Monday Jul 20, 2015

Unlocking the Secrets of Big Data with Science

Buzzwords abound in the tech world, and mobile, social, big data, and cloud are the four horsemen.  Of those I think big data is least understood, but possibly the most powerful as exemplified by my favorite quote:

“Data is the new oil; analytics the new refinery.” -- unknown

The retail industry has always been dealing with large volumes of data; it's just that now the velocity and variety have dramatically increased. So the problem for retailers is two fold: first, how do they convert all that data into meaningful information? And second, how do they make the information relevant and actionable to employees?

Oracle Retail's answer comes in two families of cloud services: Oracle Retail Advanced Science and Oracle Retail Insights.  Continuing our momentum in delivering cloud services, these products simplify implementations allowing retailers to realize value faster and with less IT effort.

Oracle Retail Advanced Science Engine

We have a long history of employing data scientists that cull through donated data to find useful insights that can be productized in algorithms.  Over the years we've led the industry in areas like demand forecasting, markdown optimization, and localized assortments.  To make it easier to bring new algorithms to market, we've built our Advanced Science Engine, a platform tuned for analyzing data at scale and exporting the results.  Over the past six months, we've adjusted the architecture to provide this in a cloud deployment.  The specific science being offered is packaged into three separate cloud services:

Advanced Clustering

This solution provides insight into how store clustering best benefits the business.  It helps to answer questions such as:

  • What categories or merchandise classifications benefit most from clustering?
  • At what level of product or location hierarchy should clusters be created?
  • What product/location attributes should be leveraged?

The solution automatically selects the best clustering method depending on the clustering approach selected, and allows for what-if scenarios that help explore the data.  Is scores clustering approaches for comparison, and recommend the optimal number of clusters.  This fosters consumer-centric assortments that ultimately increase sales.

Customer Decision Trees & Demand Transference

CDTs map the decision process made by shoppers to purchase items.  They help a retailer understand if they have the right variety of sizes, flavors, colors, etc. in their assortment.

Suppliers often provide consumer decision trees that help retailers understand the impact to assortment decisions based on "generic" consumers.  But when a consumer is identified, they become a customer.  Our solution focuses on customer decision trees, which reflect the actual customers in your stores.  The solution even allows a side-by-side comparison of imported consumer decision trees alongside the calculated customer decision trees.

Using this science helps to reduce duplication in assortments, and prevent dropping unique items to which customers are attached.  Demand transference helps forecast if customers will switch to alternatives so that the number of variety of items offered can be optimized.  This solution often works closely with Category Management.

Assortment & Space Optimization

This solution helps to identify the optimal targeted assortment withing the space constraints.  It understands shelves, pegboards, and freezers and incorporates various business rules and visual merchandising standards.  The what-if analysis is very helpful in exploring options while seeking to maximize profits for any given space within the store or store cluster.

Integrated Planning

These cloud services can be used with existing planning products, or with Oracle Retail planning solutions such as Category Management Planning & Optimization, Macro Space Optimization, Retail Demand Forecasting, and Advanced Inventory Planning.


Thursday Jun 04, 2015

IRCE 2015: Retailers Ramp Up for Holidays with Cloud Solutions and Fine Tuning

This week we spent time in Chicago showcasing the latest in our Oracle Commerce solution, our new Oracle Retail Cloud Services for omnichannel and the Oracle Retail Xstore solution at the Internet Retailer Conference and Exposition. Thanks for spending time with us. We had such a great turnout both days of the exhibition. We also hosted several retailers and had great conversations at our networking dinner with Rackspace and McFadyen.  With our ear to the ground, here is what we heard from the community. 

The holidays are a retailer’s best chance to maximize sales, profits, and positive customer impressions.  Orchestrating a successful season requires a steady rollout of new features and functionality as consumers’ descend on e-commerce sites, turn to mobile devices and shop nearby stores.

