Retailers need the web to survive the credit crunch

As the credit crunch hammers the high street, retailers are under even more pressure to expand their trading channels or seek new avenues to boost growth.

The announcement that Marks & Spencer (M&S) reported a record decline in London trading – shares plunged by 5.3 per cent yesterday, the group’s worst performance on the stock market for three years and equivalent to a loss in value of £1bn – is probably sending a shiver down the spine of most high street retailers. But the news of poor performance doesn’t necessarily come as a surprise.

When reporting its Christmas results, M&S had already predicted 2008 would be a tough trading year, but also mentioned that web transactions were the only bright spot in the festive season, with sales up 78 per cent. M&S revamped its web site last year, targeting areas such as improved functionality, searching and navigation. It also invested in the expansion of online product lines such as clothing, accessories and jewellery, which is something that most of its peers have done or are in the process of doing, along with joining up processes related to key shopping channels – high street, online and catalogue/phone.

Last week, during a question and answer session taking place at the Retail Solutions conference in London, a member of M&S’s web team – after identifying himself, of course – asked David Walmsley, head of web selling at John Lewis, the following question: “How much are you spending in your multi-channel strategy?”

There was a moment of reflection there. Walmsley reiterated his points about the importance of introducing change along with innovative systems such as analytics, emphasis on customer service management and so on, finishing elegantly by saying something along the lines of “customer-facing systems must be a priority as they will get back to the ones who looked after them during tough times.”
Of course, he did not make the slightest mention of that investment figure. And he did not return the question to Mr M&S, though I’m sure he would have, if that event had been held today.

But I asked the question. The M&S web strategist did not mention a figure either, but was surprised that John Lewis did not return the question and said that multi-channel and web, increasing in-store offerings online and so on, has always been a focus and that investment in that part of the business had not changed “at all” as a consequence of the downturn.

So where did M&S get its strategy wrong? One of the areas where the retailer is suffering the most is clothing and accessories, where allegedly a great deal of effort has been put in during the web overhaul. But a quick browse on the web site shows they don’t have that pair of shoes I saw in store the other day, nor my preferred yoghurt brand.

It seems that offering a seamless multi-channel retailing experience and making the most of the web is the way to go, but conversely retailers are still struggling to reach that Amazon kind of nirvana that they want to achieve. It might be because web is still not seen by most businesses as a revenue booster (see the example of Primark), or web budgets are tight.

Apart from the obvious extension of channel choices for customers, ensuring functionality, product availability and understanding shopping patterns and experience is essential. Most retailers are only just beginning to grasp the significance of the multi-channel trading, but they will need to take their heads out of the sand and get up to speed with technology to support today’s well informed – and cash-strapped –customers if they want to survive.

By Angelica Mari

Tym 2go2 yr plane

Imagine you are calmly browsing around duty free at Heathrow airport. You’ve checked in your bags, you’ve had a coffee, you’ve checked Facebook, you neither know nor care what time it is, because you know you’ve plenty of spare time, and now your loved one is texting you to wish you bon voyage.

Or… what's this?

It isn’t a loved one. It’s your airline telling you it knows exactly how far away you are from your gate and that you should start running - now.

Airline specialist SITA has been explaining at a conference in Brussels how the air transport industry could use technology to discover where someone is, based on their mobile phone. Airlines could use the technology to find out if a passenger is on time for his/her flight, if they are likely to show up, if they are in a congested area and whether or not they should be prompted to head to the gate.

This is obviously an excellent marketing opportunity - mobile advertising revenue is predicted to hit $14bn by 2012 - as phone settings can offer information on which languages the user speaks and what their preferences are.

And there are ways of finding out who is in the room with you and automatically accessing their contacts list. Then you could change your phone mode depending on what you want to share and who with.
It’s a bit scary, but no scarier than what we already have, according to Jim Peters, chief technology officer of SITA.

“There’s going to be spam, there are going to be viruses, there’s going to be people trying to get into your keylogger; expect them, they won’t go away,“ he said.

