Retail @ Oracle OpenWorld 2019

Retail @ Oracle OpenWorld 2019

Monday10:00- 11:00

13:30-14:15

14:30-15:15

Retail General Session: Leading in a Fast and

Fierce World

Retail Finance Modernization: PwC’s unique

approach to driving value through Oracle

Cloud with Hudson Bay and Oracle

Merchandising and 360 Degree Visibility with

Gap, Inc.

Tuesday 11:15-12:00

12:30-13:15

15:15-16:00

Retail Strategy and Portfolio Update

Omnichannel Innovation: Building Your Path to the Future

The Science of Retail Optimization

2

Sponsored by

Competing in a Fast and Fierce World

Mike Webster Senior Vice President and General Manager

Oracle Retail

Presenter

Presentation Notes

Welcome to Oracle OpenWorld The corporate team goals: Rallying the Oracle Ecosystem Employees, Partners, customers etc. Create excitement and Awareness and increases the visibility and value of Oracle Unveil changes to the Oracle Brand Showcase the innovation and technology advancements Educate our Influencer community and interact with Press, Industry Analysts, Financial Analysts Key Technology Messages: The Autonomous Enterprise: category creation. Enabling technology shift to autonomous. Customers reduce cost and risk, while focusing on innovation. Customer X continued expansion of Autonomous solutions- Database and Linux OS Innovations Second Generation Cloud: Purpose-built for the enterprise. New enhancements, new integrations, improved security capabilities and new developer tools. Multi-cloud applications (MSFT) and growing ISV ecosystem. Expanding regional presence/ DR capabilities. Security-first Commitment to Cloud: shared responsibility for securing our customer data, capabilities for automated attack detection; protection for Users, Apps, Infrastructure Continued On-Premises Innovations: Core updates to our flagship Exadata offering, which x DB consolidation for on-prem. New Exadata solution utilizing Intel, Optane and DCPMM.

The State

of Retail

The road to $28 trillion.

Presenter

Presentation Notes

Retail Retail spending going from 22 trillion in 2016 to 28 trillion by 2020 Virtually unlimited assortments, as consumers Reality check: timeless journeys that are being re-written as we think about how retailers engage with us and how they serve us, and it should be just a great time to focus on all the good things that are happening. Pressures: over-supplied, we have very easy substitution, low barriers to entry into these markets. We've got all kinds of cost issues, whether it's labor cost, fuel cost, delivery cost, nonsensical geopolitical tariff stuff that also is on the surface Retail Strategies in the market: reinventing themselves using the same digital strategies that once threatened them unifying the digital and the physical experiences architecting a business model Digital kills mediocrity. Digital exposes every single business process to your customer. These processes were never designed to see the light of day. Transition: Primary research allows us to inform our product strategy through the voice of your customer (our customers’ customer). This year we set out to understand retailers’ perception and consumer reality around three key areas of the retail experience: the final mile, mastering the connection and the store experience.

We spoke to 15,837 consumers and 225 retailers

EUROPE

France

Germany

Italy

Spain

Sweden

United Arab Emirates

United Kingdom

JAPAC

Australia

China

India

Japan

LATAM

Brazil

Chile

Mexico

NORTH AMERICA

Canada

United States of America

Copyright © 2019 Oracle and/or its affiliates.

Presenter

Presentation Notes

Key message: The bar with which we are all measured is set and constantly reset by the next great experience Narrative: Digital has completely killed mediocrity and the democratization of information and technology has ushered in a new era of customer experience. The bar with which we are all measured is set and reset every time a better experience is delivered. Retail is no longer solely benchmarked against its peers, we are benchmarked against every brand in the service industry – from streaming to banking, travel and entertainment. Transition: I am going to share with you highlights of our finding around three key areas of the customer experience I think you will find inspiring. ** Independent marketing research agency, Savanta, conducted the survey which includes reponses from over15,800 consumers and 225 retailers across five key regions: Europe (France, Germany, Italy, Spain, Sweden, UK) NA (Canada, USA), LATAM (Brazil, Chile, Mexico), Middle East (UAE) & India JAPAC (Australia, India, Japan, China).�

