10 Trends Transforming The Store

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Trends Transforming The Store

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Panelists

Greg Girard Program Director IDC Retail Insights

Debbie Hauss Editor-in-Chief Retail TouchPoints

Sally Hartnell Marketing Manager

IBM

MODERATOR

Top Ten Trends in Omnichannel Merchandising Technology Strategies and Retail Analytics Greg Girard, Program Director September 2012

© IDC Retail Insights. Reproduction is forbidden unless authorized. All rights reserved.

Circa 1997 Circa Now


Readying Ourselves for What’s Coming

Change “The future ain’t want it used to be.”

Yogi Berra


#1: Retailers will hone lessons learned for profitable agility •  The Great Recession: If it didn’t kill

you, you got religion… •  Analytics and optimization •  Process integrity •  Organizational alignment •  Mobile, social, local •  3600 Worldview of everything

•  New strategies for the new normal (economic, social, cultural, ethnic) •  Good fortune begets innovation—Family Dollar and Dollar General •  Big box stalwarts play small ball—Walmart, Target •  Established brands change the rules of engagement—Walgreens •  Dramatic shares of CapEx for Omnichannel capabilities—Nordstrom, Macy’s •  A visionary re-invents the store in the image of the brand—Apple (JCP TBD)

bigger: AMAZON | GOOGLE | FACEBOOK | EBAY


#2: Four pillars of the 3rd platform— big data, cloud, social, and mobile — will accelerate transformation of retailing


New bases of competition

3I consumers •  Instrumented •  Informed •  Interconnected

• Omnichannel •  Commerce •  Transparency •  Offer Orchestration

• Analytics •  Next Best Action •  Socialytics •  Collective Intelligence

• Shopping apps • Living apps

Social merchant Stores as Centers for Omnichannel Orchestration

Collaboration

#2: Four pillars of the 3rd platform— big data, cloud, social, and mobile — will accelerate transformation of retailing


Successful growth strategies will revolve around consumers, not products or channels

#3 Resourceful, smarter consumers in command: instrumented, interconnected, and informed


#4: Omnichannel Orchestration and Optimization …O3… will define a new retail enterprise technology model


#5: Big Data and Analytics are the new coin of the retail realm


#6: Social retailers will start making better decision New Product Development Merchandising Marketing Channels


#6: Social retailers will start making better decision

Retail Social Gnome

Socialytics Insight/ Response Ladder


Socialytics Insights > Actions > Outcomes

#6: Social retailers will start making better decision


#7: Retailers will struggle with transparency

Consumers

Competitors


Consumers Are Online Inside… Retailers Must Be Too


#8 Merchandising, marketing, and operations together must transform stores into centers of omnichannel orchestration


#8 Merchandising, marketing, and operations together must transform stores into centers of omnichannel orchestration •  Accelerate investment in:

•  Passive and active customer check-in •  Personalized self-directed shopping •  Interactive and transactional digital signage •  Augmented reality in a few instances •  Omnichannel Points of Commerce Platform •  Personalized customer offer orchestration •  Customer order orchestration •  Endless aisle assortment localization strategies •  Wifi for all

•  Omnichannel Customer Experience Management, a mash-up of … •  Associate enablement •  Web experience management •  Content management •  Merchandising—assortment, price, space strategies •  Marketing and offer orchestration •  Order and fulfillment orchestration


#9: Trends 1-8 are driving merchandising / marketing cooperation

Customer centric RRM 2.0 is emerging

(Private Promotions)

Product centric RRM 1.0 has matured (Public Prices)


#10 Retailers are engaging consumers in “Beyond & Between Commerce”


#10 Retailers are engaging consumers in “Beyond & Between Commerce”

Use, maintain, and repair hardlines

Prepare and consume food and beverages

Apply health and beauty products Take supplements and medications

Tailor, wear, accessorize, and care for apparel and footwear Consume media

Lifestyle Apps: Lives, roles, jobs, community, school….