“We will see the same kind of issues in this environment that we’ve seen on the internet. But the underlying technology is there to handle it, and there will have to be careful handling.

“I don’t want the boogie man knowing where my kids are. But for our kids and the digitally-enabled generation, it’s not scary for them. They’re not held up by these barriers, it’s going to be about what’s socially acceptable behaviour and what’s not.”

Ignoring the security issues, and provided the technology remains in “safe” hands, I would be torn between convenience and wanting to protect my privacy. I will probably think it’s fine until the adverts start coming…

By Janie Davies

Encouraging innovation, or confusing it?

I recently attended The Innovation Edge, the flagship conference of Nesta – the lengthily-named National Endowment for Science, Technology and the Arts.

By IT industry standards it was a pretty star-studded event, with speeches by the likes of web pioneer Sir Tim Berners-Lee, Bob Geldof – and some Scottish chap named Gordon Brown. For some people, that's a better line-up than the one for this year's Glastonbury Festival.

They all put on a pretty good show: Berners-Lee spoke on the importance of online civility (lol) and the threat of web spam; Geldof delivered a charismatic call for the UK's entrepreneurs to take more risks – in an ethical manner, of course; and Brown paraded the stage of the Royal Festival Hall, offering jokes and enthusiastic support for the industry, if nothing particularly concrete.

I'm not sure how many people attended the event, but if I was pushed for an estimate, I'd say there were somewhere between "loads" and "wow, it's absolutely packed in here." There was also a huge array of topics up for discussion – from the need to drive green technology, to the battle for fuelling venture funding – with some topics receiving far more detailed handling than others.

Variety is a good thing, clearly, and it's great to see Nesta attempting to cover as wide a field as possible. However, I am inclined to agree with the body's own recommendations (as outlined in its report) that the UK needs to tighten up its focus on innovation policy.

There's been a lot of recent talk of "encouraging innovation" in political circles. Again, any support for the UK's entrepreneurs and inventors is a good thing – but it needs to be specific. Nesta believes the UK is doing well in bolstering its position as a creative centre for new ideas, but that we need to set specific goals for separate parts of the industry – whether it be telecoms, clean technology or anything else.

The Technology Strategy Board's establishment of separate Knowledge Transfer Networks (KTNs) is certainly a step in the right direction. Even within these, however, it is quite mind-boggling how broad the area of focus can be. For example, the recently-announced Creative Industries KTN describes its interests as:

"Advertising; architecture; art and antiques markets; computer and video games; crafts; design; designer fashion; film and video; music; performing arts; publishing; software; television and radio."

That's a long list, and one with a huge amount of internal variation. There is potential for problems here: the government has been very vocal about reviewing the protection of intellectual property protection – but there's no one-size-fits-all approach when it comes to such matters.

Discussion of software protection has been comparatively limited so far, as better-looking poster boys such as music and film hog the limelight.

Never mind software – what about those poor antique markets? Will they get their IP protection too? Ming vase piracy is an increasing trend among young file-sharers, so I hear.

By Neon Kelly

The sound of serious organised silence

Shortly after the formation of the Serious Organised Crime Agency (Soca) in 2006, its chairman, Sir Stephen Lander, a former head of MI5, gathered together the crime correspondents of all the major national newspapers in one room.

The hacks were encouraged – no press officer attended the meeting.

But Lander – a man diminutive in stature but apparently overwhelming in personality when he wants to be– proceeded to tell them Soca would essentially be a zero-press organisation.

That meant no briefings – off the record or otherwise – from the top, no press releases, nothing. Just an annual report, and a press conference to accompany it.

Lander – secretive by both nature and nurture – wanted to run the proverbial tight ship.

The result was, for the first year or so of its operation, that the organisation went about its business without much being noticed.

But as any government press officer will tell you, if you adhere too strictly to a polished line then those who know the reality will start to become increasingly angry at what they see as hypocrisy from senior management.

Soca officers first approached Computing in July last year with their grumbles, and some went to the national newspapers too.

