NTT DATA for Retail
Challenges & Trends The current macroeconomic and social market, where recession continues, has changed the consumer s behavior inducing families to pay more attention to value for money regarding goods and services. At the same time, the diffusion of internet and mobile applications has made it possible for consumers to make more conscious purchases with respect to the past. A new type of customer emerges on the market: the self-directed customer, that acquires information independently, expects high quality contents at the right price and services that enable them to interact with companies in a flexible and simple manner, saving time and money and trying to live a gratifying shopping experience. Retailers try differentiating themselves by optimizing their offering of goods (marketing mix) and services in order to respond to all the new consumer expectations and pressure coming from new players like specialized Department Stores or Retailers new online channels. To gain market share in this increasing competitive context, retailers need to promote customer loyalty in a new way. The need to retrieve resources to increase competitiveness and, at the same time, the opportunity of new services, like for example ecommerce and new distribution models like Click&Collect or Click&Drive, induce the operational model to be reviewed in order to make it more efficient and responsive, in terms of organization, processes and tools. The optimization of sales prices, promotions and assortments can today be handled by using technologies capable of integrating the traditional know how with advanced decision support tools. The presentation of products, in-store and out of the store, regarding both food (product origin, organoleptic data, product authenticity, quality, etc.) and non-food (uses, comparisons, etc.) is enriched by digital contents and can be enjoyed by the consumer anywhere by using mobile devices. The store remains the focal point of the retailer s offer where the main interaction still takes place. A more interesting shopping experience and useful services can be identified to simplify the purchasing process for the customer thus exploiting all channels of interaction between consumer and retailer. The self services (scanning, checkout, payments, product contents and recommendations, etc.) with Mobile technologies can increase sales and generate, at the same time, efficiency in the operational management of the store. By taking advantage of new technology, retailers can interact more effectively with the consumer, even externally to the store, offering economic advantages and making the consumer loyal. In today s context, retailers have the opportunity of breaking with the past and creating a competitive advantage. The challenge thus consists in designing the most appropriate roadmap for each retailer without disrupting the service levels during the transition phases. Similarly, manufacturers of consumer packaged goods are gearing up to find a different balance between the three-way relationship with the distributive channels and the final customers. A new type of collaboration between Retailers and CPG arises to address a different approach in promotional strategies and product development. Why NTT DATA? NTT DATA has developed significant skills by working over 20 years in the Retail Market with leading international retailers (food, non-food, fashion and luxury) as well as with industrial groups and manufacturers. NTT DATA can support its clients by offering a wide range of qualified services thanks to its deep knowledge of the different Retail formats (supermarkets, hypermarkets, cash & carries, discount stores, proximities, department stores and the new digital stores), of the distribution models (direct distribution, franchise and wholesale) and of best practices. 2
NTT DATA guarantees reliability in IT consultancy, in process organization and in change management for the setup of complex projects as well as outsourcing solutions and infrastructure support. NTT DATA aims to be a global innovator in the Retail Market regarding both business models (Digital Transformation, Click&Collect/Drive, Pricing Optimization, Promotion Optimization, etc.) and technological solutions. Digital Design & Marketing skills complement Retail skills. NTT DATA offers business and system integration services with expertise in the main market platforms for Retail. It has many years experience in the major ERPs on the market and on Best Of Breed solutions and has developed some of its own solutions for which it retains the corresponding Intellectual Property, including NTT DATA 4Price, NTT DATA MoRe, NTT DATA Social Proxy and NTT DATA Mobile Payment EWA. The global presence of NTT DATA in more than 40 countries, allows clients to take advantage of its best practices and local skills (for example, taxes, payments, relations with banks and other operators, legal aspects and infrastructures) and to combine them, in the best manner, within different contexts so as to face the market s fast-changing dynamics. The IT services are provided through different delivery models based on the client s requirements (in-shore, near shore and off-shore).the strong local presence and organization enables both national and international clients to be overseen, relying on the knowledge of local requirements and being able to count on global support, when necessary. NTT DATA s approach Providing value to the client and supporting them in the process to improve company performance is at the heart of NTT DATA s innovation and change projects. This is possible only through an in-depth understanding of distinct market processes and the availability of innovative IT solutions. NTT DATA can support clients in identifying an Omnichannel strategy in terms of both communication and service definition. Thanks to its expertise, its skills in ERP solutions (like G.O.L.D., SAP, JDA, Oracle, SAS, etc.) and/or its own solutions (NTT DATA 4Price and others), it can offer an end-to-end approach: Digital Strategy - Consulting - System Integration Application Management. In each project, NTT DATA s consultants use the most appropriate methodology, developed on consolidated experience. For the different project areas, for example IT Strategy & Planning, Operational Modeling & Performance Management, Business Process Optimization and Change Management, working methodologies have been defined and integrated, when