While each retailer’s holiday readiness agenda differs depending on factors such as its size, product assortment and customer base, a good rule of thumb is to focus first on the digital experience. According to the National Retail Federation’s report on holiday 2014, 56% of consumers surveyed prior to the season said they planned to shop online, up from 51.5% in 2013 – the highest figure in the survey’s 13-year history. The average person planned to do a significant 44.4% of their shopping online, the most since the question was first posed in 2006. These consumer intentions were borne out by the season’s sales results. According to the U.S. Department of Commerce, non-store sales grew 6.8% for holiday 2014 to $101.9 billion, accounting for 16.5% of the total holiday sales figure of $616.1 billion. We believe that 2015 will also bring good fortune. 

Sophisticated tools sharpen customers’ digital search and purchase experiences, and new features bring the best of online shopping into the physical store. E-commerce is not just a significant shopping channel but a primary customer interaction vehicle. Internally, e-commerce platforms increasingly serve as a key interaction point for major systems such as inventory management, merchandising operations, loyalty and rewards programs, customer service and call center applications, promotions and recommendation engines, and the point of sale. 

Question: Can retailers prepare for the holidays with technology solutions that add value quickly to differentiate the experience in-store and online?

Answer: Yes. The advent of retail-specific cloud-based solutions that are implemented in the space of weeks rather than months, such as Oracle Cloud Services for e-commerce and retail, make this not only possible but practical. Cloud services enable retailers to prepare for any number of peak sales opportunities throughout the year. For apparel and office supply retailers, back-to-school is its own holiday season; for home and gardening retailers, spring is their prime growth season. With the accelerated deployment schedules and more frequent upgrades made possible via cloud-based solutions, retailers can test out a new solution during one peak season, then refine and customize it for the next one.

Question: What can I do to prepare for the holiday season now? 

Option 1: Search Tuning. Search tuning is a dynamic process as your business needs and data are in a constant state of change. Search tuning should be conducted on a regular basis. The Oracle Endeca application provides optimal results for specific keyword search to maximize conversion rates increasing revenue. The recommended tuning exercise is a two week workshop with Oracle Commerce Consulting tailored to your specific  mplementation and business. 

Option 2: Performance Tuning. The testing and tuning is an iterative process. The key is to discover the balance between all the different levers to optimize the performance and scale of your site through a series of engagements. A load and performance test will identify opportunities to brace and optimize in a peak trading period. Understand your site performance and functionality today. Evaluate your business planning requirements to understand the site capacity. 

The bigger question is....

Are you ready for an upgrade? Are you taking advantage of the latest and greatest functionality within the Oracle roadmap?  

In an effort to achieve new competitive advantage while lowering total cost of operation, you may consider upgrading your online commerce applications to make use of features and improvements available.  Managing a software upgrade is a complex process. Obtaining buy-in from your stakeholders, understanding the timescales, and estimating the risks involved in upgrading your commerce installation is challenging at the best of times. Making this decision in a climate of budget cuts requires a compelling and thorough business case which takes into account benefits, risks and commercial impacts. 

Focusing holiday readiness and peak trading efforts on the digital experience helps customers move seamlessly from device to device as well as between physical and digital locations. When their experience isn’t seamless – for example, when a shopper can’t use online rewards in a store, or the call center operator isn’t able to call up transaction histories – the customer experience markedly suffers. Customers don’t care about the back-end challenges retailers face with cross-channel coordination; they just know that they want their interactions to be consistently relevant, personalized, and contextual to their location and the device they are using.

Cyber Monday November 30th is 179 days away. What can you do today to get ready? Let us know if we can help you prepare for the holidays. Email us at oneretailvoice_ww@oracle.com.  Our experts are standing by. 


Friday May 01, 2015

Five Quotes from Amazon's Shareholder Letter

If you're serious about understanding the retail industry, you have to closely study Amazon.  I've come to have great respect for the company and its leader, and I continue to be amazed at their accomplishments.  That said, here are my five favorite quotes from Jeff Bezo's most recent annual letter to shareholders:

Jeff Bezos graduated from Princeton and started his career in the financial industry, so he's always been interested in business models.  This first quote references Tinder, a dating site where "a swipe can change your life."

A dreamy business offering has at least four characteristics. Customers love it, it can grow to very large size, it has strong returns on capital, and it’s durable in time – with the potential to endure for decades. When you find one of these, don’t just swipe right, get married.

