Investments for Retail in a Down Economy

Boxing.jpgAs continued proof that retail is taking it on the chin, published their list of retail bankruptcies for 2008 and 2009. It contains well-known brands such as KB Toys, Linens 'N Things, Circuit City, and the latest victim Ritz Camera. Some of these companies are down but not out. Filing Chapter 11 just means they need time to reorganize and require a temporary break from creditors. Of course simply restructuring debt may not be enough. Sometimes the organization needs some upheaval as well. Filing is a chance to change the way business is done. Those that don't embrace this chance are on a track toward Chapter 7 and eventual liquidation.

So what should retailers be doing now?

At the beginning of the year, Hung LeHong of Gartner suggested that letting IT take the year off was a bad idea. He suggested four small BI-related initiatives with big perceived value:

1. Use advanced visualization capabilities such as map-based interfaces to spice up online reports and dashboards.
2. Provide more advanced users the powerful, yet simple-to-use, new analytical capabilities found in in-memory, columnar and other next generation BI tools
3. Merge unstructured consumer data found in reviews, blogs and social networks into reports - imagine being able to see sales trending alongside average customer review scores.
4. Create the ability to send key reports and metrics to your managers' smart phones.

Below are some Oracle-specific ideas that fall into Hung's categories...

1. Oracle's acquisition of AVT, a visual space planning company, along with our work with WebCenter fit into this category. Using meaningful graphics is an important way to help users find the data they need to make decisions.

2. Oracle's latest database, 11g, is full of new and interesting features. But the biggest news this past year was the announcement of Exadata, the data appliance built with HP. As Kevin Closson explains, Exadata can really speed queries up using a combination of optimized hardware and software.

3. Retailers have been embracing social media, and its becoming an important part of brand image. Using applications like Siebel to both mine and publish via social sites will be a growing trend.

4. Mangers are on the go, so they need information to follow them. Fortunately, the Oracle Business Intelligence Enterprise Edition platform is able to deliver information to a multitude of channels, including phones.

These are all great ideas that retailers should be considering. Some other "quick wins" that have big paybacks and can take as little as 12 weeks to implement are:

1. Merchandise Financial Planning
Part of the Enterprise Performance Management cycle is planning the merchandise budget. Moving beyond simple spreadsheets can make a planners job much easier and more accurate as well.

2. Markdown Optimization
Divorcing fact from emotion can help merchants maximize profits and minimize inventory. Marking down merchandise too early will erode margins, and waiting too long could leave you with extra stock. Finding the right markdown cadence is crucial for fashion retailers.

3. Replenishment Optimization
There's a balancing point between maintaining adequate stock levels and minimizing carried inventory. Stock too little and customer leave; stock too much and you're stuck running a clearance. Optimizing for for the right compromise has big returns for retailers.

What are some other small projects with big ROI's that retailers should be considering?


Very insightful Dave. Thanks for the blog entry...highly relevant for today's industry.

Posted by Corey T on March 03, 2009 at 07:01 AM CST #

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.

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