CIO UK - September 13, 2013 - by Mark Chillingworth
“This business is about pace,” says Mark Dermody, CIO of cycling and sport retailer e-commerce business Wiggle. But the same is very true of the sports that Wiggle has become one of the leading suppliers to, cycling, triathlon and running. “You can’t grow as quickly as we are without pace,” he says.
“It’s a cool brand that resonates with the customers,” Dermody says of the bright orange and white pure play retailer riding high as cycling and outdoor competitive sports replace sedentary car travel and gyms in modern culture. In 2012 Wiggle reported a turnover of £140 million and grew by 20 per cent in a global economy that was nowhere near as healthy as the people that shop at Wiggle. Growing economies such as Asia, commodities wealthy Australia and recession hit Europe were the best markets and Wiggle says it had 70 million visits and dispatched three million orders in the Olympic year.
“We have capitalised on the opportunity, Dermody says. An Olympic year and one where Team GB did so well in athletics, cycling and triathlon will have helped, but Wiggle and Dermody are clearly ambitious.
“Our plan is to be the biggest and there is no reason why we can’t be a global player in enthusiastic participation sport,” he says.
Having a business and process model that is as slick as Bradley Wiggins in full time-trial battle cry is what has given Wiggle a serious edge in the market. It’s online, supply chain and distribution strategy enable the British company to deliver almost any size of item to Australia in just 40 hours. Another example of British competition beating the Australian’s hands down.
“The medals in cycling and triathlon have helped the sports go from strength to strength. It does feel like a real boom for the sport and for this country.
“We believe it’s sustainable. There is a global shift and people are thinking differently in the way they live and travel,” he says of the way cycling has sprinted to the forefront as a form of travel and exercise in the UK. In the summer of 2012 Sport England claimed that there were 161,000 regular cyclists in the UK and London’s growth of cycling as a commuter method has been one of the most significant. As ever consumer behaviour is well ahead of the political world, but of late the Conservative-led government has recently realised it must invest in cycling infrastructure following an inquiry and major pressure from The Times newspaper, cycling communities and British cycling legends such as Chris Boardman.
There has been no let up in the professional cycling arena either with the Sky Team winning a second Tour de France with Chris Froome, just one year after Bradley Wiggins made history as the first British winner. Wiggle itself backs one of the most significant women’s professional racing teams that include Team GB Olympic medal winners Laura Trott, Dani King and Joanna Rowsell.
Wiggle and the UK’s cycling retail industry has been an early innovator in its use of e-commerce, strong supply chains and international currency acceptance. Wiggle trades in 110 countries, in 15 currencies, and 10 languages.
“We deploy to the website every fortnight and the technology teams have the freedom to innovate using Agile and Lean methods.
“They showcase front end developments in a stand up in front of the whole company and they have to demonstrate to the company the business case and they get a lot of self esteem from that,” he says.
Wiggle and Dermody have an IT team of 70, 10 of whom in a new outsourced operation in Minsk, Belarus, that Dermody says gives him the ability to scale projects up and down as and when needed. The UK team is split between its Portsmouth home and London with the capital offering key e-commerce skills, but the CIO says Portsmouth is increasingly providing key skilled staff to organisation like his. The Portsmouth IT operation recently added eight more to its headcount and Dermody says as the Wiggle brand grows in tandem with the rise of cycling and sport recruiting skilled staff is becoming easier.
“We’ve had an awful amount of success in Portsmouth and London as the Wiggle becomes bigger.
“The strategic partnership that we have formed this year in Minsk, called EPAM, will provide us with additional software development colleagues to deliver more technology change than we could deliver on our own.”
The technology team is split between the back office operations and the organisation’s shop, its website. When Dermody joined Wiggle he introduced a delivery team into IT, which was a first for Wiggle, and introduced business analysts and project managers to the team.
“As you get bigger you do need more process and as you add more process you must not lose the agility and innovation. In forming the technology management team I was fortunate in inheriting a team of talented colleagues, some of which were ready for promotion and I was able to bring in some new blood to complement the existing team,” he says.
“I run, many of the team cycle. The passion this creates and opportunities for personal development mean we are run by our customers,” Dermody says of the benefits everyone at Wiggle receives from the organisation through a promotion to be involved in the sports it relies on and the discount staff receive. The Portsmouth headquarters is very relaxed and reminded this scribe of a broadcasting company with bold images of the sports in every meeting room and on the walls. Hanging in every corner were helmets and running gear used by the young and vibrant workforce to get to work.
