unified, connected com unified, connected commerce cted

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Unified, Connected Commerce

Retail’s Next Frontier


rontier


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“By 2017, 85% of

customers expect

one-click-away

commerce and

fulfillment from all

retailers, and those

retailers will beat

peer revenue

growth by 200

basis points.”

—IDC: Worldwide

Retail 2016

Predictions1

Next Frontier After Omnichannel

The retail industry has evolved significantly in the age of the internet,

from single channel (bricks-and-mortar stores) to multichannel

(stores and ecommerce) to omnichannel (sell in one channel and

fulfill in another). In terms of industry evolution, omnichannel and

providing a seamless customer experience is table stakes now. In the

world of omnichannel retailing, coupled with consumers’ desire for

instant gratification, consumers use various touchpoints such as

mobile, in-store, social, and web during their purchase journey where

they buy from one channel and expect fulfillment from another

channel. For example, consumers can buy product online and pick up

in the store, or buy product online and return in the store. This has

created numerous challenges for retailers in both customer

experience and supply chain arena, as it has amplified the challenge

to predict consumer demand, especially around when and how the

consumer would like the fulfillment of the order. Therefore, retailers

are shipping products from stores, and stores are now functioning as

minidistribution centers. The business process and systems that were

designed for retailers over the course of time were meant mainly for

typical stores’ replenishment. Therefore, the question is how retailers

can delight consumers in a cost-effective manner.

“By 2017, 85% of customers expect one-click-away commerce and

fulfillment from all retailers, and those retailers will beat peer revenue

growth by 200 basis points.” —IDC: Worldwide Retail 2016

Predictions1

The concept of unified, connected commerce means a convergence

of physical and digital channels. Leveraging a unified, connected

platform across all channels allows retailers to differentiate and

innovate across customer experience and supply chain dimensions,

enabling revenue growth and improving margins. It enables

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“64% of all

in-store retail sales

are influenced

by digital—

navigating the new

digital divide.”

—Deloitte Digital

20152

commerce-anywhere strategy and provides a seamless consumer

experience in today’s hyper-connected world.

“64% of all in-store retail sales are influenced by digital—navigating

the new digital divide.” —Deloitte Digital 20152

As the majority of store purchases are driven by digital engagement,

the concepts of physical and online have become irrelevant. Hence,

the need for a platform that merges and blends the physical and

online worlds into a single, unified platform that is connected across

all the channels, providing a seamless experience to consumers.

To achieve these desired business outcomes, retailers need to start

thinking in terms of building “single view of customer” capability that

provides better understanding of customer behavior, demand, and

where the customer is in the shopping journey, as well as “single

view of inventory” capability to provide a real-time visibility of

inventory and, subsequently, lay the foundation for an agile supply

chain to reduce stockouts, increase inventory turnover, and better

margins. To further amplify these capabilities, they have to leverage

the transformational technologies such as cloud, big data, mobile,

and Internet of Things (IoT), as they embark on the unified,

connected retail business model transformation. And no business

transformation is successful, if Retailers don’t consider the key

ingredient “People” in the “People, Process and Assets” paradigm.

It’s Not About Channels, It’s About Consumers

“More than 80% of Millennials use their mobile devices while

shopping in-store to access digital coupons, research products, check

prices, and pay for purchases.” —PwC, 2016 Total Retail Survey3

Consumers today are highly sophisticated and well informed about

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“More than 80%

of Millennials use

their mobile devices

while shopping

in-store to access

digital coupons,

research products,

check prices, and

pay for purchases.”

—PwC, 2016 Total

Retail Survey3

brands and products, and have high expectations of customer

experience irrespective of the channel. Therefore, retailers have to

evolve their thinking from channels, whether offline or online, and

start thinking in terms of consumers, especially around consumer

shopping and purchase journey. So the question for retailers is how

they can understand the consumer better and align with the

consumer need. The challenge in providing this capability is

compounded by the fact that today’s consumer uses various

touchpoints across web, in-store, mobile, social, call center, and

email in their shopping journey. Therefore, the relevant, associated

data resides in siloed, fragmented systems. Complicating it further,

this data is in a variety of formats—structured, unstructured, and

semistructured. This is the key barrier in providing a single view of

customer capability.