Jeff is very proud that Amazon is not just a single business, but many related businesses with synergy.  In his letter he called out three main businesses: Marketplace, Prime, and Amazon Web Services.  This next quote refers to Amazon's ability to efficiently fulfill orders quickly.

Our worldwide network of fulfillment centers has expanded from 13 in 2005, when we launched Prime, to 109 this year. We are now on our eighth generation of fulfillment center design, employing proprietary software to manage receipt, stowing, picking, and shipment.

While Prime started out focused on free shipping, many additional benefits have been added including instant video. This year, Transparent, an original series won a Golden Globe award.

I’m pretty sure we’re the first company to have figured out how to make winning a Golden Globe pay off in increased sales of power tools and baby wipes!

Combining the benefits of Prime and Marketplace has been a successful endeavor that accelerates growth in both programs, or in Bezos-speak "powering the flywheel."

Every time a seller joins Fulfillment By Amazon, Prime members get more Prime eligible selection. The value of membership goes up. This is powerful for our flywheel. FBA completes the circle: Marketplace pumps energy into Prime, and Prime pumps energy into Marketplace.

No doubt you know Amazon's $5B cloud business is growing fast.  What started as a platform mostly used by start-ups is now maturing to attract many established enterprises.  This quote refers to AWS:

What customers really want in this arena is “better and faster,” and if “better and faster” can come with a side dish of cost savings, terrific. But the cost savings is the gravy, not the steak.

Whether you love Amazon or hate them, you have to respect what they've accomplished.  And there are lessons we can all benefit from in our ongoing quest to serve shoppers.

Thursday Apr 30, 2015

A New Kind of Discount Retailer

It used to be that I always assumed Amazon had the lowest price.  Now I have to double-check before placing an order.  Lately Amazon has been focused more on customer experience than price, offering lots of goodies for Prime customers and really fast shipping.  Might that allow a new competitor to enter the market?

In the early days, Diapers.com sometimes had to buy diapers at Costco to ship to its subscription customers, sacrificing margin for share while the rest of infrastructure caught up.  The company was based on supply chain efficiencies and a lower cost to acquire and retain customers.  It worked so well that Amazon first fought them, then bought them.

So after spending two years with Amazon, Marc Lore is on his own again building a new kind of retailer. Jet.com is a cross between Costco and eBay with a huge focus on squeezing out every nickel of savings.  Consumers pay a $50/year membership fee, which is the only income for Jet.com.  Then Jet.com offers products from various retailers at deep discounts.  Those discounts come from passing on sales commissions, using the most economical shipping, combining orders, and avoiding credit cards.

To be successful, Jet.com must have the world's most efficient supply chain.  Perhaps more efficient than Amazon and Walmart.  The lynchpin will be an intelligent order management system that can efficiently source, combine, and ship products at the lowest cost.  Then there will also need to be lots of creative deals with merchants to lower prices in exchange for waiving the right to return merchandise, sharing customer data, or establishing subscriptions.

Of course this business plan requires massive scale, so the trick will be staying in business long enough to establish a large and loyal customer base.  Jet.com has already raised $220M before the website is even live, every penny of which is required for infrastructure and marketing.  But I just don't think Amazon and Walmart will stand by idly.  I think a major online price war is on the horizon, and consumers will be the big beneficiaries.

Monday Apr 27, 2015

Insights from OIC: Nordstrom’s New Canada Stores Become Testing Grounds for Enterprise IT Initiative

Last month our customer shared some fantastic experiences at Oracle Industry Connect 2015. Here is a glimpse of what you missed from the sessions....

Among its other accomplishments, Nordstrom has been a retailing technology pioneer, beating its competitors to market with customer-focused offerings including save-the-sale and endless aisle capabilities, buy online/pick up in-store, and coordinating returns between multiple stores and channels.

From 2001 until 2013, the Oracle Retail Merchandising System (RMS) served as a technology backbone for Nordstrom’s increasingly complex operations, but this required more and more customization as time progressed. When the retailer realized it was reaching the limits of customization, it initiated the Nordstrom Next Generation (NGEN) initiative, a six-plus-year program to support the company’s growth by replacing its current enterprise foundation solutions with new Oracle Retail systems offering advanced capabilities and scalability.

