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Estimated reading time: 1 minute
Retail Industry Viewpoints
Until recently, the global retail model had remained largely unchanged for hundreds—if not thousands—of years. The notion of creating a valuable commodity or product, showcasing it in physical premises, and selling it to the consumer is as old as currency itself. But now all that is changing. We’re making, selling, and buying things in entirely new ways, and the lines between supplier, manufacturer, and retailer are blurring.
“The lines demarcating industries and sectors have often blurred or disappeared. Retailers are increasingly bleeding into other consumer sectors, while those offering retail experiences are growing.”
—Deloitte: 2019 Retail Outlook
Groundbreaking new technologies, and agile, cloud-native competitors have given rise to the hyperconnected consumer. These new buyers have unprecedented power, information, and choice in the palms of their hands, and as a result, their expectations are higher than ever. But the same technologies that are disrupting retail markets deliver an opportunity to better understand the hyperconnected consumer, and deliver the frictionless, personalized experiences they demand.
To succeed in this new landscape, retailers and their suppliers must be willing to recognize, embrace, and become catalysts for change.
“By 2021, 30% of retailers will provide real-time contextual experiences wherein conversational search is empowering, services find customers, content supports sales, and consumers monetize their data.”
—IDC FutureScape: Worldwide Retail 2019 Predictions
Estimated reading time: 5 minutes
The Latest News and Updates
To successfully adjust to a new retail landscape and effectively serve the hyperconnected consumer, you’ll need all the facts, figures, and insights you can get. But it’s impossible to read everything. That’s why we’ve handpicked a selection of links to provide you with the best information and opinions on the hottest topics in retail markets.
Adapt to data-driven customer expectations.
Direct-to-consumer (DTC) brands continue to up-end business models and rewrite the playbook on how to engage customers. This report from CommerceNext and sponsored by Oracle Customer Experience Cloud, shows an increasing divide in ecommerce marketing spend and priorities between traditional retailers and digital-first DTC brands.
Discover Oracle modern marketing.
Watch Oracle's Global Managing Director of Consumer Markets, Michael Forhez, as he explains the shift in consumer demands and how important it is for retailers and consumer goods manufacturers to be agile and open to change in the fast-paced world of digital transformation.
Deliver individualized experiences in modern retail.
Today’s retailers need to be customer obsessed. Sounds simple, but the notion of customer obsession presents real challenges. The most critical being that companies don’t fully appreciate what it means to be customer obsessed or how to execute a strategy to get it done.
In this webcast, Oracle VP of Strategy, Jeff Warren, and Forrester VP and Principal Analyst, Brendan Witcher, discuss what it means to be customer obsessed and how to execute on a strategy that fulfills complex journeys with elegance and scale.
The latest from Oracle.
Advance the usage of distributed ledger technologies within the retail industry.
Oracle is working with University College London and startup Monochain, to facilitate an industry consortium focused around the potential adoption of blockchain in the retail value chain.
Estimated reading time: 4 minutes
Oracle ERP Cloud supports explosive growth at Instacart.
Head of Finance at Instacart, Javier Cortes, shares how Oracle ERP Cloud is helping the grocery delivery disruptor create an agile and scalable finance platform to support its aggressive expansion goals.
“Being able to report numbers at any point in time, being able to parse the data in a way that is understandable by the accepting team has been critical for us since we launched Oracle Cloud.” —Javier Cortes, Head of Finance, Instacart
Multinational franchise operator Alshaya partners with Oracle to support growth and expansion.
For more than 30 years, Alshaya has been a pioneering force in retail as a franchise operator of nearly 90 of the world’s best-known brands, including H&M, Mothercare, Debenhams, American Eagle Outfitters, Victoria’s Secret, and Starbucks.
Alshaya has selected Oracle's powerful, end-to-end retail solution to streamline their omnichannel operations.
“Oracle is a proven, world-class retail solution provider with unmatched expertise, and they will be a key partner in our transformation. Alshaya has worked with Oracle for many years and we are delighted to extend our collaboration with them to modernize our operations, invest in our teams, and foster future growth as we expand our omnichannel reach.” —Steve Marston, CIO, Alshaya
Oracle Cloud revolutionizes Vinomofo's customer experience.
Great customer experience is at the heart of Vinomofo's business. Oracle Warehouse Management Cloud enables Vinomofo to focus on what they do best—like quality and curation—while the warehousing and distribution takes care of itself.
