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Why implement cloud solutions?

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Want to execute seamless Omni-channel experience for your customers in your retail business?

Read how order broker cloud service can provide you scalable and reliable capability to execute a seamless shopping experience for your customers.

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How a brick and mortar retailer has competed successfully against online rivals by implementing a customer centric omni channel strategy.

 

“Customers today expect a level of convenience that brick and mortar retailers do not meet easily”

 

THE CHALLENGE:

Target has been one of the largest US large format brick and mortar retailers present in every state with thousands of brick and mortar stores since the early 20th century, initially struggling to keep up with competition of Amazon. Like many other retailers, Target had a hard time keeping pace with Amazon’s home delivery service and the convenience of the Amazon Prime Pantry functionality, that allowed customers to shop for groceries online with Amazon conveniently, quickly, and getting their orders delivered within 2 hour for free. Customers stopped shopping in stores because shopping in stores meant spending at least 2-3 hours on a weekly basis with a repetitive task that people did not enjoy and preferred to spend that time with their families, friends and not in a store shopping every Saturday.

THE SOLUTION:

Target, like many of its peers (K-Mart, Rainbow Foods, Cub Foods), started struggling competing against online competitors such as Amazon. A radical change had to be implemented quickly to avoid going bankrupt.

In 2014, the company has faced multiple challenges: an aggressive over expansion in Canada has strained the company’s financial resources while a highly publicized data security breach has also created negative impact for the retailer’s online business. As a result both CIO and CEO resigned and new leadership has taken over the company.
To tackle financial challenges and aggressive online competition, Target has initiated a bold and radical series of steps to change its business model to be fully immersed in an omni channel engagement with its customers.

As a result, Target’s revenues have increased, contributing to Target being named retailer of the year in 2018 and over performing both expected revenue and target profit figures. Current stock prices reflect well on Target’s performance, especially when comparing the prices to its peers.

What exactly has Target done to implement a seamlessly omni channel strategy that has allowed it to compete so effectively against online competitors such as Amazon? Multiple initiatives all focused on the customer.


Radical change in its stores: Target has chosen to implement a radical change in its stores by essentially converting them into a fulfillment center and a showroom style shopping experience. By doing this Target has gained a warehouse network more extensive than its online competitors, allowing it to fulfill orders quickly and efficiently. By performing this change, Target gained the capacity and ability to fulfill customer demand on multiple channels seamlessly and quickly (home deliver in 2 hours or less, like Amazon, in addition to in-store options as described below), which in turn brought a level of convenience to its customers unparalleled even among online retailers.


Online orders home delivered: Relying on its extensive network of fulfillment centers, Target gained the ability to fulfill and deliver to customers’ homes online orders quickly and efficiently, allowing the retailer to compete with online competitors effectively.
Online orders picked up in store: Customers not only have the choice of ordering online and getting the order delivered to their homes but can also pick the online order up in a store. This is a great choice to people on the road and driving by the store, allowing them to immediately or in very short time pick their order up. The warehouse in the store picks the online order just the same way as home delivery but places the completed pick for pickup. Process does not involve additional complexity but allowed Target to offer something to its customers online retailers never could, effectively out competing its online rivals with a differentiated service.


In store shopping delivered to the car: Customers also have the ability to shop in the store and scan, using their mobile phone or a scanner provided in the store, each item they wish to purchase but not actually carry the scanned items to the cash register. When ready to leave, the shopper checks out on the handheld device and goods purchased are ready to be picked up by car. For the store, the process is not more complex than picking an online order for car pickup, yet for the customer Target offers a new service for convenience not available at its online rivals. Families choose this convenient option to avoid lines at the cash registers but still be able to see and touch and try what they buy, saving time and the effort of pushing a cart through the store.


Traditional in store shopping: Customers still have the ability to shop like they used to: go through the store with a shopping cart, collect goods for purchase and check out at an automated or traditional cash register. Target is opening smaller stores closer to urban centers to reach traditional customers better.

