Friday Mar 28, 2014

Kohl’s E-Commerce Upgrade Boosts Stability Despite Tight Deployment Timetable

This is another in a series of reports filed by guest blogger Adam Blair from Oracle Industry Connect this week in Boston. Kohl's SVP of IT Richard Mozack took the stage Wednesday afternoon to deliver one of two closing keynote talks.   Here's what he had to say.

There was general agreement at Kohl’s Department Stores that the $20 billion, 1,150-store retailer, which has been rapidly increasing its store count in recent years, needed to upgrade its e-commerce platform. “This was a high-growth area, and we were struggling because we couldn’t innovate,” said Richard Mozack, Senior Vice President of IT at Kohl’s. “In addition, the holiday season would be a kind of ‘white-knuckle’ adventure” because of concerns about site availability and performance.

Where Mozack got pushback was in the aggressive timeline for making such a major change: one year from its May 2012 start to go-live. As he told the audience during the final keynote presentation at Oracle Industry Connect for Retail here, many of his own people, along with vendors and advisors, frankly said “We’re nuts to try to accomplish this in 12 months.”

The story has a happy ending, in large part because of decisions that smoothed and sped the upgrade process. Kohl’s chose Oracle Commerce for its e-commerce platform and also used Oracle as its prime systems integrator, along with AT&T as host. The retailer also decided on a “like for like” upgrade, matching functionalities from its old site to its new one.

A soft launch in May 2013, opening up the new e-commerce site to Kohl’s employees and then to select customers, gave the retailer time to work out any remaining bugs. But Mozack knew the acid test would be the holiday season, when peak traffic can be 10 times normal volume. However, holiday 2013 provided Kohl’s with 100% availability. “We were waiting for something to break, but it was crickets,” said Mozack. “This holiday was more stable than our other platform ever was.

“Now we have a foundation that we can build on, to add capabilities for a personalized omni-channel experience for our customers,” Mozack added.

Next up is a merchandising transformation that began in April 2013, also with an aggressive 12-month go-live schedule. It’s on time and is projected to be up and running in two weeks. This upgrade also features Oracle solutions and has gone “remarkably well,” said Mozack, who credited upfront work with Oracle and Accenture in the areas of change management and in deciding which systems actually required customization versus those that could remain vanilla.

These and other IT upgrades, part of a multi-year effort to simplify Kohl’s systems architecture, have been driven by basic business needs. Mozack put it simply: “We could not continue to grow at our pace with the systems we had.”

Wednesday Mar 26, 2014

ULTA Beauty’s Digital Makeover

Reporting today at Oracle Industry Connect in Boston, guest blogger Adam Blair captured insights from retailers:

ULTA Beauty’s revamp of its digital sites last year went much more than skin deep. The 675-store beauty products retailer achieved its goal of a comprehensive site redesign that provides a consistent guest experience across desktop, tablet and phone devices, and it also brought its search and navigation functions together under in-house control with the help of Oracle Commerce including Oracle Endeca and Oracle ATG 10.2.

The site’s home page, category and product pages now boast new features including product metadata and easier access to user reviews. In addition, ULTA guests can now check available inventory of specific products at the store/salon they’re planning to visit.

The redesign, designed to emphasize the breadth of product offerings available from ULTA, also gave the retailer’s business side far greater control over key e-commerce elements, including pricing, promotions and site design changes. With fast-moving beauty and cosmetics trends, “there was no way we could stay current if we had to keep going to IT for changes we wanted to make,” said Jeff Hamm, Director of Ecommerce at ULTA. Hamm and Director of IT E-Commerce Michelle Pacynski discussed the process and the results at Oracle Industry Connect for Retail here.

“Every aspect of the home page is now configurable by the business teams,” said Pacynski.

