Retail TouchPoints and JDA present live webinar "Brick Is The New Black" #BrickIsTheNewBlack

1. Brick
Is
The
New
Black
HOW
STORE
FULFILLMENT
IS
MAKING
BRICK-­‐AND-­‐MORTAR
THE
NEW
STAR
OF
OMNICHANNEL
RETAILING
SPONSORED
BY
#BrickIsBack

2. Welcome
Webinar
AEendees
#BrickIsBack

3. Follow
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Webinar
On
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#BrickIsBack
#BrickIsBack

4. About
Retail
TouchPoints
ü Launched
in
2007
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5. #BrickIsBack
Panelists
Scott Moreland
Director of Product
Management
JDA Software
MODERATOR
Leslie Hand
VP of Retail Insights
IDC Retail Insights
Alicia Fiorletta
Senior Editor
Retail TouchPoints

6. Brick is the New Black
JDA Fulfillment Webinar
November 6, 2014
Leslie Hand
Vice President, IDC Retail Insights

7. Objectives
§ Reinventing the Brick-and-mortar Experience
§ The Central Challenge – Product Visibility
§ Omni-channel Retailing With In-Store Fulfillment
§ Essential Guidance
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 7

8. Reinvent the Brick-and-Mortar Experience
Omni-channel
Customer
Stores
Sales associates
Outlets
Kiosk
Brand shops
Other staff
CX Call center
Internet TV
Online chat
Facebook
Mobile Apps
Portals
Social networking
Website
Email
Mobile Site
Virtual Stores
Twitter
Pinterest
Location based interactions
IoT
Collaboration
Fulfillment partners
XML/EDI
Competitive data
Affiliates
Market research
Marketplaces
TV placements
Online auctions
Catalogues
Magazines
Marketing collateral
Retailers
Shop in Shop
Home advisors/installers
Integrators
Pop up store
Dealers
Agents
Logistics Partners
Franchisees
Resellers

9. What Does the Customer Want?
What makes customers more loyal? (0-10 scale)
0 2 4 6 8 10
Price
Value
Friendly and helpful associates
Accurate inventory information
Personalized offers
Special events
Location based interaction
Concierge services, in store
fittings and 3D body scans
¥ Consumers rank price higher than everything
else when it comes to what makes them
more loyal, but in reality resultant loyalty is
tenuous.
¥ Consumers answer with their intellect.
¥ Shopping missions and journeys are not all
created equal.
¥ Emotion and an aggregation of impressions,
and the ultimate inspiration to buy play an
important role in consumer purchase
behavior.
¥ Personalization and interaction increase the
likelihood that loyalty will grow, and that the
customer will buy when purchase inspiration
strikes!
¥ Trustworthiness of data provided leaves a
lasting impression!
9
Source: Consumer Survey: IDC Insights – Retail, Health & Banking, June 2014 • N=1500

10. The Central Challenge
- Can I get what I want the way I want it
Fulfillment
Flexibility
Products
Service
Consistency
Product
Availability
Shopping
Ease
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 10

11. Be the Customers First Stop By Creating
the Last Best Experience
PRODUCT FULFILLMENT
OPPORTUNITY
(fulfilling the need for a product with
the right combination of availability,
price and convenience)
CONSUMER INCLINATION
(the right level of desire influenced by
need, affinity, and a confluence of
impressions / engagement, including
most recent trigger)
Purchase
Influences
RIGHT TIME
Business Value
Reduced supply chain
cost (efficiency )
Increased revenue
(product visibility and flow)
Increased profitability
(maximize full margin
sales; cut losses)
Business Value
Reduced operations cost
(automation and
communication)
Increased revenue
(customer engagement,
satisfaction and loyalty)
Increased profitability
(maximize full margin
sales; bigger baskets)
(enough time to shop, consumer readiness, and spending power)
Enabled by: Triangulation of persistent, consistent personalized
and contextualized interactions aided by all of the above
Business Value
Reduced supply chain and operations cost (efficiency and effectiveness)
Increased revenue (customer engagement, satisfaction and loyalty)
Increased profitability (maximize full margin sales; cut losses)
Source: IDC Retail Insights, July, 2014

12. Top 3 Retail Supply Chain Priorities
Increasingly
important YOY
Need for agility,
.0 50.0 100.0
Reduce costs/eliminate waste
Become more customer centric/improve service performance
Continue to modernize/update IT related supply chain
infrastructure
Improve the process of bringing new products to market
Respond more Quickly to demand volatility or changes (supply
chain agility)
Support omni-channel fulfillment through direct-to-consumer or
postponement capabilities
Improve supply chain visibility
Move our supply capabilities closer to demand
Respond more Quickly to supply disruptions or changes
Improve product compliance, Quality, safety, or environmental
sustainability
Improve collaboration with suppliers and customers (B2B
Other
commerce networks)
Next 2-3 YRS Next 12 MTHS2
Source: SCM Survey, IDC, May, 2014
N=153 retailers
Always the short
term goal
responsiveness
and resilience
Always the long
term goal
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 12

