Mark Raskino

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Mark Raskino
VP & Gartner Fellow
12 years at Gartner
27 years IT industry

Mark Raskino is a vice president and Gartner Fellow in the Executive Leadership and Innovation group of Gartner Research. Mark researches CEO priorities and attitudes to IT and major business technology trendsRead Full Bio

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Another CEO declares: we will be a technology business

by Mark Raskino  |  November 20, 2013  |  6 Comments

This week I attended an interview presentation at the UK’s Institute of Directors ( IoD ) .  The interviewee was Simon Calver,  the CEO of Mothercare – a 52 year old British high street retailer with over 300 stores and $1Bn in revenue, specializing in baby and toddler care products for new parents.  During his talk, Simon said a number of interesting things but one quote stood out to me:

“First and foremost we will be a technology business”

He pointed out that the company already gets about 25% of its sales online  with a double digit growth rate, while its store business has low single digit growth.  No surprise then that he also said

“There’s no reason why we can’t think of that [online] eventually becoming over 50% – that’s an aspiration”.

Simon came to Mothercare from Lovefilm.com an online video rental company founded in 2002, which as CEO he helped sell to Amazon.  But he wasn’t always a dot.com guy. His career started in marketing and business operations at Unilever and Pepsi.  He also spent time at Dell. So he has a balanced view of both sides of the business world – the digital side and the traditional side.

Later in his talk he said: “Every retailer should ask themselves: ‘what would this business look like if it was over 50% online’ “.

I couldn’t agree more.  If  Mothercare has already reached the 25% tipping point – every company should take heed. But Simon was also careful to point out that he will

“Use the stores as competitive advantage in an omnichannel model”.

The key insight is that the stores and their staff can offer a service experience – for example measuring a mother to be for maternity bra,  or fitting a baby seat into car safely.

I am absolutely convinced we will hear many more traditional business CEOs declare  “we must become a technology business too” over the next 2 or 3 years – and they won’t all be retailers.   The digital business revolution is well underway.

Simon Calver at the IoD November 2013

Simon (right) Calver at the IoD November 2013

 

 

 

 

 

 

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6 responses so far ↓

  • 1 Richard Hughes   November 21, 2013 at 6:18 am

    I find that declaration “we will be a technology business” very curious. Using technology does not make you a technology business any more than using the phone makes you a telco. You could make 100% of your sales online and still not be a technology business.

  • 2 Mark Raskino   November 22, 2013 at 12:33 pm

    I agree it is a curious thing Richard – but it is happening more often. For example the CEO of Tesco has said this year “we must become a Technology company too”. One way to think about it, is to ask yourself: what exactly is Amazon? It’s not just a retailer and it’s not just a technology company – it’s both. Companies like Tesco and Mothercare have to learn to compete in the on-line space – and that may mean having some technology skills as a ‘core competency’. This is already true in today’s e-commerce word. Once retail starts to bring in 3D printing services in some places, and when more an more products become part of the internet of things – even more technology capability will be needed. Bear in mind companies like Tesco and Mothercare sell own branded good too.

  • 3 Suman Challagulla   November 22, 2013 at 11:59 pm

    Very interesting article. I work in the healthcare industry within IT. So far, IT has been used to analyze data and drive sales. With the ACA, it almost seems inevitable that within the next couple of years, online healthcare insurance “sales” will reach 25% and soon to 50% thereafter. Most managers inside the healthcare industry (insurance, consulting, providers) are certainly asking – what do I do to ensure success within the online healthcare exchanges? It is certainly a situation where companies that adapt to this scenario will succeed and the others have no choice but to perish. Thanks for the informative article.

  • 4 Vincent Powell   November 27, 2013 at 4:49 pm

    Now and in the future, can a business compete and survive without engaging its clients digitally? Most customers want a digital experience before, as-well-as, or instead-of traditional sales experiences. For a long time we’ve optimised business by using technology in the ‘back office’, now we are realising that we need to bring it to the ‘front office’ and many traditional companies deploying a Digital Client Engagement strategy. With mobile internet technology now the default for communication, you’d be foolish to exclude or inhibit your business from engaging in such markets. The reality is every company needs to be a technology company.

  • 5 Mark Raskino   November 28, 2013 at 7:24 am

    Suman – I’m sure many people in your industry are expecting to see lots more personal and home healthcare monitoring technology, connected via the cloud. As the data from this technology accumulates, analysis of it will help us to diagnose disease patterns ( like Google Flu trends), allocate precious resources more effectively and insure more efficiently. Mastery of competencies like these could become central to healthcare industry companies.

  • 6 Mark Raskino   November 28, 2013 at 7:33 am

    Vincent, like many others I am fascinated by the IT strategy being pursued by Randy Mott, the CIO at General Motors. Randy came from HP to GM where he is re-internalising (my term) IT – building datacenters and hiring thousands of IT staff. It makes sense to me. if the future of automotive is the cloud connected vehicle, you need strong capabilities in the platforms that control the industry.