The tighter Soca squeezed on maintaining press silence, the more disgruntled staff started to slip through its fingers.

Last week’s story in The Times was the culmination of months of discontent.

Soca management hate it. After the Computing story last July (and this could be my sources flattering themselves - and me) Soca bigwigs were charging round their HQ waving copies of the magazine and demanding answers.

I hate to think how they reacted to The Times story.

Actually we know - this letter from Soca's director general to the editor of The Times leaves a slightly bitter taste in the mouth, and that's the watered-down version.

It's an old story.

As malcontent and political pressure mount on the organisation, those people briefing journalists will no longer be junior officers. They will increasingly be senior members of staff as everyone tries to blame each other for the mistakes and cover their own behinds.

And the story will get bigger and bigger – precisely because it's all happening behind closed doors.

Zero-press policies by government organisations simply don't work – pay cheques are too small and the potential for things to go wrong are too big.

By Tom Young

Women in IT – why bother?

I’ve been browsing the web for stories on women in IT and reading the comments posted online by readers.

Unless you’re talking to the skills councils and equality groups, it’s quite difficult to have a serious conversation about women in IT. The debate will usually dissolve into banter, with comments ranging from the tedious - such as whether women are capable of logic - via the mildly offensive - whether it would be productive to increase the eye candy for male employees  - and arriving at the outright bizarre.

For example, one reader at our sister publication The Inquirer wrote: “They do not like IT and do not wanna work in that kind of area... Just like I do not want to work in marketing or human resources, which as far as I know is women and gay biased… every time I speak to an HR guy he has that funny sounds-like-a-girl sound.”

I’m not strictly a woman in IT, but I work on a mainly male IT newsdesk and while I’m taken seriously in all aspects of my work, I’m still laughed at for needing more than 10 minutes to get ready to go out socially with my team.

From what I can see, it’s not just about accepting women in IT, it’s about accepting that they can be themselves in IT, not expecting them to adapt so perfectly to an all-male environment that nobody notices they are female. This has been a long but positive road in the general workplace and IT should be quite capable of catching up quick.

By Janie Davies

Big Brother is filling up your car

A couple of weeke ago a Computing reader wrote to the editor:

"Mike Byrne is concerned that he might one day have to present his ID card when buying petrol.  He need not worry - this is not necessary.  At Birchhanger Green services on the M11 I recently observed a notice that all registration numbers are checked against the Police National Computer (PNC) before the pump is enabled - and that this information will be retained."

Interesting.

Private sector bodies are not meant to have access to the PNC – indeed to do so would be illegal.

It turns out the system under discussion is known as ANPR – automatic number plate recognition. ANPR was widely installed at petrol stations around the country to prevent petrol theft, according to the National Policing Improvement Agency.

But who runs it? Go to the local force, they said.

So I rang Essex police. They said ANPR systems are run by the petrol companies, not the police, and this wasn't specific to Essex, it was the same all around the country.

Worried, I rang Shell, Esso and BP. All referred me to an organisation called BOSS – the British Oil Security Syndicate.

BOSS director Kevin Eastwood told me that these are all police systems, installed by private contractors.

Turns out that the systems examine a vehicle's licence plate against the PNC WITHOUT giving the cashier, or the petrol company, access to the database. 

The driver is then cleared or flagged, and the cashier has the option to enable the pump. The whole process takes a matter of seconds.

Interestingly, it seems that should a car do a runner, the cashier then has the option of adding the record to a police database.

So although Shell / Esso / BP employees cannot access the database, they can add records to it by flagging cars that have done a runner.

It is only the police who can run and can access the database.

I rang Essex police back to confirm this: I'm still waiting for them to get back to me.

So if you ever feel that Big Brother is out to get you, you can take small comfort in the fact that he is a more disorganised and lumbering beast than you might expect.

By Tom Young

Dealing with the downturn

Here at Computing, we have reported on the reaction of the IT community to the economic downturn from a number of different angles - but the tone of the conversation has changed quite considerably in the past couple of months.