13. Top 3 Retail Improvement Priorities
Big focus for
specialty fashion
SC Execution huge
focus for food,
other and gen
merch
.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 200.0
Supply chain planning (demand planning, S&OP, etc.)
Omni-channel distributed order orchestration (fulfillment
to the consumer from anywhere)
Supply chain execution (transportation, warehousing)
Demand sensing
Innovation management
Supplier management/Procurement/ B2B networks
Field service
Product compliance
Global trade management
Food Stores General Merchandise Apparel and Accessory Stores Other
Source: SCM Survey, IDC, May, 2014
N=153
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 13

14. 3 Critical Omni-channel Fulfillment Tenets
3 things to keep in mind when designing for omni-channel
fulfillment going forward:
1. Flexible predictive demand modeling is better than
modeling based solely on historic trends & is a
prerequisite for everything else
2. Extra moves are expensive – reducing costs are
critical, so you have to take extra care to put product in
the right places in your supply network, and to leverage
partners wherever possible
3. The need to satisfy customers often overall concerns 1
and 2; make sure your partners know this
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 14

15. Retailers are Redesigning Omni-channel
Fulfillment
§ Redesigning supply networks
• Balance of regional vs. national fulfillment centers
• Tiered store fulfillment by segment, category and velocity
• Direct fulfillment through supply partners
• Dark stores & bigger back rooms
• Pop up DCs to support seasonal demand
• Ship from store / site to store / returns
• Flexible fulfillment w/partners (eBay, Amazon, Jagged Peak,
Commerce Hub, UPS, USPS)
§ Last mile delivery
• 3PL
• Shutl, eBay Now, Uber, EBay Now, Shutl, Deliv, Postmates,
Instacart, USPS, Amazon, Alibaba)
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 15

16. CONTAINER STORE EXAMPLE
§ Click & Pick Up
§ Consistent Omni-channel pricing
§ New loyalty program – Pop
§ Online appointment scheduler
§ Shift to personalization & segmentation
§ Special segment specific tools including
3D planning
16
Example 1: Retailers are Innovating by
Adding Segment Specific Utility
Photo: containerstore.com

17. Example 2: Retailers are Moving to the Next
Level of Omni-channel Retailing
NEIMAN MARCUS EXAMPLE
Typical Omni-channel
Progression
1. Identify and fill gaps
2. Innovate for the customer
3. Enable omni-channel supply chain
4. Transform business
• People
• Process
• Product
• Technology
17
PERFORMANCE:
¥ Stores Revenue Growth through Q314: 5.9% comp sales
¥ Online Revenue Growth through Q314: 11% comp sales

18. Example 3: Retailers are Embracing
Broader Ecosystems
Why Amazon is such a
threat:
§ Amazon offers:
• Biggest selection of product
• Optimized prices (not
lowest)
• Best in class customer
experience
§ Innovating ahead of
competitors
§ Fulfills 30% of Marketplace
orders directly
§ Lower margins, but high
return on investment
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 18
Ø Retailers with
MarketPlaces
Ø Amazon
Ø eBay
Ø Walmart
Ø Sears
Ø Costco
Learn from
the travel
industry!

19. 19
Example 4: Retailers are Optimizing Price
and Inventory
Balance CX Innovation and
Supply Chain Efficiency
My Macy’s localization
Omnichannel integration
Magic selling customer engagement
Given the pace of change and mobility in our society, we will
never be “finished” with My Macy’s. - Macy’s 2013 Annual Report

20. Guidance – Actions to Take
§ Overcome investment barriers
• Change organizational culture
• Deploy cloud & managed service options
• Engage project champions and sponsors
§ Redefining the customer value proposition
• Define how your customer shops
• Redefine fulfillment “flow”
• Partner for success
§ Deploy new supply chain capabilities
• Identify new supply chain “nodes”
• Know where your inventory is
• Perform “best fit” JIT distribution orchestration
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 20

21. What to look for in new technologies
• Inventory
• Customer
• Products
Visible
• Service
• Responsiveness
• Product
Introductions
Fast
• Processes
• Interactions
• Execution
Automated
• Interfaces
• Processes
• Interactions
Intuitive
• Demand
• Orders
• Offers
Anticipatory
• Product
development
• Collective
intelligence
• Social networking
Participatory
© IDC Visit us at IDC.com and follow us on Twitter: @IDC 21