To help customers, Target has also made available real time product availability information for its customers. Target’s website and mobile interface both allow customers to check real-time availability of searched products at stores within a defined range of distance from the customers’ location. Target has also added a cartwheel app designed to make omni channel shopping and communicating with the customer easier by providing a convenient access to weekly ads, coupons, discounts and updates.


CONCLUSION:
By applying innovative ideas and processes supported by technology to deliver on new engagement channels to customers, Target has effectively out-competed its online rivals and has come to dominate the retail space in its markets in its own segment successfully.
To implement such an omni channel customer focused strategy Target had to make radical changes quickly, however the initiatives paid off and have proven that brick and mortar retailers can compete effectively against online competitors, to the degree that online competition has felt the loss of advantage on the online side of retailing and has begun investing in brick and mortar stores (Amazon bought Whole Foods).

 

SOURCES:
1. https://finance.yahoo.com/chart/TGT
2. https://en.wikipedia.org/wiki/Target_Corporation
3. https://en.wikipedia.org/wiki/History_of_Target_Corporation
4. https://www.target.com/
5. https://corporate.target.com/about
6. https://www.inc.com/jason-aten/targets-small-format-stores-are-its-biggest-weapon-against-amazon-walmart.html
7. https://www.cnbc.com/2019/08/23/target-opens-100-mini-stores-remodels-500-bigger-ones.html
8. https://www.cnbc.com/2019/08/25/disney-and-target-are-teaming-up-to-open-stores-with-each-others-help.html
9. https://www.retaildive.com/news/retailer-of-the-year-target/541905/
10. https://www.insider-trends.com/a-store-in-every-state-inside-targets-retail-strategy/

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Environmental protection is one of the most important issue of today. Simply looking around, everyone can see and feel the impact we have on our environment.

We believe that by making thinking green a key part of our company culture, we can reduce our environmental footprint.

Quickborn is committed to support sustainability and as first step established a comprehensive recycling program within each of our offices in collaboration with facilities management and city council. Our employees are not only able to extensively recycle waste in our offices but can also collect recyclables from their homes and communities for disposal by facilities that are collaborators for our green initiative.

  • As part of our recycle–reuse–reduce program, Quickborn has provided our teams with reusable products such as water canisters and durable shopping bags to reduce single use plastic waste.
  • Donation of old computer parts and other items to a local partner organization supporting the ethical recycling of electronics has been organized and is accessible for our teams directly.
  • Encouraging green commuting reduces our carbon footprint. By supporting team members to commute using bicycles or electric transportation methods is also part of our program. We provide facilities to park bikes securely and support transportation costs for our team members preferring a green option wherever available.
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Retailers today must have the ability to execute marketing campaigns, communication and loyalty programs efficiently and effectively to engage with a hyper-connected, hyper-informed and very impatient customer. To execute customer engagement successfully, retailers need to centralize and analyze customer data and purchasing history at a mass scale and in a short time.
 
A good Customer Relationship Management tool will identify prospects and opportunities for driving additional value for the customer and also the retailer by processing and analyzing customer behaviour information and ultimately help retailers retain customers by recommending the most relevant offers. The main objective for the retailer is to better understand the customers, and to involve them in the relationship with the retailer at all stages of their interaction with one another by serving them better: with more relevant offers, timely information and help, but only when appropriate and useful.
https://youtu.be/z0MVy130z1Q

You can read our article on Modern Day Customer Engagement here.

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In 2018, we conducted a survey of our customers and a global analysis of the retail market. Our experts have highlighted customer engagement as a key differentiating factor for success among retailers.

Retailers today must have the ability to execute marketing campaigns, communication and loyalty programs efficiently and effectively to engage with a hyper connected, hyper informed and very impatient customer. To execute customer engagement successfully, retailers need to centralize and analyze customer data and purchasing history at mass scale and in short time.

A good Customer Relationship Management tool will identify prospects and opportunities for driving additional value for the customer and also the retailer by processing and analyzing customer behavior information and ultimately help retailers retain customers by recommending the most relevant offers. The main objective for the retailer is to better understand the customers, and to involve them in the relationship with the retailer at all stages of their interaction with one another by serving them better: with more relevant offers, timely information and help, but only when appropriate and useful.

