Two years ago, U.K. retailer House of Fraser started asking itself how it could set the business up for a new multichannel customer. This summer the department store completed "Project Gold," a companywide organisational restructure designed to meet the demands of changing customer expectations.
Andy Harding joined House of Fraser almost five years ago, initially as ecommerce director, drawing on experience gained from a stint at stationery retailer Ryman and, prior to that, at mobile phone retailer Carphone Warehouse, where he ended up as director of web services. At the beginning of 2015, Harding took on a role that emerged from Project Gold, that of House of Fraser’s chief customer officer. He recently spoke to CMO.com and we began by discussing Project Gold.
Harding: Project Gold was a project I instigated and co-chaired with our new CEO as a wholesale business transformation piece. The objective was to look at how House of Fraser could move from having a multichannel team only to having the whole business working in a multichannel way. That was a big transition.
We focused on where we saw clear short-to-medium-term benefits: how to join on- and offline trading, brand and marketing functions so that we’re thinking in a customer-centric way rather than a channel-biased way.
The output of the first phase was to have a chief customer officer responsible for all customer experience and customer communications. As ecommerce director I was very focused on the bottom of the funnel and all of our performance marketing, such as email, paid search, affiliate and online marketing. As chief customer officer I took on the marketing and brand side of the business too.
CMO.com: Which functions are the responsibilities of the chief customer officer?
Harding: There are four areas. I picked up all of our customer insight work from various parts of the business. This has been brought together under a head of customer insight, and insight now informs our strategy prioritisation and decision making.
I took on all of the top-of-the-funnel brand and creative elements such as PR, social, planning, brand positioning, and creative advertising and development under a director of brand and creative. Our new philosophy is to always speak with confidence on branded fashion and styling.
I continue to look after the traditional online and multichannel trading functions, such as category management, product promotions and pricing. Within this we moved the customer marketing pieces such as CRM, loyalty and email from a separate area to come under the director of online trading. They’re now much more focused on performance and sit alongside our traditional online marketers.
I also have ownership of all the various elements of our digital product development.
CMO.com: What does digital product development mean to a retailer such as House of Fraser?
Harding: It includes all of our user experience, web design and development, plus some elements of project management. Obviously there’s a strong relationship between me and our CIO, and a big crossover with those under me in the digital products team and their counterparts in IT.
Essentially, they’re collectively responsible for the delivery of our customer-facing interfaces and experience.
CMO.com: What does the structure of your digital product area look like?
Harding: We took inspiration from some of the more innovative start-up businesses such as Spotify in how they structure their development and user interface teams for agility. We adopted the chapters and tribes concept where you have vertical skills but horizontal project teams, taking people out of specific areas of expertise such as a user experience designer, an insight analyst and business analyst and so on, and creating virtual product teams to work towards specific objectives. In our business that could be to develop a new search functionality, or a new online returns process. But it can also be smaller than that.
We also created a “sparks” idea generation function. Anyone can come up with a spark. That idea is documented and a virtual product team is created to figure out how it might look and to test it, and then take it through to full-blown interface development if we go with it.
CMO.com: Project Gold was two years in the making. What where the learnings from when you first started implementing change?
Harding: We expected knowledge transfer between on- and offline teams to happen over time, but it happened more quickly than anticipated. People have quickly got up to speed in areas where they weren’t experienced. That’s been a really positive outcome.
The other thing is that what you anticipate as the right solution from day one invariably isn’t. You have to trust that you have a framework of how it will work from a strategic perspective and directionally ensure you’re making the right decisions. But then you need to give the teams underneath the freedom to come up with the answers on new ways of working.
Almost 40 people completely changed their roles and we had 12 new roles, it was a huge business change piece.
CMO.com: How did you approach career development and striking the balance between specialist and generalist roles?
Harding: We worked from the basis that we would develop people internally and ask our online specialists to take on offline skills and experience, rather than bringing in new people.
We merged functions together by thinking about customer functions and value. For example, we now have a content team that produces content for all channels, from catalogues, to online, to point-of-sale material for the stores. It was designed to get rid of a channel bias and focus on the customer. By focusing on the customer we knew we’d lose the strict online/offline disciplines.
There are still people who are more specialist in one area within teams, but as they become more senior that’s becoming less of a delineation.
CMO.com: How has the restructure changed the way you work with your communications agency partners?
Harding: There’s been some shift but the main thing for the agencies is just interfacing with different people. Our Christmas campaign this year is a full, through-the-line, multichannel campaign where everything is linked together from online, to TV, to in-store windows, and so on. You really get a sense of a coordinated campaign. Our agencies have come together and we’ve had a much more collaborative working relationship with all of our portfolio of agencies, especially compared to last year’s campaign which was to a large extent a TV advert only. This has been driven by the need to be customer-centric and having to be consistent in all our channels in the way we talk and do things.
CMO.com: Why do you think the team has been so receptive to change?
Harding: The process for Project Gold was consultative. We set up a standalone business unit, including secondments and working with a management consultancy. The first step for them was to interview everyone from a management level up--more than 50 people--about what’s working, what’s not, how they see the future panning out, what needs to change and how it could be better.
The data from the hours of interviews were written up into themes and topics as a starting point to develop what a new structure could look like. Initially we kept thinking “channel” and had to start over several times. But once we got used to thinking “customer” we reached a place where we thought we had a workable organisational structure in place. We developed it further with the really senior people over several days.
We involved everybody in the process so that we could match the rationale of the output to the data we had in the first place, and play back to them their issues, but with answers. The communications throughout were really strong and we got to a place where they felt part of it and it wasn’t a fait accompli.
There was a complete change in focus and belief, and an immediate change in output once the strategy was embedded.
CMO.com: What new metrics, if any, have you introduced as part of the restructure?
Harding: The only thing we plan to do is introduce some of the customer KPIs at executive level. This includes NPS, customer satisfaction metrics, inference of behaviour, and of course actual active customer numbers, average spend and customer lifetime values. But those require a better single customer view than we currently have. There’s a lot of work going on behind that.
In essence, we are already measuring those KPIs but we’re now trying to embed them across the business rather than just within our team.
Data’s hard. Customer data exists in many different areas and that’s a challenge. We’re not alone in having to deal with it, but it does present complications.
CMO.com: What further changes will you make to the structure now that it’s been in place for several months?
Harding: Where people sit is still an issue and the office is full, but we’ve deliberately left it alone because we’re at peak trading. It’s the most complicated time of the year and delivers 80% of our total profit. We decided to let everyone bed in and get through peak before making any further changes. We’re aware of some we might want to make and in the New Year we’ll bring in some new people, but not immediately.
CMO.com: Aside from restructuring for multichannel, what do you see as House of Fraser’s key marketing challenges?
Harding: For House of Fraser it’s about brand awareness. We’re one of those brands where people know the name but don’t necessarily know what we do. The opportunity for us is to raise the market awareness of what we’re for, why we’re special, what we sell and what our place is on the High Street. What we’re really focused on is filling the gap between people having heard of HoF but not having been in one for years and not knowing what we sell.
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