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Brick-and-mortar retail: 5 keys for success in a digital world 5 Proven Steps for Retail Survival : How to Transform for a Digital World

Transcript of 3URYHQ6WHSVIRU5HWDLO6XUYLYDO :RUOG€¦ · Brick-and-mortar retail: 5 keys for success in a digital...

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Brick-and-mortar retail: 5 keys for success in a digital world

5 Proven Steps for Retail Survival:How to Transform for a Digital World

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Brick-and-mortar retail: 5 keys for success in a digital world

IntroductionIn recent years, much of the retail press has been centered on new channels to market: e-commerce, m-commerce, and omni-channel commerce. Thanks to the

high-profile bankruptcies of Borders Books and Tower Records, industry analysts rung the death knell for brick-and-mortar retail. They claimed it was simply

not possible to compete with the choice, convenience, and cost benefits that e-commerce vendors like Amazon provided.

But, as brick-and-mortar stores continue to flourish, that prediction has proven to be premature. Apple’s retail stores have proven to be enormously successful, and

pure play e-commerce vendors such as Bonobos, Warby Parker and even Amazon itself have all opened physical stores.

This success reflects a new point of competition: customer experience. Customers’ purchasing decisions are based on more than just price and product. Customers are placing increasing value on their relationship with the brand, a personalized

shopping experience and seamless service across channels, irrespective of whether they are online or offline. In this context, retailers with physical locations, who are able to deliver human interactions that are empathetic to customers’ needs, have an

inherent advantage in delivering a superior experience.

“Retail reinvention isn’ta simple battle to the death between bricks and clicks. It is aboutdevising retail models that work for people who are making increasing use of a growing arrayof Internet-connectedtools to change how theysearch, shop, and buy.”— David S. Evans and Richard Schmalensee, Harvard Business Review, Aug 2016

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Brick-and-mortar retail: 5 keys for success in a digital world

However, this change reflects a much deeper shift. As customer purchasing decisions focus less on product and price, so too is the market moving away from the traditional competitive paradigms of scale and scope. In a world

in which the customer experience trumps all, the point of competition now becomes speed of execution. How quickly can retailers meet customers’ needs? How quickly can they respond to changing preferences? And how quickly can they respond to volatile economic and market conditions? In a world where once the large dominated the small, it is now the fast that are out-competing the slow.

Amazon’s success is not because it is an e-commerce retailer. Amazon’s success is based on its maniacal focus on moving faster than any of its competitors. As

Jeff Bezos, Amazon’s founder and CEO, said in his 2015 letter to shareholders, “We want to combine extraordinary customer-serving capabilities with speed of movement, and nimbleness."

IT is central to this change. IT has emerged as the key enabler of business

strategy and business execution. And so, in a world in which the key point of competition is speed, the speed at which an organization can operate is in large part determined by the speed at which the IT function can deliver.

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Brick-and-mortar retail: 5 keys for success in a digital world

How then can IT leaders deliver the speed necessary to win against a

backdrop of narrowing margins and growing resource constraints? How can they free up teams from "keep the lights on" IT to projects that will deliver

growth? Existing responses, such as agile development approaches, are necessary but not sufficient to deliver the exponential increases in speed that customers are demanding.

MuleSoft’s experience shows that winning retailers - both brick-and-mortar and e-commerce retailers alike - are making a deliberate shift to change their

IT operating models. Rather than viewing IT as a delivery function, they choose to frame IT as an enablement function. By delivering technology assets, captured as reusable API building blocks, Central IT can act as a platform that allows Line of Business (LoB) teams to self-serve. And by driving reuse of these assets across teams, these organizations can then realize a 2-5x increase in productivity, and ultimately, speed of execution.

Distilling learnings from working leaders in this space - including 2 of the top

5 global retailers, and 4 of the top 7 global CPG firms - read on to discover 5 principles that will help retailers reach their digital transformation goals and

thrive in today’s competitive environment.

“The new IT operatingmodel was necessary to make sure that we build the foundation to drive agility and speed. The big benefit to the business of becoming more agile is the opportunity to innovate everywhere, not only in central IT.”— Frank Brandes, Director, Global Enterprise

Business Integration, Unilever

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Brick-and-mortar retail: 5 keys for success in a digital world

ArchitecturalPrinciplesfor Success 5

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Brick-and-mortar retail: 5 keys for success in a digital world

01 Deliver central API assets toenable innovation “at the edge”Retail organizations often operate in multiple geographic markets and multiple product segments, each with their own

idiosyncrasies. To reflect customers’ needs, it’s critical that local teams are able to drive innovation in their local markets.

Yet many IT teams are unable to do this because of day-to-day, business-as-usual IT demands. In fact, consensus

estimates from analyst firms such as Gartner and Forrester put "keep the lights on" IT spend at 70-85 percent.

By providing a central backbone of services, Central IT can provide the platform for growth that allows LoB teams to focus on innovation and growth.

1

| Proof point | A global

quick service restaurant with

locations in more than 100

countries wanted to

consolidate best practices

and accelerate innovation at

scale. Central IT built out a

set of reusable services that

allowed in-country teams to

self-serve and drive local

innovation. For example,

a mobile application is

now launching in multiple

countries that is built on a

common core, yet allows

each region to differentiate.