51%


of consumers say convenience is the number one association with a great shopping experience, ahead of experience, discovery and advice


Presenter

Presentation Notes

Key message: above all things, convenience is the most frequently cited characteristic of a great shopping experience. This is true across channels (online or store), verticals (fashion, grocery, specialty) and business models (pure online, traditional retail, DTC) Narrative: Convenience is a major driver for customers but the perception of convenience must first and foremost be understood. When it comes to the final mile of online delivery “fast and free” tops the charts with 92% of respondents stating they would like/love “free one-day delivery by whatever means is most expedient. 43% of consumers state that they would love to be able to pick up their order within an hr by whatever means is most expedient and 58% agree/strongly agree that in the future everything will be delivered on the same day of order. Portfolio tie: omnichannel store, commerce Transition: Although convenience tends to be associated with fast and free, the notion of choice coupled with an unforgiving expectation for flawless execution is also acutely top of mind for consumers China: Internet growth is robust and driven by short form mobile video and super apps, and live streaming.�Who’s winning? Taobao + Meituan Dianping. Taobao is committed to delivering goods within 15 mins. They have driven over 3B in sales this year alone.�Meituan Dianping – super app that combines all your needs, e.g., yelp, uber, fango all in one. So what? – live stream, delivery, all in one convenience; mirrors our research findings ** Supporting data behind the slide: 51%: This data point comes from combining the average convenience scores across in-store and online for each shopping mission type (Fashion, grocery, speciality) – Q27. What do you associate with a great fashion, clothing, footwear and accessories shopping experience?

86%


of consumers feel that retailers should offer the ability to “choose the most convenient delivery option for me at the time of ordering”


Presenter

Presentation Notes

Key message: Give me choice and then flawlessly execute against that commitment Narrative: Consumers equally value choice and are quick to walk away from a brand if they cannot flawlessly execute against their commitment. 49% of consumers looked for an alternative retailer when just one order did not arrive when it was promised and 13% stated they would never shop with the brand again. The concept of delivery choice heightens your supply chain complexity and frankly renders it to being now managed by committee. And that committee is not on your payroll. Add the expectation of flawless execution, which the aperture on is continuously widening. The cost of new customer acquisition is top of mind for everyone in the room, we can’t afford to lose13% of our existing customers in an industry where grow is at 2%. If your drone gets shot down by the neighbor, you lose. Portfolio Tie: supply chain and OMS Transition: finally, the notion of trust and authentic communications is essential cultivating connections

of consumers want retailers to communicate any product issues immediately

66%

52% of consumers say they are more likely to trust retailers who respond immediately

Swift ownership of wrongdoing and direct comms builds trust


Presenter

Presentation Notes

Key message: Consumers are skeptical of everyone’s intention when it comes to their data, but you can win favor by being transparent Narrative: Not too long ago we looked at the notion of loyalty and identified a significant gap in what retailers perceive as loyal customers and the consumer reality. Building upon those findings we have further explored the concept of authentic relationships and mastering the connection. When it comes right down to it, consumers expect swift and concise information from a retailer, particularly when something goes wrong (recall, mislabeling). If you can nail this aspect they will likely be more forgiving when you make a mistake, or your drone gets shot down… Portfolio tie: ORBC Transition: none, next slide is a wrap-up slide

Setting the Bar: Retail Imperatives

• Convenience: Adopt an agile mindset and fluid customer journeys

• Flawless Execution: Do what you said you would do, and constantly adjust business process to ensure customer is at the core of your operations

• Authenticity: Engage your customer as an individual, be timely and transparent

Presenter

Presentation Notes

Key message: Convenience, Flawless Execution, Authenticity Narrative: The concepts are not foreign, everyone is nodding their heads but how do we really do this, and profitably. Oracle’s point of view is that Retail is not about buy, sell, move product. It’s about putting the customer at the center of every business process and decision. Transition: We call this Modern Retail >>