Essential Guidance •  Four forces….mobile | social | big data | cloud

…your choice •  Four Horsemen of Your Apocalypse

Four Aces in Your Hand

•  Customer…context and relevance...foundation of engagement

•  Stores – the new focal point of omnichannel competition

•  Omnichannel…real-time…analytics…excellence in the ordinary

•  O3…core competency…on the 3rd Platform

© 2011 IBM Corporation © 2012 IBM Corporation

Meeting Retail Industry Imperatives without Breaking the Bank

Sally Hartnell IBM, Marketing Manager

September 26, 2012


Responding to the needs of the smarter consumer requires retailers to adopt three strategic imperatives.

2) Tune merchandise and supply networks to

customer demands

3) Drive efficiency and reduce cost of

operations

1) Deliver a smarter shopping

experience Retail


A smarter shopping experience is personalized, consistent, and relevant to the customer.

Ø Develop intelligence on customer wants and needs Ø Empower customers to use their technology of choice

Ø Ensure consistent, timely, and relevant interactions

© 2011 IBM Corporation © 2012 IBM Corporation 32

… faster insight into information assets could help you increase sales and gain competitive position?

What if …

Do I have enough inventory in all locations to last until the end of the promotion?

Should I offer free shipping to this customer?

Are slow-selling items priced higher than my competitors?

What are my top 10 selling items today and how are

they trending?

What items should I offer this customer based on her past purchases?

How long will it take my vendors to fulfill these orders based on

current inventory levels?

What percentage of items purchased today were on

promotion?


Skechers USA Accelerates Sales and Inventory Decisions

“Our complex inventory and sales reports took anywhere from a few minutes to 45 minutes to run. When we tested those same queries with Informix Warehouse Accelerator, they ran in 2 to 4 seconds each! That acceleration ranges from 60 to 1400 times faster, with an average acceleration of 465 times, all without any index or cube building, query tuning or application changes. " - Ashutosh Khunte , Senior Database Architect, Skechers USA

What’s smart? •  Average acceleration of

warehouse queries by 450X •  No tuning or application

changes to improve warehouse performance

•  Plugs into existing environment Smarter Business

Outcomes •  Rapid insight into inventory

optimizes revenue opportunities •  Agility to quickly respond to

pricing and other variables enhances competitive position


Analysis at the Speed of Thought

What is it? How is it different? IWA leverages an in-memory, columnar approach to process very complex queries at real-time speeds, without requiring any tuning or changes to business applications.

Ø Performance. Unprecedented response times with 100+ faster performance than traditional warehouses

Ø Transparency. Keep using your front-end analysis and reporting tools without having to make any changes.

Ø Simplified administration. Appliance-like hands-free operations, eliminating database tuning tasks.

Ø Software only. Optimized for Linux on the commodity hardware of your choice.

Ø Plugs into existing environments. No “rip-and-replace” required!

IBM Informix Warehouse Accelerator for Smarter Business Intelligence


Smarter Retail One of world’s largest retailers enables managers across thousands of stores to have instant insight into consumer buying behavior for faster business decisions.

What’s smart? •  500+ managers get answers to complex

queries in < 10 seconds •  No tuning or application changes to

improve warehouse performance Smarter Business Outcomes •  Rapid insight into promotion items and

inventories optimizes revenue opportunities

•  Agility to quickly respond to pricing and other variables enhances competitive position

Powered by Informix


… your information assets were part of an intelligent network, always available and easily managed, regardless of global locations or IT platforms?

What if …

How do I keep product and customer data current when the data is replicated all over the world?

We just acquired a chain of stores who are standardized on Windows.

We use Linux. How do I avoid IT expenditures and vendor lock-in?

Our US stores change prices more often than our Canadian stores. How do I easily make changes just to US stores?

How do I meet Service Level Agreements when I need to do regular maintenance?

I need to upgrade my data centers but I don’t have staff

at each location.

We want to track more product attributes but isn’t it hard to

change all the product tables at every location?


Smarter Retail McLEOD RUSSEL INDIA LIMITED, the world’s largest tea producer, eliminates downtime in the tea trade.

