Accenture Seamless Retail Technology Point of View

Seamless Technology: Unleashing an Integrated Shopping Experience

Introduction 1

What retailers need to do 2

The journey to seamless technology 4

Bring your system up to speed 4

Establish an infrastructure that allows 6 you to innovate quicker

Transform your data to deliver a 8 seamless customer experience

Organize for seamlessness 10

What now? 100 days of progress 12

Take the next step 13

References 13

Contents

Seamless Technology 1

Becoming fit and fast enough to stay ahead in the retail revolutionToday’s non-stop customer is online, on the go, in stores and in touch with social networks. They expect 24/7 access to information from across channels, and they are eager to get the product they want at the price they want. To satisfy these hungry consumers, retailers need to step up their cross-channel game by incorporating

modern-day mobile and social features into retail interactions. The winners will be those that figure out how to grow all channels in concert, and deliver a seamless customer experience by integrating price, promotions, product assortment and inventory across channels.

Many retailers have doubled their capital expenditures to invest in the new capabilities required for providing a seamless experience. Capabilities such as anywhere/anytime fulfillment no matter the device are just

the table stakes in retail today. As the number of technology options grows, so do customer expectations. But as new, disruptive technologies hit the market every day, retailers are hamstrung by legacy technology that doesn’t accommodate such capabilities.

How can retailers build a technology framework that enables them to meet or exceed the expectations of today’s digital consumer, and be flexible enough to react to tomorrow’s emerging offerings?

Retail will change more in the next five years than it has in the past 50—but not all retailers are prepared. It’s a future where retail organizations deliver seamless experiences for non-stop customers. To keep up with the frenetic pace of retail, the business—and the technology to support it—must evolve.

Can we “service-enable” our legacy systems?

Do we have the right customer, product and other enterprise data; is it clean and can we convert it to actionable insights?

Does the infrastructure allow us to enable an engaging, seamless shopping experience?

Does it or can it support real-time and relevant customer conversations, regardless of touch point?

Can we leverage what we have in place to pilot new capabilities?

Should our IT department take on new roles and responsibilities?

To move toward seamless, retailers must ask tough questions about their IT environment:

2 Seamless Technology

What retailers need to doFrom empowered customers and channel complexity to warp-speed technology innovation, the new face of retail is not for the meek.

This paper—part of Accenture’s series on seamless retailing—is intended to provide retail IT leaders with recommendations on what they can do to align the role of technology to become even more integral to the success of the company’s seamless retail strategy.

While there will be changes in the business model, organization, processes, human resources and other enabling functions, this paper focuses on four technology directives retailers need to get right to support the seamless retail vision.

Accenture’s evaluation of 60 global retailers reveals a significant gap between reality and expectations when it comes to delivering on consumers’ demands.1 When comparing things that were important to a consumer versus the retailer’s ability to provide it, retailers often scored only 1 out of 5.

Transform your data to deliver a seamless customer experience

Bring your system up to speed

Establish an infrastructure that allows you to innovate quicker

3

12

4 Organize to deliver seamless capabilities to the business

Reality

Expectations


Global internet usage will more than double by 2015.2

Consumer time spent with online retail has jumped 104 percent from 17.1 billion minutes in February 2010 to 34.9 billion minutes in February 2013.4 February 2010

17.1 billion minutes

Now

February 201334.9 billion minutes

2015

Smartphone users spend a daily average of 132 minutes using social media on their phones.3

Digital consumers are

...are you?connected...


The journey to seamless technology:Four directives for transformation

Retailers are at various levels of core strength; some have integrated key elements, such as inventory across channels when it comes to technology.

Others have invested heavily in one particular channel. Few have invested in the kind of robust core that can seamlessly support all channels. No matter where you are in the journey, it is critical to transform the technical spine of the enterprise to make use of legacy systems while also building a solid foundation for future digital expansion.

Seamless retailers can take these steps to strengthen—and expand— from the core:

Assess the future roadmap Many retailers have opted to move to an ERP system or upgrade an existing ERP system. They believe their legacy systems can’t carry them through the next wave of digital expansion. The challenge is that large ERP solutions are multi-year journeys, where real benefit, particularly around seamless, won’t be realized until late in the journey. At the same time, CIOs must continue to quickly deliver new seamless capabilities (often on their legacy systems) to meet the ever-growing demands of customers. IT budgets have grown—even doubled—to keep up with these demands.

Roadmaps are often disconnected as they are developed within operational silos, or with either a short-term focus on seamless capabilities or a longer-term vision of delivering transformational capabilities. Retailers should combine these into one enterprise roadmap that allows the business to take a broader look at the plan and prioritize based on where it can drive the most value along the seamless journey.