LoB IT

Central IT

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Brick-and-mortar retail: 5 keys for success in a digital world

02 Drive reuse of API assetsto increase agilityIn an omni-channel world, customers demand the same

shopping experience across in-store, web and mobile channels. This presents a complex connectivity challenge as retail IT teams must work across different business units and bring together disparate technology solutions combining POS, on-premises ERP and SaaS e-commerce solutions.

As the number of sales channels or markets grows, this work is often needlessly duplicated through custom code. This

results in additional effort and cost, and opens the door for inconsistent processes.

Delivering this connectivity logic through API building blocks

that can then be reused across channels, can provide 2-5x increases in implementation speed.

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| Proof point | America’s

leading rent-to-own

retailer drives sales

through in-store, web,

and franchisees, as well

as more recently building

a new sales channel

through kiosks installed

at third party retailers.

By reusing core business

services, this retailer

is able to launch new

channels 2x faster than

before.

LoB IT

Central IT

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Brick-and-mortar retail: 5 keys for success in a digital world

03 Ensure API assets arediscoverableIn organizations where central assets do exist, they are often hidden or difficult to find.

As a result, LoB teams find that it is easier to (re)create their own assets, rather than invest the time in looking

further.

For developers to leverage the API-led building blocks, it’s critical to remove as much friction as possible. This

should include ensuring that APIs are easy for developers to find and incorporate into their workflow, as well as considering internal evangelism and education efforts to promote awareness.

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| Proof point | Coca-Cola

works with an international

network of bottling

subsidiaries and wanted to

drive consistent processes

across the entire network.

Therefore, Coca-Cola

developed a set of re-

usable integration assets

that are shared through

MuleSoft’s Anypoint

Exchange, a centralized,

easy-to-use platform which

all groups can access to

discover and consume

what’s been built.

Search Add item

Status Scope RatingSort by:

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Sending JSON to a JMS QueueLearn how to connect toJMS Queues and Topics.

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(5 votes)

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Salesforce to Salesforce, Workday, SAP and Database AccountBroadcastReal time synchronization of accounts from one Salesforce org to another as well as a Workday HCM instance, an SAP instance and a Database using a non-persistent JMS topic.

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Brick-and-mortar retail: 5 keys for success in a digital world

04 Build API assets to enableself-serviceEven if API assets are discoverable, they will not be leveraged by developers if they are not easy to consume.

Developers invariably search for the most efficient way to solve the problem that is in front of them. If the

developer onboarding experience is poor - for example, if the API is not well documented - API assets will ultimately not be adopted and developers will turn to lower friction alternatives to meet their needs.

Therefore, just like the end-to-end customer experience in retail, thinking about the end-to-end developer

experience is critical for success.

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| Proof point | GANT, a

leading lifestyle and apparel

retailer with 750 stores in

70 markets, has partnered

with MuleSoft to build a

set of reusable API assets

that can be leveraged

across geographies. To

support adoption, GANT

has leveraged MuleSoft’s

Anypoint Platform to

build API portals to help

developers understand how

to use the APIs, as well as

“API notebooks” that include

interactive API examples.

GET

GET

GETDELETE PUT

API reference

/public

/public/apisSearch through all public APIs within the Anypoint Platform

Organizations are the container entity for all API Portal-related resources.

/organizations

/organizations/active

/organizations/{organizationld}The organization’s data.

Resources

API Platform 2.0.3

Overview

API reference

Query API Platform applications

Query APIs by a tag name

Public search API

Extended search API

Request API access

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Brick-and-mortar retail: 5 keys for success in a digital world

05 Think beyond technologySuccessfully implementing these architectural approaches

demands more than just technology. It requires a change in organizational mindset, and may also require new roles to be created or redistributed across team members. For example, in a world where services are more prevalent, greater resourcing must be devoted to DevOps.

Without such a holistic consideration of the end-to-end lifecycle, the impact of such architectural approaches will at best be limited, and at worst, nonexistent, as IT teams

revert to existing approaches.

In this context, organizations should consider building a

cross-functional Center for Enablement (C4E team that helps to catalyze, lead, and role model such change.

5

| Proof point | Unilever,

one of the world’s leading

consumer packaged goods

companies, partnered with

MuleSoft to set up an in-

house adaptive integration

capability, which operates

in a DevOps framework,

focused on self-service

oriented API connectivity

and supported by a Center

for Enablement approach.

Process

PeopleTechnology

C4E

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Brick-and-mortar retail: 5 keys for success in a digital world

So, now what?Here are some questions we recommend asking yourself:

-- Is there a gap between the needs of the business and the ability of IT to deliver?-- Will existing approaches be sufficient to close that gap?-- Would the principles discussed be relevant to your organization?

How do I start? Where do I start? What’s my roadmap for success?

Contact MuleSoft to figure out the best way to get started.

MuleSoft’s mission is to connect the world’s applications, data and devices. MuleSoft makes connecting anything easy with Anypoint Platform™, the only complete integration platform for SaaS, SOA and APIs. Thousands of organizations in 60 countries, from emerging brands to Global 500 enterprises, use MuleSoftto innovate faster and gain competitive advantage.