Redefining retail: Innovative solutions driving the industry forward
Today’s customer expectations in retail are more difficult to satisfy. Since the world became a connected place, customers expect to be able to shop whenever, wherever they want, for whatever, and require the pricing and quality to be as consistent as ever.
This poses many problems for retailers, whatever their specialty and/or channel.
In an ideal world, merchants should consider using every possible data source to plan strategies: inventory movement, customer behavior & demographics/segmentation, customer relationship management (CRM) systems, social media and so forth.
In order to optimize planning decisions, these systems all provide large amounts of data; but its analysis is beyond the reach of many retailers, however large.
The retail sector has seen many additional technologies become available, which while offering greater insight, do not necessarily provide a unified overview to create greater efficiency. Among the new areas are:
Location-aware software allows personalized offers and recommendations to be made to customers when close to a brick-and-mortar store (geo-fencing) as well as choice messages in-store as the customer moves through (beacon technologies).
Virtual store planning
Before any outlay, retailers can now see (and experience through virtual reality [VR]) proposed layouts, from fixture placement to projections of individual displays for seasonal goods, product promotions and so forth.
To minimize the costs of inventory movements across the supply chain, careful analytics via software can change warehouse replenishment routines, and allow direct-to-store ordering to minimize errors & waste and improve overall time-to-shelf averages.
Unified retail planning
According to a survey taken last year by Boston, USA-based retail consultancy BRP, 44 percent of retailers stated that improving analytics was a top priority, and 21 percent of those questioned said that disparate systems pose the biggest challenge to planning.
Alarmingly, 41 percent said that traditional spreadsheets were used exclusively to plan assortment, localization, and space in-store.
What unified retail planning solutions offer is optimization together of merchandising, store operations and supply chain.
While many retailers will want to optimize these areas one at a time (every journey starts with a single step!), the desired eventual goal is to draw together the mass of data now available to retailers into one coherent whole.
Retail’s biggest challenge – perishables
The area of retail which gives the quickest return on the employment of technology on its bottom line is that self-same area that has dogged specialist retailers in the sector since trading began back in pre-history – perishables, such as fresh foodstuffs like bread, fruit, and vegetables.
Traditional merchandise planning tools make it difficult to exercise a nuanced pricing policy, never mind a coherent plan.
Additionally, without the advanced analytics that the latest software and hardware breakthroughs can offer the sector, profits and customer satisfaction can be negatively affected.
Very short shelf life products are tough to manage, but one of the companies featured below claims that typical results for its grocery customers include a 30 percent reduction in inventory, a 40 percent reduction in spoilage and an availability boost of over 90 percent.
Better and more efficient management of perishable goods, in particular, means several things, all positive:
- Better looking, more attractive displays.
- Customer satisfaction increases as fresher goods are often available.
- Increase in sales.
With significant food waste now a worldwide problem that has received enormous amounts of press in recent years [two examples from APAC newspapers], retailers are feeling pressure from consumers to reduce waste. Wasted perishables are more than a PR headache – anything thrown away cannot be sold, and past-their-best products can reduce footfall.
Without accurate forecasting, the grocery retailer risks excess ordering – leading to spoilage, and deficit ordering – products out of stock and lost sales.
“An average grocery retailer writes off 2 to 5 percent of turnover every year in avoidable wastage.”
By breaking down amassed data by product, by day or week, by sell-by date, by prevailing or predicted weather conditions, and so forth, software systems can indicate what’s needed to maintain premium displays, sustain promotions, keep stock available and reduce spoilage.
Here are four companies which Tech Wire Asia consider to be worthy of mention in offering retail technology solutions which can make a significant impact on all areas of the retail sector, from fresh fruit to electronics, in traditional brick & mortar stores, and via e-commerce – and everything else in between.
While RELEX’s cloud-based retail planning software can be used to improve an individual aspect or two of a retailer’s operations, the company is increasingly concerning itself with unifying the planning processes.
In short, many retail operators will use the software to, say, improve efficiencies in forecasting and replenishment, or increase the profitability of their store space. Although this will help retailers to achieve business-changing positive effects, the retail operation should also be considered as a whole – this is the way to really steal a march on the competition.
