TRANSFORM THE ECONOMICS OF RETAILING - Oracle · in 2010. Taking the lead from retail customers,...
Transcript of TRANSFORM THE ECONOMICS OF RETAILING - Oracle · in 2010. Taking the lead from retail customers,...
TRANSFORM THE ECONOMICS OF RETAILING
A Simple, Intuitive User Experience:
The Last Mile in Delivering on the Promise of Enterprise Software
Executive Overview We have built the engine…now we must construct the car around it. Using this car analogy as a guide, software developers are embracing the one missing piece that may be holding customers back from fully utilizing their software packages: Simplicity.
Technology has provided the tools and means for retailers to deliver the best
service and experience to consumers. Now technology vendors must bring those
tools to the next level by creating simple, intuitive interfaces to help every user
easily achieve the outcomes the software was designed to produce.
“To date, enterprise software companies have been so focused on functionality,
process and the mechanics of what software can do, investments in user
experience have been orphaned,” says Duncan Angove, General Manager and
Senior Vice President of Oracle Retail.
The infrastructure is in place. Enterprise software firms have developed the
technology that enables single-data platforms, incorporating offerings from
various vendors in a single interface. But what has been missing is the over-
arching integration layer that enables the pieces to work together easily, so end-
users can learn to interact with the system with little or no training and work more
efficiently. It can be a win-win for all: a better retailer user experience translates to
a better customer experience.
In today’s retail environment, the primary goal is to improve the customer
experience. More than 50 percent of retailers surveyed in 2009 by the National
Retail Federation say their emphasis will be on customer service and experience
in 2010. Taking the lead from retail customers, Oracle is adopting this focus as
well. By improving retail enterprise user experience, software companies will help
deliver a better experience for consumers.
It is time to deliver next-gen user interfaces that will bring the consumer Web user
experience to the retail enterprise, making systems easy and fun to use for
employees, bringing the store to the headquarters every day, and putting
merchants and vendors effectively in the same room.
2
“Bringing together formerly silo’d business processes, infusing them with science, and
wrapping them in a next-gen user experience can deliver compelling financial benefits.”
Richard Flaks, Senior Retail Industry Executive
The Three-Ingredient User Experience Fix
It may sound simple – just three key ingredients will bring the ultimate user experience
to life – but executing on those ingredients successfully can only be accomplished with
extensive industry experience and insights. The most forward-thinking enterprise
software companies will combine Business Process, Science and Innovative
Interfaces to deliver the next-gen user experience.
“Bringing together formerly silo’d business processes, infusing them with science, and
wrapping them in a next-gen user experience can deliver compelling financial benefits,”
says Richard Flaks, Senior Retail Industry Executive.
This three-pronged user experience approach currently comes into play within Oracle
Retail Integrated Inventory Planning and Integrated Fashion Planning bundles
introduced in 2009 and Merchandising 2.0 scheduled to roll out throughout calendar
2010.
1. Business Process
Retailers must be able to bring significant business functions together and help all
members of their team identify their places in the workflow. The suite of software may
include a number of functions such as assortment planning, item management, order
creation, inventory management and price execution. The performance of these
functions must be visible so that different teams can collaborate to capitalize on
business opportunities, mitigate risks and make changes quickly.
The systems must work together to effectively handle transactions and feed the data
from all channels back into the planning processes to ensure better inventory selection,
capital investments and labor distribution. With an effective system in place,
headquarters, vendors and store personnel can work on the same page at any given
moment in the business process.
Beyond simplifying the overall workflow process, the most innovative enterprise
software solution also will customize the workflow for individual employees. Store
associates should be able to view a simple screen that provides the information needed
for specific tasks, such as POS or inventory look-up; and corporate HQ personnel
should be able to view inventory and merchandising information to help them make the
best decisions for the upcoming selling season.
With Oracle Retail’s Merchandise Financial Planning solution, retail customer service
3
Fact: Oracle Helped Retailers Increase
Incremental Gross Profit by More
Than US$3.2 Billion
leader Nordstrom is able to create holistic plans across all channels and gain visibility to
key financial indicators, including sales, markdowns, receipts, inventory, gross margin and
open-to-buy.
2. Science
Without science, retail is about intuition and guesswork. While intuition retains a role in
retail, today’s smart retailers know that science brings the business light years ahead. To
make the cycle complete, the software suite must take the business intelligence derived
from science and infuse it into the complete business process, allowing retailers to use
insight to make better and more profitable business decisions.
Science-based applications can turn transactions into easy-to-understand customer
profiles that can provide buyers and category managers with a clear idea of who is driving
their business. Using science, retailers can use an intelligent prediction of sales to more
accurately distribute inventory to each warehouse and every individual store. Science-
based inventory analysis can localize products demographically, regionally or to the store
level, reducing out-of-stocks and overstocks for a better gross margin return on
investment (GMROI).