“Oracle Cloud has revolutionized customers' experience. We wanted to take back ownership of our distribution chain, so we could focus on bringing the quality and diverse choice that our customers really deserve.” —Krista Diez-Simson, CFO, Vinomofo
Estimated reading time: 5 minutes
Retail Opportunity and the Hyperconnected Consumer
The one trait that sets human beings apart—the trait that allowed us to transform the planet with our societies and our infrastructure—is our remarkable adaptability. It’s enabled consumers to embrace groundbreaking new technologies with incredible eagerness. In 1995, less than 1 percent of the world’s population was internet-connected. Today, it’s greater than 40 percent.
By 2022, mobile will represent nearly 20% of all global IP traffic, fueled in part by the Internet of Things.
—Cisco: Global Mobile Data Traffic Forecast Update (2017–2022)
The hyperconnected consumer.
Today’s consumers are hyperconnected. The smartphone revolution has put unprecedented power and information in the palms of their hands, and their expectations have grown accordingly. Modern consumers expect mass personalisation, speed-of-thought commerce, and a blending of physical and digital retail experiences. If they don’t get what they want, they’ll simply go elsewhere.
The hyperconnected consumer is increasingly fickle, and brand loyalty is diminishing—yet consumers care more about the provenance of what they’re buying, and the sustainability of who’s producing it. The hyperconnected consumer can connect with brands from farm to fork, and expects both transparency and honesty throughout the brand relationship.
Capturing the loyalty of the hyperconnected consumer means delivering the personalized experiences they’ve come to expect. Increasingly, the customer experience—whether preshop, shop, or postshop—is as important as, or perhaps more important than, the product itself.
Hyperconnected consumers—and the new technologies they depend on—are transforming retailers.
Driving new consumption patterns.
Hyperconnected consumers have an appetite for innovative new consumption patterns—like the as-a-service models pioneered by disruptors such as Netflix, Uber, and Dollar Shave Club—and technology is making such consumption patterns possible. On-demand service models have the potential to disintermediate retailers, giving manufacturers and suppliers direct access to their customers. Retail is no longer seller-dictated, but consumer-defined.
Technology has changed the definition of ownership, delivering instant, disposable gratification. Increasingly, consumers want their products delivered in a way that matches their lifestyle and needs.
Transforming the physical store.
Physical stores are closing in droves, but statistics like the above can be misleading. The stores themselves aren’t necessarily disappearing—merely changing in nature. Where there may have been two dozen mom-and-pop stores a generation ago, there might now be a single superstore capable of delivering a retail experience better aligned to the needs of the modern consumer.
And then there are “experiential stores,” where prospective buyers can purchase products in person, or try out new, enriched services. Think of Apple stores—they don’t just serve a traditional retail purpose, but act as a unique opportunity to build stronger brand/customer relationships.
From shelf-stacking robots to AI fashion assistants, technology is changing how we shop, and breaking down the walls between the virtual and the real world. This is what the future of retail looks like.
Breaking down the silos between physical and digital.
To deliver the frictionless experiences consumers demand, retailers will be expected to go “phygital.” That means demolishing the silos between ecommerce and traditional retail models, and better connecting with consumers across every interaction.
To deliver rich, personalized experiences and enable consumer-centric growth, retailers need cloud services integrated with social, mobile, and analytic capabilities. They need the power to deliver commerce at the speed of thought, and they need to simplify and optimise their businesses for sustainable, profitable growth.
“While the allure of the latest tech will always be a draw, shopping center owners would be well advised to focus their tech investments on back-of-house utilizations that improve logistics, efficiency, and inventory management to provide a more frictionless experience for the shopper.”
—Forbes: Retail 2030: What Consumers Expect in the Shopping Center of the Future
Estimated reading time: 7 minutes
Digital Technologies: Enabler and Disruptor
Retailers are caught in a cycle of constant reinvention and transformation. But innovation for innovation’s sake is no use to anyone. With disruptive new consumption models emerging all the time, retailers must retain perspective and create a technology strategy capable of delivering the relevant experiences consumers expect. To capitalize on the opportunities of digital transformation, retailers must define their purpose, identify new possibilities, and prioritize the opportunities available to them.
“By 2022, 20% of retailers will embrace a complete cultural shift where leadership champions disruptive innovation, driving investment that launches the next stage of growth, while 80% see deceleration.”
—IDC: Ten Predictions for Retail Tech and Business
Personalization and Customization.
Consumers are increasingly looking for personalized, customized experiences—either in terms of product or service. The technology now exists to provide batch-of-one products, and tailored, in-store offers and experiences. Enabled by technologies such as the Internet of Things, blockchain, AI and mobility, data capture and analysis are at the heart of personalization.
Voice commerce holds promise. But, not everyone is comfortable—or even interested—in using their Amazon Echo or Google Home device to make a purchase (yet).
Demand and supply chain management.
