By 2011, virtually everyone under the age of 55 will have used the internet to buy goods and 70 per cent of the UK shopping population will regularly be buying goods online compared to just over 50 per cent of consumers today.

Consumer behaviour, both expected and unpredicted, is driving the online retail market to new highs, according to research by PricewaterhouseCoopers (PwC).

The value of the online market could reach almost £35 billion, nearly three times current spending, by 2011. The projection is based on a PwC survey of 1,500 consumers and analysis of online penetration by category of goods. In four years’ time, internet shopping is likely to account for up to 10 per cent of the entire retail market and will still be increasing its share.

According to PwC research and interviews with industry leaders, the growth of the online retail channel over the next four years will be fuelled by three key factors. Firstly, the proportion of the shopping population that is web-savvy will increase as today’s young people become active consumers and as broadband penetration continues into UK households.

Secondly, within each age group there is a sizeable proportion that intends to start shopping online in the near future. An extra 20 per cent of 55-64 year olds said they will be shopping online in the next few years compared to 39 per cent shopping online in that age group today.

The third key driver will be the increasing confidence of current shoppers, who plan to move their online spending into more varied product categories and spend more per category. According to the survey, 25 per cent more online shoppers will be buying food and groceries online (currently 38 per cent). Alongside the other online staples of CDs, books and white goods, these key drivers will generate up to seven million more online consumers over the next four years.

Mark Parry, partner, PwC, said: “Our research shows that there is no longer such thing as a typical online consumer; five years ago, the net shopper was relatively wealthy, young and male, but today’s online consumers are far more reflective of the general shopping population. The reality of online retail is finally catching up with the early hype, with online sales for 2007 predicted to grow by almost 30 per cent on last year’s high. All indications point to double-digit growth in the years ahead. The UK retail sector is an industry in transformation.”

Understanding what makes people want to shop online is an essential part of the picture. Having a cohesive online and store-based offer is now more important and complex than ever.

Mark Hudson, retail and consumer leader, PwC, said: “Even in 2011, online retail will only represent about 10 per cent of the total market value. The growth of online retail means that conventional retailers will be facing a double whammy in terms of cost.

“Consumers like to shop online primarily for purely functional reasons - it is cheaper and more convenient. Softer, people-related motivations attract them to the high street.

“Retailers will be working harder for customers; they will be making less money in the online space and competing more heavily in high-cost areas to improve the shopping experience in their stores. More than ever, having the right customer proposition and flawless execution will be critical to deliver the necessary sales growth.”

GRAPES HIT THE NET

In an bid to increase the confidence of European buyers in the consistency of Indian grapes, the country’s Agricultural and Processed Foods Product Export Development Authority (Apeda) has developed web-based software that enables customers to access the traceability details of the fruit being shipped to them.

The software - called “GrapeNet” - will provide details of fruit such as its origin and various stages, including health and safety tests in the laboratory, through a click of the mouse.

Importers can access detailed information on inspection, laboratory analysis, certificate of residue analysis and the packaging details on Apeda’s website.

The “GrapeNet” was launched by India’s minister of state for commerce, Jairam Ramesh, earlier this month.

“The pesticide issue is the single most important issue faced by commodities in any international market. Indian grapes have been facing a problem of not being accepted in EU markets due to concerns over pesticide residues,” he said.

Grapes contributed nine per cent to the horticulture export business from India last year and the category is expected to increase by around 10 per cent in value next season.

Ramesh has already asked Apeda to introduce a similar system for mangoes in the next 10-12 months, as India steps up its efforts to assure the European market.

The traceability software will help 40,000 farmers apply uniform practices, and potentially increase their earnings by more than 40 per cent, said Apeda, which told growers that the value of their grapes will rise through participation.

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Fore-cash-ting: Waitrose is rolling out new forecasting software to accurately predict customer demand, after early trials delivered benefits worth millions of pounds. The supermarket chain is replacing its bespoke stock systems because of failures to predict demand during promotions and special events, such as Christmas. The old software reacted only to past events, leading to lost sales, customer dissatisfaction and wasted stock, said Waitrose forecasting systems manager Matthew Hallett.

“The challenge for any supermarket is knowing what a customer wants to buy before they buy it, when even they do not know exactly what it is they will buy until they get to the store,” he said. Waitrose began trialling SAS software to calculate sales and forecast demand for more than 25,000 products at each store.

The retailer ran a three-month pilot in parallel with existing systems at five stores before a live trial across several stores from June to December 2006.

“We generated benefits worth millions of pounds, including increased sales over Christmas and reduced wastage of as much as 20 per cent,” said Hallett.