Modern Retail

Pivot to CustomerPut the Customer at the Core of Your Operations

Invest with IntentCreate Experiences Based on Desired Outcomes

Best to Next PracticeEngage the Customer as an Individual

Presenter

Presentation Notes

Retailers are adapting and what we see is them pursuing three very simple strategies, alright, because retail is a very hard business but the strategies don't need to be complex. They don't need to be complex, and oftentimes, we make it such. In a world of Modern Retail, retailers must be able to: Put the customer at the core of operations Adapt to the fluid customer journeys, and to constantly changing customer demand, Better engage the customer in an individualized manner Create unique experiences that keep customers intrigued and coming back Pivot to Customer Put the customer at the core of your operations Shift to Next Practice Engage the customer as an individual Invest with Intent Create unique experiences Imagine a world where you can capitalize on the point of interaction, with a customer, whether online on in store, to create a more individual experience, to plan and covert identifiable traffic and ultimately increase the projected lifetime value of a customer. Taking advantage of key interactions, such as returns, to turn managing a return from a transaction into an interaction Maximize Every Interaction Opportunity to convert and sell BOPIS and BORIS create predictable traffic Ex Home Improvements Store (Home Depot) – 45% online orders are picked up stores, this generates a high volume of in-store visits from known customers, and gives the retailer clarity into who is in their stores and when. Retailers with a higher percentage of identifiable transactions will be better able to predict with higher precision what offers are most likely to land with their customers as well as are in a better position to create and forecast traffic.

Pivot to Customer

Retail has historically focused on product, place, and price.

We believe customer becomes the fourth dimension of retail.

DESIGN-PLAN-BUY-MOVE-SELL

DESIGN-PLAN-BUY-MOVE AQUIRE-INTERACT

Presenter

Presentation Notes

Key Message: Pivot to customer places the customer in your data model. Narrative: Retail has historically focused on product, place, and price. We believe that customer becomes the fourth dimension of retail and it's something that you have to get control of, and it's something you have to architect an outcome for. Today retailers are selling what they buy, and tomorrow, what they need to be focused on is acquiring the right customer. How do they activate that customer, how do they renew that customer? Their business processes have to then change to this pivot because what was once simple as plan, and then they buy, then they move and they sell, really becomes plan, buy, move, then we need to acquire and we need to interact. Pivot to customer is the most important thing that we hear from the global community that we serve, and it is a board level conversation taking place every single day.

Invest with Intent

Consumers place more of a priority on ‘discovery’ in-store than retailers.

