Merchandising in the age of infinite aisles

HOW TO GAIN A SINGLE VERSION OF THE TRUTH

CREATING A FUTURE-PROOF PLATFORM FOR COMMERCE ANYWHERE

BEYOND RETAIL

“In order to keep pace with the rate of change in retail and satisfy increasingly demanding consumers, retailers must develop a clear, consistent understanding of how their business operates. They must have sight of the entire operation from sourcing to financial performance, via compliance and point of sale. Gaining greater insights into their operations and interactions with shoppers is essential to delivering a tailored, seamless retail experience that will keep customers coming back for more.”Mike Webster, Senior Vice President and Managing Director, Oracle Retail

Retailers are now expected to give customers access to ‘infinite aisles’ that extend well beyond the four walls of their shops

ORACLE BEYOND RETAIL

Merchandising in the age of infinite aislesRetail has come a long way since the birth of ecommerce in the 1990s, as have consumer expectations. At its core however retail is still about one thing: ensuring the right products get to the right people when and where they are wanted.

However, achieving this in today’s market has become a challenge rich in complexity. Consumers regularly cross back and forth between in-store and online and the lines have blurred as retailers encourage customers to place and pick up online orders in-store.

Retailers are now expected to give customers access to “infinite aisles” that extend

well beyond the four walls of the store. Whether a customer decides to buy an item in person, pay for it online and collect it in-store, or pay in-store and opt for home-delivery, shoppers want a seamless experience that results in them receiving their purchase when and where they want it.

So how do retailers achieve this?

Enter the merchandising system, the unsung hero of modern retail. Merchandising systems give retailers a single view of their operations. They provide businesses with real-time transparency into their inventory, supply chain and transactions so they can

make smarter decisions about how and where they should store, ship, and replenish their products. Most importantly, they allow retailers to gain total confidence in the accurate, on-time delivery of their goods.

Merchandising is a fitting subject for our first edition of Beyond Retail because it is the critical foundation of effective retail in a changing world. While it isn’t the sexiest subject it is an essential one.

In this report Oracle Retail will share examples and advice on how businesses can approach merchandising to ensure they are delivering the seamless retail experience their customers expect.

How to gain ‘a single version of the truth’Delivering on the expectations of today’s “commerce anywhere” generation requires a modern merchandising system, one that can support a seamless retail experience, at scale and across multiple channels and geographies.

The task of ensuring customers get what they want, when and where they want it, at a price they’re happy to pay can become complex. This is especially true when retailers try to tackle it with disparate or antiquated systems which can lead to discrepancies and a lack of real-time insight.

Retailers must work off a single consistent version of the truth, from supply chain to point-of-sale, to ensure all decisions are based on the same accurate data. But what does that entail? What data do they need to be looking at and what must they ensure their merchandising system supports?

MERCHANDISING CHECKLIST

Retailers should ensure their merchandising system provides:

1. A single view of sales data, inventory and availability

2. A single, integrated view of all sales channels, both physical and digital

3. A single view of costs, margin and optimum price points for all stock

4. Real-time information whenever and wherever it is needed

5. A consistent, global view of the business and its financial status

ORACLE BEYOND RETAIL

Below are five things retailers should focus on:

1. SEAMLESS CONNECTIONS BETWEEN PROCESSESFor retailers, marrying supply and demand efficiently requires reconciling sales and financial data, purchase orders, item availability, locations and suppliers quickly and precisely. Their merchandising systems must ensure this information is collected and delivered in an accurate, useable form to the right people in the organization whenever they need it.

If they cannot guarantee an efficient flow of consistent data between processes, retailers expose themselves to the risk of higher operating costs incurred through the storage of surplus stock or through expedited deliveries of out-of-stock items, and to diminished customer satisfaction which of course carries its own costs.

2. MANY PLATFORMS. ONE TRUTH.Similarly, retailers need an up-to-the-minute view of customer interactions across the growing number of channels they manage. People engage with brands in-store, online, via their mobile browser, through a mobile app, and over the phone and retailers need to ensure they can combine the data from each of these channels in a complementary

way that makes the shopping experience seamless for consumers.

They also need to feed inventory information into these channels so customers and in-store staff have a current view of availability and the whereabouts of all products.

3. A WINDOW TO VALUEIncreased transparency into stock, inventory, transactions and financial performance helps businesses make better-informed decisions about pricing, range, assortment, fulfilment and growth. This ultimately leads to more intelligent pricing strategies and a more cost-efficient business approach.

For example, with a single view of transaction and deal value, retailers can quantify the benefits of discounting individual items and determine the most profitable price point for each at every stage of its shelf life. This will also put them in a position to calculate optimal margins for their products that account for the full price of acquiring and transporting goods, of landed costs, and of storage times and sales.

This visibility also allows retailers to see where the money sits in the supply chain, which means they can manage outgoing costs and incoming revenue with clear sight of their exposure and of any additional costs related to

discounting, rebates, affiliates or franchisees.

4. AN AGILE, SCALABLE APPROACHSpeed is critical to success in today’s market, and businesses need to foster a culture that permits and encourages faster decision-making. An efficient, rapid approach is essential when it comes to rolling out new products or whole new channels, or when reacting to spikes in demand.