What’s smart? •  Enables 100 percent data availability to

critical data across 300+ endpoints •  Delivers 90 percent faster database

performance •  Return on investment within a year

Smarter Business Outcomes •  Accurate tracking of harvest, production

and sales of 220+ million pounds of tea per year

•  Satisfying customers with 24x7 service availability

“Previously, an outage could take us up to three days to recover from, and in that time, we’d be losing data and business. Since upgrading our databases to IBM Informix, we have had zero downtime.” - Shantanu Das, Deputy Manager-IT, McLEOD RUSSEL INDIA LIMITED

Powered by Informix


Optimize Retail Networks with Informix Flexible Grid

Redistribute work locally, regionally,

globally

An easy to manage clustered environment for High-Availability, Scalability & Workload Balance

Six 9’s of availability –

zero downtime for planned

maintenance

Administer the grid

as if it were a single server

Mix hardware and versions

of OS and Informix

"This is a real innovation that lowers our operating costs with less investment in hardware, and lets us leverage existing investments and resources.“

Hector De Santiago Ramirez, IT Infrastructure Manager, DHL


Informix Flexible Grid for Smarter Retail

Store3

Store1

Store2

Store5

Store7

Store6

Store4

Home Office


Smarter merchandise assortments and supply networks are essential to serving the smarter consumer. Ø Use customer insight to tailor assortments and product ranges to local markets Ø Tune stock allocations to local or fluctuating demand

Ø Design flexible supply networks to shift stock according to customer demand


ColCerámica Reduces Time-to-Market by 20 Percent

IMP14439-USEN-00

IBM Software

“We can now look at the distribution chain across all our centers and closely monitor the detail of each production step. It has helped reduce time-to-market for products by 20 percent.” - Saul Vargas, Senior Database Admiinistrator, ColCerámica, A Corona Group Company

What’s smart? •  50% faster performance when tested

against competitive databases •  Only .5 DBA needed to administer

16 sites

Smarter Business Outcomes

•  Reduced time-to-market for order delivery by 20 percent

•  Improved supply chain management across 16 distribution centers

•  Lower operational costs with Increased operational efficiency and reduced costs


Improving operations and reducing costs are essential ingredients to compete for the smarter consumer’s business. Ø Do More, Spend Less Time and Money

§  Higher performance means fewer servers – and less space, power, cooling

§  Heterogeneous grid means using your existing HW and avoiding vendor lock-in

§  Automatically sense and respond to changes without intervention • Self Maintaining means you avoid over provisioning or idle resources • Self Configuring and Self Healing mean maximizing DBA resources


§  Time to roll out new solutions takes too long

§  Maintenance and operation of existing application landscape are too expensive

§  Retailers are facing major strategic decisions with regard to infrastructure

§  Retailers need to risk and investment while testing new markets.

§  Transformation activities of acquisitions are behind schedule and synergies are not being realized

§  Data center transformation is needed to support the future generation of capabilities.

Why act now?

How can Cloud Deployments Help Retailers today?

Reducing risk Ensure the right levels of security and resiliency across all business data and processes Informix provides a single console to easily provision only what is needed, when and where it’s needed, across the entire environment

Breakthrough agility Increase ability to quickly deliver new services while containing costs and managing risk Informix manages workload utilization cost effectively for both OLTP and BI applications

Higher quality services Improve quality of services and deliver new services that help the business grow and reduce costs Informix provides around-the-clock services with virtually NO downtime, even for routine maintenance and upgrades

Doing more with less Reduce capital and operational expenditures Informix is only database that can be utilized and provisioned in the cloud on heterogeneous, commodity hardware


A System for Smarter Retailing

2) Tune merchandise and supply networks to

customer demands

3) Drive efficiency and reduce cost of

operations

1) Deliver a smarter shopping

experience Retail


For More Information

Ø Learn more about IBM Informix at www.ibm.com/informix §  Learn about the Informix Warehouse Accelerator at www.ibm.com/informix/warehouse

§  Learn about Informix Flexible Grid at www.ibm.com/informix/flexgrid

Ø Read the case studies §  McLeod Russel India Limited (click on title or go to short URL: ibm.co/UqcrzE)

§  Colceramica (click on title or go to short URL: ibm.co/SeuzdI)

Ø Test drive a free trial of IBM Informix Ultimate Warehouse Edition (click on title or go to short URL: ibm.co/SgtqGK)

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Q&A

Greg Girard Program Director IDC Retail Insights

Sally Hartnell Marketing Manager

IBM

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