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Retail RevolutionA new store IT operating model for a multi-channel world

Richard Clarke, Vice President Global Retail

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I want to talk today about …

YOU

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This is you … a customer

… doing your shopping.

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I want to talk about how customers like you …

… are forcing retailers to change the way they run stores.

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… and how in response retailers are evolving a new store IT operating model …

… for customers in a multi-channel world.

Mobile

Store

Catalogue

Online

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We are witnessing a retail revolution …

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… customers are demanding retailers restore the traditional retail experience …

… but redesign and deliver it for a modern technological age.

Yesterday Today

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1. Shopper Power

Customer Knowledge

"Any Time, Any Place, Any Where"

My Experience

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… just read the research for yourself …

… of shoppers went online to research a product before going to the store to buy it

83%

… of all transactions by 2017 will be com-pleted via mobile point of sale, self checkout at a terminal or on a shopper's mobile device

… of retailers think developing a more engaging in-store customer experienceis going to be business critical

56%74%

Source: Motorola Solutions' "Retail Vision Survey", May 2012

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2. Technology

Self Service

Online/Mobile/Wireless

Social Media

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…and the back office data analytics

Data Analytics

… which is powering cross-channel customer knowledge.

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3. Role of the Store

Woolworths (Australia)

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In response retailers are evolving a new store IT operating model …

… a new customer-centric model for a multi-channel world.

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Retailers Objectives

Productivity

Customer Experience

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New Store IT Operating Model

Inputs:- Range ?- Prices ?- Store Stock Layouts

Trading Profitability

54 Defined Measures

- Supplier Contracts& Deals- Pricing- Promotion Maintenance- Store Delivery Constraints

- Allocation Parameters- Planned Allocations- Soft Allocations

Supplier CodeSKU Cost

Store HierarchyProduct Hierarchy

Sales (sku/store/week)Gross Profit (sku/store/week)Customer SegmentationBudget ?Market Share ?

Range / OSED/OFSEDPromotion Range

Store HierarchyProduct HierarchySales(sku/store/day)Range& OSED/OFSEDComplex Item RecipeOpen Transfer OrdersOpen Direct Store OrdersInventory LevelsSupplier to Item Relationship

Released Store OrdersHard Allocation ParametersReleased Direct Store Orders

Store HierarchyProduct HierarchyDepot RangeInventory Level (Store)Open Purchase OrdersInventory LevelsSupplier to Item RelationshipSupplier Contract Constraints

Released Purchase Orders

Released Transfer OrdersForecast Transfer Orders

Sales SummariesInventory Transaction SummariesRebate Claim ValuesCustoms & Excise Costs

Store Expenses

Product HierarchiesPricesPromotion ReferenceItem Combination Pricing

Sales Transactions

EFT SettlementPayment SummariesStore Expenses

Store HierarchyProduct HierarchyRange& OSED/OFSED ?Complex Item RecipePromotion ReferencePricesReleased Transfer OrdersReleased Direct Store OrdersSupplier to Item Relationship

SKU Sales Summary TxnTransfer Receipt TxnDirect Order Receipt TxnInventory Adjustment Txn

Store HierarchyProduct HierarchyProduct AttributesReleased Transfer OrdersHard Allocation ParametersReleased Purchase OrdersSupplier to Item RelationshipRTD/RTY Orders ?

Purchase Order Receipt TxnTransfer Order Dispatch TxnInventory Adjusment TxnCustom & Excise Movements

Transfer ASN

Released Store OrdersInventory Levels

Basket Sales

Store HierarchyProduct HierarchyProduct Attributes

Inputs:- Store Hierarchy- Product Hierarchy- Depot Range- Released Transfer Orders- Forecast Transfer Orders- Suppliers to Item Relationship- Inventory (Depot)- Open Purchase Orders

- Supplier Contract constraints

Outputs :- Released Purchase Orders- Released Scheduled VehicleLoads- Forecast Purchase Orders- Forecast Vehicle Loads

Internal:- Vehicle Load Build Parameters- Delivery Scheduling Parameters- Aggregate Depot Transfer Order Demand Forecast

Warehouse Inbound PlanningInputs:- Product Hierarchy- Product Attributes- StoreHierarchy- Depot Hierarchy- Released Transfer Orders- Forecast Transfer Orders- Store Delivery Constraints

- Primary Inbound Loads (read)

Outputs :- Driver & Vehicle Intructions- Warehouse DU build instructions

Internal: - Fleet- Geography- Routings

Transport Planning

text

Driver & Vehicle InstructionsWarehouse DU Build Instructions

Supplier ASN

Supplier COR

Supplier Invoice

UDEX Product InformationNPD Information

VMI Product Information

B2B/EDIInputs:- Released Purchase Orders- Supplier Vehicle Loads- Forecast Purchase Orders- Released Direct Store Orders- Supplier COR

Outputs:- Supplier ASN- Supplier Invoice- UDEX Product Information- NPD Information- "VMI" Product information

Inputs:- Sales Summaries- Inventory Transaction Value Summaries- Payment Receipt Summaries- Remate Claim Values

- Store Expenses

- Customs & Excise Costs ?

