Tuesday Apr 03, 2012

ARTS Reference Model for Retail

Consider a hypothetical scenario where you have been tasked to set up retail operations for a electronic goods or daily consumables or a luxury brand etc. It is very likely you will be faced with the following questions:

  1. What are the essential business capabilities that you must have in place? 
  2. What are the essential business activities under-pinning each of the business capabilities, identified in Step 1?
  3. What are the set of steps that you need to perform to execute each of the business activities, identified in Step 2?

Answers to the above will drive your investments in software and hardware to enable the core retail operations. More importantly, the choices you make in responding to the above questions will have several implications in the short-run and in the long-run. In the short-term, you will incur the time and cost of defining your technology requirements, procuring the software/hardware components and getting them up and running. In the long-term, as you grow in operations organically or through M&A, partnerships and franchiser business models  you will invariably need to make more technology investments to manage the greater complexity (scale and scope) of business operations. 

"As new software applications, such as time & attendance, labor scheduling, and POS transactions, just to mention a few, are introduced into the store environment, it takes a disproportionate amount of time and effort to integrate them with existing store applications. These integration projects can add up to 50 percent to the time needed to implement a new software application and contribute significantly to the cost of the overall project, particularly if a systems integrator is called in. This has been the reality that all retailers have had to live with over the last two decades. The effect of the environment has not only been to increase costs, but also to limit retailers' ability to implement change and the speed with which they can do so." (excerpt taken from here)

Now, one would think a lot of retailers would have already gone through the pain of finding answers to these questions, so why re-invent the wheel? Precisely so, a major effort began almost 17 years ago in the retail industry to make it less expensive and less difficult to deploy new technology in stores and at the retail enterprise level. This effort is called the Association for Retail Technology Standards (ARTS). Without standards such as those defined by ARTS, you would very likely end up experiencing the following:

  • Increased Time and Cost due to resource wastage arising from
    • re-inventing the wheel i.e. re-creating vanilla processes from scratch, and
    • incurring, otherwise avoidable, mistakes and errors by ignoring experience of others
  • Sub-optimal Process Efficiency due to narrow, isolated view of processes thereby
    • ignoring process inter-dependencies i.e. optimizing parts but not the whole, and
    • resulting in lack of transparency and inter-departmental finger-pointing

Embracing ARTS standards as a blue-print for establishing or managing or streamlining your retail operations can benefit you in the following ways:

  • Improved Time-to-Market from parity with industry best-practice processes e.g. ARTS, thus
    • avoiding “reinventing the wheel” for common retail processes and focusing more on customizing processes for differentiations, and
    • lowering integration complexity and risk with a standardized vocabulary for exchange between internal and external i.e. partner systems
  • Lower Operating Costs by embracing the ARTS enterprise-wide process reference model for
    • developing and streamlining retail operations holistically instead of a narrow, silo-ed view, and 
    • procuring IT systems in compliance with ARTS thus avoiding IT budget marginalization

While parity with industry standards such as ARTS business process model by itself does not create a differentiation, it does however provide a higher starting point for bridging the strategy-execution gap in setting up and improving retail operations.

Monday Mar 26, 2012

Customer Experience Management for Retail 2.0 - part 2 / 2

In the previous post, i discussed some of the key trends shaping up in the retail industry, their implications and the challenges facing retailers seeking to regain control of the buyer-seller relationship.

Is Customer Experience Management the panacea for the ailing retailers who are now awakening to the power of the consumer?

Quite honestly, customer acquisition, retention and satisfaction have been top of mind for retailers for quite some time now. The missing piece of this puzzle is bringing all those countless hours of strategy and planning to fruition. This is more of an execution gap than anything else.

Although technology has made consumers more informed, more mobile and more social, customer experience is still largely defined by delivering on the following:

  • Consistent experiences, whether shopping online or offline
  • Personalize-able interaction ("mass market" sounds good as an internal strategy but not when you are a buyer!)
  • Timely order fulfillment, if not pro-active notification of delays

Below is a concept architecture for streamlining front-end, mid-office and back-end interfaces through shared process to achieve consistency and efficiency in managing the customer experience from order capture to order provisioning.

Friday Mar 09, 2012

Customer Experience Management for Retail 2.0 - part 1 / 2

Retail 2.0 represents the transformation in the retail industry triggered by the accelerated shift towards online and mobile technologies and social shopping paradigms. Never before has the consumer been of more importance or should i say in greater control, especially so due to the shrinking information asymmetry between merchants and consumers that has tilted the balance of power in the latter’s favor.

The graphic below outlines the key consumer trends and their implications for retailers.

Traditional, multi-channel customer experience strategies segmented customers based on channel-specific purchase cycles. However, this approach is unable to cope with today’s complex purchase journey’s that involve touch-points across multiple channels. The graphic below depicts the purchase journey of a retail consumer today.

Clearly, customer experience management for Retail 2.0 merits more than just re-branding of existing multi-channel integration strategies as customer experience management! So what should retail merchants do, in order to attract, engage, convert and retain the new-age consumer who is equipped with mobile and internet technologies to make any-time, any-place purchase decisions?

In the next post, i will share a concept architecture of streamlining customer interaction processes with BPM to integrate offer management, order capture and order provisioning to drive improvements in Customer-Lifetime Value, Just-in-Time inventory and supply management, and sales- efficiency by enabling a connected, consistent and seamless multi-channel experience.


A business centric perspective on Private Cloud, Data-center Modernization and EAI.

Sanjeev Sharma
Twitter: @sanjeevio


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