22. 22
Plan
to
Deliver
AnScipate,
Align
and
Adapt
to
Evolving
Market
CondiSons
to
Win
the
BaEle
for
Omni-­‐Channel
Loyalty
ScoE
Moreland
Product
Director,
OperaSons
&
Mobility
Follow
us
on
TwiEer
@jdaso[ware

23. 23
Shoppers’
Omni-­‐Channel
Mandate:
Flexible,
Simple,
Seamless
83%
of
consumers
are
more
likely
to
shop
with
brands
that
allow
them
to
control
where,
when
and
how
they
interact
Source:
InsStute
of
Customer
Service
Image:
ShuEerstock

24. 24
81%
of
consumers
say
it
is
important
to
be
able
to
pick
up
or
have
purchases
shipped
regardless
of
how
purchased
Source:
Accenture
Shoppers’
Omni-­‐Channel
Mandate:
Flexible,
Simple,
Seamless

25. 25
Store
fulfillment
opEons
represent
CompeEEve
OpportuniEes
36%
of
retailers
offering
in-­‐store
fulfillment
programs
have
seen
an
increase
in
foot
traffic
Source:
RIS
News
32%
of
retailers
offering
in-­‐store
fulfillment
programs
have
increased
store
revenue
via
up-­‐sell
and
cross-­‐sell
Source:
RIS
News

26. 26
The
lack
of
omni-­‐channel
integraSon
is
cosSng
retailers
60%
4.5%
of
retailers
do
not
understand
what
it
costs
them
to
pick
orders
from
the
back
room
of
the
store
Source:
DC
Velocity
71%
of
retailers
do
not
understand
of
annual
revenues
in
missed
sales
opportuniSes
what
it
costs
them
to
pick
orders
from
the
front
of
the
store
Source:
DC
Velocity
Source:
RIS
News
Today,
the
Majority
of
Retailers
Struggle
to
Offer
Profitable
Fulfillment
OpEons

27. 27
Sales
Outlet
Service
Center
Showroom
Fulfiilment
Center
Consumers
Expect
The
Role
of
the
Store
to
Expand…

28. Image
courtesy
Wikipedia
Shopper
ExpectaEons
Have
Definitely
Been
Elevated
28
Consider
Abandoning
if
No
Same
Day
Delivery?
Delivery
Important?
Apparel
Electronics
Health
&
Beauty
Home
&
Garden
Office
Supplies
SporSng
Goods
Toys
&
Games
Is
Same
Day
22%
24%
18%
16%
29%
18%
28%
6%
7%
5%
5%
6%
5%
8%
Source:
Bizrate
Insights
(n
=
100,000
global
consumers)
Already…
>6%
average
across
categories!
And
Now
The
Bar
Has
Been
Raised,
Again…

29. 29
Many
Retailers
Are
Struggling
with
Many
Challenges…
“My
business
can’t
keep
up
with
shi[ing
customer
demands.”
“How
do
I
determine
the
best
sourcing
opEon
for
each
order?
“How
do
I
balance
the
costs
of
in-­‐store
versus
DC
versus
transportaSon?”
“How
much
is
it
cosEng
me
to
fulfill
orders
from
the
store?”
“On-­‐Sme
fill
rates
for
store
orders
are
low;
customers
are
frustrated.”
“How
can
I
make
every
piece
of
inventory
available
to
every
store,
shopper
and
channel?”

30. 30
Buy
Online
Pick
Up
in
Store
Buy
in
Store
Ship
to
Home
Buy
Online
Same
Day
Delivery
Buy
Online
One
Hour
Delivery
Buy
in
Store
Ship
from
2nd
Store
Buy
Online
Return
in
Store
Inventory
Availability
Everywhere
Profitable
Sourcing
Enterprise
Inventory
Management
Cycle
Times
and
Lead
Times
Order
Staging
&
Picking
in
Store
Employee
ProducSvity
Parcel
Management
CompeSng
Store
PrioriSes
Space
AllocaSon
OpEmizing
the
operaEonal
realiEes
at
the
intersecEon
of
omni-­‐channel
promises
and
real-­‐world
delivery
to
drive
greater
effecEveness
and
profitability

31. 31
End-­‐to-­‐End
ExecuSon
Fuels
EffecSveness
DISTRIBUTED
ORDER
MANAGEMENT
STORE
OPERATIONS
INTELLIGENT
FULFILLMENT
RETAIL
PLANNING
CATEGORY
MANAGEMENT

