DIGITAL TRANSFORMATION TRENDS IN RETAIL
Digital transformation in retail can’t happen overnight. It’s an evolution, not a revolution. Here are some of the ways the industry is evolving:
• Usage of big data analytics is increasing — and will continue to increase over time. Through advances in customer real-time analytics and insights, retailers are delivering richer customer experiences, intelligent supply chain management and more.
• Retailers are putting an increased focus on a personalized in-store customer experience. Technology is transforming retail by connecting the personalized experience of the past with the savvy customers of the future.
• The retail evolution is enabling simple, affordable, effective inventory tracking and insight for brick-and-mortar retail environments.
• Cloud adoption will increase over time, and outdated legacy systems will be replaced, creating new opportunities for future-proofing.
RETAIL 2020: THE EMERGENCE OF DIGITAL RETAIL
The rapid evolution of technology is transforming the retail and fashion industry — and creating excitement, confusion, innovation, startling predictions from industry pundits, despair and opportunity. Across the industry, there is an urgent need to adopt new technology. Until recently, many retail technology professionals viewed Internet of Things (IoT) technologies and tools as offerings to consider sometime in the future. Today, we’re at the point where IoT solutions need to be not just considered but embraced — for they are one of the keys to success in the new digital retailing era.
Retail solutions based on IoT technology are now available for point-of-sale (POS) systems, omni-channel enterprise resource planning (ERP) systems, online commerce systems, email marketing and customer relationship management (CRM) systems. These solutions help retailers create a solid foundation for IoT data collection and processing, providing new customer insights. In a constantly changing world where social media is driving and influencing customers faster than traditional systems can keep up, these new technologies are foundational pillars for a successful ecommerce and retail strategy.
THE CHALLENGES: NEW CONSUMERS, NEW WAYS
CONSUMERS HAVE GONE SOCIAL AND DIGITAL
In recent years, consumer wants have shifted. Today, a consumer wants the right product at an attractive price, with good service and the convenience of online or in-store shopping— at the same time and every single time. Consumers want to be able to shop, but not necessarily visit a store. They want to be able to shop from the comfort of home or from a smartphone or a mobile tablet, and then pay online, and have goods delivered to their chosen locations. This is just the tip of the iceberg depicting a growing retail market with new
and challenging customer demands.
THERE’S A TUG OF WAR BETWEEN TRADITIONAL AND DIGITAL SHOPPING
For traditional retailers, there is a balance required between holding on to traditional retail practices vs. adopting the digital way of shopping that Millennials and their younger Generation Z counterparts (Gen Zers) use. Does a great product, attractive pricing and good service equate to customer loyalty and increasing sales? Not anymore. Whether online or shopping in a physical store, the consumer is demanding convenience, superior service and a personalized shopping experience.
As traditional retailers begin to acknowledge the impact of digital retail, young startups are already bursting with ideas on how to adapt new technology to their advantage. Free of the burden of managing change that legacy retailers carry, the new retailers are nimble in the use of new technology, such as IoT-based retail solutions, to create personalized shopping experiences.
MILLENNIALS AND GEN ZERS
• Generation Z consists of those born in 1995 or later. This generation makes up 25.9 percent of the United States population, the largest percentage, and contributes $44 billion to the American economy. By 2020, they will account for one-third of the U.S. population,
• 21 percent of Millennials said they had used their tablets to shop for places to stay within the past year, and 55 percent reported using their
smartphones to shop.
• 87 percent of Millennials said they also used a home computer to shop, and home computers remain the preferred method of booking.
MILLENNIALS AND GEN ZERS HAVE INTRODUCED NEW WAYS OF SHOPPING
Smartphones, tablets and social media are second nature to Millennials and Gen Z consumers. They thrive on technology and social media. Unlike the consumers who retailers have known in the past, Millennials and Gen Zers have little concept of brand loyalty or boundaries — either social or geographical. They are connected, social and agile. They are extremely comfortable shopping for their needs online, and visit stores mostly for the
purpose of socializing, entertainment or education.
THE SOLUTION: NEW TECHNOLOGY IN DIGITAL RETAIL
CATERING TO MILLENNIALS AND GEN Z CONSUMERS
The busy consumers of today have less time to spend on shopping errands. As a result, young startups and existing retailers are adopting intelligent services, including the innovative use of artificial intelligence (AI)-based applications.
An instance of innovative use of new-age technology was displayed when Amazon recognized that many of its customers found it tiresome to stand in a cashier’s checkout line at the store. Amazon GO stores adopted a new “Just Walk Out Technology” that enables customers to shop and leave, without ever having to stop at the cashier. Amazon used computer vision, sensor fusion and deep learning algorithms to make it convenient and easy for its customers to pick up groceries and simply walk out.
TRADITIONAL STORES LIVE ON
The brick-and-mortar store is not dead. It’s just transforming. Shoppers want more in-store experiences. Consider these findings:1
• 73 percent browse online and then buy in the store.
• percent leave when they can’t find a product or help.
• 86 percent desire to have purchased more.
