After a 20 year career in telecoms, CIO Phil Jordan begins a new career in 2018, as Group CIO of J Sainsbury’s. Jordan joined the Horizon CIO podcast to discuss his new career and reflect on that long stint at the helm of the world’s leading telecoms brands.
“Retail for me was really about choosing an industry and a marketplace that was absolutely ripe for disruption,” Jordan says of the appeal of moving sectors. Sainsbury’s is the second largest supermarket in the UK with around 16.9% of the market. And that tells you a lot about the challenge that the supermarket sector faces, second in the market and under 20% of the market share. Sainsbury’s is a stalwart of the UK retail sector and traces it roots back to 1869 and a store on Drury Lane in the heart of London’s theatre land. Sainsbury’s was an early adopter of the self service supermarket model when it landed on these shores post-war. The J Sainsbury’s plc group includes not only the supermarket, but also a banking business and more recently the Argos general merchandise retailer.
“I think all businesses are struggling with how they adapt to the new digital challenges, retail is at the forefront of that in terms of changing customer behaviour,” Jordan adds. “We can all see the impact that Amazon has had on the general retail market. Food is relatively traditional business model and supply chain, but it is going to be disrupted, positively with technology and across the whole business. Food is going to be very interesting to see what you can do with a business that has been around for a couple of hundred years and how different can you make that experience with technology over the next five to 10 years.
“If I think of the challenges that face me in the new role, the first one is maintaining momentum, it is an incredibly competitive marketplace in the grocery and retail sector. The opportunity for consolidation of the market is on my mind,” Jordan says of the challenges he and the Holborn headquartered national retailer face.
“But in terms of the opportunity with technology, the whole data agenda and what you do with that data to improve the business and how you use that data to improve the whole customer experience so that it is more personalised and more contextual and richer. That is the most exciting and interesting part of the job and for the business is the most important source of differentiation going forwards.”
Jordan has been Global CIO of Telefonica since 2011 and during that time spearheaded a greater focus on data to improve all areas of the business. Inevitably Jordan believes a similar strategic approach will be added to his basket at Sainsbury’s.
“Retailers have terrific data and I was genuinely surprised by how much a retailer knows about you as a customer, like telcos a few years ago it is not being used particularly well across the business to improve the customer experience and I see that as one of my main challenges.
“Very similar to the journey we have been on with Telefonica to take the data from the business, right from the exhaust of the business and turn it into value for Sainsbury’s and for customers,” he says.
In April of last year the J Sainsbury’s group acquired general merchandise and one time catalogue retailer Argos. In making the acquisition Sainsbury’s divested itself of DIY retailer Homebase to an Australian chain.
Jordan believes the combination of Argos and the Sainsbury’s bank, when blended with the supermarket data gives the organisation a significant opportunity. “That gives you terrific customer insight across the value chain and the extent that we integrate them we will take a view on and again it will be dependent on customer needs. The one area where the integration is crying out is data.
On the surface a global telecoms provider and a national supermarket might appear worlds apart, but Jordan sees a number of parallels. During his career at Telefonica Jordan was part of the telecoms provider realising that its network was “your biggest asset, but not your biggest source of differentiation going forward. I suspect that the same is true of the retailer, the footprint of the store and the touchpoints with the customer is very hard to replicate”. Jordan adds that in the early days of mobile telecoms consumers would talk about which network they were on and compare performance, that has died away. As a result the telecoms businesses have had to shift their focus away from the physical infrastructure and instead focus on services. Jordan says this is a result of all the network providers delivering a quality infrastructure. The CIO did leadership stints with o2 and Vodafone during that 20 year telecoms career.
“We know that people tend to shop very differently today, we know that more frequent and smaller baskets is how people are living their lives. Convenience is extremely important both online and on the street corner and the convenience store is how people want to shop and businesses like Sainsbury’s have to change and adapt to that,” Jordan says of how just as the telecoms firms had to move their focus away from infrastructure, so too will retailers have to shift some of their focus away from the stores.
“The thing that will not change is that customers want great value and great quality and they want a personalised secure services, and that doesn’t matter if you are a retailer or a telco or any other business,” he says. “Stores are starting to become places of meeting and places of eating, people don’t just want to shop, so that is why you see sushi and Patisserie Valerie in some stores, so I think there is a changing behaviour that will see business like Sainsbury’s execute in a different way and they will do that through partners and ecosystems.”
“There is always a fine line between being relevant and creepy in the digital world and I saw that in my old business, you have to be very sensitive to customer reaction,” he says of making sure that personalisation doesn’t drive consumers away. The CIO is focused on privacy, which he believes is about to rise in importance. “I think privacy is going to become way more important and we haven’t seen the consumer reaction to privacy yet as technology becomes more pervasive in our lives.”
As Jordan has alluded to, supermarket businesses are highly experienced at operating with partners and creating ecosystems, whether that is working directly with farmers and producers; distribution and marketing agencies. In the technology teams of retail that is still being developed and Jordan is clearly excited by the opportunities to increase how Sainsbury’s develops more partnerships and an ecosystem of innovation.
“Sainsbury’s can’t do everything themselves. So being able to integrate other people’s services into yours and to do it in a very seamless and intuitive way, I think, is something you have to do and it is one of the key challenges of technology. When I think of businesses like Telefonica and Sainsbury’s that are very traditional in their origin, and a lot of their processes have been around for a long time, so making those processes more integrated so that you can snap services together so you can be really adaptive for the customer, those challenges are true of both business and these are things we will focus on a lot.”
“We tried really hard to do those things in Telefonica. A lot of those things were not happening inside our business and not in our major partners. That is one of the attributes of the digital age we live in with crowdsourcing, platforms and a socially engaged set of innovators around each business, so you have to start looking for innovation in different places and be ready to listen where it exists. We worked very hard at opening ourselves to the small one and two man bands and let them come in and innovate around us. I will use that experience and I know that Sainsbury’s do a lot with a broad spectrum of business and I will be keen to recreate that type of dynamic.”
Changing customer behaviour
“We can see how the digital world is changing how we live our lives, whether it is us talking to our devices to order a song or do any number of things by just calling out. When you think about wanting to become more customer centric and more relevant in the homes of the customer we have to recognise the fact that the way that people shop and want to experience shopping is changing. It is not a question of going on a Saturday afternoon to do a big shop once a week, it is almost a continuous engagement with a business that can give you what you need and I find that really fascinating. Beyond responding to you when you need a pint of milk, but to almost anticipate what you need, not in a creepy way, perhaps you need a week of meals and the nutrition is curated by your retailer and that balance is set with the meals, a balanced healthy diet, the preparation is done,” Jordan says of how customers and retailers will integrate into each other’s lives.
“This area of personalisation I find fascinating and that is why I think this is a great time to be a technologist. With all the disruption, negative and positive, we know the future differentiation of any business is technology driven. As technologists, that gives us such an opportunity and retail will change dramatically and the extent we can help you live your life by being really relevant and personal, that is going to be a key source of success.”
Curation is a term used across a number of sectors being disrupted and Jordan sees it as becoming central to supermarkets as well and interestingly a return of skilled service and a decrease in self service. As a result supermarkets go from being the disruptor that swept aside the slow specialist services of the high street and the market square will bring those same skills back to the fore in the face of digital disruption.
“Some of these core skills become really centric to how you do that curation, you always have to do this in a way that customers want. But the more you help the consumer prepare, and package something into their lives, the more that the customer starts to rely on these skillful traditions like the butcher and the baker,” Jordan says.
“Making better digital experiences for our customers is going to be exciting.”