Monday Dec 28, 2015

Nordstrom Drives International and Omni-Channel Growth with Oracle Solutions

Founded in 1901, Seattle-based Nordstrom has long been known for superior service, going above and beyond to create a fantastic customer experience, and empowering employees to do whatever it takes to keep customers happy. To know Nordstrom, is to love Nordstrom. I would encourage you to explore for yourself, the Half-Yearly Sale is on until January 3rd. Below is an editorial view of the recent Oracle OpenWorld presentation. 

Today, the department store chain also leads the market in bringing customers new omni-channel conveniences. For example, Nordstrom offers not only in-store pickup of goods bought online, but also permits cross-channel returns with buy-anywhere-return-anywhere service at any of its Nordstrom, Nordstrom Rack and Haute Look outlets.

“We provide an awesome shopping experience,” David Boeschenstein, vice president of Merchandise and Supply Chain Technology for Nordstrom, said in a presentation at Oracle OpenWorld in October. “We make it convenient for the customer to shop wherever and whenever she wants to shop.”

Oracle Powers Nordstrom’s Renowned Inventory Management

Most recently, Nordstrom employed Oracle Retail Merchandising System to enable its omni-channel initiatives by giving the department store chain a full view of inventory. The company eventually extended the system to its Nordstrom Rack division and web storefronts, but it became overly customized and siloed over time—and a new push into Canada would necessitate improved integration.

“Our strategy is straightforward: to realize the strengths and advantages of One Nordstrom,” Boeschenstein said, referring to its unified omni-channel strategy. “But we were handcuffed by a system that’s overly complex [and] costly to maintain. As we entered the Canadian market, we wanted to make sure we were able to grow. We wanted to maintain the upgrade path, so we didn’t face the same situation going forward.”

Nordstrom identified several priorities to guide the Next Generation (NGEN) initiative. “We needed to make sure we weren’t just going to replace the system we have today,” Boeschenstein said. “We wanted to be able to justify any complexity. We want to stay nimble; we want to stay focused—and prioritize what’s added going forward.”

The announcement of a Fall 2014 launch date for its first Canadian store helped the team focus on those goals and go live with RMS 13.26 just nine months later in Calgary. “It helped us balance the ‘nice to haves’ versus the ‘need to haves,’” Boeschenstein said. “We learned a lot from the implementation. It was opportunity for us to evaluate what support was there, and evaluate our internal capabilities.”

Nordstrom Rack Moves to New Oracle Retail Solutions

The next phase of the upgrade—taking Nordstrom Rack stores in the U.S. to Oracle Retail Merchandising System Version 14.1—would be more complicated. The team broke the task into stages and looked to the Oracle Retail Reference Library for guidance. Rollout will ultimately require an interdepartmental approach, and has the full support of the company. “Acknowledging that this is the most important initiative in the company enabled us to get the resources we needed,” Boeschenstein said.

“The other thing we learned, and knew intuitively, is that there’s a need for early and often performance testing,” he added. “We’ve piloted a few stores, and now we’re taking a break to make sure performance is tuned correctly so we’re on track for Fall 2016.” In 2017, the company will upgrade to Oracle Retail Version 14.1 in Canada and introduce Nordstrom Rack stores there; full-price stores in the U.S. will see an upgrade starting in 2018.

“We have a great relationship with Oracle, and we really appreciate that,” Boeschenstein said. “We’re learning along the way, and applying the lessons learned. And we feel like we’re making significant strides in achieving our One Nordstrom strategy.”

For more insight to Nordstrom’s strategic use of Oracle solutions to support its expansion into Canada, see the full presentation "Nordstrom: Technology to Enable Future Growth". 