RELEX’s core market is in retailers of merchandise with limited shelf-life. Here, despite the perishables’ market segment being infamously fickle and difficult to master, the biggest gains can be delivered by optimizing retailers’ planning processes. Stock levels at a central warehouse and in store can, for example, be optimized to maximize sales and shelf availability, as well as minimize held inventory and waste. From a category management point of view, well-designed planograms help retailers to tailor the shopping experience to a store’s customer base and so drive sales and reduce stock. Waste reduction of up to 40 percent is but one proven benefit of these actions.
RELEX’s software can drive improvements in each area of retail planning and boost efficiencies when these processes are optimized in conjunction.
Read more about RELEX
Australian company Pronto offers a full enterprise resource planning (ERP) software suite, of which its Xi Retail module supports companies in their endeavors to produce an omnichannel retail ecosystem. (Other modules available include engineering services software and a solution designed to manage field agents.
Pronto Xi is used currently by over 100,000 retailers, including Leica, Nike, and OfficeMax. The company has won awards in its native land, including a recent Australian Business Award for the best software.
The Pronto Xi for Retail suite adds sales & marketing functions to the finance and distribution-oriented Pronto Xi and includes a point-of-sale solution as well as an out-of-the-box e-commerce system called Pronto Avenue.
The system is fully integrated with IBM’s powerful Cognos business intelligence (BI) framework, which gives mid-sized retailers the opportunity to access that offering’s power.
Pronto Xi is simple to use and can be used on mobile devices too. Its simplicity belies the power of the underlying customer relationship management (CRM) suite, with informative dashboards giving insightful results for the business owner and strategy-maker.
Group trading, stock allocation, and promotions management tools are all available as part of Pronto’s service, and all is available as a cloud-based platform; there’s little need to enhance in-house tech provisioning.
Aimed at the smaller retail outfit, Vend’s cloud-based solution is entirely web-based and is responsive, so it renders well on mobile devices – devices which are becoming an increasingly common sight in the hands of retail staff.
If there’s Internet outage, the POS and other on-premises software continue to work, merely re-syncing seamlessly once a connection is re-established.
As well as sale item management, the software can cope with purchases made on account, and even layaways – items being put on ‘one side’ (reservations) for later purchase.
Refunds and gift cards are available, and individual shop floor staff log in separately, making individual tracking of performance possible, as well as granular access to the various aspects of the software, conditional on a staff member’s level of responsibility.
Vend also offers its software for larger concerns with multiple retail outlets, uniting stock and cross-store product updates, and managing store-to-store inventory movement.
The product is therefore suitable for retailers who are perhaps starting small but need a system that will not hamper them once the business grows to multiple outlets.
There’s also an e-commerce code base, allowing users to make the transition to a multi-channel sales model that combines the ever more popular online sales model with traditional bricks-and-mortar shop front(s).
The German giant’s retail-oriented system helps retailers gain insights into customer behavior, anticipate demand, manage inventory, and deliver personalized, omnichannel offers and services.
The size of the SAP freight train is indicated by the fact that, in some format or another, 80 percent of the retailers in the Forbes Global 2000 are SAP customers.
Retail’s digital horizon is disrupting classic commercial models, and traditional processes such as supply, warehousing, and logistics decisions are increasingly triggered autonomously.
As tech becomes omnipresent in the retail sphere, a player like SAP is large and powerful enough to cope with novel and unexpected sources of change which are facilitated by new technology, like machine learning and IoT sensors. These can feed into a digital core designed to improve the retail experience for customers, and maximize opportunities to sell.
SAP’s offering is too large to cover in the space available here, but enterprise customers will be aware of SAP and may have it employed in other areas of the organization.
As far as retail goes, SAP can offer:
- marketing and merchandising insights
- omnichannel pricing and promotions
- procurement analysis
- sourcing and contract management
- merchandise buying
- supply chain data
- allocation and replenishment
- inventory and order response
- logistics & fulfilment
- customer data, engagement, and personalization
- store and digital commerce