Monthly Archives: September 2011

In defence of Morrisons

Yesterday, reported that retailers were losing millions because of poorly integrated touchpoints. It goes on to say many are playing catch-up and can’t understand why “retailers are allowing sub-standard websites to damage online sales opportunities”. Of course in an ideal world all major retailers would be investing in the digital channel but I think Morrisons has a defendable argument as to why they are late. I should say from the outset this is my analysis and I don’t have an inside track on what Morrisons is doing.

If you drive down the M5 between Bristol and Exeter you will see one reason why, in Morrisons case the website is not currently the centre of attention. They are investing £95million in a new regional distribution centre and the project is slightly behind. However, it is a very important project in support of allowing Morrisons to distribute nationally.

The group is also only half-way through an IT infrastructure roll out at an estimated cost of £310m. The project, called “Evolve” will be completed in 2013 and is a five year upgrade of virtually every system and process the business has. The upgrade will support the groups planned expansion to 600 stores whilst saving support costs and providing operational benefits and efficiencies. Back in 2004 Morrisons also paid £3.35bn to acquire Safeway and has some problems integrating the 327 stores and IT systems into its own.

Also, Morrisons only announced that it would have a go at online sales in 2010 and even then was cautious because of keeping costs under control. Recent news compared Morrisons to the sales Tesco and Sainsburys are achieving online but that hardly seems fair given Tesco’s was the worlds first online grocer and Sainsbury started online in 1998. Having said that, the recent acquisition of a 10% stake in FreshDirect is designed to accelerate the groups knowledge of how to run an online business. They will actually get a seat on the board and the ability to learn about the systems and processes FreshDirect has. They also announced the acquisition of Kiddicare back in February who is an online retailer of cots, nappies and push-chairs.

8th September, Morrisons announced its interim results for the half year to 31st July 2011. Although Morrisons financial performance is good, they can only do so much. Revenue is up as was PBT (to £449m for the period) and cashflow was £667m, £97m up on the previous period but with higher outflows due to capital expenditure. They have also initiated the first phase of the planned £1bn equity retirement. As a result debt grew £238m to £1,055m but they do have a £1.26bn revolving credit facility available until 2016 and with £494m not drawn down.

Can they also invest in a major multi-channel, integrated customer experience programme? I would argue they already are by getting solid building blocks in place both in terms of systems and knowledge. This will put them in a very good position to accelerate development of mobile channels and possibly even overtake some of the competition.

Big data, big opportunity

I visited Adtec today and attended various presentations and seminars. One of these was delivered by Fabric/Infosys and talked about Big data and to kick it off presented some interesting data facts I want to share. You might be surprised to know that:

  • Amex is 85% certain of who will divorce based on transaction data
  • Twitter is 97.3% accurate in reporting box office takings and more accurate than the film organisation responsible for making these forecasts
  • Google’s data predicting flu (influenza) trends is more accurate than The Centre for Disease Control

There was another statistic about Facebook being more accurate than Gallup weekly polls in predicting a political outcome (I think from mid-terms) but the pace was so fast I missed it. After a quick Google search I only found less accurate claims such as this: click link.

Another amazing stat., although not from this session is that 90% of all the data in the world was created in the last two years.

So “Big Data” is hot and a term that will grow in use.

The Numbers and Connections

“The success of human beings depends crucially, but precariously, on numbers and connections.” This quotation comes from chapter one titled “The collective brain” in Matt Ridley’s excellent book called “The Rational Optimist“. In this chapter Ridley describes a world that thrived due to the increasing connections between humans and the trade effect that resulted. He also talks about innovation networks and division of labour all enhanced by the increasing connections we have and diminished or even reversed when connections are lost.

With the rise of the Internet human beings have never been more connected and each day, as technology advances, social behaviour adapts and connections increase. This increases our ability to trade goods and ideas and innovation is enhanced. This got me thinking about “Crowd Sourcing” and how genuinely innovated this is.

I noticed that over the summer, First Direct launched the “First Direct Lab” – described as “crowdsourcing platform that will give customers a stake in the online and telephone bank’s digital marketing efforts”. I have a bit of a problem with this definition as I think it gives customers a voice, not a stake. There are no consequences for them offering poor advice. However, I can see it makes sense to engage more with customers and isn’t that just the point?

Crowdsourcing is simply another way to engage with customers in the same way that surveys and customer panels can. They facilitate a conversation rather than listen to the results of marketing efforts. There is significant evidence that they work and Gary Hamel, business guru, provided various evidence in his book “The future of management”.