CONVENIENCE DISCOVERY BRAND EXPERIENCE ADVICE

Consumer Retailer

Presenter

Presentation Notes

Consumers: Other – 5% None of the above for retailers is 8% Key message: Investment should be directly tied to well defined consumer experience outcomes Narrative: In our research we found that again, convenience reigns supreme for customers and retailers are not far behind in respect to how they prioritize their store strategy but there are some interesting gaps in Discovery and Expert Advice where consumers put more value on these aspects of the store CX than retailers appreciate – are we prioritizing brand experience and convenience at the expense of new product discovery? Possibly. The concept of invest with intent is easy to comprehend but very, difficult to do, particularly for retailers. Many of you are supporting either business processes or IT processes are in excesses of 20 years old, and those business processes and IT architectures are laden with debt. Our estimation is that roughly 80% of the IT spend that happens in retail is on maintenance and legacy support integration. There's very few dollars that are available for true innovation, very few dollars that are available for pivoting to customer. And you take all this debt and then you have to try to fit that into a new IT deployment strategy and there's no shortage of options for you. Do you go on-premise? Do you go Software as a Service? Platform as a Service? Hybrid? It's limitless. Everyone is investing in a lot of different things, very little of which has the intent behind it to drive successful customer outcomes. And we compound this debt problem with a fascination with shiny objects. Okay, because you must be constantly being asked by your business owners, by your governance and board processes, "What do you do with AI? What about machine learning?" What about all these sexy things that they read about in the popular press like robots in the dressing room? We're fans of all of those, we're a technology company, but we believe that artificial intelligence should be always incomplete. That's what it stands for in retail. AI is always incomplete if you don't have a single view of inventory, a single view of order, and a single view of customer. It renders things like CRM to be customer rejection monitoring, because without having the foundation and platform in place, there's really no way for you to engage in a campaign that starts a conversation and ends up in an interaction and a loyal brand user. Transition: So if your customers really want robots then give them robots but have the process and platform in place to flawlessly execute every promise the robot makes. ** ADDITIONAL EXCERPT FROM XTALK ON THIS TOPIC And things like IoT, just honestly, or just kind of the ignorance of thought. If again, I'm attaching IoT to basically report on something I can't even see from an inventory standpoint because I don't have the platform to monitor which channel is it in. What are receipt flows coming for that item, before I can even start to think about IoT. So we like these things, we invest in them heavily. To us, the big difference is these are not products. Most of the world will tell you, "Have you bought an AI solution?" These are features, they're not products. They're features in our world, because when we architect the platform, we wanna take advantage of those capabilities natively in giving you a business process design for a retail outcome that takes advantage of some of these capabilities, and we're gonna do so by managing them autonomously. Because as part of our cloud service, we wanna make sure all of those features give you the agility that you need so you can keep pace with your business. And that platform that we describe is not some kind of just a repository where things go to die. Our platform strategy is as much about informing things as it is executing things simultaneously, and that's a huge differentiator that we think brings value to the conversation that you have. And it's, again, really hard work to invest with intent, because again, you have these other constraints, you have capital constraints, you have OPEC constraints, but at the end, really investing with intent flips the lens in terms of what are you spending your dollars on and how do you optimize those to get the best answer possible? 8%

Best to Next Practice


Presenter

Presentation Notes

Key Message: If you are actively working to implement the Best Practice you’re late. Narrative: Once you have the customer at the center of your operations you can then take that voice of customer, that customer taste profile, that behavior model and begin to inform enterprise decisions. We are not just talking about personalization, we are talking about things like informing your product strategy based on returns intelligence, informing your assortment and allocation based on predictive intelligence on the next best offer for your customers…let’s looks at a few examples

Best to Next: Markdown Optimization to Markdown Avoidance

of consumers want competitive offers and discounts for products or experiences

85%

of consumers expect a level of personalization in all forms of communication

73%


Presenter

Presentation Notes

Key message: Get The Assortment Right. Place The Inventory With Intent. Build Targeted Offer Strategies. Narrative: Markdowns are measured in hundreds of millions of dollars. I think I've read estimates it's somewhere between $300 and $400 billion goes into markdown. And I think all of our customers continue to invest in optimization engines, and they're working on what's the initial markup. They've got all these complex capabilities that look at time-based markdowns and looking through, how do they mark down based on sell-through? These processes are tried and they've been tested, but what we think is, the next practice thinking is that when you really start to engage and target the right customer, okay, and you start to connect these processes, that in real-time drive an optimal pricing and fulfillment capability into the market. And ultimately, what we want to do is to expose these kind of purchase profiles for individual customer segments, so we can then empower the store associates to serve them. Stat 2: personal offers add another level of complexity to the equation. If the end goal is to sell at full price, isolating best customers that buy at full price and then creating opportunities to target lookalikes is key (I wouldn’t mention Consumer Insights but that’s the prime use case for initial rollout; acquiring “ideal” customers, whatever ideal means to you)

Best to Next: Returns Processing to Capitalizing on the Moment

of global consumers intend to return their gifts during the 2019 holiday season

77%

66% of these returns will be in-store


Presenter

Presentation Notes

Key message: Returns create another point of interaction between the consumer and the brand. Narrative: Returns are simply a fact of life for retailers, but a select few have started to reimagine their returns process to capture essential information and inform other parts of the business and improve customer satisfaction. When a consumer visits a store to return a purchase, that customer comes with a history and therefore opportunity. An opportunity to understand their taste preferences, their fit preferences, and begin to differentiate between what they purchase for themselves, and what is purchased for others in the household. This level of intelligence cannot be attained from 3rd party data no matter how covert Alexa or IoT are. This is about retailers owning the moment with their customer and turning it into new opportunity.