With the Internet of Things beginning to proliferate, the digital thread now runs through every process, factory, machine, and product. Real-time, sense-and-response, demand and supply chain management has linked the connected consumer, home, product, and store with the broader supply chain. This provides retailers with access to new insights and an opportunity to enable deeper collaboration across the supply chain.
Speed to market.
Digital technologies are slashing time to market. Retailers have an opportunity to become first to market, or at the very least, fast followers—rapidly responding to consumer demands with innovative product offerings.
Organizations with successful transformations deploy more technologies than others do.
Disruptive players and technologies.
Disruptive, consumer-centric players like Amazon and Alibaba are redefining retail markets and raising the bar for end-to-end experience. They’re innovating rapidly, acquiring other industry disruptors, and developing new purchase models based on breakthrough technologies.
“Amazon has surpassed Walmart as the biggest retailer on the planet on Forbes' Global 2000 list of the world’s biggest public companies, as measured by a composite score of revenues, profits, assets, and market value. Behind Amazon and Walmart, the third-largest retailer on the planet is Chinese ecommerce giant Alibaba.” —Forbes: Amazon Surpasses Walmart as the World's Largest Retailer
Consider also Sephora's "Color IQ" innovation, allowing customers to find the perfect makeup shade without ever putting anything on their face. Color IQ scans a customer’s face and provides personalized recommendations for foundation and concealer shades, while Lip IQ does the same to help find the perfect shade of lipstick. It’s a huge help to customers who know the stress (and cost) of finding the perfect shade by trial and error.
The war for talent.
The future of retail—indeed, the present—is technologically driven. With retailers and consumers becoming less distinct, new business and consumption models becoming commonplace, and consumer expectations becoming increasingly demanding, retailers must adapt rapidly, or perish. To thrive in this landscape demands top talent, but individuals with the required skills and experience are in high demand.
To attract, retain, and develop the best talent in this competitive marketplace, players will be forced to innovate and offer attractive workplace environments.
Estimated reading time: 2 minutes
Blurring the Line Between Manufacturer and Retailer
A combination of consumer demands and technological developments is blurring the line between supplier, manufacturer, and retailer—helping to reduce time to market, wastage, and operational expense. They’re causing retailers to completely reimagine the supply chain, moving from a traditional, linear string of processes—source, create, deliver, consume—to a more interconnected, organic approach.
In our new digital world, a rigid supply chain is no longer practical. A retailer’s supply chain needs to be agile, flexible, intelligent, and collaborative—and underpinned by data transparency between retailers, suppliers, and manufacturers.Source: PLMA International
Value chain disruptors/thought-starters:
Amazon and Alibaba—are vertically integrated logistics providers, not just ecommerce retailers
Warby Parker, Stitch Fix, and Sephora—are transcending “brick or click” for the sake of the consumer
Bingobox—is the unmanned, automated store being rolled out for 24-hour access
Manufacturers are becoming retailers and retailers are becoming service providers. They’re discovering new opportunities to foster collaboration, increase revenue growth, and get ahead of the competition. And digital is changing the way trading partners manage beyond their singular enterprises—all parties, suppliers, distributors, and retailers must connect to increase efficiency and find mutual success.
Blockchain is poised to upend the way we consume from what we wear to what we eat. As solutions come to the forefront, it’s vital they’re deployed in a responsible manner, because with all these hopes come fear over hype, data security, interoperability, and access. For example, the recent outbreak of food poisoning across the US and Europe due to contaminated romaine lettuce, is a sign of larger problems in the food supply chain, problems exacerbated by consumer demand for fresher, less processed, farm-to-fork fare. If we don’t take action, we could experience a near epidemic of such contaminations. Recent IT advancements, specifically through the Internet of Things and with blockchain distributed ledger technology, provide answers to the problem.
In retail, change remains continuous—so predicting the next big thing is far from an exact science. Players must improve operational agility and adopt cloud-enabled, consumer-centric data analytics to better forecast where consumers are going if they’re to anticipate the next disruptive influence.“Retailers should work with suppliers on cost improvements and innovations. Suppliers can be great idea generators because they know a retailer’s bad habits better than the retailer itself does and would rather help change those habits than lose the business.”
—McKinsey: Perspectives on Retail and Consumer Goods
Estimated reading time: 2 minutes
Driving Business Growth with New Digital Technologies
Technology gives organizations the chance to use industry disruption as a catalyst for innovation and business growth. Game-changing technologies like chatbots, AI, machine learning, blockchain, IoT, and 3D printing are emerging all the time, putting retailers on the back foot—when’s the right time to invest, and which technologies are worth exploring?
IDC estimate that the amount being spent on digital transformation will grow to almost US$2 trillion by 2022, a CAGR of almost 17 percent from 2018.
In a 2019 Accenture survey, 94 percent of respondents indicated that they’ve accelerated their pace of digital innovation over the last three years.