• 70 percent of sales will be completed in store by 2020.
USE OF MULTIPLE TOOLS TO CATER TO RETAIL NEEDS
SAP S/4HANA at a retail operation’s digital core brings in all the components of the new shopping experience, enabling retailers to meet evolving customer wants and shopping behaviors. AI, for instance, may illuminate a retailer’s understanding of customer behavior and persona, and then customize the shopping experience in real time. Moreover, promoting brand messages via current social media channels is another aspect of this. With SAP S/4HANA at the core, this becomes a reality.
PARTNERING WITH TECHNOLOGY PROVIDERS FOR SUCCESS
While the transition to new technology can be difficult, retailers are making the necessary changes and are revisiting their current business strategies and goals. Many retailers are duly overhauling their organizational structures, reviewing existing processes and making unprecedented investments in IT to transition their organizations to the next-generation retail solution.
One way to ease the transition and make it sustainable for retailers is to enter into partnerships with service providers and technology companies specializing in niche areas. Such a collaborative approach allows retailers to overcome the challenges of making heavy monetary and resource investments and enables the retailer to achieve quicker time to value.
RETAIL 2020 — TECHNOLOGY IS ESSENTIAL
The age of digital transformation has arrived and is undeniably transforming the retail and fashion industry. Groupsoft, an SAP Services Partner and systems integrator, helps organizations put technology to work for a smooth and efficient digital transformation.
Groupsoft’s experienced consulting team assists retailers with new-generation SAP S/4HANA solutions — specifically SAP S/4HANA Retail for merchandise management and SAP S/4HANA Fashion for fashion management. The new digital core solution, SAP S/4HANA for Retail, provides agility and flexibility that enables retailers to reinvent their omni-channel retail business.
SAP S/4HANA SOLUTION PORTFOLIO FOR RETAIL
SAP S/4HANA Retail and SAP S/4HANA Fashion tightly integrate with the SAP S/4HANA solution portfolio for retail. The portfolio solution consists of SAP Customer Activity Repository, Retail Planning Bundle (Merchandise Assortment Planning), SAP CRM and Loyalty, SAP Hybris Commerce, GK POS, SAP SuccessFactors and SAP S/4HANA Finance.
The SAP S/4HANA Retail and Fashion Solution provides end-to-end retail core processes support, starting with master data down to point-of-sales connectivity. It allows insight into operational retail and fashion data, empowering users with contextual, relevant, real-timeinformation for faster and better decision making.
The SAP S/4HANA solution portfolio for retail is designed and developed on big data with built-in analytics and mobile-friendly applications. Users can easily access and use these apps across locations and platforms.
SAP HANA IN A RETAIL 2020 SOLUTION
As stores become intelligent, interactive, sources of entertainment and meet-up places for Gen X and Z shoppers, the need for software applications, and supporting infrastructure becomes paramount. This is where the Groupsoft Retail Solution on Intel-based Dell EMC infrastructure comes into play.
The Groupsoft-Dell EMC retail solution is built on retail software and certified SAP solutions to enable an end-to-end shopping experience — from wearables and smartphones at the edge communicating past and present buying behavior to sophisticated analytics computing at the core and in the cloud.
Central to e-commerce retail solutions are SAP standards and SAP technologies. Using the SAP HANA application platform and in-memory database technologies, all types of retail data is turned into actionable insights by running analytics at significant speeds to enhance the customer experience and provide a retail platform for growth.
THE HARDWARE FOUNDATION: DELL EMC INFRASTRUCTURE WITH INTEL XEON PROCESSORS
Dell EMC infrastructure components provide a robust hardware foundation for the Groupsoft-Dell EMC retail solution. These building blocks for retail solutions include the compute power of Dell EMC PowerEdge™ servers with the latest Intel® Xeon® processors, working in combination with Dell EMC software, storage and networking products. Dell EMC offers a portfolio of infrastructure options that include Ready Nodes, Ready Bundles and Ready Systems. To make it easier for customers to decide on which deployment model is best for them, Dell EMC offers certified SAP HANA Ready Solutions optimized for SAP analytic workloads.
Managing and growing retail operations can be done successfully with data insights to a customer’s online and in-store shopping behavior. Moreover, analyzing all the data generated by your retail operations from customer data points, transaction sales data, to online social media data, and then adding business to business vendor and supply chain data increases the complexity of the task. Leveraging SAP analytics Ready Solutions from Dell EMC and SAP services from Groupsoft provides a single view of retail customer data and gives all your departments a unified view of the business for real-time decisions.
• Ready Nodes for retail are built on Dell EMC PowerEdge servers with Intel Xeon processors, and delivered with SAP HANA software pre-loaded.
• Ready Bundles for retail are based on SAP-certified Dell EMC servers, storage and networking, including support for SAP HANA Tailored Data Center Integration (TDI).
• Ready Systems for retail are pre-built systems with the convenience of an appliance and the flexibility of TDI, including options that incorporate Dell EMC V[x]Block, VxRail and VxRack.
