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Retail Strategy: IT Investment

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https://flevy.com/browse/flevypro/retail-strategy-it-investment-3774

DOCUMENT DESCRIPTION
Organizations need to develop critical capabilities to stay ahead of the competition. A proven method to achieve this objective is to reinvest the savings achieved through IT Cost Management into building capabilities critical for the future. In order to decide the areas of IT investment, Retailers need to adopt a market-focused approach, where they need to distinguish the trends transpiring across industries that have the potential to deliver value for the business.

Retailers need to recognize key emerging trends that can deliver new value for their businesses. This presentation breaks down 5 key trends that are transforming the Retail industry. Three of these trends focus on the customer while the other 2 aim at perfecting the implementation capabilities.

These are the areas where market leaders in the Retail sector are concentrating on in terms of making targeted investments:

1. Business Intelligence
2. Next Generation In-store Technologies
3. Cross-channel Integration
4. Supplier Collaboration
5. Pricing/Markdown Optimization

The slide deck also includes some slide templates for you to use in your own business presentations.

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Retail Strategy: IT Investment

  1. 1. This is an exclusive document to the FlevyPro community - http://flevy.com/pro Framework Primer Retail Strategy: IT Investment Presentation created by Pricing/ Markdown Optimization Supplier Collaboration Business Intelligence Next Generation In-store Technologies Cross-channel Integration
  2. 2. 2This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Contents Overview IT Cost Management Areas of IT Investment Templates The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  3. 3. 3This document is an exclusive document available to FlevyPro members - http://flevy.com/pro This framework discusses the 5 key areas of IT critical for the Retailers to invest to secure a competitive, leading position Presentation Overview Retailers need to recognize key emerging trends that can deliver new value for their businesses. Organizations need to develop critical capabilities to stay ahead of the competition. A proven method to achieve this objective is to reinvest the savings achieved through IT Cost Management into building capabilities critical for the future. In order to decide the areas of IT investment, Retailers need to adopt a market-focused approach, where they need to distinguish the trends transpiring across industries that have the potential to deliver value for the business. This presentation breaks down 5 key trends that are transforming the Retail industry. Three of these trends focus on the customer while the other 2 aim at perfecting the implementation capabilities. These are the areas where market leaders in the Retail sector are concentrating on in terms of making targeted investments: The slide deck also includes some slide templates for you to use in your own business presentations. 1 Business Intelligence 2 Next Generation In-store Technologies 3 Cross-channel Integration 4 Supplier Collaboration 5 Pricing/Markdown Optimization The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  4. 4. 4This document is an exclusive document available to FlevyPro members - http://flevy.com/pro The Retail industry is traditionally a low-margin business, which is under fierce threat by cutthroat competition nowadays The Retail industry is replete with challenges, such as fragmented IT applications, complexities, and disconnected systems—resulting in high costs. State of the Retail Industry Source: Winning in Retail IT, Booz & Co, 2010 With weak consumer spending; saturated markets; increased consumers demands for service and lower prices; and intense competition; the bottom lines for Retailers are squeezing and the options for growth are getting thin. Such low margins compel the Retailers to save costs across the operations, including IT, which is vital for the success of every strategic endeavor—e.g., enhancing customer experience, customer loyalty, or cross-channel integration. Resultantly, IT budgets are also shrinking. To this end, sustaining a cost-effective, efficient, and customer-centric IT function is a priority for the Retail CIO. The Retail industry faces quite a few IT challenges—e.g., hundreds of discrete locations, numerous applications, and diverse technology infrastructure and systems. The IT function needs to integrate various disjointed applications, including store-based point-of-sale, supply chain, and human resource management with their core systems. In these context, rational utilization of technology is important to achieve customer loyalty with clusters of customers across the store, online, and catalog channels. Most Retailers count on cumbersome bespoke ERP systems to deal with merchandising systems and price management, which further add to costs and complicatedness. The apprehensions for customer privacy and data security, and dependence on traditional ERP systems limit the Retail sector to take full advantage of offshore IT infrastructure and solutions delivery services. The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  5. 5. 5This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Contents Overview IT Cost Management Areas of IT Investment Templates The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  6. 6. 