House of Fraser embarks on 'pioneering' customer-centric restructure

House of Fraser chief customer officer Andy Harding told Retail Week the department store group has aimed to “future-proof” its organisational structure and stay ahead of the competition in the face of radically changing shopping habits.

Retailers have long struggled to structure their businesses to meet the changing demands of shoppers. The big four grocers are among retailers to have restructured their stores and head offices. However House of Fraser’s initiative represents a step beyond that because it has placed its ‘customer insight’ team at the centre of the business.

The unified customer insight team brings together for the first time House of Fraser’s brand, CRM, product and multichannel functions. The heads of those departments now report into Harding and that team sits at the centre of the business so decisions can be based on customer insight “rather than perception or opinion”.

“Customer insight has to be at the heart of everything we do,” said Harding. “One of our core values is ‘always put the customer first’. But which business wouldn’t say that? There’s a big difference between talking the talk and walking the walk. This demonstrates we are really customer-centric.”

The rest of the company has been broken down by customer journey: ‘awareness and consideration’, where brand and creative teams sit; ‘conversion and loyalty’, where the trading departments sit; and ‘advocacy’. The digital product teams sit throughout those departments, said Harding.

Multichannel at the forefront

The move follows on from the first phase of the restructure which involved merging its multichannel trading team with its buying department.

House of Fraser has been one of the retailers at the forefront of multichnnel development and has trialled innovative technology in-store in order to better merge the online and offline experience, including using beacon technology in its store mannequins. The retailer is also planning to launch shoppable windows in the run-up to Christmas.

Harding said the restructure is designed to “break down barriers” between departments and get all colleagues engaged in a customer centric strategy. “Our departments were all separated by traditional organisational structures. If we’re going to deliver a seamless experience we need to structure the business so that is customer centric not channel centric,” said Harding.

“Customers don’t think about channels anymore, they think of us as one business, whether mobile, tablet, or store,” said Harding. “They want a consistent experience. This is relatively pioneering. We’re not treading a well-trodden path.

“We’re future-proofing our business as far as we can predict customer [behaviour].”

Harding said the new structure, which has resulted in the creation of a net 12 new roles, would better enable the retailer to measure ‘customer lifetime value’.

He said the business asked itself 18 months ago if it was set up for a future when online sales represented 40% of total revenue. “Are we structured for that growth, what will our business look like? We embarked on a project to understand whether organizationally we were ready for the future, in terms of multichannel growth,” said Harding. At present online sales represent 19% of total sales - ahead of the market.

The move is designed to set House of Fraser up for “significant long-term growth”, but Harding conceded: “There’s no right answer.”