Virgin Retail plans major technology upgrade

The UK high-street retailer is boosting its online presence amid increasing competition from Web-only competitors and supermarkets
Written by Andrew Donoghue, Contributor

Virgin Retail is planning a significant upgrade to its Internet operations in the next two months which will affect both its high-street and online presence. The company is also investigating the potential of Voice over IP, but has no plans for RFID technology.

The retail chain of the Virgin group of companies which includes the high-profile Virgin Megastores, is to upgrade its Internet shopping systems for customers in-store and at home. The new Web-based ecommerce system is due to go live in April.

According to Tony Johnson, Virgin Retail's IT director the company is moving away from its existing system of in-store kiosks for Internet shopping because they confused customers. "We discovered that a lot of customers did not realise what the kiosks were for and assumed they were some kind of guide or portal about the store itself," he said.

Virgin will replace the kiosks with an Internet-based ordering system managed by Virgin staff rather than by customers. Goods will be delivered to shoppers the day after the order.

The same system will also be made available to consumers via a new transactional Web site which Virgin hopes will help it keep pace with growing competition from online retailers such as Amazon and Tesco.com.

But rather than opting to build its transactional Web presence from scratch Johnson said Virgin is planning to use an unidentified third-party provider to design and host the site. "A lot of technology is becoming commoditised. Web sites are falling into this bracket too, so why should I bother developing that myself? We are working with a provider which effectively gives us all that 'out of the box'."

Johnson was speaking at the annual employee and partner conference of virtual network provider Vanco in Budapest. Vanco will manage much of the network upgrade required to manage the new in-store technology and Web-site upgrade.

"Real time sales data and inventory is the holy grail for our business. Now we have got a network in place to enable this means we are going to move to a virtual real time environment in our stores," said Johnson.

Virgin Retail is also assessing the potential of voice-over-IP services to help cut communications costs in the organisation. But Johnson said the significant infrastructure costs associated with VoIP meant that the company will not be rushing into a deployment and would probably carry out an initial trial at any new green-field sites the company may open in the future.

Johnson also added that the company had looked into RFID technology but the costs involved were prohibitive at this time. He explained the electronic tag and reader system for identifying products throughout a retailers supply chain was only viable for company's with the scale of WalMart or Tesco.

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