Enable your architecture Retailers should invest in service-enabling their legacy systems. Done right, a service-oriented architecture (SOA) enables complex transactions, the kind that seamless retailers require. For example, if a customer starts to buy items in one channel, only to complete the purchase in another, retailers will require access to complex pricing, product availability and customer data. SOA can provide this, and unlock several opportunities.

Bring your system up to speed1

International grocery retailer Tesco, through its innovation lab, is enabling solutions such as interactive screens and micro-home delivery. They’ve explored mobile solutions, such as mobile phone apps where consumers can scan products and add them to a virtual shopping basket. The checkout process is paperless, and reduced to a few clicks.5

Add item


• Legacy solutions can last much longer when they are service-enabled and can support many seamless vision concepts.

• Some seamless capabilities can be introduced and abstracted from the rest of the architecture—inventory visibility, for instance, can be introduced on top of existing legacy architecture.

• SOA allows a retailer to quickly take advantage of solutions from third parties and make things appear plug-and-play.

• Innovations can be introduced faster.

Invest strategically Realign IT budget allocations to support a more seamless view. This includes both where you invest the money, as well as how you take your organization through the budgeting process. Finally, measure return on invested capital closely. Quick-turn projects may yield enough return on invested capital to pay for themselves and support new capabilities.

Scale at speed With the right infrastructure in place, you can innovate more quickly. Some companies build a formal place—such as an Innovation Lab—where good ideas can take shape at speed. For example, at Nordstrom Labs, a team of techies, designers, entrepreneurs, statisticians, researchers and artists collaborate to validate ideas, whether new products and services, or even innovation in operations, business models and management.6

Technologists and e-commerce business types contribute to @WalmartLabs, which represents the fusion of retail, social and mobile. One of the first projects originating from WalmartLabs was Shopycat, a gift recommendation app that scans your friends’ profiles to identify interesting gift ideas from their stream of likes, comments and status updates. Shopycat then seeks out an appropriate gift from Walmart’s product database.7


Infrastructure is oftentimes an inhibitor for retailers because it takes a long time to get right. The increasing number and variety of devices, demands for access—both internal and external—and the need to move at speed would overstretch any organization.

Successful companies in a seamless model create a technology infrastructure to flex with the retail demands and, at the same time, help increase sales and decrease costs. This entails upgrading the infrastructure to support increased remote connectivity, cloud-based services and Bring Your Own Device (BYOD) demands.

Retailers should focus on these areas of their infrastructure to enable flexibility and innovation at speed:

Adopt cloud computing A flexible cloud approach will make it easier to move and innovate faster —for example, the ability to launch a new product website in days rather than weeks or months. The cloud also enables incremental capacity for times of peak demand, for example, ramping up online capabilities before the holiday season. And hybrid cloud models integrate the private and public cloud for greater elasticity during changes in volume.

The cloud can provide computing “on demand,” using infrastructure-as-a-service (IaaS) offerings to source raw computing resources, processing power, network bandwidth and storage whenever needed to support peak times, such as holiday or major sales.

Successful companies will support increased remote connectivity, cloud-based services and Bring Your Own Device (BYOD) demands.

Establish an infrastructure that allows you to innovate quicker

2

BYOD


Be mega mobile More consumers are using mobile devices for a better cross-channel experience or to conduct tasks, such as checkout. Accenture’s recent survey found that 50 percent of U.S. consumers are willing to buy using their mobile phone.8 And as more consumers go mobile, more employees are using handheld devices to support consumer needs. Being mega mobile can bring the store to life in a digital world, delivering a differentiated customer experience that drives higher conversions.

There is a large market space in retail that could foster rapid growth in mobile point of sale (POS), which will mature the technology and challenge the need for register POS for larger players in the future. Some retailers, such as Nordstrom, have already armed store employees with mobile POS devices.

Accommodate devices Numerous devices of a variety of types—digital signage, self-checkout, personal devices and employee devices—call for regular content updates in the store. Retailers will increasingly explore approaches that make it easier for the business to offer secure and controlled data access from any device. For example, virtualization offers greater flexibility, such as running Windows apps on Android or Apple iOS devices. Also, software-as-a-service (SaaS) solutions can lower the total cost of ownership and cut IT costs.

Rethink the security model Seamless retailers should re-examine how they protect the technology environment, and how they provide access. Internal and external security must change to accommodate an increasing number and variety of people and devices accessing the network. This includes third-party providers that use a separate network, employees who bring their own devices and consumers who need external connectivity with the retail network.