DELL EMC IOT SOLUTIONS
Retailers are evaluating how the Internet of Things will change the way they conduct business and drive significant return on investment (ROI) in terms of operational efficiency, improved customer experience, risk mitigation and enablement of entirely new business models.
For retailers looking to capitalize on the IoT technologies, the Dell IoT Edge Gateway offers many advantages. In particular, the gateway helps retailers:
• Enable real-time decision making through analytics at the edge
• Reduce data transfer costs through data compression and cleansing
• Reduce operations and maintenance costs
• Improve security and data continuity
Retail companies that want to maximize their IoT investments can count on Dell EMC to provide for their needs from the edge, with software partners like SAP and service partners like Groupsoft. Today’s innovative approaches to retail operations — like enhancing the customer experience in-store or online, ensuring the supply chain is connected and monitored, making price adjustments on the fly as supply and demand changes per store, per geography and per trends — requires an interconnected network of edge-to-core-to- cloud devices. Dell IoT solutions provide that and much more.
Dell’s IoT ecosystem provides analytics enabled at the edge, data center and cloud. Use case examples benefiting from this ecosystem include customers who use wearables and smartphones at home, at work or at play to look up product information, to compare reviews or check out the latest social media commentary before they order products. Moreover, Dell IoT analytics solutions provide real-time insights into customer behavior and changing trends, enabling companies to meet and exceed customers’ expectations per click and per order. All the while, Dell IoT security helps ensure that any entry into the retail network is protected and helps enable safe deployment of IoT initiatives.
To accelerate the time to market for retailers’ IoT projects, Dell provides IoT Labs, a place to explore business outcomes and test and deploy IoT projects before taking them into production. Current labs are located in Santa Clara, California; Limerick, Ireland; and Singapore.
Retailers who prefer to do their proofs of concept in their own labs are supported with the necessary tools and resources to complete their projects. These services are provided free of charge for qualified customers.
HYBRID AND CLOUD OPTIONS
A majority of industries still employ on-premises solutions. However, organizations are progressively moving to cloud deployments, whether for sandbox explorations, testing, quality assurance (QA), or production environments. To meet the needs of these organizations, Dell EMC offers a complete selection of fully managed cloud and hybrid cloud solutions for off-premises SAP HANA environments.
• For hybrid cloud, Dell EMC offers a mix of on-premises, private cloud and Virtustream public cloud services with orchestration between the platforms. Such configurations enable workloads to move between private and public clouds as computing needs and costs change, giving businesses greater flexibility and more data deployment options. The Dell EMC Enterprise Hybrid Cloud solution consists of hardware, software and services from Dell EMC and VMware brought together into a platform to deliver the foundation for infrastructure-as-a-service. Dell EMC and VMware engineering teams have designed, tested and proven the hybrid cloud solution in multiple workload settings, so organizations can avoid risk and accelerate time to production value.
• For off-premises managed cloud for SAP, Virtustream, a Dell Technologies company, provides private, hybrid and public cloud solutions, and offers an unparalleled platform for running SAP and SAP HANA workloads in the cloud. Virtustream cloud solutions are purpose-built to run complex, mission-critical, I/O-intensive applications like SAP with unmatched economics, application-level performance SLAs and integrated security and compliance. Virtustream pre-sales experts and consultants have extensive experience working directly with SAP applications. They have the expertise to seamlessly migrate SAP deployments to the cloud.
• To integrate processes and build a connected business, Dell Boomi enables organizations to integrate and connect any combination of public, private, or hybrid cloud or on-premises applications, accelerating e-commerce solutions and retail deployments.
Data from CRM, marketing automation and ERP systems can be quickly integrated using Boomi Atomsphere technology to provide a single-pane 360-degree view of customers. Boomi has pre-built connectors to integrate the most commonly used applications, along with technology connectors that can be quickly configured for any data source, in the cloud or on-premises, enabling better insights into sales operations and improving strategy decisions.
BETTER TOGETHER: DELL EMC, GROUPSOFT, INTEL, AND SAP
The Dell EMC and Groupsoft solution for retail brings together all the hardware, software, services and expertise needed to design and deploy a comprehensive solution that spans a broad environment.
• Dell EMC provides a blueprint for industry-leading IoT solutions that leverage proven infrastructure components and powerful hardware, including Intel Xeon processors, required to drive real-time analytics.
• Intel processors empower Dell EMC compute solutions to run at peak capacity and enable world-leading benchmark performance.
• Groupsoft provides solutions in SAP Business Suite, covering strategy, architecture, implementation, performance optimization, integration, extensions, upgrades, training and managed services.
• SAP provides SAP HANA software for in-memory, high-speed computing and deep knowledge expertise in retail solutions. SAP SE is a multinational software corporation that makes enterprise software to manage business operations and customer relations.
Ultimately, the combination of in-depth retail expertise, powerful infrastructure, sophisticated software and a leading-edge in-memory database enables retailers to offer e-commerce solutions that enhance the customer’s shopping experience while growing revenue.