Best to Next: Order Orchestration to Predictive Placement

of global consumers would love to be able to order as much as they like, pay for what they keep and return the rest for free

52%

47% of global consumers of consumers would equally love to reserve products online and test in store before buying

Presenter

Presentation Notes

Key message: Predict The Next Purchase. Place Product With Purpose. Move Towards Individualization. Narrative: There's so much fascination and fixation over, we need to orchestrate orders. And our belief is, very simply, if we look at it from a customer standpoint, source location of products just don't matter to us as customers. We want what we want, we want it where we want it, we want it when we want it. And what today's best practice is trying to do, is to make all this complexity about segmenting inventory by channel, by sales channel, and separating the location to the customer. We're trying to make that as invisible to them as we can, but it's not working. It's not working. Again, these seams become very, very obvious to us in terms of delivery fulfillment and all of the KPIs that govern order management and order orchestration today. As business models evolve and we begin to adopt more service oriented retail offers like subscriptions and try before you buys we need to account for that in our inventory placement. Imagine a health and beauty retailer offering in-home consultation – the next gen Avon Lady if you will – that associate needs inventory and we need to be able to ultimately predict the redemption rates and then put the unwanted items back into circulation in the right place and time.

Financial Benefits of Next Practice

6% Increase in Gross Margin $ from Markdown Avoidance

$75mIncrease in Revenue for a Mid-size Retailer targeting Purchase with Purchase traffic

20%3% Increase in Revenue from Individualized Offers

Increase in Net Promoter Score from Capitalizing on the Moment

Copyright © 2019, Oracle and/or its affiliates. All rights reserved. |

Presenter

Presentation Notes

Reminder of the key omnichannel challenges (Omni Execution, Employee Experience and Customer Experience) and the benefits (the good) that can be derived from excellence, as well as the negatives (the bad and the ugly) that can impact us if we aren’t prepared. So what’s the financial outcome, the prize on offer here?�The benefits of addressing the omnichannel challenges that we highlighted combined with the the move to next practice offer considerable financial impact to the retailer. We have been working with a number of retailers to prove the potential wins of the move to next practice. We have seen in excess of $75m potential increase in revenue (at $500mn - $1b turnover retailers) just by targeting purchase with purchase traffic at the point of pick up in store. We worked with a retailer where 45% of ordering were being picked up in store from known customers - this gives the retailer clarity on who is in their stores and when. We can use this identified traffic and transactions to predict with a high precision what offers are most likely to generate additional purchases. - Proactively individualising offers and promotions to influence the next purchase��We help retailers Avoid the markdown by getting the assortment right, placing the inventory with intent and building targeted offers to clear, which can deliver us a 6% increase in gross margin dollars and as well as a 3% increase in revenue from the individualised offers.��Finally these improvements to omnichannel execution, improvements to delivering the journeys that customers want and by targeting them with offers and rewards they they want drives loyalty, and increases net promotor score by as much as 20% as well as improvement employee engagement. ��

Gap, Inc. wins Cloud Trailblazer Award

› Integrated newly acquired brand Intermix into ecosystem,

migrated Banana Republic to the cloud

› Embarked on a cloud-first initiative for continuous

delivery of innovation with a lower TCO

› Gain operational efficiencies to allow merchants to focus

on the art of retail with Oracle Retail Merchandising Cloud

Service

Presenter

Presentation Notes

Invest with Intent Integrated Newly Acquired Brand Intermix Into Ecosystem Shift to Next Practice Embarked on a Cloud-First Initiative for Continuous Delivery of Innovation with a Lower TCO Pivot to Customer Gain Operational Efficiencies to Allow Merchants to Focus on the Art of Retail