necessary, with those internationally known, including CBPA, Cobit, ITIL, Six Sigma, etc. These methodologies are undoubtedly accelerators and facilitators but each client has its own characteristics which must be taken into consideration when attentively identifying the working method and the business model. NTT DATA has a reactive and vendorindependent approach that, though based on valid methodologies and frameworks, ensures flexibility, makes use of open source technologies where possible and optimizes the clients ROI (Return On Investment), maximizing project efficiency. NTT DATA s strength consists of the capacity of calibrating the clients necessary services with their specific requirements and characteristics. Lastly, NTT DATA s services of Application Management & Development support all the phases of the applications service lifecycle, from requirements to design, to test verifications, to the final implementation and to maintenance over time, in line with the indicators of the services operability and service level agreement. 3
NTT DATA s offering for Retail NTT DATA supports, with innovation, the creation of new sales opportunities and the optimization of the operational model. Create new sales opportunities Optimize the operational model Create new sales opportunities Innovation aims to increase sales by offering new services and improved price/quality real and perceived ratio, thanks to multi-channel and a renewed role of the physical store. The key elements for achieving this objective are: Omnichannel Retailing: new channels and new models The Omnichannel Retailing aims to integrate the physical channels (stores, show rooms, points of merchandise delivery, etc.) and the digital channels (ecommerce, Mobile promotion, Social promotion, etc.) in order to respond to the new ways in which consumers go through the shopping process, while increasing the opportunities for retailers. The evolution from traditional models to new models requires specific skills and methodologies to design and implement Digital Transformation interacting both with business (marketing, sales, purchases, etc.) and with supporting functions (logistics, information systems, administration and control, etc.). New logistic models have been developed, particularly, in grocery and others are in the process of being defined: for example, Click&Collect with the different store-based or standalone ways. NTT DATA is able to sustain its clients by offering services ranging from the definition of digital strategy to organizational and process consultancy, defining business plans and the designing of the operational model, to governing and implementing the solutions (system integration) until managing the continuous AMO and outsourcing services of the infrastructures. The supporting technologies, such as ecommerce and its related products (DAM, recommendation engine, etc.), Mobile Promotion and Advertising, Mobile Payment, Mobile Security and Management, Social Communication, are qualifying factors for which NTT DATA has strong competences in both market products and open source products. In some cases, Best of Breed and accelerator solutions have been developed (like NTT DATA MoRe - Mobile Retailing). 4
Consumer knowledge and personalized loyalty The evolution towards Omnichannel retailing increases the opportunities for retailers to know their own customers and to combine tailored advantages with traditional promotions. In addition to the usual Customer Analytics techniques for customer profiling on both the physical and on-line channels, the emerging ecosystem allows a new type of interaction with the consumer. The opportunity of making a proposal of goods and/or services to the right consumer, at the right time and place, greatly increases the probability of the retailer to generate incremental sales without interfering in the customer s privacy. To enable these opportunities, a real time or near real-time marketing engine is required that takes advantage of BigData technologies alongside those of traditional profiling. Working with main vendors, as well as using their own framework, NTT DATA is able to design and implement the right solution for its customers. The store of the future The store remains the main element of interaction with the consumer while the points of contact for the retailer can be increased: alongside the usual staff attended ones, new unattended points of contact (in store or not, like self, kiosks, Digital wall, etc), customer devices (mobile, web) and social media can also be introduced. There is also the possibility of intercepting the consumer s mobile which allows the retailer to provide enriched push/pull digital information related to the single product and to send general informative messages like campaigns or promotions (Beacon, smart labels, wifi, etc.). It s possible, for example, to link digital contents to the product (traceability of food products, extended contents for complex products, procedures and instructions regarding DIY, product history), provide services (mobile self-scanning, reservation code to skip queues, Mobile payment, etc.) and propose offers that can be easily used with the new technologies, allowing a richer and more stimulating interaction, even real-time, with the consumer. By having access to more information, it s easier for the sales staff to interact with the customer and to improve the sales process by, for example, having a customer s profile or identifying the stock availability of an item missing from the shelf. To support this new model, the retailer s application suite and the internal organization need to be evolved, in order to ensure the coherence of messages, promotions and offers proposed at all touch-points and also to be aligned with those made available to the sales staff. NTT DATA is able to help clients in the evolution towards the store of the future, combining innovation with the value and the sustainability of the initiatives over time. The competence of the most innovative technologies and models and the knowledge of retail processes allow a pragmatic and, at the same time, visionary approach. 5