Therefore, to eliminate this complexity, retailers have to unify the

data by implementing an enterprisewide platform that provides the

ability to integrate consumer data from various sources in structured

and unstructured formats, and across multiple touchpoints and

interactions. They also need to leverage big data technologies on this

centralized data to do the predictive analytics modeling and leverage

consumer insights to make better business decisions. Retailers need

to analyze this data in the right context and develop insights on a

timely basis to maximize the opportunity for delighting customers.

For example, they can use a data management platform for offline

spend data, do social listening, use data aggregators, and weather

data, thereby enriching consumer insight and providing meaningful

insights—in the right context, at the right time.

To further personalize the customer experience, retailers need to

build IoT capabilities such as Beacon (in-store GPS), enabling retailers

to interact with consumers in a meaningful way as they navigate the

store. By leveraging Beacon sensor technology, retailers can get a

better understanding of the consumer and his/her spend history and

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“Overstocks and

out-of-stocks cost

retailers US$1.1

trillion globally in

lost revenue.”

—IHL4

preferences

promotions and also enabling store associates to provide

personalized serv

RealInterconnected

“Overstocks

lost revenue

Delivering on customer experience requires understanding consumer

demand so that retailers can better plan and be prepared

and how much inventory to carry.

easy,

chain that can enable flexible business

processing

complexity of order fulfillment due to siloed business processes

fragmented data sources and

inventory

achieving successful

expectations.

Therefore

business

chain

today’s

need to first and foremost develop a single view of inventory

capability as they simply can’t

don’t have the capability to see the complete end

what inv

agile supply chain and better forecasting

better pricing, marketing

effective merchandising operations and order fulfillment.

preferences, thereby delivering more-targeted and relevant


personalized service.

Real-Time Visibility in an Ever-Cnterconnected Supply Chain

Overstocks and out-of-stocks cost retailers US$1.1 t

lost revenue.” —IHL4


demand so that retailers can better plan and be prepared

and how much inventory to carry. Consumer expectations of fast,

and convenient delivery of products requires an agile

chain that can enable flexible business processes

processing, inventory shipments, and returns handling.

complexity of order fulfillment due to siloed business processes

fragmented data sources and systems, and lack of single vie

inventory visibility on a real-time basis are among the

achieving successful omnichannel execution and meeting consumer

expectations.

Therefore, retailers have to evaluate their siloed

business processes and understand how they can make their supply

chain align with consumer demand coming from various sources in

today’s digital world. To orchestrate the agile supply chain, retailers


capability as they simply can’t run their business operations if they

don’t have the capability to see the complete end-to

what inventory is available for consumers and where

agile supply chain and better forecasting will subsequently

better pricing, marketing, and promotions, driving efficient and


targeted and relevant


omplex,

trillion globally in


demand so that retailers can better plan and be prepared for where

Consumer expectations of fast,

and convenient delivery of products requires an agile supply

processes around orders

and returns handling. The

complexity of order fulfillment due to siloed business processes,

and lack of single view of

the key barriers in

channel execution and meeting consumer

etailers have to evaluate their siloed supply chain

w they can make their supply

consumer demand coming from various sources in

o orchestrate the agile supply chain, retailers


operations if they

to-end picture of

and where. In addition, an

subsequently enable

and promotions, driving efficient and


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To accurately identify the demand signal from c

and develop relevant insights,

analytics

unstructured data sources and analyze t

analytics

will enable

marketing campaign

corrective action

further optimize the

frequency

visibility of

the inventory will also

price across different channels, and enable

promotions

higher sales, better margins

the end of the day, it’s all about right produc

price,

Key Ingredient Transformation

No business transformation is successful if

ingredient

Navigating through the

takes place across the

(LOBs)

channel

understand,

this business transformation

marketplace.