Perry Ellis 7 Weeks to True Business Value

› Adopt Oracle Retail Customer Engagement Cloud

Service to scale and innovate at unprecedented rate

› Extend the power of the modern platform to a single

view of customer

› Gain 360 degree view of over 1 million customers to

drive loyalty for retail and wholesale

Presenter

Presentation Notes

Invest with Intent Adopt Retail Rich Cloud Service to Scale and Innovate at Unprecedented Rate Shift to Next Practice Extend the Power of the Modern Platform to a Single View of Customer Pivot to Customer Gain 360 Degree View of Over 1 Million Customers to Drive Loyalty for Retail and Wholesale

Unified Online Customer Experience in the Cloud

› Unify and offer the best possible customer experience

› Adopt a modern operating platforms with global reach

and scale that allows us to execute integrated marketing

plans to support product launches

› Quick ROI, starting in Hong Kong with Oracle Commerce

Cloud

› Deployed over 35 countries in 10 languages with 15

currencies in seven months

Presenter

Presentation Notes

Invest with Intent Unify And Offer The Best Possible Customer Experience Across 90 Countries Shift to Next Practice Adopt a Modern Operating Platforms With Global Reach And Scale That Allows Us To Execute Integrated Marketing Plans To Support Product Launches Pivot to Customer Quick ROI, Starting in Hong Kong Deployed over 35 Countries In 10 Languages with 15 Currencies in Seven Months

Foundation for Growth and Innovation

› Enterprise-wide inventory and accurate data integration

between the store and headquarters

› Serving over nine million customers daily through a

seamless digital experience

› Transparency with real-time available-to-promise

inventory with Oracle Retail Merchandise Operations

Management

21

Presenter

Presentation Notes

Invest with Intent Enterprise-wide inventory and accurate data integration between the store and headquarters Shift to Next Practice Serving over nine million customers daily through a seamless digital experience Pivot to Customer Transparency with real-time available-to-promise inventory

Unlocking the Power of Omnichannel

› Focus on customer facing tools to maximize ROI

increasing digital sales by 150%

› Extend stock capability at virtually every location across

200 stores and central warehouse with Oracle Retail

Planning and Optimization

› Established the foundation for a modern and digital retail

operation beginning with brick and mortar with Oracle

Retail Xstore Point-of-Service22

Presenter

Presentation Notes

Invest with Intent Focus on Customer Facing Tools to Maximize ROI Increasing Digital Sales by 150% Shift to Next Practice Extend Stock Capability at Virtually Every Location Across 200 Stores and Central Warehouse Pivot to Customer Established the Foundation for a Modern and Digital Retail Operation Beginning with Brick and Mortar

A Connected Customer Experience

› Aligned technology to deliver a single brand

experience in 63 countries with Oracle Retail Xstore

Point-of-Service

› Modernized the sales experience to conduct 70%

mobile transactions in Japan

› Tuned operations to efficiently maintain prestigious

service level agreement

Presenter

Presentation Notes

Invest with Intent Align Technology To Deliver A Single Brand Experience in 63 Countries Shift to Next Practice Modernize to conduct 70% mobile transactions in Japan Pivot to Customer Tune operations to efficiently maintain prestigious service level agreement

The Power of One

› Adopt a modern platform to drive one unified global

process while maintaining local flexibility

› Allow for localized and visual inventory to maximize sales

and guest experience

› Entice customers with a local selection, community

activities and a seamless brand experience at the point of

intent

Presenter

Presentation Notes

Assortment at cluster level allowing Invest with Intent Adopt a Modern Platform to Drive One Unified Global Process While Maintaining Local Flexibility Shift to Next Practice Assortment At Cluster Level Allowing For Localized and Visual Assortment To Maximize Sales And Guest Experience Pivot to Customer Entice Customers with a Local Assortment, Community Activities and a Seamless Brand Experience at the Point of Intent

Platforms Win

OPENINFORM EXECUTE AT SCALEELASTIC COMPREHENSIVE GLOBAL ARTIFICIAL INTELLIGENCE MACHINE LEARNING

Your Move

Mike Webster

Senior Vice President and General ManagerOracle Retail

Retail @ Oracle OpenWorld 2019

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