From asking whether the crunch would affect the industry in February, we moved on to giving practical advice to managers on how to survive the recession in April. While analysts are trying to make some sense of the situation to translate it into numbers and trends, the simple conclusion is that the crunch is already here for the IT sector.

At a recent industry event, Gartner research vice president for emerging trends Mark Raskino gave practical advice to some 200 chief information officers. He highlighted that IT leaders “must not panic [about the implications of the downturn], but should act now” and “do not wait for instructions or permission.”

The analyst then moved on to suggesting a range of different shapes and sizes for possible IT-driven business decision plans, all of which advised IT directors to keep IT costs in trim “to avoid knee-jerk decisions later”.

But when Raskino asked the managers present whether their budgeting plans had changed at all as a consequence of the downturn, only a handful of candid leaders raised their hands, including Del Monte Foods IT director Mike Proudlock. I was seating next to a former CIO of a large financial services company, who whispered to me: “I am the living proof of cost-cutting…” He did not raise his hand, though.

For this article, we had a couple of out takes due to the broad “survival guide” nature of the copy, but when we asked where the cost-cutting actually starts, reducing staff overheads was a common answer from IT decision makers. Former Egg chief information officer Tom Ilube said that slashing workforce, as well as focusing on systems aimed at rationalising staff resources, would be near the top of the list of priorities during tough times.

News of lay-offs in the industry have already started to hit the headlines, with supplier Logica CMG planning to axe 500-or-so UK jobs to reap £80m in savings and “revitalise the business”. Speaking of revitalising, we interviewed Royal Mail’s CIO Robin Dargue last week and found out more about his transformation plans. Dargue has a large chunk of a £1.2bn budget to spend on technology, but when it came to evaluating his skills base, he chose to retrain around half of a 300-strong IT workforce.

In the current economic climate, IT capability reviews - such as the one carried out by Royal Mail - may become a trend. But companies should be undertaking such reviews anyway, said Marilyn Davidson, director of the Association of Technical Staffing Companies (ATSCO).

“There is a possibility that the downturn will force employers to undertake such reviews. But businesses should always ensure that their skills base is fit-for-purpose and keep expertise within the business to remain lean, mean and more competitive,” she said.

The way in which IT leaders manage cost-cutting processes – especially in the human resources field – is a delicate issue. If things worsen and “mean” reviewing processes are carried out, we may see some “grilling” of businesses by workers unions in the not too distant future.

By Angelica Mari

China hopes to promote the "People's Games"

Despite having access to CNN, BBC World, reasonably fast broadband and clearance into a high security Olympics testing lab, I am unable to read Computing’s newsdesk blog in China. I can read Computing's news pages and the comments, but when I go to the blogs, there’s a long pause before being told “page can’t be displayed.”

Apart from that 'restriction', it’s not so different from home. The most alien morsels on tonight’s menu were duck brains - served with the rest of the duck - and turtle. I don’t mind admitting that I wasn’t brave enough to try either - and was very happy with mandarin fish and ginger-spiced scrambled egg. Our hosts dismissed our queries about the likelihood of encountering monkey brains or cat, which they said would be “very unusual…possibly in the south.“

Chinese people are very tolerant of westerners who haven‘t got the hang of the etiquette; we have it very easy here, more so than in many European countries, I would say. There’s no pressure to speak Chinese, or do things the Chinese way - and their understanding of British culture is as good as ours. The most challenging thing for me, so far, has been handing over business cards with both hands, while trying not to drop my handbag.

As a technology journalist, I’ve been welcomed with open arms and apart from not being able to get to our blog, I can find out everything I need to know. I don’t have to ask any awkward questions about politics and human rights, because I’m hear to find out more about something that China clearly does very well.

Hosting the Olympics is a century old dream for China, since a student paper in 1908 asked when it would happen. Sun Weide, deputy director of Beijing’s organising committee for the Games, reminded us about this earlier today, as he talked about what the Olympic means to China.

