  6:25  
I think it's about using the, the great thing that the store can offer that digital, the pure digital channels can't is really obvious. It's about human interaction. And I think great retailers will be able to blend the best of tech with the best of human interaction and service lead propositions. And when those two things come together, and it becomes really genuinely seamless for the customer so that they don't think about the online store being different the physical store, their journey is one, and the retailer can see that the whole customer journey is there right in front of them, they can interact with the customer, totally seamlessly cross-channel. I think that's got to be the future.

Poppie Mickleburgh  7:07  
And so do you think the kind of I guess the winners and the new retail world will be those that have both an online and a physical presence?

Ed Connolly  7:15  
I absolutely do. Online and physical blending the best of both worlds. And I think weaving in a very high level of experience into their physical and their online experiences for customers.

Poppie Mickleburgh  7:27  
And so do you think we might be seeing more partnerships forming within the retail space? So much more brand and retail partnerships in terms of people that are online wanting some physical space and that side of things?

Ed Connolly  7:39  
Yeah, I think so. I think partnerships are already a major part of retail. Certainly, if you think about our, you know, our business we already partner with with loads of tech companies. We're a hub for technology, for service providers, for brands, and we work really closely with lots of different partnerships. I think the key to it is creating relationships which are well balanced and relationships which offer mutual value to both parties. But certainly no one wants to do everything themselves. And where you have specialisms and increasingly we will see specialisms is particularly in the tech space. And I think partnerships is the natural solution.

Poppie Mickleburgh  8:22  
And so, how do you go and find who the right partners are? What do you guys do to make sure that, you know, they're the right strategic fit for your business?

Ed Connolly  8:30  
We run tender processes and of course, we get to know who's out there. So you know, you pick up so much through your networks, that you can, you can work out who the right people are for you. And you know, the more you build those networks up, the more you talk to other people and what they've done, you learn a little bit more every time. And so when you're ready to go into the market to work out who you want to partner with, you're already ahead of the game,

Poppie Mickleburgh  8:55  
And for you, what technologies do you think will have the biggest impact in retail over the next couple of years?

Ed Connolly  9:02  
Well, I think hyper connectivity will be one of the transformative technologies that really changes what retail is all about. And if you think about how, how chip sizes are shrinking down to almost nothing. And you think about the bandwidth for 5G and later generations will give, than almost every item that is bought can talk to every other item. And it will be broadcasting and receiving information in real time. I think that gives retailers a huge opportunity to build up a really rich portrait of customers and enable them to create propositions which feel really personalised are very immersive for customers. So they'll be using VR, and they'll be using AI with all of those technologies that are emerging to create both those portraits but also inform the propositions that feel amazing for customers in the future. 

Poppie Mickleburgh  9:54  
Can you give me an example of where you think VR and AI might be working in one the projects you're working on? 

Ed Connolly  10:01  
So yeah, we've just launched a visualisation tool for customers in three shops. This is a headset, which feels quite futuristic, but customers are engaging with it, and they're absolutely loving it. And the great thing is we can see a route through to value as well. So it's really helping customers, visualise what their living room is going to look like with all of the items that we sell. And it enables them to plan out, in a very futuristic way. But in a very engaging way, what the space will look like with the John Lewis assets that we provide them.

Poppie Mickleburgh  10:34  
Brilliant. It sounds like Ventures, doing lots of really exciting and innovative trials. And I'm guessing some work really well, and maybe some not so well. Can you talk to us a little bit about a culture of kind of failing fast but but winning big, because I think some retailers get a bit nervous about trying something that might not work and kind of the impact that can have?

Ed Connolly  10:54  
Yeah, absolutely, I think if you're going to create a culture of innovation, you have to accept that part and parcel of that is failing. And rather than see it as failure in the old sense of the word, you've got to see it as an opportunity for learning. So some of the things that we've done have just haven't worked, we haven't found a route to value with them, or they fail because we haven't been able to make them feasible. And rather than, you know, take that on our shoulders heavily, we've really embraced it. And so ventures has had a couple of those things where we haven't launched into market, but we've taken the learnings from them. And we've applied them to other propositions. And we've, rather than feel bad about it, we've actually celebrated it.

Poppie Mickleburgh  11:35  
Brilliant, and how how long do you trial something until you decide whether or not it's going to have an impact?

Ed Connolly  11:41  
Each one has its own profile. So typically will take six months to a year to, to explore the proposition, to design it, to build it, and then to get it launched. So something like 18 months to two years, then you've got a really great handle on real time customer data, and you're able to then make some choices about whether you want to pursue it, you want to back it big or you just want to keep it bubbling along or you want to put it down altogether.

Poppie Mickleburgh  12:07  
How do you make sure that you've got buy in from all of John Lewis? And I guess in particular, the senior team? And how does, how does that work?

Ed Connolly  12:17  
Good question. Because I think a lot of these things can fail when they run out of sponsorship internally. And, you know, it's our job to just make sure that we are communicating all the time. And we're really understanding what the needs of our clients are internally, and understanding that we're building propositions which really suit their, what their customers are telling them they need. So it's totally in sync with the strategy of the whole organisation. And they look at a business unit like Ventures as the means to the end that they already want strategically. So it's about communication and making sure that strategically, we're totally aligned.

Poppie Mickleburgh  12:56  
And Ed finally, you guys are partnering with us on Tech., which we're delighted about. Can you tell us why you decided to partner with Tech. and what you're looking forward to?

Ed Connolly  13:04  
Yeah, well, part of it is just building out our own external presence and opening ourselves up to what is going on out there in the tech world. We're really excited about meeting start-ups and talking about what we're up to, telling people about what we're all about culturally as well and seeing what talent is out there. And we talked about partnerships, and we're definitely open to you know, thinking about who we might partner with in the future. So getting out there, meeting some of the exciting startups and the people who are really changing tech is what we're really interested in.

Poppie Mickleburgh  13:35  
Picking up on that start-up side of things. I know start-ups are really important to John Lewis. Can you tell us a little bit about why, I know you've had J-Labs and all of that side of things. Why are start-ups important to the business?

Ed Connolly  13:47  
I think start-ups bring this huge level of energy and enthusiasm and they're not constrained in any way. So they really open up your thinking about what possibilities might exist out there. You know, they don't have any of the constraints of a big organisation behind them so their thinking and their connectedness to the customer really inspires us. So we love meeting them, we love finding out about what they're up to and what their insights are. But most of all, we will just love the passion that they bring to it.

Poppie Mickleburgh  14:16  
Absolutely. Well, you'll have 100 of them to get through at Tech., so I hope the team a ready. Ed thank you so much for your time today. Really appreciate it and we look forward to seeing you in October

Ed Connolly  14:24  
Thanks Poppie.

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