The New Age of Engaged Retailing

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1 The New Age of Engaged Retailing Consumerization of IT has blurred the lines between physical and online retailers. Consequently, the focus now is on how retailers can integrate technologies like Mobility, Analytics and Social into their Omni-Channel Commerce platform. This is critical to understand customer needs at every stage of the purchase cycle more deeply and engage appropriately across channels to make a tangible impact on business results. This whitepaper examines the theme of Engaged Retailing and relies on our experience built through partnering with retailers.

2 What is Engaged Retailing? Today s connected world is at the stage where a consumer hails a cab using a GPS enabled mobile app and is informed about their waiting time that also tracks the cab s progress status. All these facilities are available to the consumer at the cost of few clicks. Similarly, more such examples can be drawn from the food, beverages and entertainment industries. Engaged Retailing focuses on how the shopping experience needs to evolve in the context of the customers preferences and eventually maximize value for both the customer and retailer. Personalization, Convenience and Value continue to be the big pillars of a retail consumer s decision making. Technology can help retailers take the jump to aid a consumer s decision making. However to identify what is required and implementing it requires a well-crafted roadmap, which blends an understanding of business context as well as that of technology platforms. Emerging Omni-Channel Commerce platforms offer a sound foundation in terms of enabling data capture, transaction and order interoperability across multiple interfaces such as web, mobile, POS and kiosk, enabling a seamless cross channel connected environment. However, progressive retailers need to go beyond this to integrate other technologies and applications such as Search, Mobility, Analytics and Social to enable a more complete customer engagement roadmap at each stage of the shopping cycle. Some of the key steps in this roadmap are Seamless Shopping, Fulfillment Flexibility, Single View of the Customer and the Responsive Retail Enterprise. CIOs will also need to pay attention to the operations and technology issues that enable a fast first-time right enablement of the Engaged Retailing agenda. Seamless Shopping The single most direct driver of enhanced shopping convenience, Omni-Channel platforms enable the store and customer to interact across devices, at various stages of purchase cycle seamlessly. Today a consumer starts research on the mobile, pursues it on the web, experiences at the store and completes the purchase through any one of these channels. The expectation is to have seamless product information, availability, service, promotion and loyalty experience at all touch-points. A larger Mobility strategy with the right platforms and apps portfolio is often integral to achieving the desired experience. Fulfillment Flexibility Order fullfillment flexibility is now a must-have. Consumers expect to order online, pick up from store or warehouse, buy at the store, deliver at home or any combinations of these that suits the particular purchase occasion. Research reveals customers value convenience in terms of a preferred time or place of delivery more than even speed of delivery. Omni-Channel Commerce platforms enable portability of orders and single view of inventory. However, often it also requires a clear shift in business mindset to achieve truly integrated operations. Personalized Sustain revenue growth with futureready Omni-Channel business Integrate applications for consumer connect and satisfaction Convenient Allow Omni-Channel order fulfillment Improve merchandising efficiency and operations Value Lower TCO Enable managed services model Rationalize license costs A good Omni-Channel Commerce platform provides the foundation for seamless cross channel access and fulfillment, on which value added solutions can be built to achieve the desired shopping experience. Omni-Channel System Online Store Mobile Shop Catalogs Kiosk Social Call Centre Channel Management Business Services Core Commerce Platforms Data Source Integration Engaged Retailing Roadmap Stage Seamless Shopping Fulfilment Flexibility Focus Technology Benefits Single store: Online, Mobile, store presence and connectivity Customer record visibility: Online, In-store, Center and Service Cross channel inventory information and shopping cart Shopping assistance: In-store, Online chat, Call Centre Mobility CRM ERP Customer Loyalty Share of wallet Channels: Store, Online, Kiosk, Center Integration: Sales Orders, Customer Information Cross-channel inventory access, order placement and fulfillment ERP Warehouse Management Mobility Customer convenience Cross-channel traffic Omni-Channel Solution Allows a Single Integrated Shopping Environment A leading Middle Eastern transit retailer chose to implement a retail Omni- Channel solution that allowed for a single integrated shopping environment across duty-free retail outlet universe, airport lounges and in-flight shopping touch points. A 24X7 operating environment, single loyalty systems and secure multi-currency payment completed a seamless shopping experience. Retailers need to map and solve different use situations, context and environments in which their customers could shop.