Outputs :- Supplier Codes- Card Files- SKU Cost

- Budget ?

Internal:- Chart of Accounts- Ledger Posings & Adjustments

Financial Management (Inv Matching)

Inputs:- Supplier Codes- Inventory Transactions(Receipts, Issues, Adjustments, Sales)- Sales (sku/store/day)- SKU Cost- Range by Cluster by OSED/OFSED- Released Direct Store Orders- Released Transfer Orders- Forecast Direct Store Orders-

Outputs :- Store Hierarchies- Product Hierarchies- Product Attributes- Product to Supplier Relationships- Complex Item Recipe Model- Range by Store by OSED/OFSED- Promotion Master Data- Prices- Invnentory Levels- Open Direct Orders- Open Purchase Orders- Open Transfer Orders(?)- Valued Receipts- Inventory Transaction Valuations- Depot Range- Store Delivery Constraints

Internal:- Item Creation& Attributes- Recipe Model Maintenance- Supplier to item Relationship

Central Merchandising

Inputs:- Product Hierarchy (full?)- Promotion Reference- Prices- Item Combination Pricing- Home Store Loyalty Balances- Card Files- "VMI" Products- "VMI" Prices

- In-StoreStY Picking Results

Outputs :- Basket Sales- EFT Settlement- Loyalty Points Transaction- Payment Summaries- Wet Stock Sales- Boots Sales

Internal:-

POS Operations

Inputs:- Sales Detail (Basket)- Sales Forecast- Released StoreOrders- Forecast Store Orders

- Inventory Levels

Outputs :- Sales Summary (sku/stor / week)- Gross Profit (Sku/Store/Week)- Customer Segmentation- Availability (Store or Shelf ??)- Sales Space by SKU-

Internal:- KPI Calculations

Enterprise Data Warehousing

Inputs:- Store Hierarchy- Product Hierarchy- Sales (sku/store/week)- StY Orders- Store Customer Orders- Range & OSED/OFSED- Suppliers to Item Relationship- Inventory (Store & Depot)- Complex Item Recipe Model- Store Shelf Capacities- Open Orders- Code Age Check Results

Outputs :- Sales Forecast- Released Direct Store Orders- Released Transfer Orders- Forecast Direct Store Orders- Forecast Transfer Orders

- Hard Allocation parameters

Internal:- Sales History (sku/store/week)- Forecasting Parameters- Replenishment Parameters

Store Replenishment PlanningInputs:- Store Hierarchy- Product Hierarchy- Sales (sku/store)- Gross Profit (sku/store/week)- Market Share- Customer Segmentation

- Budgets ?

Outputs :- SKU Range (by Cluster)- Range OSED / OFSED- Promotion Range- SKU Shelf Capacity (by Cluster)- Store SKU Locations

Internal:- Sales History (sku/store/week)- Market Share- iLabel product images

Range & Space Planning

Depot OperationsInputs:- Product Hierarchies- Product Attributes- Store Hierarchies- Supplier to Item Relationship- Releasd Transfer Orders- Hard Allocation Parameters

- Released Purchase Orders- Supplier ASN

- Vehicle / DU build instruction- RTD/RTV Orders

Outputs :- Supplier COR- Purchase Order receipts- Transfer Order Dispatch- Inventory Adjustments

- Transfer ASN

- Customs & Excise movements?

Internal:- Inventory by location- Hard Allocations- Pick instructions

Store OperationsInputs:- Product Hierarchies- Product Attributes- Transfer ASN- Direct Order ASN- Sales Transactions

Outputs :- Product Hierarchies- Store Expenses- Transfer Receipt Txn- Direct Order Receipt Txn- Inventory Adjustment Txn- Promotion Reference- Prices- Item Combination Pricing- Code Age Check Results ?

Internal:- Customer Order Ref ?????