6This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Despite the number of challenges in the IT domain, the leadership in Retail needs to work on building their IT competencies and saving costs For more information on these 4 levers, refer to this framework on the topic: https://www.com IT Cost Management – 4 Levers of IT Cost Management Regardless of the ever-increasing rivalry and the challenges associated with technology, Retail CIOs should prioritize Cost Reduction and improved IT prowess. Specifically, there are 4 levers at the disposal of CIOs to drive significant savings in IT spend: Application & Infrastructure Simplification Demand Management Lean IT Organization Strategic Sourcing Source: Winning in Retail IT, Booz & Co, 2010 • Drives IT efficiency to new levels by taking greater advantage of the best skills and cost-saving techniques • Rationalizes application portfolios and infrastructure, reducing complexity and cost. • Focuses discretionary spending on highest-value projects. • Concentrates on current and future tech priorities designed to add real value to the business. The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  7. 7. 7This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Pricing/ Markdown Optimization Supplier Collaboration Business Intelligence Next Generation In-store Technologies An important element of IT Cost Management is reinvesting the cost savings to develop market-facing competencies Reinvesting costs saved through IT Cost Management in these 5 areas helps to boost revenue, enhance efficiency, and improve the customer experience. IT Cost Management – 5 Core Areas of IT Investment Five key trends are transforming the Retail industry; 3 of them concentrate on the customer while the other 2 aim at perfecting the implementation capabilities. These are the areas where market leaders in the Retail sector are concentrating on in terms of making targeted investments: The cost savings achieved through IT Cost Management should be reinvested to build capabilities critical to stay competitive. In order to decide the areas of IT investment, Retailers need to adopt a market- focused method. This includes distinguishing the trends transpiring around the Retail business world, promising to deliver value for the industry. Cross-channel Integration Source: Winning in Retail IT, Booz & Co, 2010 The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  8. 8. 8This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Contents Overview IT Cost Management Areas of IT Investment Templates The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  9. 9. 9This document is an exclusive document available to FlevyPro members - http://flevy.com/pro A key area to invest in IT—and develop critical capabilities—is Business Intelligence Advanced data analytics tools and techniques help the Retailers to recognize customer behaviors and tailor their offerings to fulfill their customers’ requirements effectively. Business Intelligence – Overview REQUISITE COMPETENCIES Integrate data to help organizational strategic planning. Employ the available data to identify customer demands and to promptly understand the shifts in their needs. DETAILS Like other sectors, Retailers are also making huge investments in developing capabilities and applications to gather, consolidate, and cumulate the data required to carefully evaluate customer activities, spending tendencies, and interpret the impact of their business decisions— e.g., pricing, promotions, and new product launch. Definition Business intelligence comprises the capabili- ties, know-how, systems, tools, excellence, threats, and procedures employed to assist an enterprise develop a thorough appreciation of market performance and commercial environment. RETAIL TREND Business Intelligence The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  10. 10. 10This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Up-and-coming hardware and software POS solutions are another area to invest in IT to stay ahead in the Retail game Next-generation Retail systems drive operational efficiencies through better transaction management and less handling of cash. Next Generation In-store Technologies – Overview Definition These are the latest and emerging hardware and software POS solutions for the Retail sector that the Retailers use to increase revenues and decrease expenses during the customer point of sale process. RETAIL TREND Next Generation In-store Technologies REQUISITE COMPETENCIES Improve customer experience through prompt and straightforward transaction processing. Reduce the amount of time customers stand in line and decrease the number of walkouts. DETAILS Next-generation Retail systems consist of advanced POS systems such as wireless POS/portable terminals, kiosks, and self-checkout terminals. These systems help decrease customer transaction times, integrate new customer management abilities—e.g., loyalty programs and personalization features. The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  11. 11. 11This document is an exclusive document available to FlevyPro members - http://flevy.com/pro The integration of customer transaction channels is another key IT investment for the Retailers Cross-channel integration objectively develops a consistent customer experience across all interaction channels—the web, physical stores, call centers, and catalogs. Cross-channel Integration – Overview REQUISITE COMPETENCIES Coordinate customer experiences across all transaction channels—in- store/online/call center. Integrate back-office operations for all channels of interaction so customers can easily move between them. DETAILS Integration means more than creating a common brand identity and look and feel. By enhancing Retail, supply chain, and back-office systems across the value chain—from merchandising and POS systems to business intelligence tools—integrating across every channel allows Retailers to offer cross-channel loyalty programs, consistent online and in-store pricing, inventory visibility across channels, and advanced in-store kiosks, and mobile commerce solutions. Definition Cross-channel Integration involves the integration of customer transaction channels onto one platform—for instance, it entails the blending of operations related applications and cross-channel interaction systems. RETAIL TREND Cross- channel Integration The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  12. 12. 