An “active defense” approach will help control and manage access to trusted or untrusted devices and enable data loss prevention for mobility. The retailer must also be able to integrate with third-party networks using open architecture cloud services. The cloud provides an extra layer of security.9

Leading organizations will understand the business consequences of inevitable data leaks and respond proportionally; different levels of attack require a different speed, scale and type of response.10

Data leaks


There is no shortage of data in a retailer’s ecosystem. Huge volumes of data are coming from point of sale, social media placements, shipments, inventory, employee data, third parties and more.

This data explosion creates opportunities to analyze across the enterprise to yield better decisions about everything from inventory forecasting to how to personalize the online brand experience. However, before this information can be analyzed, it must be accurate, high quality and shared frequently.

You can also manage data better and faster than ever before. Rather than relying on retail data platforms that have been built around functions, seamless retailers are taking advantage of disruptive technologies that are built around flexibility. Today’s enterprise data platforms connect data from across the business to allow retailers to collect, store and act on data seamlessly and efficiently—all at a lower cost than traditional methods.

Retailers should consider these principles to get more from their data:

Think about data differently If the data is not seamless, the experience is not seamless. Data fiefdoms prevent retailers from achieving a holistic view of the consumer—and the business itself. By rethinking the data ecosystem (including all customer-facing and back office data) and taking a consistent, integrated approach, retailers can improve visibility and accuracy. This clearer view extends beyond the consumer to also include product and other key retail elements. Consistent product information and other content delivered on a frequent and accurate basis is the foundation of seamless.

Transform your data to deliver a seamless customer experience

3

Aim for 100 percent data accuracy A lack of data accuracy is like playing with fire. For example, if a customer visits the store expecting to find an item, but your inventory data is wrong, they won’t see the item—and you risk not seeing them again in your store.

Create an agile architecture There are two different architectures developing in a parallel way today—traditional enterprise data warehouses (EDWs) and Big Data. Retailers can combine the two to get the best of both capabilities. Big Data can help to create an enterprise data hub, which then feeds operational data stores that fuel analytics. In this way, data can be loaded in near-real time and analytics can be delivered within hours, minutes or even seconds. This instant access allows retailers to analyze data and make decisions at critical points in time. Reacting to consumers with such speed can ultimately change buyer behavior and purchase decisions. Furthermore, managing and updating prolific content regularly keeps things timely and relevant for consumers.

Organize for effectiveness Data has often been under the jurisdiction of each functional silo. As the organization moves toward seamless technology, the governance model should change as well. Retailers must decide who owns the data. This “data lead” should be accountable for establishing a seamless data vision, and ensuring that data is collected, managed and analyzed in ways that adhere to the vision. Organizations could place a chief customer officer, chief channel officer or chief marketing officer in this role.

%100


Integrated Enterprise Analytic Platform

Macy’s increased store sales by 10 percent by leveraging terabytes of data about customer buying behavior.

Customer buying behavior data

1. Leverage Big Data technology to create an enterprise data hub. POS, inventory and other data can be loaded in batches or in real time. By using Hadoop, key analytics can be delivered in hours versus days, weeks or months.

2. Simplify the building of the Teradata EDW by leveraging the enterprise operational data store (ODS).

3. Integrate the analytic tools with the analytic stores.

This architecture is much more flexible, nimble, and powerful because it builds on existing investments.

Copyright 2013 Accenture. All rights reserved.

10%sales boost

POS

Inventory

Other internal

Other external

ETL MDM

Hadoop Layered Enterprise Data Hub

Staging Cleansed Golden Analytics App Specific

Add layers as needed

Exploratory DWCMs

Teradata EDW

ReportsDashboardAnalytics Apps

Analytics Models & Apps

Visualization

The future will be marked by a blend of database heavyweights, like Oracle and Teradata, and new open-source projects—such as Hadoop—that are making sense of the flood of data generated by the digital revolution.11

SAP HANA


Organize for seamlessness4

Few retailers have successfully consolidated marketing, merchandising and supply chain silos to build an omni-channel organization that supports one seamless vision of serving the customer.

How can retailers connect the seams to support a cohesive customer experience and drive growth across all channels? IT can lead a “one-channel” team that seizes every opportunity to make connections that yield better business outcomes across the enterprise.

To unleash the power of truly integrated IT, organizations must embrace new roles for IT including:

IT as a leader in innovation and business strategy To bring the best, up-to-the-minute capabilities to customers, IT must be fast in identifying how the latest in technology innovation can support or lead business strategy and innovation.