The redesign process, which took approximately six months and was completed in time for the 2013 holiday season, eventually involved running both the “traditional” site and the redesigned site simultaneously. This large-scale A/B testing allowed ULTA to continue refining the new site’s design with actual guest feedback, ensuring performance and the user experience would be positive. “What had looked good ‘on paper’ or to us internally might not look good to a user,” Hamm admitted. The testing process was supplemented by focus groups, online surveys and store intercepts.

The site redesign has received a positive guest response as well as increased consistency between its navigation and search functions. The retailer’s overall results have been strong, with an 82.5% comp store sales increase for Q4 of 2013. ULTA Beauty opened 125 stores last year and is on track to open an additional 100 locations in 2014.

Resisting ‘Scope Creep’ Ensured Hot Topic Merchandising Upgrade’s Success

Reporting today at Oracle Industry Connect in Boston, guest blogger Adam Blair captured insights from retailers:

Hot Topic’s IT team was determined to make the retailer’s merchandising systems upgrade clean, simple and logical, as well as on-time and on-budget. They achieved these goals by “religiously” avoiding scope creep and involving business users early on in the 10-month process.

“We really managed the scope of this. It’s vanilla – not even French vanilla,” said Hassan Youssfi, Vice President of IT Applications at Hot Topic. He and COO Don Hendricks presented their best practices for a smooth systems upgrade and integration process at Oracle Industry Connect for Retail here.

“You will hear from users who want to add ‘flavor’ to your vanilla project,” Youssfi noted. The IT team addressed this issue by providing its business users with early “sneak previews,” designed to bring issues to the surface and “tackle them early in the process,” he added.

Another important success factor was that Hot Topic, which also includes the Torrid brand, spent three months doing a complete data cleanup on the retailer’s legacy system prior to beginning the upgrade itself, which was completed in February 2013. “The data from the old system had never been purged, and the style/class hierarchies had grown over the years,” Hendricks explained. “We wanted to clean up the data in the old system’s format so that people could see the changes and not attribute them to the implementation of the new system.”

Hendricks and Youssfi also credited the functionally rich Oracle systems, powered by Exadata, with allowing them to keep the overall upgrade “vanilla” while still offering internal users an improved experience. Solutions include Oracle Retail Merchandising System, Sales Audit, Price Management, Invoice Match and Analytics.

Benefits include creating a single system of record where there had previously been separate siloed databases, and providing easier access to data by the retailer’s business users. “IT is not in the reporting business any longer, because users can write their own reports,” said Hendricks. Hot Topic has also gained efficiency, speed and enhanced capabilities: “Certain promotion types that had not been possible with legacy systems are now capable of being done,” he noted.

Deckers Outdoor and Scheels All Sports reveal secrets to in-store engagement

Reporting today at Oracle Industry Connect in Boston, guest blogger Adam Blair captured insights from retailers:

Providing store employees with both the training and the tools to enhance the customer experience are critical to making the brick-and-mortar store a true point of differentiation, according to executives from Deckers Outdoor and Scheels All Sports who participated in a panel discussion moderated by Stores Editor-in-Chief Susan Reda at Oracle Industry Connect for Retail here.

“We focus on training our sales associates to provide a great experience, and that kind of customer service training includes how to ask questions and how to interact with customers to find out what they are really looking for – and how to translate what the customer is saying into a product they would want,” said Marc Windahl, Vice President of IT at Scheels. The retailer also turns its 25 stores into destinations for the entire family: “Eight of our stores have Ferris wheels, and many have features such as miniature bowling alleys and golf simulators,” as well as restaurants and coffee shops featuring multi-flavored fudge made on-site, Windahl added.

A retailer’s corporate structure is also critical, according to Kim Heidt, Global Director of Store Operations at Deckers Outdoor, known for its Ugg shoe brands. “We’ve created a president of omnichannel responsible for all our e-commerce, stores and wholesale operations internationally, which helps us all work closely together here, operating off of a single project list,” said Heidt. “In addition, our company president does a quarterly ‘town hall’ meeting to identify our key initiatives and how we’re tracking to them. This helps create business owners in the stores, so even down to the level of the store associate, they understand what we’re doing in omnichannel. We’re putting technology behind our efforts, but also empowering our stores to do the things that need to be done for good customer service.”