12This document is an exclusive document available to FlevyPro members - http://flevy.com/pro A robust communication flow and partnership between different suppliers is another important factor to look at while investing in Retail IT Building information sharing platforms that provide near real-time sharing of demand and supply information with suppliers is critical to the success of such systems. Supplier Collaboration – Overview Definition Supplier Collaboration simply means sharing of information between suppliers and merchants to augment the supply chain activity. RETAIL TREND Supplier Collaboration REQUISITE COMPETENCIES Allocate inventory and capacity effectively through better coordination with suppliers. Streamline the Retailer/supplier relationship to make the supply chain more efficient. DETAILS Retailers are investing in systems that foster more robust collaboration with suppliers to better manage supply chains—including everything from merchandise planning, sourcing, and purchasing to replenishment and inventory management. The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  13. 13. 13This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Evaluating the factors affecting demand—e.g., consumer behavior, trends, purchase history—is critical in optimizing pricing to maximize profits Leading Retailers are already making real gains in profitability by integrating demand forecasts, promotional information, and regional/local variations. Pricing/Markdown Optimization – Overview Definition Pricing/markdown optimization involves the ways to predict the profitability of different price actions to drive incremental profitability. RETAIL TREND Pricing/ Markdown Optimization REQUISITE COMPETENCIES Optimize product pricing to maximize profitability. Mark down prices on seasonal merchandise to maximize profit. DETAILS Using sophisticated analytics and algorithms, Retailers are moving toward a highly analytical approach to pricing and markdowns. Proper pricing of an item can be the difference between a profitable item and a loser. The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  14. 14. 14This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Contents Overview IT Cost Management Areas of IT Investment Templates The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  15. 15. 15This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Insert headline Insert bumper. 4 Levers of IT Cost Management – TEMPLATE Application & Infrastructure Simplification Demand Management Lean IT Organization Strategic Sourcing Source: Winning in Retail IT, Booz & Co, 2010 • Insert filler text, filler text, filler text, filler text, filler text, filler text. • Insert filler text, filler text, filler text, filler text. • Insert filler text, filler text, filler text, filler text, filler text, filler text. • Insert filler text, filler text, filler text, filler text. • Insert filler text, filler text, filler text, filler text, filler text, filler text. • Insert filler text, filler text, filler text, filler text. • Insert filler text, filler text, filler text, filler text, filler text, filler text. • Insert filler text, filler text, filler text, filler text. The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  16. 16. 16This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Insert headline Insert bumper. 5 Core Areas of IT Investment – TEMPLATE Pricing/ Markdown Optimization Supplier Collaboration Business Intelligence Next Generation In-store Technologies Cross-channel Integration Source: Winning in Retail IT, Booz & Co, 2010 The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  17. 17. 17This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Insert headline Insert bumper. 5 Core Areas of IT Investment – TEMPLATE ALTERNATE Next Generation In-store Technologies Business Intelligence Cross-channel Integration Supplier Collaboration Pricing/Markdown Optimization Source: Winning in Retail IT, Booz & Co, 2010 The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  18. 18. 18This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Insert headline Insert bumper. 5 Core Areas of IT Investment – TEMPLATE ATERNATE Next Generation In-store Technologies Business Intelligence Pricing/Markdown Optimization Supplier Collaboration Cross-channel Integration • Insert filler text, filler text, filler text, filler text, filler text, filler text. • Insert filler text, filler text, filler text, filler text, filler text, filler text. • Insert filler text, filler text, filler text, filler text, filler text, filler text. • Insert filler text, filler text, filler text, filler text, filler text, filler text. Source: Winning in Retail IT, Booz & Co, 2010 The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  19. 19. 19This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Download 100s of similar frameworks from the FlevyPro Library: https://flevy.com/pro/library/frameworks The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  20. 20. 20This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Need more frameworks? Download our Complete Business Frameworks Reference Guide, a 350+ slide compilation of 50+ frameworks, on Flevy The Complete Business Frameworks Reference Guide is a best selling document on Flevy. It is 350+ slides--covering 50+ common management consulting frameworks and methodologies. A summary is provided for each business framework. The frameworks in this deck span across Corporate Strategy, Sales, Marketing, Operations, Organization, Change Management, and Finance. This reference guide is great for those who need a refresher on common frameworks, as well as be introduced and learn new useful frameworks. You can find this document here: http://flevy.com/browse/business-document/complete- consulting-frameworks-toolkit-644 The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  21. 21. 21This document is an exclusive document available to FlevyPro members - http://flevy.com/pro Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com The content on this page has been partially hidden. FlevyPro members can download the full document here: http://flevy.com/browse/flevypro/retail-strategy-it-investment-3774
  22. 22. 1 Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com

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