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How to Turn 9 Retail IT Challenges Into 9 Business Opportunities

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1. Introduction

 

According to a recent market study on the state of the retail sector that we have released at Openbravo, almost 82% of today's retailers were planning to increase their IT budgets this year which clearly shows a trend change that would continue in the coming years. Top priorities in retailers' IT spending are focused on cross-channel, cloud and mobile capabilities, and 79% of retailers will invest specifically in their store systems, where the number of retailers using mobile POS is expected to triple in 2015. This shows a positive market outlook for vendors of innovative solutions and systems targeting retail.

What the same study confirms as well is that despite the rapid growth of online retail, physical stores will continue to be the main driver of total retail sales for several more years to come. This is especially true in emerging markets due to different infrastructure, legal and consumer behavior reasons. Over the coming years, 89% of total retail sales in developed countries like the USA, and a whopping 95% on average in emerging markets like Mexico or India will still be realized in physical stores. It is clear then that physical stores will continue to play a key role in the retail space.

Retail dynamics are changing though and that needs to be taken into account by retailers themselves in their strategies, as well as by solution vendors like Openbravo to continue to support retailers for enhanced competitiveness.

 

Back in 2010 we made the strategic decision to develop a new point of sale solution, fully web and mobile. At Openbravo we were well positioned to do so since today's mobile point of sale is an evolution of our tremendously successful previous point of sale solution, the Openbravo Java POS that was downloaded close to 1 million times! Our entirely new point of sale was launched in 2012 embedded in the new Openbravo for Retail solution. Today we can still proudly say that it is a differential product in the market and this has allowed us to achieve great results especially in emerging markets where open source affordability plays a key role.

 

 

2. Embracing Mobility

 

Mobility has rapidly become one of the highest priorities for forward-thinking companies in recent years and it is deeply transforming the way they do business. Employees, suppliers and customers are benefitting from mobile technologies with better access to the best information anytime, anywhere. The explosion of the use of tablets and smartphones has only accelerated this process.

Retailers are not an exception and mobility has been pointed out as one of the most important IT investment decisions. Customer Service, Store Operations or Supply Chain are the areas which have benefitted most by enabling retailers to better connect with customers, manage stores and collaborate with the supply chain more efficiently.

In the stores, mobile POS has penetrated deeply into the critical realms of the shopping experience and customer satisfaction. More empowered employees armed with mobile solutions count now with better tools and information on hand to provide a better shopping experience on the shop floor.

It is of no surprise then to see that the adoption of mobile POS has tripled according to a recent Openbravo study. Hardgoods and softgoods specialty retailers are the most interested, to whom an interactive assisted sale everywhere in the store makes all the difference.

Processes such as inventory management are also benefit highly from mobility. More accurate inventory counts or goods movements can be executed from a mobile device and in real time thus helping to significantly improve store operations and the whole supply chain when they are executed in the stores or in central warehouses or supplier facilities.

 

Openbravo provides retailers with a mobile-ready platform that allows them to easily extend their business processes to any mobile devices and touch screens. Thanks to the Openbravo Core Mobile Infrastructure, retailers can build and deploy mobile applications for secure access to business processes, anytime, anywhere, and on any device thanks to the use of HTML5 and responsive design technologies. It leverages the Openbravo web based architecture so all mobile solutions are also web based thus helping to dramatically simplify the way mobile solutions must be deployed and maintained. And by storing transactions processed during connection outage and sending them transparently to the back-office once connectivity returns, support is provided for uninterrupted operations.

The Openbravo Web POS is a full web and mobile POS solution that provides full transactional support from any device, unusual in other solutions where the mobile POS supports only a limited functionality. Thanks to it being a full web POS the way it is deployed is dramatically simplified since only a browser is required, thus providing independence from the mobile device so the retailer can select the device of its choice. Terminals can be rapidly added and removed, therefore helping to adapt more effectively to stationary situations or enabling new stores to be opened much faster.

An additional mobile functionality for purchasing and warehouse operations is also available, including management of goods movements, picking lists and inventory counts, that can be easily extended to adapt to customer requirements.

 

 

3. Leveraging the Cloud

 

The cloud is a disruptive technology for all businesses in all industries, which is transforming how companies invest and manage their IT assets. This is especially relevant for retailers who need to embrace technology that will allow them to react faster and be more flexible to succeed in today's super-empowered consumer age. 68% of retail executives plan to adopt cloud technologies into their business strategies and operations.

The financial advantages of the cloud, primarily the ability to move capital to operating expenses, may initially drive cloud adoption for many retailers, but there are more benefits and they are commonly related to IT efficiency, IT agility and business innovation.

Higher business agility: The cloud provides IT departments with the ability to provision and deliver solutions faster which is very attractive to retailers facing common seasonal situations that require constant capacity adjustments. Faster time to market is also achieved making, for example, geographic expansion easier, without the expense of developing traditional IT infrastructure.

Lower cost: The cloud provides more attractive pricing models compared with traditional offerings. Cost efficiency is also improved since cloud adoption allows to reduce idle time for IT assets.