since

such as

level metrics

ccurately identify the demand signal from consumer

and develop relevant insights, retailers need to develop

analytics capability to organize these fragmented

unstructured data sources and analyze them by doing

analytics to gain better insight into consumer demand.

will enable retailers to see the signals in consumer demand

marketing campaigns and promotions are progressing

corrective action to minimize out-of-stock inventory issues.

further optimize the operations, retailers need to leverage

requency identification technology, which will provide

visibility of inventory via automated tracking. Better understanding of

the inventory will also subsequently enable retailers to synchronize

price across different channels, and enable consistent pricing

promotions across the physical and digital worlds. This will result in

higher sales, better margins, and satisfied and happy customers. At

nd of the day, it’s all about right product, right location, right

and right time.

Key Ingredient for Successful ransformation: People

business transformation is successful if we don’t consider the key

ingredient of people in the “people, process, and a

Navigating through the culture will be critical as the

takes place across the entire organization where l

(LOBs) and IT have to collaborate as they break down the

channels, business processes, and systems. Retailers have to c

nderstand, articulate, and justify the critical need

business transformation in the hyper-competitive retail

marketplace. Collaboration among LOBs would be extremely

the transformation would require change at mul

such as business process, organizational structure,

level metrics as they transition from channel to customer mindset

onsumer behavior

develop big data

these fragmented structured and

by doing predictive

better insight into consumer demand. This capability

to see the signals in consumer demand and how

are progressing, thereby taking

tock inventory issues. To

etailers need to leverage radio

will provide real-time

Better understanding of

enable retailers to synchronize

consistent pricing and

This will result in

and satisfied and happy customers. At

t, right location, right

don’t consider the key

ssets” paradigm.

culture will be critical as the transformation

lines of business

down the siloed

. Retailers have to clearly

need and urgency for

competitive retail

among LOBs would be extremely critical

change at multiple levels

rganizational structure, and enterprise-

stomer mindset.

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“Retailers believe

a unified commerce

platform will

improve consumer

response and

associate

productivity by

better supporting

omnichannel

strategy and

execution.”

—NRF survey5

This will require alignment not only between LOBs and IT, as retailers

simplify the business process and move away from the competition

between digital and physical stores, but also in incubating the

collaborative culture with the customer focus. The framework needs

to include why business transformation to unified, connected

platform is important, what the future/end state (organization

structure, business process, enterprise customer-centric metrics) will

look like, how the business success will be measured, and who is

accountable/responsible for the benefit attainment as the change

progresses. Retailers also need to plan for training and employee

engagement plans, and celebrate short-term wins. Leveraging this

approach will not only reduce the degree of organization confusion

during the transition to unified, connected platform, but will also

accelerate the benefit attainment, thereby ensuring long-term

sustainability of the business transformation initiative.

Conclusion

According to a recent National Retail Federation (NRF) survey,

retailers believe a unified commerce platform can better address the

following business imperatives:5

1. Quickly respond to consumer demands: enabling

organizational agility to effectively execute merchandising,

marketing, promotional, and loyalty initiatives

2. Increase store associate productivity: in addition to increased

efficiency and lower costs, arming associates to enhance

customer interaction and increase conversion

3. Support omnichannel strategy and execution: providing the

backbone to manage data and functionality related to

customers, product, price, inventory, orders, and content

across channels

It’s all about evolution. Retailers have to be laser-focused on the goal

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of developing u

channels, processes

the customer

anywhere

manner

have to

two competing

investing in

transformation

business

highlighting

retail

this phased approach will

business impact, prioritize

and highlight

retailers to map the transformation timeline

the business processes a

necessary to achieve

As retailers evaluate key

digital and offline world

they need to adopt

mindset.

big data,

to access data and applications in a

manner

commerce

cloud platform

new applications across the enterprise (

enabling retailers to transform business in

deployment model

experience

value.