Technology is critical to many store-based initiatives, from mobile point-of-sale that opens up valuable real estate to analytics capable of passively tracking shoppers’ cell phones to help retailers understand actual traffic and shopping patterns. Panelist Jeff Grossman, Director of Retail Solution Consulting for Oracle, noted that “there’s a lot of technology out there to help retailers revolutionize their business and get closer to customers.” He discussed BLE (Bluetooth Low Energy) technology that emits a Bluetooth signal that’s readable by customers’ cell phones equipped with a specific mobile app. This technology can be used to send marketing content to a device when the shopper gets near a specific aisle or product.

Moderator Reda questioned how much consumers will be willing to accept in terms of in-store communications to their own devices. Grossman noted that any application’s benefits need to be relevant to each customer. “With any marketing campaign, there’s the context for it, the content that’s delivered and the conduit to deliver it,” he said. “If a shopper downloads the Walgreens app to help handle their prescriptions or the Kohl’s app to take advantage of coupons, that provides a real benefit to them.”

To make the store experience even more relevant, retailers should be looking for technology that gives them a common view of the customer across channels, providing store associates with information about, for example, a shopper’s past purchases and recent online searches. Such technology needs to be accompanied by ongoing and upgraded training of associates. “They should know why customers are getting specific messages, and also be aware that not all customers will be getting the same message while they are in the store,” said Deckers’ Heidt.

Neiman Marcus CEO Calls Merchandising System Revamp Transformative

Reporting today at Oracle Industry Connect in Boston, guest blogger Adam Blair captured insights from retailers.

Calling the implementation of a revamped common merchandising system “the single biggest capital project we’ve ever done at Neiman Marcus,” President and CEO Karen Katz discussed the luxury retailer’s need to keep this major technology transformation on track with Oracle President Mark Hurd at Oracle Industry Connect for Retail here.

Katz admitted that the 41-store retailer, known for its personalized customer service and carefully curated product assortments, faces some singular challenges – in part because it has been so successful. “Our merchants believe that the way we run our business is so unique that we need highly customized systems,” Katz told Hurd. “We want [Oracle’s] help in making sure we don’t do that. You’ve worked with hundreds of retailers on these types of transformations. We know we’ll make some mistakes but we don’t want to make the same ones as others have, so staying on a clear path and keeping us focused will be very important.”

Neiman Marcus is hardly technophobic; its $1 billion-plus in digital sales makes it the largest luxury e-commerce business in the world. Three years ago, the retailer equipped all 5,000 of its store associates with iPhones, with the mobile devices replacing the ubiquitous “black books” that contained detailed information on the retailer’s highly demanding customers and their shopping preferences. “We wanted our associates to keep their client books in the app, but we also wanted them to communicate with customers as they wanted, via text, e-mails or phone calls. Now they can send photos, collages or ideas about wardrobe items that the customers might need,” noted Katz.

In its quest to create “the same kind of memorable customer experience online as in our stores,” Katz noted that Neiman Marcus has created the position of senior vice president of omni-channel and also has relaunched its consumer mobile app, which connects shoppers with their preferred sales associates. In turn, the retailer’s commission-based associates have been incentivized to create more omni-channel customers. “There are entire categories of product that we’re never going to sell within our stores, such as home furnishings, sheets and towels,” said Katz. “Our associates can sell these through the website and get commissions on those sales.”

Katz noted that while she honors the brand’s storied history, technology is critical to staying relevant, especially given the power of today’s consumer: “Retailers need to accept that the customer is in the driver’s seat, and not just follow her but get out in front of her. That will be the future.”

Oracle today released more information about the initiative with Neiman Marcus

Tuesday Mar 25, 2014

Reporting from Oracle Industry Connect

A message from Rose Spicer of Oracle Retail:

We will be reporting all this week from the first Oracle Industry Connect, taking place in Boston.  This event, more than any other, demonstrates why, as the senior director of retail marketing for Oracle, I love my job.  Thanks to David for inviting us to share highlights here.