3 Omni-Channel Order Fulfillment for Orders Placed through Web and Mobile A world-leader in hypermarket retailing enabled Omni-Channel order fulfillment, allowing web- and mobile based orders to be collected from the store. The service enhanced store traffic and sales significantly. Cross-channel fulfillment solutions often involve deep custom engineering efforts to integrate Omni-Channel platforms with existing store and ERP systems, demanding more of your technology teams and implementation partners. Single View of Customer As customer behaviors change rapidly to seek and transact across multiple channels, understanding this behavior and the underlying core values of the customer is even more important. Migrating existing customer data from independent multi-channel systems that often separate online and store-led POS and CRM data into a single customer data master and sustaining this in the new operating environment is a critical task. Extending the usage of this data through Analytics and Search to aid product recommendations, offers and promotions relevant to the individual customer drives the key value lever for personalization. Responsive Retailer A key aspect of Omni-Channel strategy is that the volume of data related to customer and operations increases significantly. The data also tends to have more real time actionable elements. It is critical for retailers to make them available for efficient processing for insights that drive business decisions. For example, even as retailers are going global, there is increasing demand to understand local needs and create a customer-centric merchandising and promotion strategy even at the level of a single store. Store-level self-service business intelligence to aid employee decision making can further enhance this approach. Personalized Master Data Management Loyalty and Promotions Social Media Merchandising Analytics Engaged Retailing is based not just on enabling a superior shopping experience, but in capturing more relevant data and translating them into customer and business centric insights that truly add value to the exchange. Engaged Retailing Roadmap Stage Focus Technology Benefits Single View of the Customer Understanding customer and market trends Customer master data, online, POS, Social Predicting customer behavior: needs, preferences, occasion, basket, churn Personalization: assortment, offers, user experience Search Analytics Social Listening Superior targeting, ticket size Enhanced conversion and retention Responsive Retailer Merchandising and Inventory Management Promotions management Store planning MDM Analytics Store and merchandise productivity Operating margins Omni-Channel Commerce Enables Single View of the Customer A leading European travel retailer merged online and retail channels with an Omni-Channel Commerce platform for a single view of the customer. Superior package search and personalization integrations further enhanced conversion and pricing yield leading to rapid growth web sales within a year. Real value is derived when data that allows for a cross-channel view of the customer is implemented with appropriate tools to personalize value to the consumer Big Data Analytics Helps Derive Actionable Business Insights on Various Transactional Data A large Asian health and personal care retailer is using a Big Data Analytics platform to derive actionable business insights about operations, merchandising and customer preferences from loyalty and transaction data. The merchandising and promotion decision is completely driven by the insights from the platform. Collecting and converting larger volumes of data into actionable business insights is even more critical in a fast moving connected world.

4 The focus on customer-facing systems needs to be matched with an effort to streamline internal operations and IT ecosystems. Retail continues to be a business driven by the need to maintain high levels of operational efficiency to ensure margins are sustained, especially in the face of price competition from pure-play online models. Leading Omni-Channel Commerce platforms provide a head-start with built in content, catalog, master data and order management features. Once again, going beyond the standard out-of-the-box solutions and ensuring effective management of the IT agenda ensures optimal costs and ROI. Operations Ecosystem The content, catalog and campaign management features of Omni-Channel Commerce platforms are often new applications that enhance operations efficiency to retailers. However, further extensions and integrations into the wider operations footprint can add significant value. Including vendors in the commerce platform scope and supply chain innovations directly from vendor and drop-ship logistics partner systems can take the operations efficiency agenda further. Technology Backbone Omni-Channel Commerce platforms by themselves offer significant scope for simplifying the application landscape. Investments in the right vendor who can bring expertise to the table are critical to maximize value from industry segment specific solutions. Realizing enhancement through value added new technology-led solutions for customer engagement as outlined in earlier sections also places a higher emphasis on the applications strategy and IT operating model to ensure fast first time right implementation. Engaged Retailing Roadmap Stage Operations Ecosystem Technology Backbone Focus Technology Benefits Catalog and content management: Online, In-Store Marketing campaign management Vendor management Supply chain efficiencies: internal and external Omni-Chanel Commerce ERP Analytics SCM and Logistics Operation reliability and efficiency Scalability Application landscape: rationalization, integration IT operating models: In-house and outsourced roles, skills and deliverables Infrastructure: Scalability and costs Business Applications portfolio: new, legacy Infrastructure: On Premise, Cloud, hybrid Program and system reliability IT project and systems support costs Buy E-Commerce Footprint Helps Expand in the Online Market A large Asian fashion retailer extended their E-Commerce footprint to participate in online market places. A scalable middleware solution integrated multiple 3P E-Commerce portals, vendors, logistics partners and ERP into one flexible automated operation. As retailers evolve to more mature Omni-Channel models, the need to look at applications that leverage and scale the ecosystem of partners and vendors in ways more familiar to online players increases. Omni-Channel Solution Implementation Supports Digital Business Growth A leading travel retailer chose to implement an Omni-Channel Commerce solution to support digital business growth. A strategic managed services partnership enabled them to gain a scalable talent pool on the new technology and the industry expertise to adapt the platform to their specific business needs, allowing timely implementation of the program. The complexity and strategic business scope of such projects make selection of implementation models and partners a critical factor for success.

