Tuesday Oct 16, 2012

What's Old is New Again

Last night I told my son he could stream music to his tablet "from the cloud" (in this case, the Amazon Cloud).  He paused, then said, "what is the cloud?"  I replied, "a bunch of servers connected to the internet."  Apparently he had visions of something much more magnificent.  Another similar term is "big data."  These marketing terms help to quickly convey topics but are oversimplifications that are open to many interpretations.  At their core, those terms are shiny packages holding recycled ideas.

I see many headlines declaring big data changes everything, but it doesn't.  Savvy retailers have been dealing with large volumes of data since the electronic cash register was invented.  But there have been a few changes to the landscape that make big data a topic of conversation:

1. Computing power has caught up to storage volumes. Its now possible to more thoroughly analyze the copious volumes of data retailers have been squirreling away.  CPUs are faster, sold state drives more plentiful, and new ways to store and search data are available.  My iPhone is more powerful than the computer used in the Apollo mission to the moon.

2. Unstructured data is everywhere.  The Web used to be where retailers published product information, but now users are generating the bulk of the content in the form of comments, videos, and "likes."  The variety of information available to retailers is huge, and it's meaning difficult to discern.

3. Everything is connected.  Looking at a report from my router, there are no less than 20 active devices on my home network.  We can track the location of mobile phones, tag products with RFID, and set our thermostats (I love my Nest) from a thousand miles away.  Not only is there more data, but its arriving at a higher velocity.

Careful readers will note the three Vs that help define so-called big data: volume, variety, and velocity. We now have more volume, more variety, and more velocity and different technologies to deal with them.  But at the heart, the objectives are still the same:

  • Informed decisions
  • Accurate forecasts
  • Improved optimizations

So don't let the term "big data" throw you off the scent.  Retailers still need to execute on the basics.  But do take a fresh look at the data that's available and the new technologies to process it.  The landscape will continue to change and agile organizations will always be reevaluating their approaches.  You just need to add some more weapons to the arsenal.

Tuesday Dec 20, 2011

Retail Strategy for 2012

Earlier this month I reviewed my 2011 predictions and made new ones for 2012.  Of course I wasn't the only one thinking about what's next for retail.  RIS News published their 2012 outlook, Retail Touchpoints has their 2012 insights, and Stores has their 2012 predictions so there's no shortage of opinions.  Reading these articles, its easy to pull out the major themes and they're exactly what you'd expect.  I could write about each theme, but I thought it would be more fun to remove all but the buzzwords.  See if you can still understand my summations...

  • Mobile-- anywhere/anytime commerce, always on consumers, omni-channel, Amazon's showroom, ubiquitous access to product info, QRCodes, online inside, NFC, loyalty, empowered employees, endless aisles, tablets
  • Social-- one-to-marketing, f-commerce, big data, customer analytics, psychographics, contextual offers
  • Cloud-- deployment, management, access data from anywhere, lower TCO, elastic, utility pricing, security, SLAs, SaaS, outage

This shortened version of writing sure saves time!  Here's the point.  Now is a good time to reflect on this year and think about your strategy for next year, which had better address all three mentioned areas.  I'm not saying you need to embrace all three, but you do need to have a point-of-view on how each can affect your business.  As you're reviewing your strategy, here's a little advice for the new year:

Don't get caught up in the buzzwords.  Look past the coolness factor and figure out how things directly impact the business.  A Twitter account might increase sales, but old-fashion supply-chain management might move the needle even more.  Put a little money toward innovation, and invest the rest toward improving the basics.

Skate to where the puck is going.  Your strategy must not only address your customers but also your future customers.  Run ideas past your teenage kids because they will soon be your customers.  This is especially important for matters relating to privacy, which continues to vary greatly by generations.

Measure twice, cut once.  Strategies must be based on data, not gut feelings.  Execute only after you've done the necessary analysis and have metrics in place to assess results. Challenge the statistics and use multiple sources.

Food for thought.  See you next year at NRF!

Wednesday Nov 23, 2011

Reviewing Retail Predictions for 2011

I've been busy thinking about what 2012 and beyond will look like for retail, and I have some interesting predictions to share.  But before I go there, let’s first review this year’s predictions before making new ones for 2012.

1. Alternate Payments
We've seen several alternate payment schemes emerge over the last two years, and 2011 may be the year one of them takes hold. Any competition that can drive down fees will be good for everyone. I'm betting that Apple will add NFC chips to their next version of the iPhone, then enable payments in stores using iTunes accounts on the backend. Paypal will continue to make inroads, and Isis will announce a pilot.