Modern merchandising systems allow retailers to automate many of these processes. In periods of high demand such as the week before Christmas, automated replenishment serves as a welcome assistance to brands keen to ensure customers find the gifts they want, when and where they want them.

5. A GLOBAL VIEWWhen it comes to reporting on financials in global businesses, a consolidated calculation depends on multiple currency conversions. The retailers’ systems must therefore be able to automatically convert financial data into one standard currency using consistent exchange rates across the business to ensure retailers can get a single, reliable snapshot of their global business.

CUSTOMER CASE STUDIES

NORDSTROM

Nordstrom, one of North America’s leading fashion specialty retailers, implemented new merchandise operations management and inventory management solutions to support its expansion in Canada. Nordstrom has long been recognized as a technology pioneer in the retail industry and with its latest move put itself in a position to deliver a highly relevant and personalized experience that allows its customers in new markets to shop on their terms.

Bill Tucker, Nordstrom’s VP of Technology, said “Oracle’s retail industry solutions help ensure that our technology investment evolves with our business to support our growth strategy and help us meet the changing expectations of our customers.”

What does modern merchandising look like in practice? Here we share the insights and experiences of three leading retailers.

PANDA

Azizia Panda United operates Saudi Arabia’s largest hypermarket, HyperPanda, and supermarket chain, Panda. With 102 supermarkets and 47 hypermarkets across Saudi Arabia and the United Arab Emirates, Panda needed systems in place that provide agility and scalability. It was also crucial Panda ensured its operations are integrated and provide reliable business data and insights that

can drive profitability and improved customer experience. Fawaz Kilfaden, IT Director at Azizia Panda United, said: “To achieve our corporate goals and expansion initiatives, we need the right systems, processes and people in place. Oracle will support our current and future business strategy, enabling us to diversify and build our brand, improve our speed to market, and qualify and manage risks and opportunities.”

CHARMING CHARLIE

Opening an average of 55 stores annually, global women’s fashion and accessories retailer charming charlie outgrew the capabilities of its former merchandising system. Following an upgrade, the retailer has been able to automate its pricing strategy execution and simplify key operations such as re-class and markdowns. charming charlie can now maintain its rapid

pace of expansion while tailoring its services to the demands of each market it serves.

John Hnanicek, CIO at charming charlie, said: “With the complexity of a lot of product SKUs, ongoing store openings, and international expansion, we needed a technology foundation from Oracle Retail that would be able to grow with us.”

ORACLE BEYOND RETAIL

A future-proof platform for commerce anywhereKeeping pace with changing consumer demands requires retailers to be better than ever at listening to signals within their own data and understanding how those signals relate to and build an entire view of their business. No decisions should be taken based on signals in isolation. An effective merchandising system can give retailers the power to seamlessly integrate every single moving part of their operation and understand the way they relate to each other.

But it is not all about technology. Gaining a ‘single version of the

truth’ requires cultural and not just technological change within organisations. Retailers must identify and break down the silos within their business, wherever they have developed - be that in their processes, their structure, their working relationships, their technology or their data.

By creating a true, single view of their entire operation, retailers will be freed from the mounting complexity of modern retail and in a far stronger position to get back to what really matters – serving their customers as best they can.

An effective merchandising system can give retailers the power to seamlessly integrate every single moving part of their operation.

With real-time product, inventory, and pricing data at their fingertips, in-store associates become as knowledgeable and helpful as the recommendations on a retailer’s website

The product’s journey from source to customer is becoming increasingly complex, and maintaining a single, accurate view of what’s happening is no small feat

Consumers expect the ability to shop for anything, anytime, and on any device. Retailers need to give them access to “endless aisles” that extend well beyond the walls of their stores

The storefront and homepage may be the face of a retail business, but the merchandising system is its backbone. A successful operation cannot stand up without it

Consumers think in terms of their overall experience with a brand. Retailers need to deliver a consistent service in-store, online, and on the move

Oracle Retail Merchandise Operations Management (MOM) supports the intelligent allocation and replenishment of products so customers always find what they’re looking for

Delivering a seamless and convenient shopping experience makes customers more likely to come back for more

A Closer Look At Commerce Anywhere

Inventory transparency and

Integrating merchandising analytics into ecommerce systems allows retailers to deliver a seamless experience for shoppers that use multiple platforms during a purchase

MOM creates more accurate profiles of product distribution to individual stores and customers. MOM systems also provide an up-to-the-minute view of inventory and processes across the business

QUICK SNACKS

SUPER MART

SUITS YOU

La Boutique

KIDZ CLOTHES

SPAR

KLES

JEWELS

Retailers benefit from improved planning and forecasting; smarter inventory management; and an up-to-the-minute consolidated view of financials

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The complexity of running a global retail business is increasing all the time. Merchandising provides a critical foundation for success and gives retailers a complete view of what’s happening across their business, from supplier to point of sale and financial performance. This single view of their business gives retailers greater confidence in their decision-making and enables them to develop faster and smarter ways of working to combat mounting complexity.

BEYOND RETAIL