of developing unified, connected commerce by breaking down

nnels, processes, and systems, thereby providing

customer across all consumer touchpoints and

anywhere/fulfill-anywhere business model in a cost

manner. The associated challenges are further amplified as

have to also prioritize the technology investment dollars

competing agendas: “keeping the lights on” while simultaneously

ting in laying the foundation for successful

transformation. To execute the unified, connected

business transformation, retailers need to develop

highlighting clear line-of-sight visibility between business

retail solution capabilities. The business transformation

phased approach will show business strategy execution, highlight

business impact, prioritize investment requirement

and highlight dependencies across various business units

etailers to map the transformation timeline and chart the course of

the business processes and critical capability changes

necessary to achieve unified, connected commerce.

etailers evaluate key foundational technologies

igital and offline worlds, and enable a mobile-optimized platform,

they need to adopt a “cloud-first” or, in some cases

mindset. For example, in leveraging cloud for omnic

ata, and IoT as a service, cloud provides an agile way

to access data and applications in an agile, scalable

manner, and enables retailers to rapidly implement

ommerce business model. Additionally, retailers can leverage the

cloud platform framework, tools, and services to extend existing or

new applications across the enterprise (marketing,

enabling retailers to transform business into

deployment model and thereby providing better customer

experience, reducing out-of-stock conditions, and preserving

value.

by breaking down silo

providing a single view of

and enabling a buy-

in a cost-effective

. The associated challenges are further amplified as retailers

dollars between the

“keeping the lights on” while simultaneously

successful business

onnected commerce

develop a roadmap

business needs and

business transformation roadmap in

strategy execution, highlight

investment requirements, manage risk,

business units, enabling

and chart the course of

capability changes that are

technologies to merge the

optimized platform,

in some cases, a “cloud-only”

channel retailing,

provides an agile way for retailers

scalable, and secure

rapidly implement the unified

etailers can leverage the

and services to extend existing or

arketing, commerce, IT),

an uninhibited

better customer

and preserving brand

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With these concepts laid out

target

transformation.

platform, visit oracle.com/retail

Authors

Dan Conway, Retail, CG Industry

References

1. “IDC FutureScape: Worldwide Retail 2016 Predictions”

2. “Navigating the New Digital Divide”

3. Total Retail Survey 2016—

4. “Retail’s $1.1 Trillion Inventory Distortion Problem”

2015.

5. “Building the Business Case for a Unified Commerce Platform”

Federation, Executive Research Report, 2015.

Copyright © 2016, Oracle and/or its affiliates. All rights reserved. This document is provided contents hereof are subject to change without notice. This document is not warranted to be errorwarranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantabilitfitness for a particular purpose. We specifically disclaim any liability with respect to this document, and no contractual obformed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by a

electronic or mechanical, for any purpose, without our prior written permission

With these concepts laid out, Oracle works with retailers to

target areas and opportunities aligned with a unified

transformation. To learn more about Oracle’s unified

platform, visit oracle.com/retail.

Industry Lead Sharad Kala, Business

“IDC FutureScape: Worldwide Retail 2016 Predictions”—IDC Webcast, Nov. 4, 2015

“Navigating the New Digital Divide”—Deloitte Digital Retail, May 2015.

—PwC, February 2016.

$1.1 Trillion Inventory Distortion Problem”—IHL Group Research Study, June

Building the Business Case for a Unified Commerce Platform”—

Federation, Executive Research Report, 2015.

2016, Oracle and/or its affiliates. All rights reserved. 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 subject to any other

ties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantabilitfitness for a particular purpose. We specifically disclaim any liability with respect to this document, and no contractual obformed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by a

electronic or mechanical, for any purpose, without our prior written permission.

works with retailers to identify

nified commerce

nified commerce

Business Value, Lead

IDC Webcast, Nov. 4, 2015.

IHL Group Research Study, June

—National Retail

information purposes only, and the free, nor subject to any other

ties 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,

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