Forecast Purchase Orders

Released Purchase OrdersReleased Direct Store Orders

Store Shelf Capacity ?

eCommerce

Outputs:- Picking Results- StY Orders- Store Customer Orders

Picking Results

StY OrdersStore Customer Orders

Range ?Store Stock Layout

Report Queries

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Retail Solutions

New Store IT Operating Model

IT Op Model Strategy

Performance Management

Integration

Applications

Infrastructure/Networks

Services

1

2

3

4

Customer Journey

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Customer Journey

Typical Journey

Guest Need

Current Experience

Solutions

New Experience

Plan Arrive & Navigate

Process

Impersonal

Helpful and Efficient

Browse & Select

Information

Rushed

Simple and Personalized

Purchase

Process

Inefficient

Fast, Secure Service

After Sales

Experience

Functional

Personal and supportive

Information

Manual

Simple, fast informed

1. Online (Click 'n' Collect)

2. Mobile Marketing

3. Social Media

1. Mobile App2. Geo-location3. Customer ID4. Digital Media

1. Personaliza-tion (promos/menu)

2. Social Clienteling

3. Smart Stock4. Price Compa-

rison

1. Self Service2. Mobile PoS3. BYOD4. NFC-enabled

payment

1. Customer analytics

2. Intelligent service management

3. Mobile marketing

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… and the IT op model strategy

Strategy Objective Solutions

Cross-E

nterprise De

livery

Busine

ss Ch

ange

Product Selection

Customer Engagement

Payment Experience

IT Integration

"Fast and Easy"

"Recognize ME"

"Paying my way"

"IT for customer"

Click 'n' Collect Smartphone browse/order/pay

Social Clienteling Data Strategy/Integration

Mobile PoS NFC/Contactless

Wireless/Infrastructure Mgmt. Middleware/Integration

Sales Loyalty Productivity

Roadmap Programmatic Business case

Geo-Location Services

Customer Analytics

SaaS Applications

1

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Solutions – applications

TODAY

ERP

Data Data Data

UI

PoS App A

Integration

UI

PoS App B

Integration

UI

PoS App C

Integration

UI

PoS App C

Integration

Complex and inconsistent

Channel "silos" – pos and data

No single view of the customer

"Manual" cross-channel shopping

Limited deployment options

High development and maintenance cost

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Solutions – applications

Single Transaction RepositoryPoS App (with APIs to third parties)

Deployment Options (thin/thick, cloud)

FUJITSUNext Gen Retail Platform

Reporting

ERP

Data Integration

Single selling engine

Single view of the customer

Omni-channel shopping

Multiple deployment options

Reduced development and maintenance cost and business risk

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Solutions – infrastructure/networks

Linked to customer journey

Portfolio of PoS and retail operations products

Integrated – front and back office and consumer

Wireless-enabled

SCO

PoSCon-

sumer Mobile

Kiosk/Pay

Station

Con-cierge

Digital Media

TabletAsso-ciate Mobile

2

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Flexi-Checkout (U-Reverse)

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Flexi-Checkout (U-Reverse)

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Solutions – services

Retail as a Service powered by Fujitsu

IT Products & Services Menu

Pay per Use Model

Outcome-Based Contracting

= € × per store per month

IT Support SLAs

IT Products & Services

HostingIT

Blueprint

2

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Integration – in store and front to back office

Wireless-enabled store

SOA-based model for in store services

PoS to HQ ERP integration

3

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Performance Management

Objectives

Productivity

Customer Experience

Results

Business Outcomes

TCO savings fund investment in Customer Experience

Profit Centre

4

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Auchan – Self Service Operating Model

Global French food Fujitsu operates in France, Italy,

Spain, Portugal, Luxembourg, Poland, Hungary, Romania, Russia, Morocco, China and Taiwan

c. 3,000 stores across hypermarkets, supermarkets and specialty

Fujitsu is partner for 10+ years across PoS hw, sw and services including help desk and project management

Auchan Lacroix Saint-Ouen

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Separate Scanning And Payment

Up to 40% improvement in Checkout processing times

One to one scanning and payment stations

Recycling payment station

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SCO Carts

Fujitsu High Volume Trolley Self Checkout

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Point of Sale Services (hw, sw, service)

Subscription-based

Cloud-based model

Hallmark – Retail as a Service

3,200 stores in US and rest of the world

Company owned and franchisee base

Estimated ~$3B in annual revenues

Fujitsu has been PoS partner since 2005

Seeking a new PoS solution model and multi-channel functionality

Benefits

Future-proof store IT

Opex commercial model

Reduced TCO

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So we come back to you …

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… driving a new customer-centric retail IT operating model.

Mobile

Store

Catalogue

Online

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The revolution has started …

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TescoVirtual Shopping

Mall, Gatwick Airport, UK

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