Nordstrom’s recent expansion into Canada is doubling as the first phase/pilot for NGEN, according to Nordstrom Director of Supply Chain and Fulfillment Brenda Glasgow, who spoke in late March at Oracle Industry Connect in Washington DC. The retailer has already opened two of a planned 10 full-line stores in Canada, with the next opening planned for fall 2015, and also plans to open its off-price Nordstrom Rack stores beginning in 2017.

The Canada expansion “gives us a chance to test, learn, and adjust with our business partners and technologists,” said Glasgow. “It’s allowing us to socialize the ‘vanilla’ implementations of Oracle solutions, and giving us practice managing the scope of these implementations.”

Nordstrom is still relying heavily on Oracle solutions, particularly in merchandising with Oracle Retail Merchandise Operations Management (MOM). This system is supporting international requirements around currencies and import/export issues, and Nordstrom is also taking advantage of new trade management and invoice matching modules that supplant older legacy applications for these functions.

Glasgow and Deby Hansen, Director of Program Management and Architecture for Nordstrom, identified key learnings from the Canada opportunity that include leveraging best practices identified in the Oracle Retail Reference Library, and using a process-led design approach that makes extensive use of personas and job roles. “By painting a full picture of a job’s process flow, it’s been easier to work through what’s been different from one system to the next,” said Glasgow. “We need to balance respecting our people’s business requirements with our motivation to stay ‘vanilla’ with these implementations.”

Nordstrom will apply these learnings as NGEN progresses, supporting long-term corporate goals that include sustaining the company’s growth, supporting its Nordstrom Rack stores becoming more of a separate entity, and “keeping us on an upgrade path that leverages our research and development investments,” said Hansen.

Congratulations to Nordstrom for their hard work and success. Nordstrom continues to impress the industry with their approach to the enterprise transformation. Read the press release or check out the presentation in the RACK to dive a little deeper. 


Wednesday Apr 15, 2015

Wicked Fast Delivery

Amazon announced one hour delivery for Austin so I had to give it a try.  My daughter needs a larger camera bag, so I decided that would be a great item to order.  You have to order via the PrimeNow mobile app and its a reduced set of available items, but I had no problem finding what I wanted.  I waited until 8am to start my order, which took six minutes because I used my office address and had to verify my credit card.  Here are some screen shots of the order:

Two hour delivery is free, and one hour is $7.99.  It also recommends a tip of $5.00.  Between the delivery charge and tip, I guess they cover the cost.  It might even be cheaper than two-day shipping according Paula Rosenblum, a retail analyst with RSR.  I chose the one hour delivery and received a text message at 8:11am stating, "Your Amazon Prime Now order will arrive soon."  Then at 8:21am I received a second text message stating, "You Amazon Prime Now order has been delivered."  Yep, it was delivered in 15 minutes.

Now you can see in the map above that the DC is very close to my office, but its still impressive how fast I got my order.  I can definitely say I'll use the service again.

Retailers have the opportunity to offer similar services by partnering with delivery companies.  They key is managing in-store inventory and the picking process.  I expect to see this service from local stores in the next year.

Monday Apr 13, 2015

Glance User Experience

The Apple Watch seems to be getting mixed reviews in the press, but plenty of people ordered one on launch day.  I visited an Apple store on Friday to see them for myself, but I'm not yet swayed to make the investment.  However, prior to launch I purchased a Pebble smartwatch in order to assess the utility of the category.

I've found that the smartwatch doesn't have much in common with the traditional watch beyond its location on the wrist.  Its better characterized as an electronic information hub that goes far beyond displaying just the time.  But its no substitute for a smartphone, and in fact its really just an extension of one.

The same impetus behind the migration of the watch from one's pocket to the wrist is powering the smartwatch -- the Glance UX.  People want to get information in a glance, and at this the smartwatch excels.  No need to pull out your smartphone to see the time, date, weather, texts, tweets, etc., just glance at your wrist and be informed.  The guys at AppsLab even named their first smartwatch app "Glance."

So from a retail industry perspective, I don't see wrist-based commerce being the norm.  Rather, the smartwatch will surface location-based marketing messages, coupons, and help with paymentsTarget, for example, provides a shopping list via the smartwatch.  But that's just the consumer side -- there are plenty of applications for employees.  In fact, our Retail Applied Research (RAR) team created a prototype app for a hotel manager to quickly receive information about the business.  Corey Nash, head of RAR, says it allows the manager to conveniently get "sips of data."