Waitrose plans to roll the system out to all its 184 stores by September.

UNILEVER TRACED TO MUDDY BOOTS

Muddy Boots Software has signed a major contract with international consumer products giant Unilever, a deal which will see the traceability solutions provider deliver its Quickfire mobile audit management software across the whole of Unilever’s dried and frozen fruit and vegetable supply base.

This is one of Muddy Boots’ most significant global deals, and will initially involve 400 supplier implementations to be spread over a three-year period. It is great news for Muddy Boots, as this contract sets to accelerate the growth it has witnessed over the last few years.

Unilever claims to have led the way on sustainable agriculture for more than a decade, and by using Muddy Boots’ Quickfire software, the firm’s “10 sustainability indicators covering social, economic and environmental factors” can be closely monitored and controlled. By working in partnership with Muddy Boots, Unilever will enhance its supply chain management systems, building on itsreputation as a leading organisation on sustainability.

Jonathan Evans, managing director of Muddy Boots, said: “Unilever’s decision to form a relationship with Muddy Boots illustrates its confidence in our capacity to add value to its business and to support its quest for sustainable development. We value our relationship with Unilever and believe strongly in the firm’s commitment to its sustainability programme, ‘growing for the future’; we look forward to working closely with the company and its suppliers in developing those values.”

Jan Kees Vis, sustainable agriculture director of Unilever, said: “The scope and scale of our endeavour - sourcing all raw materials from sustainable sources - means we must make sustainability improvements among all our suppliers and the millions of farmers involved with our business. It is crucial to have good information on performance, trends, and gaps. And Muddy Boots is essential to us achieving that.”

CLIMATE CHANGED

Canadian IT specialist Climate Control Systems Inc (CCS) has launched its new Climate Manager product, a climate control computer 25 years in the making.

The concept was born in an age before computers had taken over our lives and growers generally controlled the microclimate of a greenhouse manually with a thermometer. CCS was one of the first firms to supply computerised automation equipment and technology to control the climate for greenhouse hydroponic crops in the Leamington area of Canada.

“The secret is in the technology. We’re introducing the latest in technology to the agriculture sector to keep them going for another 25 years, but this time it’s Canadian,” said Eric Labbate, CCS president.

The product is based on hardware and software components more familiar to the automotive and aerospace industry. The main PC talks to a plug-in computer brain inside each control panel. It can talk over an ethernet network to multiple plug-in computers located throughout the greenhouse.

Rather than one, central system, Climate Manager works with multi computers, processing many instructions per second. This computing power gives a grower the ability to access their climate computer with a web browser and log on from a remote computer or Blackberry device to check climatic conditions at their greenhouse operation and make changes in real time.

Since 1985, CCS has been supplying greenhouse automation equipment to control the climate and irrigation for greenhouse hydroponics crops, drip fertigation and closed looped water recycling. To date, they have designed hardware and software control programmes for vegetable, flower and nursery crops.

ABS ON MICROSOFT SHORTLIST

Anglia Business Solutions has been selected as a finalist in Microsoft Corporation’s Partner of the Year Award in Microsoft Dynamics NAV.

Winners of the 2007 Microsoft Partner Program Awards, which recognise Microsoft partners that deliver market-leading, Microsoft-based solutions, will be announced on July 11 in Denver, Colorado at the Microsoft Worldwide Partner Conference.

“Anglia Business Solutions has been working with the award-winning Dynamics NAV platform for the past 10 years” said Anglia’s managing director, David Hurley, pictured. “Our strategy is to focus on the supply chain arena in the mid-range business sector.

“In 2005, we adopted a vertical focus targeted on the food supply chain industry, and the fresh produce sector in particular. We have set up a specialist ISV unit to create and develop a leading edge Dynamics NAV-based package, LINKFresh, which meets all the business needs of the global fresh produce industry. The reputation of the LINKFresh product has spread rapidly as clients have reported some very impressive improvements in productivity and profitability.

“Our objective is to leverage the reputation of the LINKFresh package to become the number one application for the fresh produce sector. Being chosen as a finalist for the Worldwide NAV Partner of the Year Award is a superb tribute to the dedication and skills of our people, as well as the customers who worked in partnership with us to achieve this global recognition.”

Awards will be presented in a number of categories, with winners chosen from a pool of more than 1,800 entrants worldwide.

“We have a diverse and talented partner ecosystem that each year raises the bar in the design and deployment of customer solutions built on Microsoft technologies,” said Allison L Watson, corporate vice-president, Microsoft Worldwide Partner Group. “We are pleased to recognise Anglia Business Solutions as one of our partners leading the field in this category.”