“We have adopted three key concepts,” he said. “Green Olympics, high-tech Olympics - to promote the growth of high-tech industry in China - and the People’s Games. And we hope the events will promote better understanding between China and the outside world.”

The National Aquatics Centre, known as 'The Water Cube, is glowing blue tonight. Sometimes it’s red, or is set up so the bubbles make a ripple effect. I guess I won’t see it any other way before I go, but I’m certainly glad to have been here at all.

By Janie Davies

Fun and Games: China prepares Olympics IT

In a traditional Chinese restaurant in central Beijing, the waitresses dart around in full length silk gowns and enormous floral headdresses, carrying buckets of water and paper lanterns containing small candles.

They curtsey and greet us all in Chinese, before whipping out their handheld, electronic pads to take our orders. Later, our host and interpreter, wearing a shiny pink Bluetooth headset, laughs as she tries to translate the symbolism of each dish into something we can relate to.

And overlooking Beijing’s Olympic stadium, affectionately named the 'birds nest', I have to remind myself that China is still emerging. Everything is geared up towards the 2008 Olympics, from special lighting along the highways, to the corporate neon signs lighting up the high rise sprawl.

It is clear already that the Games are going to leave an enormous legacy and the anticipation is in the air. The preparations for Beijing 2008 are immense. Atos Origin, IT partner of the International Olympic Committee, has had a team here since 2004, working with the Beijing Organising Committee and local and international technology firms.

There will be 4000 IT experts and 21,600 media representatives involved in the event that will cover 28 sports, across 70 venues and seven cities. And when that’s all over, the systems will be modified for the Paralympics Games in September.

It was 1932 when stop watches and the human eyes proved insufficient and officials turned to newsreel film to determine that US runner Eddie Tolan was winner of the 100 meters race. Since then the Games has evolved from telex to computer punch cards, live coverage and eventually the internet.

The Beijing Games are meant to be the most-technologically enabled ever - and while I’ve only just heard of Qinhuangdao and Tianjin, I can see why Chinese cities are ready for it.

By Janie Davies

Being human

Microsoft recently published a set of predictions on the future relationship between people and machines, under the snappy title of Being Human: Human-Computer Interaction in the year 2020.

I'm not sure if I'm the only person who pictures a Jetsons-style future when I see reports like that, but I should probably learn to curb my unrealistic expectations. Microsoft's study bears no trace of robot butlers, nor the automatic hovercar I've wanted since watching Blade Runner as a child. All the same, the contents of the report makes for interesting reading.

One of Microsoft's core arguments is that at present, technology tends to be developed to fulfil a specific task or purpose. Someone finds a problem, realises that computers can help and then sets about developing a solution. While there's nothing wrong with this approach, Microsoft predicts that the near future will see things working the other way around - machines will recognise our problems, then build solutions for us.

That sounds a little scary, but in truth what this boils down to is that computers and other smart devices will be so much part of our lives that they'll "understand" what we want and need. Machines will be built into our clothes, our vehicles, our household items. We'll cease to see them as specific tools, but rather as part of our lives.

This is all very exciting stuff to think about. However, there's also slight problem with this ubiquity: it will also make computers effectively invisible.

Like all industries, the technology sector needs a steady supply of new thinkers to ensure its future development – which in practice translates to a steady supply of computing and engineering students. Some people are already worried about the falling members of UK students studying IT, but if technology becomes familiar to the point of becoming quotidian, surely this problem can only get worse?

Microsoft senior researcher Richard Harper isn’t sure. On the one hand, he says, there’s a chance that young people will be ultimately discouraged by an environment where machines can solve all our problems before we even know what they are; Conversely, it is possible that this stable environment will spur people on to try new ideas, to innovate beyond the obvious concerns of society.

Of course, it’s highly unlikely that computers will resolve all our problems in the future – about as likely as a manufacturer producing an affordable robot butler. Despite this, it’s still worth considering about how the here-and-now will affect what happens in a few years’ time. If the UK is to be a contender in tomorrow’s technology industry, we have to make sure that young people are excited by what’s going on today.

By Neon Kelly