Off the Shelf: The Retail & CPG Blog

TOGAF stands for “The Open Group Architecture Framework”.  This framework adds some level of standardization and uniformity to the task of defining an architecture.  TOGAF will not, in and of itself, turn Enterprise Architecture into an engineering discipline, but it is a step in that direction.  It defines a methodology for turning a vague need for improvement into a documented, actionable, architecture.  You still have to do the hard work of defining everything and getting everyone to agree, but at least you have a defined process, albeit a high-level one, that you can follow.  This imposes some order on what has often been a random process.

Other engineering disciplines have been through this process of becoming formalized in years past.  Ship design, building architecture and mechanical design are all reasonably formal processes that yield a predictable result.  These approaches evolved over the centuries and certain artifacts became first commonly produced, then expected and finally required for the industry to function.  (Can you imagine hiring a home-builder who was not working to a set of plans or blueprints?  )

TOGAF, at the high level, defines the following

·         Preliminary Phase

·         Architectural Vision

·         Business Architecture

·         Information Systems Architecture

·         Technical Architecture

·         Opportunities and Solutions

·         Migration and Planning

·         Implementation and Governance

·         Architectural Change Management

·         Requirements Management

Generally speaking, the architecture starts at the Preliminary Phase and Continues roughly in order until it comes to the Architectural Change Management Phase, with loops allowed for iteration.  Requirements Management is addressed in all phases.

You normally don’t think of an eCommerce Architecture as being an Enterprise Architecture, but it is so complex that an enterprise architecture framework like TOGAF maps to it nicely.  According to TOGAF, you can declare an entire organization as the enterprise, or a section of it.  I suggest defining the eCommerce ecosystem as an enterprise and applying TOGAF to it.

The iterative nature of the TOGAF framework maps nicely to eCommerce Architecture also.  Everyone in eCommerce will agree that these are projects that never end.  The expectations of the business evolve so quickly that one release ends and another begins in a staccato cadence.  If we take the time to add just a little formality to this, we may find that our expectation setting with the business improves and they begin to trust that we know what we are doing.

Posted by Stephen Alan Potts at 4:44 PM | Permalink | Comments (0) | TrackBacks (0)

Over the years, most of the mid-sized and large corporations have grown inorganically through acquisition. When these acquisitions happened, they tried to assuage the feelings of the people in the acquired company by providing them autonomy to function. This has resulted in lack of standard practices across the organization and even larger organizations are not able to leverage the economies of large scale for the simple reason that the scale was not large enough. That is confusing right? What I am trying to say is that these corporations look bigger from outside, but essentially they function as a large group of smaller organizations. How will these companies have a better bargaining power with their suppliers when every division and location chose its own suppliers and made their own merchandizing decisions?

During tough times, like the one we are currently experiencing, this situation of lack of standard practices across organization presents a huge opportunity to the business to make the processes more efficient, reduce cost significantly, improve customer satisfaction and more importantly improve both top-line as well as bottom-line. Now, traditionally, the concept of shared services has been looked at as more of a cost reduction opportunity. But there has been a significant mind-shift in that though. Some matured organizations are looking at this as a means to drive better top-line.
 

For example, companies in the distribution industry have always had a bigger sales force. It is very obvious that there can be a significant cut in the sales force, but still produce the same, if not, better results, if. I am not talking about the productivity levels of the field staff.  One closer look at how the sales people are spending their time will provide alarming findings. One study says that almost 60% of their bandwidth is spent on administrative tasks like helping the customers track their order, payments, etc. These can very well be carried out by a back office organization more efficiently. By creating a CRM shared service center, companies can reduce cost significantly by cutting down their sales force and/or increase sales since their sales force will have double the bandwidth to do business development and not get bogged down with the administrative tasks.
 