In simple terms, use the watch to receive notifications, the phone to research products, and the tablet/PC to consummate the purchase.  Each device has a unique role in the commerce ecosystem and together they provide and efficient shopping experience.

Tuesday Mar 31, 2015

The Next Steps for Subscription Commerce

I recall a few years back when flash sales were all the rage, probably peaking when Nordstrom acquired HauteLook. The model readily captures the excitement of discovery, and draws on the competitive nature of deal-hunters.  This cue-routine-reward formula has only one flaw -- as competition enters the market, differentiation dwindles.  Obviously flash sales are very different from traditional online retailing, but there isn't much difference between flash sale sites.  A typical customer is a member of several sites without much loyalty to any particular one.  Then the pressure to watch several sites and pounce on deals becomes exhausting.

Subscription commerce, from sites like Birchbox and Stitch Fix, maintain the excitement of discovery plus add the regularity of a subscription with a rewards program that garners loyalty.  You get a box of curated stuff every month and points awarded for purchases.  Over time the company develops a profile of you so that the box can be better curated for your tastes and style.  The model seems to be working well enough for Nordstrom to buy Trunk Club.

Now here are three next steps that retailers should consider:

1. Smarter Subscriptions

Just as the basics are replenished in a store, the same needs to happen in homes. This starts with the dry basics like toilet paper, cereal, and makeup.  Retailers should know a customer's preferences and consumption level, and help replenish products just-in-time. This takes historical data and forecasting, or possibly the use of in-home sensors (i.e. Internet of Things).  Nobody enjoys shopping for toothpaste, so just figure out when I need more and have it delivered before I run out.

2. Better Personalization

Customers are members of many segments, and its the intersection of those segments that makes them unique.  To cull out segment membership requires a mix of soliciting preferences (e.g. what heel height do you prefer?), collecting available psychographic data (what heel heights did you like on Facebook or pin on Pinterest?), and analyzing historical sales (what heel heights have you purchased?).  Even so, a healthy amount of A/B testing is required to stay on top of emerging trends as tastes tend to be dynamic.  Use the data to make the product selections more tailored and relevant.

3. Inclusive Store Experience

To date, subscription commerce has been a solely digital activity, but many customers still require more physical interaction.  For style-sensitive products like fashion, why not provide monthly, personalized suggestions with an opportunity to schedule a try-on appointment in the store?  Or perhaps an in-store tasting for the jelly-of-the-month club?  Driving customers to the store should increase basket size, and also provide customers with the flexibility to tweak their personalized product recommendation.

I'm watching the market to see if these ideas gain traction.  Use the comments to express your own opinions as well.

Wednesday Mar 25, 2015

How Leveraging the Cloud Can Unleash Retailers’ Business Agility

A Viewpoint from Jeff Warren, Vice President Solution Management, Oracle Retail 

Newly launched Oracle Retail Cloud Services combine reliability, security, cost savings and built-in interoperability

The ever-accelerating pace of change in retail puts pressure on everyone within the retail enterprise, but perhaps no one feels it more acutely than the CIO. Technology is rapidly reshaping key elements of the traditional shopping experience, from m-commerce and mobile payments to store-based fulfillment. IT departments are tasked with discovering, and bringing on line, these fast-emerging functionalities, while at the same time maintaining the existing architectures that support both basic corporate and retail-specific systems.

Given these competing demands – “keeping the lights on” while simultaneously serving as the engine for business agility – retail CIOs require cloud-based applications from a trusted technology partner with extensive industry expertise. Oracle is responding with a new offering of Oracle Retail Cloud Services applications for managing e-commerce; customer engagement; order management and order brokering; loss prevention; and brand compliance. (See product list below.)

Cloud-based applications, which in essence outsource many elements of IT management, maintenance, and upgrades, address retailers’ need for business agility. It’s increasingly common that when an IT organization can’t supply the new functionality that the business side seeks, a simple lack of time is cause. Cloud deployments free up IT resources for more strategic projects, and they also allow technology vendors to deliver innovation to retail users more quickly and with more frequent updates.