The iPhone 4S did not contain an NFC chip, so we’ll have to continuing waiting for the iPhone 5. PayPal announced its moving into in-store payments, and Google launched its wallet in selected cities.  Overall I think the payment scene is heating up and that trend will continue.

2. Engineered Systems
The industry is moving toward purpose-built appliances that are optimized across the entire stack. Oracle calls these "engineered systems" and the first two examples are Exadata and Exalogic, but there are other examples from other vendors. These are particularly important to the retail industry because of the volume of data that must be processed. There should be continued adoption in 2011.

Oracle reports that Exadata is its fasting growing product, and at the recent OpenWorld it announced the SuperCluster and Exalytics products, both continuing the engineered systems trend. SAP’s HANA continues to receive attention, and IBM also seems to be moving in this direction.

3. Social Analytics
There are lots of tools that provide insight into how a brand is perceived across popular internet sites, but as far as I know, these tools are not industry specific. The next step needs to mine the data and determine how it should influence retail operations. The data needs to help retailers determine how they create promotions, which products to stock, and how to keep consumers engaged. Social data alone does not provide the answers, but its one more data point that will help retailers make better decisions. Look for some vendor consolidation to help make this happen.

In March, Salesforce.com acquired leading social monitoring vendor Radian6 and followed up with acquisitions of Heroku and Model Metrics. The notion of Social CRM seems to be going more mainstream now.

4. 2-D Barcodes
Look for more QRCodes on shelf-tags, in newspaper circulars, and on billboards. It's a great portal from the physical world into the digital one that buys us time until augmented reality matures further. Nobody wants to type "www", backslash, and ".com" on their phones.

QRCodes are everywhere. ‘Nuff said.

5. In the words of Microsoft, "To the Cloud!"
My favorite "cloud application" is Evernote. If you take notes on your work laptop, you will inevitably need those notes on your home PC. And if you manage to solve that problem, you'll need to access them from your mobile phone. Evernote stores your notes in the cloud and provides easy ways to access them. Being able to access a service from anywhere and not having to worry about backups, upgrades, etc. is great. Retailers will start to rely on cloud services, both public and private, in the coming year.

There were no shortage of announcements in this area: Amazon’s cloud-based Kindle Fire, Apple’s iCloud, Oracle’s Public Cloud, etc. I saw an interesting presentation showing how BevMo moved their systems to the cloud.  Seems like retailers are starting to consider the cloud for specific uses.

6. F-CommerceTop of Form

Move over "E" and "M" so we can introduce "F-Commerce," which should go mainstream in 2011. Already several retailers have created small stores on Facebook, and it won't be long before Facebook becomes a full-fledged channel in the omni-channel world of retail. The battle between Facebook and Google will heat up over retail, where both stand to make lots of money.

JCPenney and ASOS both put their entire catalogs on Facebook, and lots of other retailers have connected Facebook to their e-commerce site. I still think selling from the newsfeed is the best approach, and several retailers are trying that approach as well. I just don’t see Google+ as a threat to Facebook, so I think that battle is over.  I called 2011 The Year of F-Commerce, and that was probably accurate.

Its good to look back at predictions, but we also have to think about what was missed.  I didn't see Amazon entering the tablet business with such a splash, although in hindsight it was obvious. Nor did I think HP would fall so far so fast.  Look for my 2012 predictions coming soon.

Thursday Oct 06, 2011

OpenWorld 2011, Retail Perspective Part 2

For those that can't afford the capital investment, Oracle is offering its Exadata and Exalogic machines as part of the Oracle Public Cloud, as was announced at OpenWorld  Retailers can easily provision both database and middleware environments in which they can deploy their applications and pay a monthly fee.  Additionally, Oracle is offering its Fusion applications on the cloud.

What's unique here is the fact that Oracle is using the same technologies normally used on-premise.  This means that existing on-premise applications can be moved back and forth between the cloud and data center as appropriate.  So your next question must be, can I run my Oracle Retail applications on Oracle's cloud?

If all the requirements of the product are met, then it makes no difference whether you deploy on-premise or on the cloud.  If you're using the supported version of the operating system, database, and middleware then where the hardware is located should make no difference.  While we've not yet had the opportunity to test our products on the Oracle Public Cloud, we have tried them on Amazon's cloud without issue.

But do retail applications like merchandising and POS really belong on the cloud?  I'm not quite there yet -- I cling to the belief that core applications should be on-premise, but many non-core applications work just fine in the cloud.  We will get there eventually -- its really a matter of organizations catching up with the technology.

Wednesday Sep 22, 2010

Exalogic and Cloud Computing

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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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