Oracle’s retail customer community is a rich resource for peer-to-peer insights to best practices and business strategies. Follow this blog in the coming weeks as we share a series of stories presented by retailers during Oracle OpenWorld 2015 in San Francisco. We invite you to learn more about the Oracle solutions used by these and other retailers worldwide, join us at the National Retail Federation “Big Show” held January 17-20 in New York City, New York, where we will demonstrate the industry’s most comprehensive suite of cloud and retail services solutions. #NRF16 

Thursday Dec 24, 2015

Fall into the Gap Inc: Upgrade to New Global Retail Systems

In the final shopping days of the year, I am proud to profile one of my personal favorites. In case you missed OpenWorld, here is a little synopsis of the recent presentation from Oracle OpenWorld.  We are thankful for the long time partnership with Gap. Personally, I would encourage you to "Fall into the Gap" to take advantage of the winter sale for last minute gifts for the procrastinators out there. Remember you can also endear yourself to a loved one who can take advantage of these awesome sales in the coming weeks. 


Launched in 1969 by Don and Doris Fisher, “the Gap” was named for the “Generation Gap” that was developing between older generations and what would become known as baby boomers. And thanks to its hip positioning and catchy Fall into the Gap jingle, Gap grew fast. In 1973, the small chain went public at $18 per share.


More recently, the company faced a different kind of gap—an upgrade gap that was threatening to make its software systems obsolete. “We were two to four versions behind in some of our Oracle systems,” said Connie Santilli, Senior Director for Gap, Inc., at the recent Oracle Open World conference in San Francisco. “When you are in that situation, every fix has to be re-engineered and retrofitted and you cannot take advantage of the capabilities of the newer versions.”


Gap, Inc. has never stopped growing, Santilli noted in the session, “Merchandising: a Foundation for Growth and Innovation at Gap, Inc.” The company acquired safari-style outfitter Banana Republic in the 1990s, and launched its own value brand, Old Navy; more recently, it has expanded into women’s athletic wear and designer apparel with the Athleta and Intermix brands. Gap, Inc. now operates or franchises more than 3,700 stores in 90 countries, and logs more than $16 billion in sales annually.


Gap, Inc. Empowers a Team with Deep Retail and IT Expertise


As its global footprint grew, the company was running three separate instances of its merchandising systems to cover North American, European and Asian markets. The company made extensive customizations to its Oracle Retail Version 10 upon implementation for North America in 2004. Europe went live with Version 12 in 2008; Asia, two years later. The highly-customized systems remained in place with multiple patches ever since.


To streamline and simplify its global IT environment, take advantage of new capabilities and set a course for ongoing upgrades, Gap realized it needed an overhaul, and fast. Together with Oracle and Infosys, the company created a plan to “de-risk” a full implementation, looking to streamline its inventory, supply chain and merchandising platforms and cut costly customizations in order to support continued growth in new markets and channels. “It’s like a new install for us,” Santilli said. “Like setting up a parallel system and firing it up.”


The plan launched in September 2014 with a new install covering Gap’s Asian markets. The deployment wasn’t easy—for one thing, stores and websites needed to stay live during a two- to three-day conversion. The team tested Oracle’s Version 14 by conducting mock deployments a week ahead of the go-live date, just nine months later.


“We took stores in Hong Kong, Japan and Shanghai, and did the installations,” said Paul Lamoureux, senior director of Enterprise Architecture for Gap, Inc. “We loaded a whole day’s data to duplicate the craziness that happens across stores, deployed it and backed it out again.”


Once deployed, the new system was a big success, Lamoureux said, delivering complete visibility across all outlets in the region. Now, the challenge for Gap and its partners is to apply that single code base in markets throughout the world to bring deliver a universal, updatable solution system-wide. Gap began deployment in Europe in the third quarter of 2015 and expects to complete it by the mid-2016; Japan will follow immediately after, and the entire company expects to be running Version 14 by mid-2018.


Gap went from an AIX environment to a Linux environment on a short timeline in Asia, noted Rick Whicker, senior director of Information Technology for Gap, Inc., and it couldn’t have been done without the dedicated, 20-person implementation team that includes IT professionals from Gap, Oracle and Infosys. “It really made the project successful in getting through the nine-month window.” Santilli applauded Oracle Consulting Services (ACS) for its attentive account management. 