Keeping Costs in Check

The other benefits of cloud-based applications have been well documented, and are part of the reason so many businesses and individuals have been embracing cloud-based applications, data storage, and processing. They include:

● Lower initial hardware and software costs

● Lower ongoing costs, leading to a lower TCO (Total Cost of Ownership)

● Faster deployments and streamlined routes for patches and system upgrades

Other cloud features are particularly well suited to a retail environment. Scalability and easy access to additional processing power on an as-needed basis fit the needs of a highly seasonal business, one that must often deal with unexpected spikes (such as when a retailer seeks to promote a suddenly “hot” product) and dips.

Oracle’s subscription-based pricing for retail applications maximizes this benefit, bundling software, hardware, and upgrades into a predictable cost structure. In addition, by pricing IT services like a utility, retailers only pay for the processing power they require and actually use.

Mitigating Risk, Maximizing Security

Many retailers have hesitated with cloud deployments based on concerns about data security and overall reliability. This is understandable, given that retail data breaches are highly visible and can tarnish both individual companies and the entire industry. The ability to protect data and maintain the trust of their customers necessarily remains top-of-mind for retailers.

Oracle Retail Cloud Services benefit from the company’s worldclass culture of operational excellence. Oracle Data Centers are classified as Tier 4, the highest level of sophistication, providing 99.995% of uptime. This translates to less than 30 minutes of downtime during an entire calendar year – performance that very few (if any) retailers could match. Oracle Retail also has access to Oracle’s top-notch expertise in the cloud, security, and networking.

Security features inherent to Oracle technology solutions allow for transparent data encryption at the column level, allowing PII (Personally Identifiable Information) to be encrypted using keys that are held in a separate “wallet.” Backups are automatically encrypted, and keys can easily be changed on an as-needed basis. The Oracle Retail solutions leverage Oracle Identity Manager solutions to manage and enforce authentication and authorization for applications, and all elements are PCI-DSS certified.

Built-In Interoperability

Retailers will also benefit from the strategy behind Oracle Retail Cloud Services. These solutions are part of the retail industry group’s comprehensive Commerce Anywhere strategy, which encompasses technology ranging from financial applications to system hardware, so they are designed for maximum interoperability with both on-premise and cloud-based systems.

Oracle also offers flexibility in cloud deployment options. Because different retailers will be at different points in the cloud adoption curve, Managed Cloud services (also known as hosting) allow users to get more comfortable with the concept of outsourcing elements of their IT infrastructure. As the technology provides “wins” and the retailer’s culture adapts, the adoption path can ultimately lead to Oracle Infrastructure-as-a-Service and Platform-as-a-Service offerings. Oracle offers choices that retailers can leverage based on where they are in terms of their own maturity level and business needs.

Most importantly, Oracle Retail Cloud Services give CIOs the tools to keep up with today’s dizzying speed of change. Retailers can no longer wait one to two years to implement the next big thing; IT departments need to deliver meaningful value to the business in time frames that are measured in months. By outsourcing key day-to-day operational duties to cloud providers, IT departments are freed up to offer higher levels of strategic innovation and business agility.

Thursday Mar 12, 2015

Retail Innovation Labs

It seems to be all the rage for retailers to open an office in one of the tech cites and call it a lab.  In many cases they truly are labs where research is performed, but in others they are simply offices with an IT focus, typically where e-commerce development is done.  Either way, retailers are spending big bucks on office space and talent.  I think this trend was kicked off by Walmart's purchase of Kosmix, and was quickly followed Nordstrom Labs, who recently scaled back on their efforts.  Actually, the whole thing was probably started by Amazon and their Lab126 and A9 labs.

Anyway, I wanted a single spot where I could maintain a list of retail labs.  I've not interacted with all of these labs, so I don't know their true scope or size.  Links are provided where possible.

Amazon
Argos
CVS
HomeDepot
JCPenney
John Lewis
Kohls
Lowes
Lululemon
Macy’s
Marks & Spencer
Neiman Marcus
Nordstrom
Rakuten
Sears
Sephora
Shop Direct
Staples
Suning
Target
Tesco
Walgreens
Walmart
Zappos

If there's a lab I've missed, let me know in the comments.