Though the outlook of executives has changed over the years on shared services, quite a few of them are still very conservative in their thought. They fear backlash from their employees the moment they talk about shared services. The companies need to relook at their communication strategy and see if they can convince their employees to look at shared services as a positive step. They need to be told that the company will not be able to do business in the same profitable manner, if they don’t take steps to cut down cost and increase revenue. Put these two options in front of them – do you want to impact a smaller percentage of the organization (from an employee base perspective) thru shared services and benefit the whole company Or continue as it is, which will result in negative growth, which in turn might result in head count reduction. The moment the employees see these two options in front of them, they will understand that shared services is a win-win for everybody
 

Another way of gaining support internally on shared services is by letting people from various levels and various divisions within the organization be involved in the decision making process. Put the ownership on this task force to identify those areas of business which can be brought under shared services. The decision on which functions go into shared services should not be decided by a select top executives sitting in a corporate conference room. Rather it should be a collaborative effort of various levels of people who should jointly decide with the corporate executives on what parts of their business functions should be brought under shared services. This way there is an ownership of this concept much beyond the corporate executives and the members of this task force will become the champions to sell this idea to the rest of the company

Posted by Prasanna Ramaswamy at 3:10 PM | Permalink | Comments (0) | TrackBacks (0)

With the advent of smart phones and 3G bandwidth, from a consumer standpoint, bricks and clicks worlds are merging fast. What would this mean to the stores of the future and multi-channel commerce?

Many retailers had traditionally kept their stores and ecommerce divisions separate, but several have jumped on the multi channel commerce and are integrating their operations and/ or capabilities. For instance, most store employees were incentivized to close the sales through the stores channel only, but the most progressive companies today have incentivized store representatives to increase e-commerce sales. “Buy online and pick up at store” is the corollary arrangement.

Yet, the paradigm broadly is that the “Attract and Sell” event happens in one channel mainly, which is then supported by “Post-Sale” events in other channels. Post Sale events could be  returns, exchanges and customer service.

Oncoming change: As in-store shoppers start getting quick and easy web access via 3G smartphones, I believe a paradigm shift is happening: the “Attract and Sell” event itself will be split amongst multiple channels. For instance, it will become easier for consumers to shortlist products into a shopping list on their mobile devices, walk into a store, show the list on their devices to the store reps, get store personnel to spend time helping choose the right product, and then go online to find the specific reviews, research the best price, and locate another neighbourhood store (or online retailer) to buy the product from. Throw in the possibility of the consumer getting quick pre-purchase feedback from one’s social network via twitter, and we can start imagining the complex inter-meshing of channels during the “Attract and Sell” even.

Lately, there is a definite trend in the US towards making healthier eating options available to kids.
- Michelle Obama has provided some much needed visibility and support to this cause.
- The US Congress is working on legislation that incentivizes healthier school lunches.
- The top beverage companies are taking off unhealthy products from US schools. Clinton’s initiative have been  instrumental in making this happen.
- News organizations are focusing on the growing childhood obesity in US and raising awareness of this hidden epidemic.
- In the health care debate, most believe that prevention is certainly preferred to cure.

At the same time, I believe there are several challenges that remain in making kids eat healthier. Here are some I can think of.

1.       Addressing a global problem with a limited solution

2.       Product innovation and availability

There is a market void that will get created as unhealthy products get off the shelf. Encouraging kids to eat more veggies, whole grains and other natural products is important but a more difficult one to practically achieve for parents and schools - as these are not really "cool". I believe that F&B majors - can and should play an important and profitable role in creating new "cool" healthy products. It is a win-win-win-win for parents, schools, kids and the corporations.

Let us take a reality check here with some examples. Kids love pizza, pastas and juices/ sodas. I am not aware of any major US grocers or restaurant chain that sells fat free cheese pizzas widely. Whole grain pastas are available in certain retailers but very few restaurants. Most establishments do offer no or low sugar variants for sodas though yet few other healthy beverages. 

Posted by Aditya Mittal at 4:41 AM | Permalink | Comments (0) | TrackBacks (0)

Payment Card Industry (PCI) compliance is one of the most significant issue confronting retailers, no matter their size, type of business or geographic location. Identity thefts, frauds and misuse of credit card data are ubiquitous, given the advances of technology and the smaller world we live in. This forces the PCI regulators to enforce new set of rules and retailers to spend enormous amount of money every year to be PCI compliant.

I feel that this problem is here to stay and therefore retailers and PCI authorities should look at a long term strategy which would be beneficial to both parties and above all the end consumer whose identity and finance are at risk. I suggest coming up with a solution which does not require retailers to store credit card data in their data base at all. Credit card data can be stored in large data centers managed by organizations which will adhere to strict PCI guidelines. This will ensure greater control over data security for PCI authorities and relieve the retailers of the burden of maintaining customer credit card data.

