Global Trends All Channel Retail Paul Hill – Solution Director, Retail
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
The new bread of shopper: Informed, empowered and always connected
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Single Channel
“Legacy” • Customers experience a
single type of touch point
• Retailers have a single type of touch point
Multi-Channel
“Reality” • Customer sees multiple touch
points acting independently
• Retailers’ channel knowledge & operations exist in technical and functional silos
Omni-Channel
“Aspiration” • Customer sees multiple touch
points as part of single brand
• Retailers’ have a ‘single view of the customer’, but they operate in functional silos
All-Channel
“Nirvana” • Customer experience a brand,
not a channel within a brand
• Retailers leverage their ‘single view of the customer’ in coordinated and strategic ways
The Furious Pace of Change…and its Impact on Retail
Accelerating Pace of Change
6
3.5 yrs
10 yrs
15 yrs
28 yrs
31 yrs
Time to 50% Consumer Adoption
Change Will Happen Faster Than We Can Imagine…
Driving this rapid change, the Millenial
Born Between 1981 and 2000
76M 51M 80M
The Largest Generation Retail has Ever Seen
The store is often the last step the millennial takes
Yesterday’s
“Moment of Truth” “Moment of Truth”
COMMUNICATE
DISCOVER
EXPLORE
COMPARE
SOCIALIZE
SELECT
Today’s
“Moments of Influence” “Moments of Influence” Opportunity –and Risk– in Every Moment
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
1:1 Mass
YESTERYEAR TODAY
CU
STOM
ER EXPEC
TATION
S
New Supply Chain Complexity
Copyright 2013 JDA Software, Inc. - CONFIDENTIAL
• Product choice – access to the biggest shop on the Planet
• Buying choice – buy from any channel, any device, anytime
• Fulfilment choice – deliver anywhere, anytime
• Knowledge rich – Product info. and live reviews
• Price savvy – access to the lowest price available
• Connected – instant communication to social media channels
Consumer led change
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Customer Focus Product I Want Where I Want The Device I Choose When I Want to Shop The Price I Want When I Want It
“R” Transitioning to “I”
Tomorrow’s Enterprise Focus Right Product Right Place Right Time Right Price Right Quantity
Today’s
Copyright 2013 JDA Software, Inc. - CONFIDENTIAL
Customer Front & Center
Real-time, shared inventory
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
How Can Retailers Succeed?
PEOPLE
PROCESS
TECHNOLOGY
Processes must evolve from product to consumer centric
People need to adapt new practices that ensure an aligned enterprise Technology must be capable of supporting new business paradigms
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
• Reacting to consumer behavior
• Nightly inventory batch updates
• Static & rigid supply chains
• Channel segmented inventory
• Channel order management
• Supply chain is cost center
• Anticipating consumer demand
• Real time inventory visibility
• Flexible & dynamic supply chains
• Enterprise inventory orchestration
• Profitable distributed order management
• Supply chain is a strategic differentiator
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
All Channel Strategy Maturity Model
1
2
3
4
CH
AN
NEL
STR
ATEG
Y All Channel
Cross Channel
Web Channel
Store Channel
TRANSACTIONAL BRICK & MORTAR MASS MERCHANDISING COST CONTROL
EXPLORATORY SIMPLE WEB PRESENCE SEPARATE TEAMS DISPARATE INVENTORY
MANDATORY BRAND ENHANCEMENT LIMITED COLLABORATION INVENTORY VISIBILITY
IMPERATIVE MAXIMIZE ENGAGEMENT INTEGRATED TEAMS SHARED INVENTORY
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Key Tenets of All-Channel Success
Consumer-centric All-channel assortments
Unified All-channel customer engagement
Flexible, real time, responsive supply chain
Profit-based distributed order management
Single enterprise-wide demand shaping forecast
1
2
3
4
5
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Key Tenets of All-Channel Success
Consumer-centric All-channel assortments
Unified All-channel customer engagement
Flexible, real time, responsive supply chain
Profit-based distributed order management
Single enterprise-wide demand shaping forecast
1
2
3
4
5
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Web
Call Center
Catalog
All-Channel Engagement
Existing Practices • Disparate Customer Data Sources • Multiple Views of Customer • Independent Customer-Channel Interaction
Emerging Practices • Single repository for all customer data • Integrated all channel view of customers • Synchronized channel – customer interaction
Store
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
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PRODUCT
CHANNEL
CUSTOMER
TIME
All-Channel Data Capture
SOCIAL SERVICE
CLICKSTREAM PREFERENCES
see adding customer data to merchandising as
a top-three opportunity
51%
--RSR Research Optimizing Assortments to
Invigorate Retail, 2012
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
50%
47% Source: Teen Vogue
45% shop in-store for the
experience Source: Accenture
The Store Still Matters
shop both in-store & online
choose to shop in-store
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Key Tenets of All-Channel Success
Consumer-centric All-channel assortments
Unified All-channel customer engagement
Flexible, real time, responsive supply chain
Profit-based distributed order management
Single enterprise-wide demand shaping forecast
1
2
3
4
5
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
61% of major purchase shoppers start with ONLINE RESEARCH
to narrow products and brands IN-STORE
RESEARCH
to experience and finalize selection BACK TO THE WEB What can I afford?
