Over the past year Oracle and SAP have made moves to
provide users in retail with a portfolio of enterprise software by
acquiring companies to bolster their retail platforms.
Users have benefited as a result, as their IT systems expand to
incorporate customer relationship management and analytics, better
database support and greater integration with the rest of the
enterprise through service oriented architectures (SOAs). There has
also been a trend towards building more sophistication into
electronic point of sale terminals.
A Forrester Research report published earlier this month
identified two emerging trends in retail applications that will
continue through 2006.
It said platforms would increasingly use software to help
retailers collect and mine more granular customer data on all
aspects of their shopping. Forrester expects these platforms to use
SOAs to link into enterprise applications which, it said, would
break down application boundaries, eventually allowing retailers to
use less software.
The second trend was large platform suppliers offering
themselves as a one-stop-shop for retail, as both Oracle and SAP
digest their recent retail IT acquisitions.
"With Oracle's acquisition of Retek and ProfitLogic, and SAP's
acquisition of Khimetrics and Triversity, we will be watching their
roadmaps closely for signs of a fuller integration of optimisation
into core merchandising, as well as roadmaps that start to add
consumer data to product and price data, said Nikki Baird, senior
analyst at Forrester Research.
"No supplier will have this more holistic capability in 2006,
but retailers can get ahead of the game by re-evaluating their
merchandising and marketing processes in light of the powerful
combination of product and consumer insights."
Oracle aims to offer a full set of retail software applications
- a similar strategy to IBM and SAP. "Before Oracle Retail was
created, each individual company [PeopleSoft, Retek, ProfitLogic,
and 360Commerce] offered a compelling set of applications and
technology for the industry. Now, retailers can team with Oracle
Retail to address one particular business need or all of their
needs with a common view of customers, demand, and inventory across
the entire enterprise," said Duncan Angove, Oracle Retail general
manager.
However, Oracle's longer-term strategy is to combine all its
products into one modular Java-based framework, based on an
SOA.
The company said the integration of Oracle and Retek products
would occur in phases, starting with integration between Oracle
E-Business Suite Financials and the Retek Xi application suite.
The plan is to continue by integrating Retek Xi with PeopleSoft
Enterprise Financials, and eventually with select incremental
Oracle E-Business Suite modules.
"We will, however, maintain standalone integration points so
that customers continue to have the option of implementing point
solutions or an enterprise system," the company said.
Retail software providers' focus on integration ties in with
users' desire for more relevant business data.
As firms use scanners, in-store kiosks and more sophisticated
CRM to capture data, Forrester Research predicts that software
platform providers will offer retailers new master data management
and datawarehousing tools to deal with it.
"The aim is to get integrated multi-channel views of consumers",
said Baird. Better business intelligence will also be a
requirement.
According to Forrester Research, the crux of the problem is
turning data into insights. It expects users in retail to focus on
marketing automation during 2006 as they look to build up their
customer analytics capabilities. "Insights will need to be tested,
leading to closer ties between online and stores," said Baird.
As database and middleware software platform suppliers add more
features to their retail products, Epos suppliers are also
developing their software.
Baird said Epos systems are becoming increasingly sophisticated
and look more like mini- enterprise resource planning
applications.
She said Epos terminals are being designed to holistically
manage store operations, including fraud audit, inventory and order
management, returns, labour management, CRM and loyalty, and
back-office accounting.
"Epos replacements and upgrades in the first half of this decade
have put a lot of these extended capabilities in stores, making
Epos more of a store platform than merely a cash register
application," said Baird.
IBM in particular has a huge range of retail products to sell
alongside its Open Pos products. These include Business
Intelligence for retail (a datawarehouse system for retailers),
Customer Interaction and Channel Integration (which can pool data
from Epos systems, store kiosks, websites, wireless devices and
call centres), and IBM's own ERP system - ERP for Retail.
So, what does the future look like for retail software?
"Self-service, including self-checkout and kiosks, will see more
experimentation and a few hardy retailers taking on roll-outs,"
said Baird. "But there is also potential to use more immature
technologies like Bluetooth and SMS for engaging consumers in
stores.
"More innovative retailers will explore what it takes to mesh
all these interactions together with non-store channels to see if
CRM, commerce platforms and content management can deliver
consistently across all consumer touch-points.
"On the operations side, investment in workforce management will
continue to be strong. In-store inventory management and tools to
monitor store performance will grow in importance as stores feel
the pressure from multi-channel fulfilment and granular assortment
management."
SAP develops business process platform for retailers
As a result of SAP developing its business process platform for
retail and bringing Triversity into the fold, retailers may be
encouraged to use SAP's Netweaver platform as an alternative to
IBM's competing Store Integration Framework.
Like Oracle, SAP is aiming to create a modular service oriented
architecture-based framework using Netweaver as the application
server platform, Forrester Research said.
One high-profile implementation of SAP Triversity is at Virgin
Entertainment Group. In January, the firm chose an SAP Triversity
point of sale system to automate and integrate its Virgin
Megastores in the US.
Virgin said it expected the system to enable staff to
efficiently manage inventory and pricing rules, apply discounts,
add promotions and adapt to sales tax changes without the use of
custom programming.
Another SAP user is clothing and accessories designer Kenneth
Cole Productions, which is implementing SAP for Retail, SAP Apparel
and Footwear and SAP Triversity to gain an integrated, end-to-end
view of its businesses.
Kenneth Cole said the software would help it increase sales,
streamline and optimise operations and improve customer
service.
The products are designed to co-ordinate across all aspects of
the business, including product development, merchandising,
customer relationship management, supply chain and inventory
management, store operations and labour optimisation, as well as
financial reporting.