32. 32
Accurate
Sourcing
Leads
to
OpSmized
Fulfillment
-­‐Strategic
posiSoning
of
inventory
-­‐Accurate
inventory
visibility
to
in-­‐stock
and
in-­‐transit
-­‐Reduced
labor
costs
-­‐Efficient
order
fulfillment
based
on
demand
and
labor
availability
AFTER
-­‐Inefficient
inventory
sourcing
-­‐Limited
inventory
visibility
-­‐Increased
labor
costs
due
to
poor
demand
planning
-­‐Flawed
order
execuSon
decisions
lead
to
higher
transportaSon
costs
BEFORE
Out
of
Stocks
|
Low
Fill
Rates
|
Lost
Sales
Higher
Fill
Rates
|
Good
Experiences
|
Fewer
Out
of
Stocks

33. 33
ImplicaSons
to
the
Store
Omni-­‐Channel
Places
New
Demands
on
Retail

34. 34
The
Race
to
Catch
Up
Retailers
that
provide
store
fulfillment
are
ocen
scrambling
to
meet
elevated
customer
expectaEons
for
lead
Emes
and
service
opEons
• StarEng
off
slow
• Paper-­‐based,
manual
picking
• Serial
Order
Processing
• No
Labor
Planning
• Long
Lead
Times
• Poor
ExcepEon
Handling

35. Current Processes Work
Only at Low Volumes
35
Challenges
at
Scale
As Volumes Scale:
• Risk of fulfillment
inaccuracies
• Lead times
increasingly difficult
to meet
• More execution
complications
• Customer service
and operations may
suffer
• Increasing store
labor expenses

36. 36
The Customer-Facing Associate
• Understands customers, products,
prices, and promotions
• Skilled in using new technologies
and tools to gather and share information
about customer’s needs
• Acts as a customer ambassador
• May be called on as a “part-time picker”
SpecializaEon
Required

37. 37
The Fulfillment-Centric Associate
• Acts
as
a
personal
shopper
for
the
online
customer
• Supports
the
store’s
fulfillment
center
model
by
picking,
packing,
and
shipping
New
Roles:
New
Skills,
New
Tools

38. 38
Driving
a
Variety
of
In-­‐Store
Picking
Scenarios
MOBILIZING
STORE
FULFILLMENT
AND
PICKING
Single Item
Quickly find and pull a single item
from inventory, usually with timely
communication to confirm availability
and demonstrate compliance
Multiple Item
For a single order, find and pull
multiple items from inventory. This
use case demands knowledge of
store layout to efficiently sort
selection sequence
Multiple Order
Similar to multiple item picking,
except orders are now merged and
sequenced together to drive a single
efficient path through the store.

39. 39
72%
of
store
managers
indicate
that
their
labor
budget
has
stayed
the
same
or
decreased
in
the
past
year
Source:
Integrated
SoluSons
for
Retail
While
Store
Payrolls
Keep
Shrinking

40. ImpacSng
the
EnSre
Business
Plan
to
Deliver
40

41. Time-­‐Phased
ForecasEng
Localized
Assortments
Omnipresent
and
Omni-­‐channel
Fulfillment-­‐based
Pricing
Dynamic
AllocaEon
Distributed
Order
Management
Order
Flow
OrchestraEon
DisrupEon
Response
Scheduling
OpEmizaEon
41
SoluSon
Suites
that
Execute
A
Proven
Formula
for
Omni-­‐Channel
Fulfillment
CONSUMER-­‐CENTRIC
MERCHANDISING
EXCEPTIONAL
SUPPLY
CHAIN
EXECUTION
PRODUCTIVE
&
INTEGRATED
STORE
OPERATIONS
Task
Management
Store
Fulfillment
OperaEons
Inventory
Visibility

42. 42
Bridging
the
Gap
Between
Customer
ExpectaSons
and
Profitable
Omni-­‐channel
Fulfillment
PLANNING
&
REPLENISHMENT
TRANSPORTATION
MANAGEMENT
WAREHOUSE/LABOR
MANAGEMENT
DISTRIBUTED
ORDER
MGMT
IN-­‐STORE
PICKING
Integrated,
HolisSc
Forecasts
Align
and
OpSmize
Transport
Models
Maximize
Assets
and
Resources
Ensure
Profitable
Fulfillment
EffecSve
Associates

43. Follow
us
on
TwiEer
@jdaso[ware

44. #BrickIsBack
Q
&
A
//
Panelists
Scott Moreland
Director of Product
Management
JDA Software
MODERATOR
Leslie Hand
VP of Retail Insights
IDC Retail Insights
Alicia Fiorletta
Senior Editor
Retail TouchPoints

45. Thanks
for
aEending!
#BrickIsBack
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and
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