“Implementing an entirely new version is a big challenge,” Whicker said. “I’ve heard of clients that were able to write a kind of conversion script to ease the transition. In our case, that was not possible.” For companies needing to implement a similar overhaul, Whicker said, “think security from day one.” Firewalls and other protections can require coordination across many departments. “Oracle Retail Version 14 is a well-written product,” he added. “But that doesn’t mean we didn’t have performance challenges. Lots of different stores and lots of different prices were a problem, but we were able to ‘tune’ the software—and most of those tuning exercises are now inside the base product.


“The Oracle code base is exceptionally stable,” Whicker said. “We were ready for hundreds of issues to come through, and we even never got close to that number. After implementation, we were stable within 30 days. And we were able to eliminate 58% of customizations, which we all know are costly.”

Oracle’s retail customer community is a rich resource for peer-to-peer insights to best practices and business strategies. Follow this blog in the coming weeks as we share a series of stories presented by retailers during Oracle OpenWorld 2015 in San Francisco. We invite you to learn more about the Oracle solutions used by these and other retailers worldwide, join us at the National Retail Federation “Big Show” held January 17-20 in New York City, New York, where we will demonstrate the industry’s most comprehensive suite of cloud and retail services solutions. #NRF16 

Wednesday May 27, 2015

Insights from OIC: LIDS Sports Group Makes Inventory Easy to Access Across Channels

In late March, retail executives gathered at Oracle Industry Connect 2015 to share perspectives. Here is a glimpse of what you missed from the sessions....


Making complete store inventories available to both its online shoppers and associates in physical stores has given Lids Sports Group a 1.5% in-store sales boost and helped e-commerce sales rise “dramatically,” according to Vice President of Information Technology Larry Havlik. He and Lids Director of Applications Development Kevin Thompson revealed the bottom-line and customer service benefits of implementing the Oracle Retail omnichannel order broker solution at Oracle Industry Connect earlier this year.


Prior to going live with the Oracle Retail Order Broker solution (formerly Oracle’s MICROS Locate) in February, online shoppers only saw the caps, apparel, and sports memorabilia currently in stock at Lids’ Indianapolis distribution center, meaning that some items and sizes would display as “unavailable.” However, by adding the on-shelf inventory of 800 of its 1,400 brick-and-mortar stores, Lids immediately moved an additional 72,000 UPCs into the “available for purchase” category.


“Where the inventory is currently located isn’t visible to the online customer, and it doesn’t need to be,” said Havlik. “Locate’s job as an order broker is to accept an order and then look for the best ‘match’ for filling it, whether that’s the DC or another Lids store.”


In addition to expanding offerings to its online shoppers, the Locate deployment has created flexible save-the-sale options in physical stores. Associates can arrange for a requested item to be shipped to a customer’s home or for it to be picked up at another Lids store.


The enhanced availability is particularly beneficial for Lids, which features a large amount of branded team merchandise. Home-town loyalties to different sports teams means stores located in different cities, or even just in different parts of a region, can carry widely varying assortments. “Even stores located only 15 miles apart can have stock differences of as much as 65%,” explained Thompson.

Havlik and Thompson both appreciate the ability to apply Lids-specific business rules to Locate’s order management and fulfillment functions. Settings can be adjusted to decrease available quantities of an item from an individual store to ensure it doesn’t go out of stock, or to increase available quantities if the item is easily available from a DC or other source. For fragile items such as Tiffany lamps, the system can be set up to only fulfill from the DC to ensure products are packaged and shipped so as to avoid breakage.

Other factors used by the system’s decision tree include choosing the fastest/cheapest shipping option; consolidating multi-item orders into as few shipments as possible; and even using different stores’ sell-through and shrink rates as a “tie-breaker.” “Locate could choose to fulfill an item from a store where this item hasn’t been selling well, or it could take into account that a store with a high shrink rate might not be trusted to actually have the inventory on hand,” said Thompson.


