Oracle Offers Insight-Driven Retailing

 
 
By Dan Berthiaume  |  Posted 2008-06-19 Email Print this article Print
 
 
 
 
 
 
 

Oracle Retail Release 13 focuses on customer experience and profit margins.

Oracle is positioning Oracle Retail Release 13 as an integrated solutions suite based on best-of-breed applications and the company's long-term vision for the retail sector.

Announced June 17, Oracle Retail Release 13 offers specific features for the fashion, food, hard-lines and emerging markets verticals.

Duncan Angove, general manager and senior vice president of Oracle Retail, said the new enterprise suite enables "insight-driven retail" based on Oracle's acquisitions of numerous best-of-breed technology providers.

"We have acquired best-of-breed applications in merchandising, stores, planning and optimization," Angove said. "We are bringing those applications together in a complete, open suite."

He said Oracle Retail was architected with key retail value drivers, including internal invested capital, same-store sales, and obtaining new partners for growth.

"Traditional growth and margin strategies have been based on diminishing returns with store saturation," Angove said. "Retailers began lacking intimacy and differentiation in response. How do you allow retailers to continue benefiting from economies of scale while injecting intimacy back into their business?"

Oracle Retail connects central merchandising and supply chain managers with information about customers at the store level, he said.

"Localized merchandising, marketing and supply chain properties will deliver huge benefits to retailers' profit statements," he said.

Dave Boyce, vice president of product strategy for Oracle Retail, described some of the new suite's vertical-specific features.

"In fashion retailing, you have gone from two floor sets a year to 12 to 13 floor sets a year," Boyce said. "There is high inventory risk and sourcing complexity."

In response, Boyce said Oracle Retail allows forecasting decisions to be approved in scale, and also allows forecasting optimization technology to be applied to up-front buying and allocation decisions, resulting in 5 to 10 percent increases in gross margins and improved inventory turns. He said improved pricing effectiveness can improve gross margins by another 5 to 15 percent, and real-time inventory visibility and improved checkout and returns processes can add an additional 1 to 3 percent to gross margins.

For food retailers, Boyce said Oracle Retail can help combat thin margins, proliferating formats and increasing competition by applying precision analytics to inventory, reducing carrying costs by up to 10 percent. He said optimized pricing and promotions, as well as features aiding the development and management of private label merchandise, can further aid profits and sales.

Oracle Retail can also help hard-line retailers address "unique challenges," according to Boyce.

"Goods can be ordered through multiple channels, with thin margins and price transparency due to the Internet," he said. "You need to create value to properly justify a premium price."

To that end, Boyce said Oracle Retail can optimize hard-line space and merchandising mix to improve margins by as much as 2.5 percent, and also improve the bottom line by integrating promotion and pricing optimization, optimizing multichannel customer service levels, and making goods flow more efficiently.

In addition, he said retailers in emerging markets can use Oracle Retail to obtain a platform to support "astronomical growth," as well as support decisions for multiple formats and geographies in one global instance. Mature tools, scripts and regional partners can help emerging market retailers go live as soon as possible, lowering the total cost of ownership, Boyce said.

Greg Buzek, founder and president of technology research company IHL Group, said the latest release of Oracle Retail is what the retail industry has been waiting for.

"When retailers saw Oracle and SAP acquiring all those technology vendors, they hoped the integration would provide a best-of-breed ERP solution for the retail environment," Buzek said. "This is the first solution that puts it all under one umbrella for Oracle."

He said Oracle's ROI claims will need to prove themselves over time.

"I'm not sure if the ROI requires all components to be in place," Buzek said. "Clearly there should be more synergies than with what has happened in the past."

Buzek also said that due to the slow economy, most retailers will probably implement individual Oracle Retail applications.

"If you have the entire thing and it needs to be replaced, that's a heavy investment," he said. "Has Oracle missed the market window? It probably would have been more successful a year earlier, which is no fault of Oracle."

Dan Berthiaume covers the retail space for eWEEK. For more industry news, check out eWEEK.com's Retail Site.

 
 
 
 
 
 
 
 
 
 
 

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