—Forbes: A CEO Cheat Sheet For Digital Transformation 2.0
Chatbots can play the role of a virtual shop-floor assistant, guiding consumers through purchase decisions and enhancing the customer experience. Chatbots enabled by AI are a more effective means of answering customer queries than web pages—they’re responsive, intuitive, and quick, and can even help to close sales that might otherwise be missed.
“One of the most amazing technologies that is currently enjoying a surge due messaging apps popularity are chatbots. Retail companies are using chatbots to bridge the gap between online and offline experiences. They carry potential to replace the tasks of human workers, like taking customer queries, providing customer service, and upselling to shoppers.” —Artjoms Prokopiško, Contributor, Chatbots Life
What new opportunities will AI unleash on the retail sector?
The next logical step in the evolution of the retail industry is to deploy AI not only to improve customer experience but also to bolster its operations and processes. AI deployments among large retailers have increased exponentially in recent years, but many use cases have yet to be tapped.
Effectively, machine learning involves “training” a computer with vast quantities of data until it “learns” correct responses by identifying patterns in that data. It’s already found its way into consumer technologies—such as Amazon Echo and Google Home—and it’s revolutionizing numerous business processes, too.
The Internet of Things.
The possibilities offered by the Internet of Things (IoT) can be broken into two distinct parts: products and data. IoT is giving rise to a wealth of new connected products and services—from white goods to central heating systems, cars, cities, assembly lines, and even entire factories. The data generated and captured by IoT will enable the creation of new business models, enhance existing business processes, reduce costs, and offer new value-added services.
“For the first time, [blockchain provides] a way for one internet user to transfer a unique piece of digital property to another internet user…the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.”
—Marc Andreesen, Entrepreneur and Software Engineer, The New York Times: Why Bitcoin Matters
Virtual reality and augmented reality.
It’s easy to dismiss virtual reality and augmented reality as fads, but both technologies are finding a host of new practical applications—from Snapchat filters to the heads-up displays in executive cars to the entertainment industry. The gaming industry alone—already worth more than double the international film industry—will be completely transformed by virtual reality, providing the opportunity to explore entirely new immersive dimensions. As a creative tool, virtual reality could prove just as groundbreakingly disruptive as the moving image.
Early trials of virtual reality in retail show strong promise for the future virtual in-store experience, while augmented reality applications can provide the consumer with new levels of insight and information overlaid on real-world scenarios.
The possibilities afforded by 3D printing are only beginning to be realized. It’s helping to slash time to market, enable rapid, on-demand prototyping and widespread customisation, and greatly enhance the speed and accuracy of manufacturing. While integration issues have hampered early adopters, 3D printing has already disrupted the medical technology, automotive, fashion, and manufacturing industries, and many more are likely to follow.
Tech trends in retail.
no longer react to disruption, but cause it
adopt a fail-fast culture of innovation
develop new ways of designing, creating, and delivering products
connect with consumers through new technologies
embed AI to amplify value across the application portfolio
eliminate the complexity of combining and integrating datasets, and gain new insights with big data and visual analysis
align marketing across every stage of the consumer journey—preshop, shop, and postshop
Estimated reading time: 2 minutes
Cloud Is the Destination
Retail markets are changing rapidly and fundamentally. In an unpredictable future—dictated by transformative technologies, agile competitors, and changing consumer expectations—only the cloud can deliver the scalability, flexibility, cost efficiency, and future readiness consumer markets demand.
“Oracle Service Cloud enabled us to provide superior customer service, launch better campaigns, and monitor our activities on an integrated omnichannel cloud platform. We have saved time, effort, money, and can focus more on giving parents the support they need for their baby’s nutrition.” —Isabelle Simal, International Customer Service Manager, Nestlé BabyNes (Nestlé S.A.)
Cloud acts as both an enabler and an accelerant—paving the way for implementation of any new technology.
It’s imperative that retailers construct a cloud strategy capable of exploiting digital opportunities, enabling new consumption models, meeting the expectations of hyperconnected consumers, and responding proactively to change.
Cloud transformation helps retailers:
transform their technology footprint from on-premise to as a service
enable seamless integration of analog and digital worlds
deliver rich, personalized experiences and real-time insights
improve trading partner collaboration
reduce costs and increase speed to market with simplified IT
In this era of profound change, we’re being forced to re-examine the nature of retail markets themselves. What is a manufacturer? What is a retailer? What is a consumer? No longer will they slot so neatly into individual boxes. With the lines between supplier, manufacturer, and retailer blurring, the new world of retail practically defies description. With the right cloud strategy in place, businesses can prepare for—and thrive in—a challenging, unpredictable future.