The best user interface will orchestrate a unified layer at the top of the core enterprise
technology footprint, providing the ability to bring together the inevitably heterogeneous
retail IT footprint – effectively connecting applications from multiple sources in a way
that capitalizes on existing IT investments and enables retail end users to work smarter
and faster.
3. Innovative Interfaces
The challenge presented to today’s enterprise software companies is making the
complicated retail science and business analytics work within a user-friendly interface.
“Ten years ago, developers were so focused on getting the science right that they figured
the interface could be changed later,” says Angove, “but in most cases that did not
happen and now we are seeing that user adoption has been slow and has prevented
retailers from realizing the full value of these advanced technologies. We have to present
the data in a way that is consumable by the average end-user.”
Each piece of the technology puzzle must be accessible by all business units and brought
together in a way that enables the enterprise to devise more creative and relevant offerings
for their customers more quickly.
COMPETITIVE EDGE Retailers can gain competitive edge by
enabling seamless workflows across key
business applications such as assortment
planning while capitalizing on and extending
those core capabilities with newer
technologies such as:
• Intelligent Search
• Visualization of Products, Stores, Time and
Customers
• Collaboration Frameworks
• Social Networking
• Unlimited Product Delivery (from wireless
phones, handhelds, laptops, store kiosks to
home or store)
• Exception Management and Alerting
• Usability Tools (drag and drop, product
carousels, configurable financial performance
widgets)
• Digital Asset Management
• Video Streaming
• Image Support
• Seamless Business Intelligence
4
“We have always viewed our technology efforts as customer service initiatives to improve
our merchandise offering and the way we serve customers. Our partnership with Oracle
continues to drive measurable results to our business.”
Jan Walsh, Vice President and Business Information Officer, Nordstrom
Today’s retail insights must be extracted from the latest sources and delivered to all
personnel from headquarters to store associates. This means being able to get feedback
from all consumer constituencies through social media, enabling store associates to
upload photos on wireless devices to make real-time merchandising decisions, and being
able to get the latest and greatest products out on the shelves before the competition
does.
The best user interface will orchestrate a unified layer at the top of the core enterprise
technology footprint, providing the ability to bring together the inevitably heterogeneous
retail IT footprint – effectively connecting applications from multiple sources in a way
that capitalizes on existing IT investments and enables retail end users to work smarter
and faster.
A Retail Day in the Life with Next Gen User Experience
To put the puzzle together and visualize the next-gen user experience in action, take a
look at Oracle Retail’s Fast Fashion solution. Oracle has combined best-of-breed
5
“We chal lenged Oracle Retail to provide us with solut ions and technology
across our ent i re retail footprint within an integrated framework. In the end,
there was no one else in the market close to delivering the broad range of
solutions that Oracle could for our business. They made it an easy decision for
us to partner with them.”
Kristen Blum, Chief Information Officer, Abercrombie & Fitch
FAST FASHIONSOLUTION
The Fast Fashion screen shot shows how
complex business information is presented in a
visually appealing and easy-to-understand
format:
• Alerts define the biggest immediate risks
• Category Performance information assists in
future product planning
• Location Performance drills down sales
information to region or store
• Top Key Items show which products are
driving the business
• Navigation Bar helps execute against
priorities
capabilities from the retail applications suite “to provide a systemic approach to fashion
planning that will drive top-line sales and maximize bottom line profitability,” according
to Angove. To help retailers identify fast-moving merchandise and make real-time
merchandising decisions, Oracle started with the end-to-end business processes
developed in Oracle Retail’s solution suite, expanded it with business intelligence from
Oracle Technology, and infused fashion science throughout the workflow. The Fast
Fashion application uses forecasting to understand how items will perform and
leverages optimization to identify which items to send to which stores and what price
will achieve the best financial outcome. All of these ingredients together wrapped into a
simple, intuitive and visual interface deliver a powerful, next-gen user experience.
Integrating all of these capabilities into a holistic offering takes the financial impact to a
new level, enabling up to a five percent increase in sales, eight percent improvement in
gross margin and seven percent decrease in inventory, according to Angove. For a $1-
$3 billion fashion retailer, that adds up to nearly $50-$100 million in value annually.
Using the Fast Fashion solution, a retailer can easily view the previous weekend’s
performance on Monday morning. In the past, the Monday morning report may have
6
Fact: Retailers Running Oracle Are
48% More Profitable Than Their Peers
been compiled from multiple systems in Excel-based or mainframe reports. Although
this example portrays the interface designed for the fashion industry, the same premises
hold true for grocery, fast-moving consumer goods and other retail segments.
Infusing Social Networking into the Retail User Interface
Retailers have a new and exciting opportunity to reach consumers and their peers in an
immediate and impactful way – through the use of social media. Social networks and
blogs are now the fourth most popular online activity ahead of personal email,
according to a March 2009 report from Nielsen Online. Member communities are
visited by 67 percent of the global online population, and time spent is growing at three
times the overall Internet rate, accounting for almost 10 percent of all Internet time,
Nielsen reports.
