Digital is undoubtedly changing the world and although it is seen as a threat by many companies it is also a serious opportunity that can be grasped by retailers as long as they take the necessary steps.

Businesses must invest in their capabilities in order to ensure they are continually innovating and competing because a failure to do so could be catastrophic. This is the view of Mark Dermody, IT director at Costa, when speaking ahead of presenting at RBTE 2017.

“What we’ve seen so far with digital looks great but what is to come will be fantastic. But if companies do not invest in it then they will be disrupted by younger, more agile businesses. Just look at Clinton Cards, Kodak and London black cabs,” he explains.

Dermody suggests digital is all about the customer and he cites Uber as digitising the process of taking a cab by making the whole process more seamless for the customer: “They took a very different approach – taking orders by app, letting you know when the cab will appear, and taking your money seamlessly. They understood the customer.”

He also references the rise of driverless cars, contact centres that are fully automated through robots, and virtual doctors. This all points to a world where the customer is in the driving seat: “Switching to another company is easy. It takes two seconds to delete an app. The implication for businesses is that they need to better understand the customer.”

Top-down digital drive

For this he says there has to be strong business alignment around digital and that this has to be sponsored by the CEO. One of the key failings for companies is that they still regard digital as a technology issue whereas Dermody says it has to be business-led. This is underpinned by investment in the right technology, which is around the customer experience and product management.  

In contrast, he strongly advocates no further investment is made in legacy systems: “They have to go. Companies are putting off replacing them because this is really hard to do. But you have to invest and get on with it.”

Part of the solution is cloud-based technologies, which are the new breed of products replacing the build-your-own era. Allied to this is the adoption of agile methodologies. Using this approach ensures innovations can be undertaken at speed: “Customers will not wait for you. They’ll go to a better company. The IT function therefore needs to work at a greater speed. And it needs to understand the latest technologies.”   

Investment in people

Helping this is the employment of a broader mix of people within the IT function. “It is not only millennials that need to be a key part of IT but also a greater diversity across ages, ethnicity and gender,” he says.

Dermody advises retailers to invest in people capabilities as well as technology capabilities: “You need the right technology platform and also the right people with the right skills. Recruiting people is a huge issue. Product delivery and technology delivery is about people, people, people just like stores were about location, location, location.” 

He recognises that it is tough for hospitality and retail companies to attract individuals with the required technical skills when they are in demand from other sectors but he says Costa does not find it too tough because it is a well known brand. “It all comes down to the brand. People like the Costa brand, they use it, and they can therefore relate to it. We’re good at attracting the right talent,” says Dermody.

Dermody will be speaking at RBTE in London's Olympia on Monday 8 May 10:20-10:50 in Theatre Two.