CLEAR THE IMPLEMENTATION HURDLE

In this month’s column, Anglia Business Solutions moves onto the implementation stage, and advises a clear focus on people and processes, as well as technology.

In last month’s article “does the technology matter?” the focus, for obvious reasons, was on the technology platform. However, once you have selected the right software for your business, you still have a way to go before benefiting from the investment.

The next challenge is the implementation process. This is where many an Enterprise Resource Planning (ERP) project has foundered in the past.

Basically, there are three core elements that make up a centralised ERP system: the people, the processes and the technology. Getting any one of these wrong can hamper the success of the project. However, by far the most important aspect is how people are managed throughout the inevitable changes to the working environment caused by the deployment of a new all- embracing solution. Responsibility for this element rests firmly with the management team of the company implementing the system.

The first aspect in the deployment of a centralised integrated business management solution is to realise that it will affect all parts of the business. The system will impact on people planning and ordering the fresh produce, executing those orders through QC and the packing processes, transporting the goods to the customers, collecting the money and paying the growers. At each stage of the process, the company will be reliant on the personnel operating in those areas to accurately record what they have done. In many cases, the data will be posted directly into the system. Missing or incorrect data can have a significant impact throughout the business. Their co-operation is vital to the success of the project.

It therefore makes perfect business sense to manage this process through thoughtful planning and sensitive implementation. This involves consultation with, and the involvement of, the people affected by the changes. Consultation, however, does not just mean selling the change to people as a way of accelerating agreement and implementation. The changes brought about by the new system need to be understood and managed in a way that people can effectively cope with the implications for them. Change is almost always unsettling, so the management team needs to be a settling influence.

Peter Sturrock, managing director of Ithaka Leadership Development, has been involved in rescuing failing ERP implementations and has strong views on the subject. “Whether it be a large multi-site organisation, an acquisitive plc cascading its ERP into newly acquired companies, or a small- to medium-sized business on one site, there are critical leadership and cultural issues in these scenarios that need to be addressed properly for successful ERP implementation to be achieved. In many cases where ERP has failed, the underlying cause is poor leadership or management.

The large organisation is likely to form a dedicated implementation team. The challenge is to develop a high-performing team composed of seconded personnel, contracted consultants and representatives from the ERP specialist supplier. Uniting disparate people into an effective team requires professional and cohesive leadership skills, using competencies different to those that drive the implementation project forward. Teams left to evolve naturally all too often become very task focused on ERP implementation. This means that the hidden critical success factors do not get the attention they need. As a result, the team and project start failing to deliver.

The acquisitive company cascading its ERP into newly acquired companies with their differing cultures, face all of the issues discussed above. This is also compounded by having to consider how to merge the cultures of the two organisations and learn to work together.

The small- to medium-sized business may not have the opportunity to form a dedicated implementation team. Typically, the demands of the project are added to current responsibilities, creating a highly intensive, potentially stressful situation. Furthermore, some members of the management team may not see it as their project, rather as an IT andfFinance project. Yet, buy-in of all from the outset is critical.

Smaller in scale, the team will be more accustomed to working together. But the business often lacks expertise in planning and delivering major, cross-functional projects, and consequently underestimates the effort required in the early stages. This later magnifies the resources required as the implementation deadline approaches. The small organisation also has the issue of developing how to work with the ERP organisation. These operate to professional project management disciplines and rely on deliverables being met for their resource to be available at the right times. Failure by management to deliver results in project problems and/or slippage.

In all three scenarios, care should be taken to ensure that:

• The leader appointed needs to have their authority, responsibilities and accountability clearly defined

• The leadership team for the project is carefully selected

• As a new team, investment is made in their development to rapidly enable them to become a high performing team - the development process should be designed in a practical way to add real value to the project

• As pressures increase through the project life-cycle, the leader has an escape valve, an external mentor as a sounding board.

• Continuous performance improvement is maintained by the leadership team. Teams have often found that the use of an expert external facilitator helps the team resolve difficult, sensitive and potentially confrontational issues smoothly and effectively

In the rapidly consolidating world that is the fresh produce industry, where businesses are getting larger as a means of competing, change is inevitable.

New, more powerful systems are required to manage the more demanding processes involved in coping with the expanded organisations. Where new business management solutions are involved, the impact of changes on people within those organisations needs careful management to ensure their buy-in. As people are a company’s most important asset, the role of management in leveraging the skills of those assets throughout this transition process is vital to the success of the business.

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