Better integration capabilities: The cloud offers unique opportunities for integration given that the information is more easily accessible from other solutions and in a highly secure way.

Leverage other technologies: In combination with mobile, social, and analytics technologies, cloud platforms will continue to add agility, efficiency, and cost savings to projects while enabling options that are not otherwise viable.

 

Openbravo provides retailers with a cloud-ready platform so they can benefit from a higher IT agility and deployment simplicity. The Openbravo native web architecture is of great benefit, allowing to transparently deploy the system under different scenarios.

The Openbravo Commerce Platform can also be deployed as an On Demand service using the Amazon AWS infrastructure and managed by Openbravo directly. In comparison with traditional SaaS models, Openbravo On Demand does not only provide a managed infrastructure but it also gives retailers the possibility to fully adapt their system, typical of an On Premise deployment, so it combines the advantages of both worlds.

 

 

4. Progressing in Crosschannel

 

Retailers no longer need evidence that cross-channel capabilities are critical factors for success today and they will be even more important in the future. This interest is fully confirmed by several studies that reveal that multi-channel consumers are more profitable than consumers using just one channel.

However, this does not mean that all retailers are ready for it and in fact most, if not all retailers have a long way to go to become true champions in this field.

Several aspects have been pointed out as main reasons behind this lower cross-channel adoption.

Poor Merchandise Management Agility and Supply Chain Management Efficiency. Merchandise Management Agility and Supply Chain Management Efficiency are considered two of the most important building blocks for any successful cross-channel strategy. However, a lot of retailers are still using old systems, which do not provide the required capabilities, for example when managing a huge number of products, assortments, or promotions across all channels.

Lack of Business Analytics. For any successful cross-channel strategy, retailers need actionable customer intelligence that allows them to react quickly to customer behavior changes and evaluate the efficiency of any decision. 71% of retailers think that cross channel initiatives are still low due to the lack of proper actionable analytics.

Lack of a Single Platform. A single platform would facilitate seamless cross-channel scenarios but the reality is that for the moment, retailers' transaction platform will be a hybrid of multiple channel specific platforms. It is the natural result if you take into account how they made their large prior IT investments. An interesting aspect to consider is whether in the future the primary transaction system will be POS or E-commerce. At the moment, only big retailers can afford to progress in this field and we are starting to hear about new Order Management Systems that are trying to orchestrate the fulfillment process across different channels.

 

The Openbravo Commerce Platform allows retailers to progress solidly in their crosschannel strategies.

Higher merchandise management agility is provided with the capacity of dealing with a huge number of products and assortments in an effective way, with features like product characteristics, variants and multilevel product catalogs. This agility is also achieved by the availability of a powerful price and promotions engine for a faster development and execution of pricing strategies. An unlimited number of price list versions and a strong discounts and promotion engine including scaled prices, discretionary or automatic discounts, buy one get 2 promotions, packs, amount or percentage discounts at line or ticket level are some of the existing features.

Seamless supply chain operations are supported with a comprehensive procurement, warehouse and inventory management functionality. Retailers can achieve an accurate control of the whole procurement process with requisitions, purchase orders and goods receipts, get visibility in real time about stock in all locations with alerts for replenishment and real time control of order status and warehouse movements for an accurate planning of picking, packing and shipping activities.

Advanced analytics are provided by Openbravo Retail Analytics, a powerful embedded analytics engine with visual and role-tailored decision-making tools that communicate key performance indicators in simple terms and allow to drill down when immediate action is required. And it requires minimal IT overheads since in most common scenarios it can be simply deployed in the same Openbravo instance.

The online channel can also be efficiently integrated by means of existing connectors with platforms like Magento that finally allow retailers to integrate all their channels and leverage the Openbravo fl exible architecture to build a true OMS that orchestrates processes across all channels.

 

 

5. Leveraging Competitive Advantages

 

In today's hyper-competitive landscape retailers need to develop competitive advantages. Under these circumstances, retailers are struggling to make the most of their systems, mainly due to the existence of a gap between key business requirements and systems capabilities. That gap can be particularly wide with traditional solutions, particularly as a firm's business processes change as the organization itself grows and changes.

So retailers are seeking modern systems that allow them to support their competitive advantages in a sustainable manner. Very specific business requirements such as loyalty programs, custom pricing and special inventory replenishment procedures are just some examples that can make all the difference and require the system to be adapted. In fact it is known that a lot of retailers have very customized legacy systems and they consider it impossible to move to a new system due to the complexity it represents. These retailers need solutions that can be easily adapted to their requirements and not the other way around.

 

 

6. Being Agile and Staying Innovative

 

Today's dynamic markets are very demanding and agility for responsiveness is becoming a must. Unforseen market and business events, changes in existing processes or the introduction of new products are some examples that require a quick reaction and will very often have an impact on the existing systems. Therefore retailers require business management systems that are easy to evolve and maintain. They should provide a straightforward process to upgrade the system to newer versions without any painful migration process thus allowing to continuously adopt new innovations while protecting any existing specific developments.