Over the years we have cultivated what was Oracle Retail CrossTalk, a retail industry conference that started in 2006 with only 2 retail speakers. By 2013, we proudly hosted a forum with 90% of the content delivered by retailers for retailers, and it became an annual “must-attend” for the growing community of great retailers who use Oracle solutions. Retailers learned from one another and built valuable exchanges beyond the days of the conference.

This year we are pleased to host a new iteration of this customer gathering by introducing the inaugural Oracle Industry Connect, a conference modeled after CrossTalk and extended to offer separate “conferences within a conference” for five more industries.  Within this new model, we look forward to welcoming 225 retailers executives from over 102 brands from 18 different countries.

More than 30 retailers and industry influencers tell their stories and weigh in on industry trends. Among them, Neiman Marcus, Kohl’s, Groupe Dynamite, TJX, Deckers Outdoor, Scheels, Stage Stores, ULTA Beauty, C. Wonder, Luxottica, Zenni Optical, Academy Sports, charming charlie, Hot Topic, Konzum, and Country Road.

We have the best community of customers. I look forward to seeing many of our friends in Boston this week. If you are unable to join us, be sure to watch here for updates as guest blogger and retail industry writer Adam Blair reports from Boston.

Monday Mar 03, 2014

Two Really Cool Approaches to Payment

As if the oodles of emerging payment schemes weren't enough, two more approaches have arrived on scene.  Aside from enabling your phone to make payments, they are very unique and well worth some consideration.  The first solution is called LoopPay, and its creators claim it works on 90% of existing payment terminals without any new hardware.  Install the wallet on your phone and plug-in either the fob or charge case, then tap on any existing payment terminal to pay using your credit or debit card.  Now think about that.  How's it done?

No, they're not using NFC or bluetooth to communicate with the terminal.  That would involve additional or updated hardware, and I said this works with existing terminals.  Are they using sound like ShopKick?  Nope.  QRcodes?  Good guess, but no.  Think about it from the terminal's perspective.  The only way to enter card data is the keyboard or the magstripe.  Wait for it.  Yes, the phone via the fob emits a magnetic field that contains the track data.  Its pushing the track data into the magstripe head of the terminal.  From the terminal's perspective, we have a traditional, card-present transaction.

Here's the rub: like I said, it only works on 90% of the terminals, and in real-world tests maybe even less.  Its a tough sell for banks and retailers to say "works most of the time" to their customers.  Obviously there are security concerns as well, but I'm assuming they are able to vary the track data just as EMV would, so its at least as secure...maybe.  But then again, I'm still not convinced that tapping my phone is any more efficient than swiping inserting my card.

The second approach is a bit more traditional.  If you'll recall, Google Wallet only worked on certain phones when it was first released.  iPhones were out because they don't support NFC, and only select carriers were supported with Android.  That's because the wallet made use of the secure element, a place were crypto algorithms are run and data can be secured.  The secure element can be built into the phone, but most of the time its in the SIM chip that's owned by the telcos.  And as Google found out, if the telcos don't allow access to the secure element, you can't do NFC payment.

That's where SimplyTapp enters the scene.  They're advancing Host Card Emulation (HCE), a method by which you can do NFC payments using a secure element that resides in the cloud instead of the phone.  Android has included HCE in their latest version, KitKat, so now all NFC-capable phones are ready for NFC payments.  The big news here is that banks are now free to create payment schemes without getting approval from the telcos.  Both MasterCard and Visa recently endorsed HCE so I'd expect existing banking applications to begin adding the ability to pay soon.

So where does that leave us?  The telcos continue to want a piece of mobile payments via Isis; Google gets access to more handsets; banks are well positioned to support their own mobile payments; MCX continues to focus on reducing merchant fees; and Apple is the wildcard.


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