Monday Mar 02, 2015

Payment Consolidation

What do you get when you add the following pairs?  Samsung+LoopPay, Google+Softcard, PayPal+Paydiant?  Answer: Viable ApplePay competitors.

First everyone and his brother had a mobile payment solution, then a select few rose to the top and got acquired.  The cycle goes like this: innovation, consolidation, standardization.  In this case, there's room for multiple standards, but not too many.  When the music stops, somebody will inevitably be left without a chair.  Today I feel like that's Samsung.

Google wants to play by established rules, but for the longest time telcos weren't letting them in the game.  Their recent agreement with the backers of Softcard now level's the playing field.  I think their ultimate strategy is the obvious one: advertising.  Being part of offline transactions gives them access to the customer's eyes and intentions.  Combine that with their existing online efforts and you have omni-channel marketing.

Approaching from a different angle, Apple is constantly looking for ways to remove the friction in everyday lives.  Their focus is on the user experience of payments, making sure its as smooth and simple as possible.  This either drives sales of existing devices or creates new markets.  With ApplyPay they'll sell more iPhones and create a new market by eventually charging fees (that consumers won't see directly).  They managed to dodge the telcos and get the backing of the banks, but that's no surprise given their track record in other industries. 

On the other hand, PayPal is more aligned with the merchants so their acquisition of the MCX technology-provider makes lots of sense. Their goal is to offer an alternative to swipe fees that satisfies both consumers and merchants.  Their work with Discover, beacons, and their Square-like fob are seeing some success with smaller retailers.  The ability to create orders and do person-to-person payments also sets them apart.

Then there's Samsung, the smartphone manufacturer.  LoopPay has very cool technology that transmits the card data to an existing magstripe reader through the air.  So for terminals that don't support NFC, the consumer can still put the phone within 3 inches of the magstripe terminal and send the card data.  That means that generally every existing merchant can already accept SamsungPay.  But there are two issues.  First, I'm not confident this system works 100% of the time.  And second, its predicated on dying, insecure technology.  Clearly Samsung isn't worried about either of those issues.

All these moves coupled with the occasional security breach makes this space very exciting.  Sit back and enjoy the ride.

Friday Feb 27, 2015

Is Mobile Over-hyped?

Don't get me wrong; I think mobile has and will continue to have a huge impact to the retail industry.  It's just that sometimes we get swept up by the shinny new object and neglect the basics.  Less than two years ago Marc Andreessen declared that stores were dead, yet they still typically represents more than 90% of a retailer's revenue.  Investments may not track contributions exactly, and that's understandable.  We just can't let the ratio get too out-of-sync.  Put another way, a meal consists of main dishes and side dishes.  If the chef neglects the side dishes the meal won't be ruined, but the converse is not true.

After the holidays I kept seeing stories about mobile traffic doubling or tripling, so retailers were upping their investments.  But we need to put that in perspective.  Even with huge growth, mobile is still not as big as PC traffic. MarketLive estimates PCs account for 56% of website traffic, and more importantly, 75% of the revenue.  See the chart at the left from e-Marketer, which also shows average order value from PCs is higher too.

I trust actual metrics much more than the surveys that ask questions like, "have you purchased something from your smartphone in the last six months?"  Few haven't, but often they're small, infrequent purchases so it tends to overweight the results.

And there's a big difference between browsing and buying.  As you can see below, shoppers often are doing research on their mobile devices then completing the purchase on their PC.  The PC has a definite advantage when it comes to conversion.  From my own experience, I rarely buy on my mobile phone but split purchases between my tablet and PC.  After all, today's tablet is basically as powerful as our PCs.

Infographic: Smartphone Shoppers Rarely Close the Deal | Statista
You will find more statistics at Statista

So back to the original question, is mobile over-hyped?  No, its hugely important to the retail business, and customers have come to expect top-notch experiences on their mobile devices.  But don't get distracted to the extent that the basics get underfunded.  The "main dishes" of retail are what continue to bring in the majority of sales.

Tuesday Feb 10, 2015

Your Product, Your Problem

Today's posting comes from Paul Woodward, formerly with MICROS and now part of the Oracle Retail family. Paul has 20 years experience dealing with the supply chain with recent focus on brand compliance.