Some leading companies are initiating the role of a chief technology officer (CTO) to stay on top of emerging technologies that will differentiate the company. Separate from the CIO, whose role is to focus on enabling the business, the CTO focuses on the development of new technologies and strategies to enable new capabilities and speed to market.

IT can lead a “one-channel” team that seizes every opportunity to make connections that yield better business outcomes across the enterprise.

One-channel team


IT as a key contributor to the business transformation agenda Few retailers successfully align their IT and business transformation agendas. Oftentimes, these agendas may come together once a year during the annual planning cycle. Instead, IT and business program leadership should come together within one integrated “business transformation office” to ensure ongoing, year-round strategy and priority alignment. The office will help to avoid conflicting priorities and diluted focus, and it can improve corporate agility by breaking down functional silos. The right resources will be directed to the highest priority programs. This office should also be responsible for measuring the success of IT initiatives.

IT as a leader of the seamless retail agenda IT should play a lead integrator role in programs such as:

• Looking across the entire business to serve as the protector of data integrity, security and consistency throughout all systems and processes.

• Connecting store and online channels in a flexible fulfillment model.

• Enabling new digital connections that improve the ways in which retailers interact with consumers.

• Migrating from custom applications that meet the needs of one business and require decisions at one level, to enterprise applications that will require decisions at an enterprise level.

IT as an enabler of corporate agility and efficiencies through key alliances Cloud technologies and other third-party partner models are enabling organizations to gain competitive advantage by piecing together the right components at the right price and the right time, rather than building them in-house. IT must own the process for piecing together these capabilities into a seamless experience for employees and consumers.

By collaborating with suppliers, IT will no longer have to source scarce talent to support new technologies. However, this will have major implications for current IT talent as they will be leveraged in new ways. There will be less need for applications experts and a shift toward higher-value activities in areas such as understanding business needs, and managing relationships with business customers and cloud suppliers.

Walmart Chief Technology Officer Chip Hernandez is responsible for developing and maintaining a technology strategy supporting Walmart’s corporate strategic plan.


What now? 100 days of progressThere’s no reason to wait for seamless technology. Start today and take these actions over the next 100 days to accelerate your speed to seamless.

Create a consolidated roadmap to outline the best short- and long-term ideas to support the seamless vision, and then prioritize the ones that offer the most value.

Think about the timing of next-generation capabilities and don’t invest ahead of the curve.

Start less and finish more. Evaluate current initiatives against what will drive the most value for the business. Double down on those initiatives that offer the most value, and stop those that don’t.

Begin to outline the roles, responsibilities and people that can support your seamless organization.


Take the next stepAccenture has a dedicated team focused on helping retailers build the technology foundation to support seamless retail. For more information please contact:

GlobalChris [email protected]

Asia PacificTakaaki Haraguchi [email protected]

EuropeAdrian [email protected]

North AmericaDave Richards [email protected]

References1 Accenture Seamless Retail Consumer Survey, November 2012

2 Bloget, Henry; The Business Insider, The Future of Mobile; Retrieved online March 2012 at http://www.businessinsider.com/the-future-of-mobile-deck-2012-3#-11

3 IDC report, Always Connected: How Smartphones and Social Media Keep us Engaged, sponsored by Facebook

4 comScore Inc., State of the U.S. Online Retail Economy, Q1 2013; Retrieved online May 2013 at http://www.comscore.com/Insights/ Presentations_and_Whitepapers/2013/State_of_the_US_Online_Retail_Economy_Q1_2013

5 McNamara, Mike, Tesco Chief Information Officer; September 2012; Retrieved video: Take a shopping trip into the future, online at https://www.tescoplc.com/talkingshop/index.asp?blogid=63

6 Retrieved online September 2013 at http://nordstrominnovationlab.com

7 Shoultz, Mike; Will Walmart Labs Make Walmart More Innovative in E-commerce?; Digital Spark Marketing, Retrieved online September 2013 at http://www.digitalsparkmarketing.com/innovation/walmart-labs/

8 Accenture Seamless Retail Consumer Survey, November 2012

9 Retail Information Systems News, Rethinking TCO for POS; Retrieved online July 2012 at http://risnews.edgl.com/retail-whitepapers/Rethinking-TCO-for-POS80966

10 Accenture Technology Vision 2013, page 68

11 Winkler, Rolfe; Elephant in the Room to Weigh on Growth for Oracle, Teradata, Wall Street Journal, August 18, 2013


About Accenture Accenture is a global management consulting, technology services and outsourcing company, with approximately 266,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.

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Accenture Seamless Retail Technology Point of View

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