“To be able to build a business out of what we love doing is very satisfying,” he says.
The Wiggle platform has been developed on Microsoft .Net with an Endecca search engine.
In the last year Dermody and his team have put in the two largest IT projects of Wiggle’s short history, a new carrier management system for its logistics and a warehouse management system that eradicated a swathe of paper processes that even a 13-year-old company can find itself beset with. With both projects successful Dermody is assessing further improvements to the back office operations at Wiggle that will provide the flexibility a growing online retailer needs to scale.
“We are not likely to go with a large scale end-to-end ERP. We are considering a number of solutions for the buying and finance processes. Master data management and how cloud computing can be used are being considered closely,” he says.
As Wiggle becomes an increasingly global brand Dermody sees cloud as an inevitable gear for his operation, especially software as a service. Cloud is already used for development, customer surveys and in the contact centre.
At the front end of the organisation Dermody’s major Col to conquer is mobile. The Wiggle site is rich in content, especially high quality images of the millions of products it stores. Each image is shot and created in-house in the Portsmouth studio. This will create performance and speed challenges for Wiggle on mobile platforms, the CIO says, but he has high hopes for the new 4G network rolling out across the country.
Dermody took the concept of mobile to the operating board of the company and helped them understand the opportunities and is now at the strategy creation phase with full board buy into the need to react.
“I expect us to develop for the tablet first very soon. We already have a good conversion rate on the tablet,” he says. Many CIOs in retail and financial services are seeing increased usage of their online platforms from tablets, but low transaction conversions.
Despite the focus on mobile, Dermody is not convinced yet of the need to adopt responsive design.
“You have to download a lot of assets to the mobile and that affects the performance,” he says of the Wiggle site.
To demonstrate the new warehouse management system in operation, Dermody took CIO UK next door to the warehouse, which is the crank and pedals constantly moving this e-commerce operation forwards. The warehouse staff speed around the building with the alacrity of the athletes they serve, but on their wrists is not the latest Garmin heart monitoring and GPS watch, but a picking device connected to the Red Prairie warehouse management system.
“This project was an example of a good relationship between the technology and warehouse teams,” he says of arguably the two most important elements to the Wiggle business.
“It was the biggest project the company has embarked on and as a new IT director it was good to get that under my belt.”
Wiggle has teams of pickers working round the clock to satisfy the global demand for sports equipment. The wrist based picking system has increased the reliability of the business and therefore customer satisfaction.
“We had 10 people from the warehouse work on the project and that really worked well to provide full support to warehouse staff once the system was in use,” he says. Manual picking is still the most effective method for Wiggle as a result of the diversity of products it trades. Orders can be thimble sized parts, lightweight running tops, difficult to pack wire beaded tyres or a full-size bicycle. In the basement of the headquarters a team pre-build and pack bikes in a room that is an sweet shop for some of the cycling crazy CIOs we have met.
Wiggle offers next day delivery to UK and European customers if the order is placed before 6pm UK time. In the distribution area of the operation pallets of goods are being made up for delivery to the state capitals of Australia, a growing but difficult market for Wiggle as the parochial authorities constantly pass legislation to ensure that all goods sold in Australia have an Australian approval code. Thus ensuring healthy sports like cycling remain prohibitively expensive and minority down under. Shelves bulge with goods heading across Europe and the UK as teams pack orders.
“You are only as good as your last delivery,” Dermody says of the importance of this side of the business as we tour the logistics centre.
Dermody has spent 80 per cent of his career in e-commerce, he says, so Wiggle is good fit and he was enticed to the organisation by its global opportunities.
“First and foremost I am a retailer,” he says. Dermody was at eCommera and Sainsbury’s before joining Wiggle.
“At Sainsbury’s we scaled the grocery online organisation and then implemented the non-food business. That enabled me to learn a lot about best of breed products,” he says of his time as head of e-commerce business systems at the supermarket chain. Other retailers on his palmarès include New Look and Ocado.
“As I bring on new teams I’ve learned to put more into the inductions,” he says of leadership lessons on the climb to be a CIO.
Original publication is here.