This month the New York attorney general accused GNC, Target, Walgreens, and Walmart of selling fraudulent herbal supplements whose contents did not match the labels.  Four out of five products did not contain ingredients matching the label and often instead contained cheap fillers, which could potentially harm those with allergies.

With the many scares over the past 12 months including the use of horse meat in Europe, the need for retailers to demonstrate due diligence in their collection, capture, and validation of supplier and product data is now fundamental to the protection of their brand and consumer trust.

As consumers, we continue to drive complexity into the supply chain -- we want greater ranges, experimental flavours, convenient ready to go products, choice of price points and an appreciation of our dietary needs. This creates a significant risk for the retailer as they balance bringing products to market quickly to meet the demand whilst ensuring thorough assessment of these ranges.

Just ten years ago consumers didn’t really care.  They didn’t ask for the information and they probably didn’t know they needed it. Now a third of consumers are allergic to something and 1 in 6 has a form of food related illness each year. This, along with our thirst for better living, healthier options, and the media's encouragement to know more, is firmly establishing that if it’s your label, it’s your product, and it’s your problem.


The average retailer is now handling over 10,000 active products from 2,000 production sites worldwide, and as the FDA and regulative requirements continually evolve and demand more transparency.  Retailers are faced with an ever increasing risk of failing to meet their brand promises.

Oracle Retail MICROS mycreations has been specifically developed to support this requirement. With over 20 years of proven capability in enabling the growth and protection of private label brands worldwide, the brand compliance cloud platform empowers retailers to collaborate with their supply chain in efficiently providing accurate and reliable data the consumer can trust.



Wednesday Feb 04, 2015

RetailROI Hall of Fame Class of 2015

I've posted several stories about the important work that the Retail Orphan Initiative does throughout the world.  I hope that perhaps you'll be inspired to offer your time, expertise, or even make a donation.  At the recent Super Saturday event, a few people were recognized for their contributions to ROI, and were awarded fantastic bobbleheads!  Below find the ROI Hall of Fame Class of 2015:

Scott Hagizadegan

Scott has traveled to 3 different ROI countries (Honduras, Dominican Republic, and Zambia) as well as led 2 different Trips to Zambia.  His company Ignisis has also donated numerous firewalls and monitors these for health and keeping the kids safe.

Jeff Roster

Jeff has made several trips to Honduras and is leading the trip to Congo.  He also has been instrumental in helping the microbusiness in Honduras, scheduling Life Skills webinars with business leaders for the kids at Plan Escalon.  

Randy Cucerzan

Randy is in charge of the RetailROI projects in Honduras. Starting with the original computer lab, Randy has now traveled to Honduras 9 times, leading 7 or 8 of those trips.  

John Geyerman

John has made several trips to Honduras, but most importantly he spearheaded the donations and installation of a cafeteria kitchen for a school of 600 children by getting suppliers and vendors involved.  A US quality cafeteria for total cost of about $65,000.  Not satisfied with just that, John had the Schlotzky's food safety course translated to Spanish and taught classes at Plan Escalon so kids would have certification.

Congratulations to all of the inductees! 


Tuesday Feb 03, 2015

Happy Birthday Amazon Prime

Has it been 10 years?  During that time Amazon's revenue has increased from $6.9B to $89.0B, and I'm guessing the unique program was a big part of that growth.  It's estimated there are $40M members, which would represent about 45% of Amazon's US customers.  I'm a member (although I only receive the free 2-day shipping because I share my brother's membership).  The student discount trains young shoppers to expect 2-day delivery, and I imagine the program is pretty sticky.  Unfortunately, Amazon is pretty secretive about its successful program.  Clearly they lose money on the actual shipping, but they seem to make it up on the increased number of purchases.

Now there's Prime Fresh for $299/year to deliver fresh groceries in limited cities.  Back in 2005 I could never have imagined how successful this program appears to be, and what's more impressive is the breadth of its offerings. Now Amazon is starting to open stores on college campuses, considering the purchase of existing Radio Shack stores, and there's always PrimeAir hanging out there waiting for regulators to set it free.  I wonder what's next?

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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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