Prospecting
Remember that attracting a new customer costs ten times more effort than keeping an existing customer.
Analysis

  1. Do we know the target customers accurately and efficiently?
  2. What are current trends?
  3. What are marketing campaigns that work?

These are all questions that need to be analyzed in detail to achieve good client engagement.

Networks
Engage social networks to work for retailers: What if satisfied customers talked about their experience to their friends? A retailer's job at this stage will be to provide maximum satisfaction in customer experiences by encouraging and enabling the concept of ambassadors:

  1. To identify and reward the engagement of customers on social networks
  2. To identify and engage the entourage of these customers

Customer Relationship
Means the recording of customer data and their interactions with the brand, for example through

  • their purchases,
  • their returns,
  • their interest in campaigns and promotions,
  • their calls and the resolution of their problems
  • their comments on social networks

All of this data must be recorded, sorted, and stored for analysis and insight.

Marketing
The management of offers and promotions, personalized or not, the creation of coupons, or simply advertising; can now be targeted smartly, if CRM data is correctly used.
A great novelty is to bring marketing teams into symbiosis with customer relation teams, for example sales teams, customer service teams or digital teams; ideally this is accompanied by a specialized tool that allows a 360° vision of the customer.
The tasks are then simplified and made more reliable by following best practice patterns. The creation of customer segments, through analysis of customer behavior, make it possible to precisely target groups of people for specific messages and campaigns.

Loyalty
Customers must feel engaged. This is mainly done through loyalty programs, with or without a card or other identifying mechanism, which is usually accompanied by rewards of different kinds.
Loyalty options are the "visible and official" part of customer loyalty. Point calculations, loyalty levels, discounts or associated gifts are tracked and appreciated over time.
There are other factors of loyalty:
The customer can also associate with a brand, in the long-term or for a particular event; this is the case when a couple chooses a brand to build their list of wedding gifts.
The customer will also have a feeling of loyalty when their experience is fully omni-channel enabled, allowing them to keep their wish list or shopping basket created on the internet when they enter a brick & mortar store.
Customer loyalty can also be rewarded by social media posts as a brand ambassador.


For each of these functionalities, Data is at the heart of analysis and decision support; a good tool should be powerful and stable and the data should be organized efficiently and the user interface should be easy to navigate, so that teams can easily access the right information at a glance for all channels of engagement.

How can a retailer best select the right tool and easily integrate it into business processes and the existing application environment?

To answer this question one option is the Oracle Retail Customer Engagement Cloud Solution.

Beyond the standard features offered by CRM tools, including visualization of customer records and purchase history; this solution draws our attention to key points:

The business features associated with:

  • Marketing functionalities: offers and promotions, campaigns, coupon management are accessible through targeting by smart lists of customer segments, whether dynamic or static.
  • Loyalty: via management of loyalty cards, gift cards, reward programs and management of wish lists
  • Omni-channel customer journey: the tool makes it possible to coordinate all customer data regardless of channel (store, e-commerce, mobile) and to identify the trends.
  • Analysis: of results by intelligent reporting tools that enable buyers to adapt their offer and further improve the company's turnover.

We also want to highlight the ability to manage franchise operations which enables and manages access to customer information for franchisees based on their store or group of stores.

Other features simplify daily operations such as currency management, duplicate entry management, order and status management, role and privilege management.

Social media features are available to identify customer profiles and gather insights on social networks.

Technical and integration features available on cloud-based solution, along with other features such as the Web service approach, ergonomic configuration, and pre-integrated Oracle Commerce cloud suite for easy combination of payment tools (X-store), e-commerce (OCC), order management (OMS), BI (Retail Insight), make the cloud an ideal technology to deploy quickly with minimal effort and high reliability both for the users and the technical integration into the existing solution landscape.I

If you are interested in seeing or learning more about how a modern customer engagement can improve your retail business results, contact us for a presentation and demonstration of our approach here.

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Cloud solutions have been around for quite some time, yet I still hear a lot of debate about which one is to be preferred: cloud-based or on premise solution? Let me shed some light onto this subject with specific relevance to retail business domain. 

