RSR Research – The next generation of technology is here

Walnut Creek, Calif.  - In a webinar on June 27,  analysts from RSR Research presented insights gleaned from numerous retail IT-focused events they attended this past spring. Their findings focused on five key areas: next generation POS/store/commerce engine, buy side of omnichannel, user experience, high performance computing and cloud.

Next generation POS/store/commerce engine
Retailers want to perform one single in-store POS upgrade that ties together both EMV payment cards and mobile payment. The store still drives the overwhelming bulk of most retailers’ profits and thus remains at the center of omnichannel retailing strategies. However, leading-edge omnichannel providers and retailers still want robust e-commerce functionality linked to stores.

“We’re still looking for a single commerce engine with single channel extensions,” said RSR analyst Paula Rosenblum.

“If you claim to have a retail-centric ERP system, it must have an e-commerce component,” commented RSR analyst Brian Kilcourse.

Kilcourse cited SAP’s recent purchase of e-commerce specialist Hybris as an example of the movement of retail ERP to encompass digital retailing.

Buy side of omnichannel
Although most omnichannel activity prior to this year occurred on the consumer-facing sell side of retailing, 2013 is seeing increased activity focused on the supplier-facing buy side.

“Retailers who can figure out how to consistently deliver on cross-channel promises efficiently have a competitive advantage,” said Rosenblum. “This is the hard stuff.”

RSR analyst Nikki Baird said that for the most part, sell-side omnichannel technology implementations have served mainly to disguise the complexity of omnichannel operations from consumers, who expect an easy and seamless process.

“Now is the time to make it simple,” said Baird. “We as an industry tend to focus on price sensitivity. But consumer data shows that what consumers most want is for retailers to show them what they want and not show them what they don’t want.”

User experience
RSR analyst Steve Rowen said retailers must offer omnichannel retailing experiences that meet the standards consumers are used to in their own lives with an array of digital devices.

“Consumers are used to using heavy duty technology in a fun form factor that is incredibly easy to use,” said Rowen.

Rosenblum added that SAP is addressing this situation by making user interfaces a top design priority and developing its solutions with mobile as the first screen. Kilcourse touched on the evolution of how retailers use social media as an omnichannel tool.

“Retailers are moving beyond social retail,” he said. “They realize that social media’s real value is to create a sense of community for the customer.”

High-performance computing
As retailers are forced to stretch the capacity of their IT systems across a broadening set of functions, high-performance computing becomes a necessity.

“Virtualization allows retailers to achieve a quality of service at economy of scale,” said Kilcourse. “You can compute more with less power at lower cost.”

Kilcourse said the advent of Big Data, which consists of signals generated outside of transactions, necessitates virtualization to adequately process and analyze it.

“Big Data is digital bread crumbs developed out of processes,” he said.

The Hadoop open source framework is one popular means of processing and analyzing Big Data. Kilcourse said Google and Facebook use Hadoop, and Sears is currently evaluating it. Other virtualized platforms for processing and analyzing Big Data include SAP Hana, Oracle Exalogic, IBM PureData (formerly Netezza) and SAS In-Memory Analytics. Kilcourse also advised retailers to keep a close on eye on developments with the IBM Watson artificial intelligence platform.

“Watson can be employed as an engagement adviser,” he said. “You can learn answers to questions based on unstructured data. It’s a new level of predictive analysis, especially for social data.”

Cloud
Cloud computing’s main value to retailers is as a less costly alternative to on-premises computing.
“Retailers are in a big hurry to modify their informational capability to live in the omnichannel space,” said Kilcourse. “Cloud lets you extend the brand to millions of users across the world.”

As an example, Rowen said Williams-Sonoma used the NetSuite cloud platform to expand into Australia, which the retailer never could have done otherwise. Rosenblum said GTNexus offers cloud solutions that can handle the geographical breadth of the entire retailer supply chain.

“The notion of on-premise deployment across the entire supply chain is almost impossible,” said Rosenblum.