For retailers, this paradigm shift poses major risks and opportunities. “The key is to
understand and harness the medium, capitalizing on it to understand the customers,
what they want and how to deliver it in a way that’s relevant, unique, compelling,
efficient and profitable,” says Flaks.
Retailers can join in the social media revolution in several ways. They can advertise
within relevant media, monitor communities to elicit trend information or participate
actively by creating company blogs, posts, chats, surveys and groups. Enterprise
technologies such as Oracle Beehive and Web offerings such as Facebook and
YouTube make it possible to easily devise ideas and test them or take input from key
constituents on trends and act on them quickly to capture a hot market trend.
Retailers can go further by incorporating social media information into the business
process. Following is an eight-step strategy example in which social media capabilities
might come together to support a next-gen workflow within the user interface:
1. Create a Merchandising Concept that brings together several items from your assortment to deliver an “outfit” to your customers, helping them to think about how they might wear the latest styles and helping the retailer build their market basket size or up-sell opportunity.
2. Review Customer Dashboard for a quick view into key segments and who is
buying certain items. Also find out what other items key customers are purchasing.
Create a fan club on Facebook for the purpose of collecting feedback on products.
3. Post to Facebook: From a posting set up screen, grab a hot item merchandising concept, such as “Fall Day to Night Look” and post it via Facebook to a selected
7
“To date, enterprise software companies have been so focused on functionality, process and
the mechanics of what software can do, investments in user experience have been orphaned.”
Duncan Angove, General Manager and Senior Vice President, Oracle Retail
group or fan club for feedback.
4. Collect Fan Club Feedback & Analysis: Fan club members comment on the merchandising concept and rate the offering and the styles included in it on a variety of
dimensions – color, styling, coordinates, etc.
5. Create Item Scorecard: The feedback from the Facebook fan club powers an item
scorecard which has been derived from a combination of quantitative metrics, such as
sales, and gross margin as well as more qualitative metrics, such as fit, fabric, quality,
styling and coordinates.
6. Review Visual Feedback from Store Managers: Through the collaboration
dashboard, review a running list of feedback on the merchandising concept and new
ideas for what might work in the store, including iPhone pictures of outfits devised by
your store managers and their associates.
7. Review Market Dynamics: Through Listening Post technology, access a running list
of where the item and the vendor/brand have been featured in the press to understand
what’s hot and what’s not.
8. Update and Execute Merchandising Strategy: With social media information in
hand, make final tweaks to the merchandising strategy and execute in a coordinated way
to store visual merchandising, e-commerce and marketing teams.
Conclusion
By harnessing the power of simplicity, enterprise software companies can bring the end-
user what they most desire: an intuitive and easy-to-use software solution that provides
the insights and information necessary to move the business forward.
To achieve this goal, retailers must respond to needs at each of three primary touch
points: consumers, employees and vendor integration. Then, the end-product must be
infused with three components: business process, science and innovative interfaces.
Retailers also should keep a keen eye on the movement of social media and how to insert
social input into the business process, leveraging the power of the data captured through
customer ratings and other online feedback frameworks to add a more comprehensive
and meaningful picture around business performance.
Once all the technology pieces are in place, connecting retail stakeholders in new
compelling ways, retailers can jump-start an era of retailing that enables all key
stakeholders to understand customers, devise more innovative offerings and
merchandising strategies, and execute flawlessly against business objectives.
8
Fact: Oracle Helped Retailers Drive
an Additional US$11.2 Billion in
Annual Revenue
About Oracle
Oracle is the number one provider of innovative and comprehensive industry software
solutions for retailers – enabling organizations to serve their customers better by
applying insight into daily business decisions for more profitable results. With software
that provides supply chain, operations, merchandising, store systems, optimization as
well as enterprise applications and infrastructure software, Oracle partners with the
world’s leading retail companies, including 20 of the 20 top retailers worldwide, to
transform the economics of their businesses.
Contact Us
To learn more, please visit oracle.com/industries/retail, or email
[email protected] to contact an Oracle representative.
9
Oracle Corporation
Worldwide Headquarters
500 Oracle Parkway
Redwood Shores, CA
94065
U.S.A.
Worldwide Inquiries
Phone
+1.650.506.7000
+1.80 0.ORACLE1
Fax
+1.650.506.7200
oracle.com
Copyright © 2010, Oracle and/or its affiliates. All rights reserved. Published in the U.S.A. This document is provided for information purposes only, and the contents hereof are subject to change without notice. This document is not
warranted to be error-free, nor is it subject to any other warranties or conditions, whether expressed orally or implied
in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically
disclaim any liability with respect to this document, and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or
mechanical, for any purpose, without our prior written permission.
Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.