MADRID: For John Lewis, the British retail partnership, investment in digital transformation is not about tech so much as creating services that people love and are willing to pay for.

This is according to John Lewis’ Group Development Director, Tom Athron, speaking at the World Retail Congress, whose experience in digital transformation has seen multiple popular and profitable new ideas take form.

“It’s not about investing in technology, it’s investing in services that customers love,” he said. (For a full report read Getting started on digital transformation with Turkcell, John Lewis, and Burberry).

But there’s a crucial test: early on in the process it is important that you build a service that people are willing to pay for; trying out a digital service as a free add-on tends to simply devalue it.

While he conceded that the partnership structure means that the firm isn’t bound to the same pressures as a publicly listed company, he highlighted two investments that have proved particularly successful.

One was Ocado, the shopping technology company, although that investment incurred losses before coming good. A second was the acquisition of e-commerce service, which became John Lewis’ shopping website and now accounts for 30-50% of total revenue depending on the week.

However, part of the skill of transformation is being able to detach oneself emotionally from a new idea if it isn’t progressing, Athron said. “Walking away is as important as the successes”.

A route to success for John Lewis has been to externalise innovation through JLP Ventures, which takes care of new ideas in a small team environment, trying ideas for size in hours rather than weeks. At the same time, testing new ideas is not – at an early stage – about how it will integrate into the rest of the business.

“Don’t try to learn all your lessons at once,” Athron said; don’t integrate until “you think it’s a goer – you can fix an integration problem later”.

Speaking more broadly about technology’s – and, therefore, e-commerce’s – impact on traditional retail, he suggested that companies need to be more open to the modern shopping experience at the level of profit and loss.

“Stop being obsessed with a P&L for your shops and P&L for online,” said Athron. Done right, it can mean linking value back to the shops even when the purchase is completed on another channel. Here lies a challenge for many legacy organisations: allocating sales back requires rewarding people in one silo for work done in another.

Sourced from WARC