 

DEFINITIONS, PROS AND CONS

Cloud solutions are software programs that run on a hosted environment, typically without the option of running them locally, or on premise.

The pros: These solutions are easy and quick to deploy because they do not require acquisition of hardware, installation of operating systems, servers software, IT teams to manage them, etc on the customer side. They are running in a central server park, accessible over the internet (with the appropriate level of connection security in place). Usually their licensing is simpler than on premise solutions because cloud based solutions are typically licensed like a rental, a periodic (for example monthly or annual) service fee is charged for their use. These solutions are usually easier to maintain since upgrades are typically rolled on by the vendor automatically as part of the service (on time frames agreed with the customer and leaving plenty of time for customer to test changes and manage business process change adoption)

The cons: On the other hand they are not easily customized, especially if they are multi-tenant (multiple customers use the same servers and programs for their software solution, with a clear separation of their data of course to avoid one customer being able to see the data of another customer). Also if the customer stops paying the cloud service fee, access to the solution may be closed by the solution vendor, placing risk on the customer’s business continuity.

On premise solutions: When a solution runs on premise, it is locally installed and run on the customer’s own hardware.

The pros: The advantage is that customization is easier to build, and in case the customer stops paying for maintenance, they still retain the solution and the business can continue to run on the solution, even though no future updates are accessible to be added.’

The cons: On premise solutions require the customer to take care of purchasing the hardware for the server, installing all necessary software components such as the operating system, database server, application server, and configuring and maintaining all this technology (a.k.a. the platform) to work properly to run the business application. The disadvantage of this approach is that the customer is in charge of running the platform along with all the extra effort, expertise, license cost and complexity associated with doing so. The customer is also in charge of scheduling, installing, regression testing (if customization is done, then also retro-fitting) solution upgrades released by the solution vendor in addition to managing adoption of new solution functionality.

 

WHICH ONE SHOULD I CHOOSE

Based on the above, it seems on premise option has advantages but requires additional effort from the customer: acquire and size hardware, install, configure, administer, license and maintain software like operating system, database, application server, additional server utilities like integration platforms separately. Also because of these additional steps, on premise solutions take longer to implement and deploy, because the platform needs to be built first. Maintaining and upgrading them is also a task solely landing on the customer as a to do. On the other hand all business software solution is in house and under total control of the customer, can be customized, etc.

Cloud on the other hand is much faster the deploy, it is commissioned, not built, which takes less time and requires no or little IT skills from the customer. Licensing structure is simpler and instead of an investment cost it is an operational ongoing cost (service fee). Upgrades are also rolled on automatically as part of the service. On the other hand there is less direct control of the platform by the customer including control for customization.

 

BIG IMPACT CONSIDERATION

A very important business aspect to consider when choosing between a cloud or an on premise solution is long term maintenance cost of upgrading the solutions. Cloud solutions are typically updated with new features and platform versions by the solution provider as part of the standard service. This means cloud solutions evolve over time and customers automatically get the benefits of this continuous evolution. With on premise solutions, evolution is a manual step where solution version updates need to be downloaded from the solution provider and installed into the on premise server, performing retrofitting and regression testing in case when customization have been made to the on premise solution. This is, over time a significant effort, causing additional costs incurred directly when performing the upgrade.

Costs are incurred indirectly when the upgrade is delayed and the customer is running on an outdated system, missing the latest key business features that could differentiate the business against competitors (for example by allowing the customer to provide better customer service to its own customers, the consumers, then its competitors). In an age where consumers want to be served in an ever increasing number of channels and with greater flexibility in transgressing these channels (for example buy online, return in store) every day, not having a solution in place that can seamlessly support those latest consumer behavior and preference trends with the right capabilities is catastrophic in an increasingly competitive and disruptive business environment.

 

CONCLUSION

In a nutshell, if you can and it’s available, choose the cloud option. It gives you the flexibility of being able to always run with the latest set of business process support on your cloud solution.

If you would like to discuss this subject matter in more details, have comments, feedback or additional thoughts, please do not hesitate to reach out.

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