5 Experimenting with the Experience: A Mobile Shopping Application 1 Create shopping lists 2 Find the most convenient store for your location - near home, on way to office 3 Check and confirm product availability across locations 8 Analyze shopping 4 Reach store - trend, loyalty program status and budgets for next buy identify product location in store with tracker 5 Scan product bar code for information, self billing and check out 7 Share feedback on product and shopping experience 6 Schedule delivery of items at home as per convenience New technologies can help redefine the shopping experience. The experimental mobile-based shopping assistance app outlined here is a proof of the possible. Most leading retail technology solutions companies are working on a range of next-gen retail application platforms in the areas of Mobility, Analytics, Promotions and Social Sentiment Analysis that retailers can strap on to leading Omni-Channel solutions to maximize their engagement quotient. Sonata Software: Retail Services Overview Sonata Software is a strategic IT solutions provider with a track record of powering business transformation initiatives of some of the most well-known retail enterprises across the globe. The company specializes in applying technologies such as Omni-Channel Commerce and Analytics-driven insights to enhance customer engagement for retailers. SoŶatàs Retail services are anchored on deep technology expertise gained from long-standing partnerships on classleading solutions such as Microsoft Dynamics AX Retail, hybris, Moovweb, Microsoft Business Intelligence, Hadoop and Azure to deliver superior solutions such Omni-Channel revenue generation and fulfilment, E-Commerce and mobile business enablement, dynamic promotions, personalization, loyalty and IT infrastructure and support services. These capabilities have seen Sonata emerge as a service provider of choice for retailers across Mass Merchandise, Specialty, Apparel, Quick Service Restaurant and Transit Retail segments, including some of the largest global Fortune 100 brands. A unique customer-specific Centre of Excellence model of delivering service to clients has seen Sonata significantly enhance the extent of strategic focus, collaboration, innovation and knowledge management impacting each relationship. A wide range of retail-specific solution assets, proven frameworks, methodologies and a large dedicated retail vertical team, not only ensure quality and reliability but also reduce TCO for its clients. For Retail leadership seeking to drive strategic business advantage with IT, SoŶatàs focus on the vertical, deep technology capability and commitment to customers make it a partner of choice for translating their vision to reality. Most Innovative Partner 2012

6 ABOUT SONATA SOFTWARE Sonata Software is a global IT services firm focused on catalyzing transformational IT initiatives of its clients through deep domain knowledge, technology expertise and customer commitment. The company delivers innovative new solutions for Travel, Retail and Consumer Goods industries by integrating technologies such as Omni-Channel Commerce, Mobility, Analytics, Cloud and ERP, to drive enhanced customer engagement, operations efficiency and return on IT investments. A trusted long-term service provider to Fortune 100 companies across both the software product development and enterprise business segments, Sonata seeks to add differentiated value to leaders who want to make an impact on their businesses, with IT. NORTH AMERICA EUROPE ASIA ANZ in f t For more information write to us at: APS Trust Building, Bull Temple Road N. R. Colony, Bangalore , India T: F:

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