Optimization of the retailer s offering and products The optimization of the marketing mix involves assortments, prices and promotions in a multi-channel context. The ability of adopting sophisticated optimization algorithms incorporated in simple-to-use solutions integrating, when relevant, decision support tools with execution tools, brings maximum economic benefit and, at the same time, optimizes management costs. The solution NTT DATA 4PRICE for optimizing sales prices, the rationalization of assortments and the optimization of promotional replenishment all converge to the same objective. NTT DATA services and solutions enable retailers to define, implement and measure the right offering in an omnichannel perspective. Optimize the operational model Reviewing the operational model is fundamental in achieving a lean organization at lower costs in terms of processes and systems, in order to react quickly to new business requirements and to internal structural company growths or company expansions due to external acquisitions. The main areas of NTT DATA s expertise are: Supply Chain Management The objective of NTT DATA is to help its clients improve turnover and profit, optimizing the Supply Chain and logistics, the availability of on-shelf products, services and customer retention. Managing the entire Supply Chain, from the shelf to the supplier, allows stock and service levels to be optimized. To do this, different solutions such as automatic store replenishment, automatic warehouse replenishment, can be integrated considering the last miles, stock (facing) and layout on the shelf. NTT DATA, thanks to its competence in process and organizational issues, is able to support retailers throughout the Supply Chain thus reducing costs and maximizing economic benefits. Solutions to optimize the promotional management are available to facilitate the process of preparing the promotion and of estimating the quantity for the single site. The mix of forecast algorithms, trend analysis during the promo and simple operational tools provide support to category managers, purchases and sales departments, in the life cycle of the promotion, from its conception to the management of the follow-up. Managing the assortment up to the shelf needs to be integrated with the supply chain in order to create a virtuous process that optimizes stock and service levels. The new mobile technology, mentioned above, for the interaction with the customer can be used in the store to manage stock more efficiently. NTT DATA uses market solutions to optimize these processes or researches innovative solutions and develops them. Logistics and Transport In the Logistics and Transport industry, NTT DATA collaborates with its clients to improve both the distribution network and the Supply Chain processes and, to provide specific information technology solutions. In terms of designing methods, systems and layouts, it stands out for its support in reducing costs and times of business processes, starting from the concreteness of quantitative elements, by taking advantage of specific techniques and skills of quick simulation of the operational dynamics in order to evaluate alternatives and to optimize warehouse and merchandise transport logistic systems. 6
In practice, as well as adopting worldwide market solutions, NTT DATA has developed IT solutions to support the planning of transport, optimize the delivery tours and, to keep track of the deliveries and the returnable containers, completely dematerializing the delivery notes. IT Optimization, Application Management & Outsourcing NTT DATA helps identify immediate and long-term opportunities of improving efficiency and optimization by management, constant evaluation, analysis and innovation of the entire portfolio of applications: Application Management is a catalyst to obtain maximum business value of the client s applications while reducing costs and risks. The framework of NTT DATA s Application Management and Outsourcing Services (AMO), known as DynAMO, helps clients to significantly improve their operational support model and to increase the business user satisfaction, taking advantage of NTT DATA s global resources, its proven methodologies and its process of transition and transformation of application portfolios in order to achieve maximum results with minimum expenditure. Administrative and Backoffice Processes The administrative processes are optimized thanks to the dematerialization of documents: managing the entire life cycle of documents electronically both internally (intranet) and externally (extranet, internet) to organizations (partners, suppliers, clients) ensures a simple, efficient and productive creation, research, distribution, archiving and sharing of the information. The efficiency of traditional processes, like invoice matching, allows the operational costs to be optimized. Alongside its experience in the most popular ERPs, NTT DATA has knowledge of processes and Best of Breed solutions, both market and open source. Real estate and rental management Managing real estate involves different business departments and, being tied to the sales network including shopping malls, is fragmented on the territory. The integration of all the management operations of the estate, both from an economic (budget and final balance) and an operational point of view (asset management, purchases, maintenance interventions, design, rental income and expenses, etc.), allows an important item of the company s annual financial statement to be controlled. NTT DATA s competence allows all the processes in this area to be automated by using complete technological market solutions (asset management, real estate, rental income and expenses, etc.) internationally widespread in various industries, including retail and consumer. 7
NTT DATA is a leading IT services provider and global innovation partner headquartered in Tokyo, with business operations in over 40 countries. Our emphasis is on long-term commitment, combining global reach with local intimacy to provide premier professional services varying from consulting and systems development to outsourcing. Ask the experts: Enrico Cantoni, Vice President, Head of Retail & Consumer Phone +39 02 83125348, enrico.cantoni@nttdata.com Loredana Donghi, Account Manager Phone +39 02 83125731, loredana.donghi@nttdata.com Laura Rescalli, Account Manager Phone +39 02 83125739, laura.rescalli@nttdata.com Alessandro Coccia, Account Manager Phone +39 02 83125739, alessandro.coccia@nttdata.com Francesca Silvestrini, Account Manager Phone +39 02 83125866, francesca.silvestrini@nttdata.com NTT DATA Italia S.p.A. Viale Cassala 14A 20143 Milan, Italy Telephone +39 02 831251 www.nttdata.com/it Copyright 2014 NTT DATA Italia SpA 2014-11