Havlik expects even bigger sales increases, both in stores and online, as Lids brings additional stores’ inventory into the system and as “people get more comfortable with saving ‘lost’ sales via Locate.”


Now Available: Augment the Store Experience with Cloud Services


Cloud-based applications essentially outsource many elements of IT management including maintenance and upgrades, leaving time for internal teams to focus on driving business improvements (versus keeping the lights on). Like most industries, the retail industry is increasingly looking to cloud-based solutions when an IT organization can’t carve out time to explore and implement new functionality that the business side seeks due to a lack of resources and competing priorities. 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. On April 1st, Oracle Retail announced the Cloud Services offerings.  By taking advantage of the flexibility afforded by cloud-based solutions, your team will find it easier to extend and support new technologies to stores located throughout your geographical footprint. 


Call to Action: How will you differentiate your store experience? 

Oracle Retail Xstore with Order Broker will also be available for demonstration at booth #709 during the IRCE conference on June 2-4, 2015 in Chicago. Stop by and see us or contact Oracle Retail oneretailvoice_ww@oracle.com to take steps that will impact your bottom line. 

For more insights from OIC, see the remarks by NordstromULTA BeautyOur Executive Team and watch here for more Oracle customer stories. And for another perspective on Lids’ success, click here.

The Oracle Retail team loves the LIDS co-branded shirts. Photo credit: Steve Paradise

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. 


Friday Oct 26, 2012

Analytics in an Omni-Channel World

Retail has been around ever since mankind started bartering.  The earliest transactions were very specific to the individuals buying and selling, then someone had the bright idea to open a store.  Those transactions were a little more generic, but the store owner still knew his customers and what they wanted.  As the chains rolled out, customer intimacy was sacrificed for scale, and retailers began to rely on segments and clusters.  But thanks to the widespread availability of data and the technology to convert said data into information, retailers are getting back to details.

The retail industry is following a maturity model for analytics that is has progressed through five stages, each delivering more value than the previous.

Store Analytics

Brick-and-mortar retailers (and pure-play catalogers as well) that collect anonymous basket-level data are able to get some sense of demand to help with allocation decisions.  Promotions and foot-traffic can be measured to understand marketing effectiveness and perhaps focus groups can help test ideas.  But decisions are influenced by the majority, using faceless customer segments and aggregated industry data points.  Loyalty programs help a little, but in many cases the cost outweighs the benefits.

Web Analytics

The Web made it much easier to collect data on specific, yet still anonymous consumers using cookies to track visits. Clickstreams and product searches are analyzed to understand the purchase journey, gauge demand, and better understand up-selling opportunities.  Personalization begins to allow retailers target market consumers with recommendations.

Cross-Channel Analytics

This phase is a minor one, but where most retailers probably sit today.  They are able to use information from one channel to bolster activities in another. However, there are technical challenges combining data silos so its not an easy task.  But for those retailers that are able to perform analytics on both sources of data, the pay-off is pretty nice.  Revenue per customer begins to go up as customers have a better brand experience.

Mobile & Social Analytics

Big data technologies are enabling a 360-degree view of the customer by incorporating psychographic data from social sites alongside traditional demographic data.  Retailers can track individual preferences, opinions, hobbies, etc. in order to understand a consumer's motivations.  Using mobile devices, consumers can interact with brands anywhere, anytime, accessing deep product information and reviews.  Mobile, combined with a loyalty program, presents an opportunity to put shopping into geographic context, understanding paths to the store, patterns within the store, and be an always-on advertising conduit.

Omni-Channel Analytics

All this data along with the proper technology represents a new paradigm in which the clock is turned back and retail becomes very personal once again.  Rich, individualized data better illuminates demand, allows for highly localized assortments, and helps tailor up-selling.  Interactions with all channels help build an accurate profile of each consumer, and allows retailers to tailor the retail experience to meet the heightened expectations of today's sophisticated shopper.  And of course this culminates in greater customer satisfaction and business profitability.

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News and ideas about the retail industry with a focus on customers, innovation, trends and emerging technologies.




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