Best Deal?
How will I pay?
67% decide how to pay before they go in store
94% MAKING THE PURCHASE
of consumers make major purchases in store
Advice from friends & family
? # $
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2
3
4
5
Assortment Demand: Today’s Reality
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Web
Call Center
Catalog
New Assortment Paradigms
Existing Practices • Chain wide homogenous assortments • Pre season assortment range plans • Disjointed or loosely coupled processes • Gut feel “buy-based” decisions • Inadequate supply chain integration • Inconsistent practices across channels
Emerging Practices • Micro-segmented all channel assortments • Continuous lifecycle assortment planning • Tightly integrated to all critical processes • Analytics driven “sell-based” decisions • Incorporate supply chain constraints • Consistent all channel business processes
Store
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Assort to the Shopper, not the Channel
Customer Profile Assortment Demand Channel Fulfillment Channel
Strategically position assorted inventory across the network and remain flexible enough to manage a myriad of options
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Key Tenets of All-Channel Success
Consumer-centric All-channel assortments
Unified All-channel customer engagement
Flexible, real time, responsive supply chain
Profit-based distributed order management
Single enterprise-wide demand shaping forecast
1
2
3
4
5
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Cost Center vs. Strategic Weapon
Traditional Supply Chain View
Supply Side Dominance
Unsupportive of All-Channel Retail
Segregated Channel Strategy
Rigid, Single Path
Constraint Based vs. Customer Driven
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
New Levels/Sources of Demand Causing Increased Variability
Increased Service Standards Across All Retail Channels
Creating Sustainable Business Models for Profitable Growth
Increased Supply Chain Visibility and Traceability
Demand shifts to alternate channels e-Commerce, mobile, social interaction growth
Demand generation & desired fulfilment channel
Rising consumer expectations, zero tolerance 24/7 connected consumers desire for transparency
Balancing customer service and cost to serve
Heightened pressure for forecast accuracy Increasing regulation & carbon footprint reduction
Segmentation agendas to manage disruption
Demand shifts to alternate channels e-Commerce, mobile, social interaction growth
Demand generation & desired fulfilment channel
Forces of Change
1 2
3 4
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Custom
er e-
Com
mer
ce
Hea
dqua
rter
St
ore
Shared stock
Warehouses Marketing
E-Commerce
Store
Planishment
Till
PSP
Collect in store
Home delivery
Planning Mobile Drop shipment
All-C
hann
el
Shared stock
All-Channel: Integrated objectives, methods and platforms
“Success will come when the SC is managed as a unified total vs. independent business units”
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Key Tenets of All-Channel Success
Consumer-centric All-channel assortments
Unified All-channel customer engagement
Flexible, real time, responsive supply chain
Profit-based distributed order management
Single enterprise-wide demand shaping forecast
1
2
4
3
5
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Customer Service Realities
44% High shipping costs
41%
25%
Not ready to purchase
High product prices
Why
We
Wal
k Aw
ay…
61% of all online shopping carts are abandoned``
Source: Invesp
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Retail’s New Balancing Act
Customer Expectations and Organizational Constraints Retail has evolved from a single-channel ‘transactional’ environment into a complex matrix of all-channel order orchestration
Walking the tightrope between…
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Customer Engagement: All-Channel Order Orchestration
Six In Stock in Her Size Busiest Weekend
• Gold Coast
• Melbourne
Plenty in Stock in DC Shipping Constraint?
• Adelaide
Brisbane •
Platinum Customer Places Order via Website
Free 2-Day Delivery
Vendor Has in Stock Shipping Constraint?
How to Maximize Profitability and Meet
Her Expectations?
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Key Tenets of All-Channel Success
Consumer-centric all-channel assortments
Unified all-channel customer engagement
Flexible, real time, responsive supply chain
Profit-based distributed order management
Single enterprise-wide demand shaping forecast
1
2
5
3
4
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
• Complexity managing . apps • Purpose-driven apps address
across all channels
Incorporating the voice of the customer as a demand influencer
Anticipating consumer response to
price, promotions and offers
Leveraging the consumer’s cross channel shopping behavior
New Demand Challenges Emerge
Copyright 2013 JDA Software Group, Inc. - CONFIDENTIAL
Incorporating the voice of the customer as a demand influencer
Anticipating consumer response to
price, promotions and offers
Leveraging the consumer’s cross channel shopping behavior
Orchestrating all downstream systems to profitably execute against demand shaping plans
Organizational constraints buried in myopic demand execution principles (vs. integrated demand management)
New Demand Challenges Emerge
Copyright 2013 JDA Software, Inc. - CONFIDENTIAL
Succeeding in the future
“The key is flexibility. With the increasing occurrence of channel overlap and the pace at which new applications and devices are brought to market, the future leaders of retail will be those who can quickly……..
Source: Stores Magazine, January 2013
embrace operational changes brought about by new technologies and anticipate integration of emerging solutions that have not yet been invented.”
Global Trends All Channel Retail