 

Openbravo is a fully modular platform. Modularity changes the way in which Openbravo can be adapted to user needs. Instead of customizing the code to match user requirements, it is possible to externally -from an independent module- extend functionality and to configure it, providing higher fl exibility and greatly simplifying the adaptation of the system to user needs. And most importantly, this guarantees the isolation and protection of any existing customization so the system can be updated frequently and smoothly.

Openbravo modular architecture also enables a more efficient development process, encourages sharing and reuse of new functionality, and reduces complexity through modules that can add new functionality and modify/extend behavior of other modules so it greatly helps to reduce time-to-market when introducing new changes.

 

 

7. Being Prepared for Growth

 

Successful retailers do not only care for their situation today but they also constantly seek growth opportunities. Introduction of new products, new promotions, new stores or international operations are just some of the business events that retailers will face along the way. So they need to adopt solutions that effectively support their future growth, without impacting their whole business performance.

 

Openbravo provides retailers with a future-proof platform ready to adapt to future needs and growth. It features a highly scalable arquitecture that has been designed for high performance and heavy load environments (users and data) and allows to adapt to any stage of growth thus increasing IT responsiveness to business objectives.

Openbravo's web architecture enables real-time operation and simplifies the system landscape, making it easier to deploy and maintain thus decreasing its operation costs.

Retailers seeking growth internationally can also benefit from the Openbravo Commerce Platform capabilities, thanks to the support it provides to international operations with multi-language, multi-currency or multi-accounting features.

 

 

8. Ensuring Secure Operations

 

Security is another big concern for retailers. Secured system access but most importantly accurate operational control and audit to avoid any fraudulent activity in particular at the point of sale or in online transactions is a must for retailers today.

 

The Openbravo Commerce Platform provides a strong and fl exible security model that allows retailers to be in control of their operations.

Secure HTTPS access and LDAP authentication as well as a role based system and auditing capabilities are some of the available features. At the POS the system allows to easily configure manager approvals for most typical actions, which improves operational efficiency and help to minimize fraudulent activities.efficiency while helping to minimize fraudulent activities.

 

 

9. Leveraging Prior IT Investments

 

One of the biggest concerns when adopting a new solution is the capacity to continue using existing systems in other areas that allow the leveraging of prior investments. More complex supply chains also demand the capacity to easily integrate with customers and suppliers' systems. And with a growing number of new retail technologies it is mandatory that the adopted platforms provide proper tools that allow retailers to leverage them (new payment methods, digital signage, social media integration, location based marketing...).

 

Openbravo provides retailers with a highly interoperable platform that helps retailers to leverage their prior IT investments while ensuring that new and future technologies will be easily integrated.

The Openbravo Commerce Platform provides an out-of-the-box web services layer (JSON/XML CRUD REST web services), which simplifies the way other solutions can be integrated. Standard web services can be easily extended to adapt to any integration requirement. Ad-hoc web services for specific entities (SOAP) can be also developed.

Retailers can benefit from existing connectors with solutions like Magento, SugarCRM or ZohoReports.

 

 

10. Improving Customer Service and Boosting Staff Productivity

 

With consumers at the center of any retailer strategy a superb service becomes a critical goal. To achieve that it is imperative to count with highly motivated and empowered employees. Employees armed with better tools and information that help to provide customers the expected shopping experience.

In addition, given that retail has one of the highest turnover rates and faces frequent stationary situations that require constant adaptation to the available staff capacity, retailers and especially brick-and-mortar retailers need to ensure staff productivity in a shorter time, so adopted tools must enable staff to start working with minimum training.

 

The Openbravo Commerce Platform provides a highly productive web interface for higher staff productivity and people's collaboration.

The Openbravo POS allows the processing of new sales in minutes, including a training mode that allows people to get trained rapidly. Sales associates armed with mobile devices can provide an interactive assisted sale everywhere in the store to improve customer service and increase cross-selling and up-selling opportunities. A fully embedded analytics engine helps store managers to take more informed decisions and get better insights into the store performance.

 

 

11. Final Summary

 

Mobilize your organization and leverage existing mobile POS, mobile purchasing and mobile warehouse solutions.

Adopt a cloud-ready platform for higher business agility.

Progress in Cross-Channel thanks to achieving higher merchandise management agility, ensuring supply chain management efficiency and gaining insights into your business performance across all channels with a powerful embedded analytics engine.

Adapt for competitiveness by easily adapting the solution to your business needs and not the other way around React faster to market changes and leverage continous innovations delivered by Openbravo thanks to modularity, which allows you to safely and rapidly introduce modifications and dramatically simplifies the upgrade process.

Be prepared for your future growth. Introduce new stores, manage a huge number of products and assortments or expand internationally thanks to support to international operations Ensure higher operational efficiency and security with advanced features such as auditing or manager approvals that help to minimize risk of fraud activities Leverage prior investments with a platform that is easy to integrate with Empower your staff and boost productivity with a solution which is easy to learn and use and provide modern tools that will help to improve decision making and customer service.

Read the infographic Retail IT Systems Priorities in the New Consumer Age for more information.

 

Click here to download this eBook in PDF format.