So to my question about how genuinely innovative crowdsourcing is. My conclusion is that the technique is innovative based on the new technology available now and its ability to facilitate wider conversations. But ultimately, the idea is as innovative as the first person who said – “gather round you guys, what do you think about this?”.

npower vs OVO

I have just switched my electricity and gas supply to OVO and it wasn’t a price decision. In fact I have signed up for their green tarrif so I am actually paying a little more, but the stories of great customer service were sufficiently powerful to make me put my money where my customer experience mouth is.

Sadly, I am also leaving npower with nothing to do with the cost of supply and have a customer service tail of woe to tell that reveals broken systems and processes that cannot support the good intentions of the staff. I promised to write to the member of staff that was dealing with me and summarise what had happened and thought I’d share it here:

Dear Diane,

We spoke recently about problems I have been having with npower and despite the fact I have made the decision to switch providers I did promise to send a letter setting out why and so here it is.

You will see from your system various communications and I will first point to my letter to Julie Jaglowski, Customer Services Director of 6th May 2011. This letter explained that the property was a holiday home and asked that all correspondence was sent to my home address (shown above). The letter was sent after numerous phone calls had failed to result in a change and I hoped at Julie’s lofty position she would have the power (see what I did there) to enforce the change.

I received a reply to this letter 12th May 2011 from Sarah Harrison, Customer Service Advisor (presumably Julie was too busy making sure letters were sent to the correct address to actually write back to me), apologising and confirming that all correspondence would now be sent to my home address and acknowledging the property is a holiday home.

13th May 2011, Brian Watson, Customer Care Team Manager wrote to me thanking me for contacting npower and asking if I was happy with the resolution and explanation given. He wrote to me at the holiday home address (obviously Julie had not yet got to Brian).

In July 2011, friends used the holiday home and brought back a number of items of post from npower all relating to the gas meter safety inspection. The letters had an increasingly threatening and urgent tone until the final one was a “Warrant of Entry to Enter Your Home”. Apparently Julie’s influence had not extended to the courts either.

I had first sight of this pile of correspondence 31st July and called npower 1st August and was told that the premises was being entered 2nd August. As this was happening I would be on my way to Spain for a holiday so it wasn’t ideal and I had visions of my holiday home being left open all summer. I offered the 7/8/9 September as alternative dates but was told that was not possible – it was simply too urgent and too dangerous for me to not have this gas meter safety inspection sooner.

After approximately two hours of phone calls and no doubt endless hard work by your colleagues I was told the appointment could be postponed and when would I like it scheduled for.  Once again suggested 8th September when I would guarantee to be at the holiday home.

I received three phone messages from you between the 1st August and 7th September. All left voicemails with no detail of the reason for the call. The number to call was an 0845 number so I would be returning the call at my expense. Because of the problems I had experienced the first time I received a message, despite being in Spain, I called and spoke to one of your colleagues who explained the reason for the call was to confirm the 8th September.

That call was 22nd August. I then received a call 1st September again leaving a message, which I returned, again at my expense and was told the call concerned confirming the 8th September appointment. I politely explained that I had already received a call, returned it from Spain and was happy that the 8th was in my diary. You then called me on the 7th September and left a message, which I again responded to at my expense also asking to confirm the 8th September and that was when we spoke at greater length.

But it gets even better!

I arrived at my holiday home 6th September to find letters from npower as follows:

  • 2nd August from Brian Watson ref: CT/COMPACK
    • Apologising and telling me my complaint has been assigned to an advisor in the complaints team
  • 2nd August from Brian Watson ref: CT/COMPES2
    • Apologising and telling me my complaint has been assigned to the Executive complaints team
  • 25th August from Diane Scott ref: 98270688
    • Explaining you had been having difficulty getting hold of me by phone and confirming the appointment on the 8th September

 Despite all the calls and letters, npower had still failed to amend my correspondence address.

 To add insult to injury I was in attendance during the “Gas & Electricity Meter Safety Inspection” and it was nothing more than meter readings. The lady turned up with a digital recorder and nothing else. Presumably she is equipped with an acute sense of smell and x-ray vision!

I hope you will agree this is a fiasco, but even if you do I will probably never hear from you for ages as you will no doubt write to me at my Devon address


In fact credit where to Diane at npower, I did receive a letter from her to my home address and also the offer of compensation which was paid even though they know I am switching.