Credit card data is handled by retailers in two areas of their business process.  First, when the retailers authorize the credit card during payment in stores or online. Second,  when the credit card data need to be retrieved. For example:

• during settlement transactions to actually charge the card
• during return transactions when the money need to be given back to the customer
• when the credit card data is required by retailers for customer analytics.

Most retailers use some kind of encryption and decryption logic to achieve these objectives. This however requires the retailer to store the credit card information, encrypted or otherwise in their own database.

During the payment process, retailers authorize the credit card. This requires the transaction amount and the credit card information to be sent to the banks for validation.  Even though the credit card data is sent to the banks, retailers still end up storing the credit card data. I suggest that instead of storing the credit card data, retailers can store a unique identifier for the transaction. The actual credit card information along with the unique identifier can be stored in the data centers maintained by PCI certified organizations and can be controlled by strict PCI compliance guidelines. The unique identifier can be used whenever the actual credit card data for the specific transaction need to be retrieved.

I understand that the above solution is easier said than done and requires significant investment by retailers, PCI authorities and large corporations who own the data centers. It requires investment in technologies to have the rock solid secure channels of communication.  It also requires resolving technological challenges to make the data centers full proof from security threats. Issues such as customer analytics using credit card would still remain and need to be resolved.

That said, I believe that if all parties involved tie up to invest and resolve the technological and process related challenges, 5 years from now, this investment would benefit every one. Thousands of retailers will save on investing in monitoring their credit card data and complying with new PCI compliance guidelines every year. PCI authorities and credit card providers like Visa, Amex and Master card will have to manage only a handful of companies and their data centers instead of auditing thousands of retailers. It also opens a new area of business opportunities for organizations maintaining these data centers

Posted by Somnath Sinha at 10:30 PM | Permalink | Comments (0) | TrackBacks (0)

Recently, I visited India for a vacation, after about 2 years of being away. The pace of change in India never fails to amaze. Back in my hometown (Indore), many streets are virtually unrecognizable. Malls and stores have opened up all over. People are out to buy with a vengeance. The economy remains strong and growing. One can say that the rich have significant disposable income, and are looking for innovative ways to dispose of it!!

Retailers are cashing in, ..or should be if they aren’t already. For apparel retail, I did see several new domestic apparel brands and a few US / international ones too including a handful of premium apparel brands. Yet, several of the US based luxury brands are conspicuous by their absence. Yes, I get it that India is an emerging economy and US/ Europe based luxury and apparel companies are in a wait-and-watch-mode, but I felt money is being left on the table..literally. There is a significant unmet demand for premium international brands.

A lot of the rich folks in India are a brand conscious lot and also clearly differentiate domestic and international brands. Many buy “imported” merchandise – ranging from apparel, the latest electronics, alcohol, etc – during their trips abroad. Some will even coax and cajole their friends and relatives travelling abroad to get their favorite merchandise. Yet, the number of such transactions is limited by the impracticality. In today's flat world, most are already very familiar with the international brands and the image they convey.

So, I am thinking: “What’s up? Where are the premium apparel retailers?” In a series of blogs, I intend to bring up various dimensions of this issue.

Hope to get your thoughts and inputs. 

Posted by Aditya Mittal at 5:47 AM | Permalink | Comments (0) | TrackBacks (0)

Having it "my way" is not just about lettuce and tomato anymore. Customized apparel is a growing fad.  Adidas and Nike seem to be the leaders in this area, but other brands like Keds are also allowing you to design your own shoe.

How custom is too custom? There is a limit to the amount of customization that is financially feasible. We are not creating 100% bespoke, made to order apparel here. Customizing DC Shoe's Keds line on Zazzle allows picking from a pre-set template and then selection of a rage of colors for each area on the shoe.

Mi Adidas takes it a step further. They provide "inspirations from Adidas" that make suggestions on designs, some based on your favorite college basketball team. Unfortunately of the 3 sample teams used for this inspiration, (Kansas, UT, and Wisconsin) only 1 is left in March madness.

Nike is bringing kids back into stores with the concept store it opened last year, 225 Forest in Laguna Beach, CA. 225 Forest gets a little funkier in that in invites local artists to come in and provide custom designs for their Hurley and Converse brands. These custom designs are then offered to the public on products like board shorts and then printed using equipment local to the store.

Hey, I haven't quite bought into the idea of buying a pair of pink and orange shoes that look like they are twice as wide as my foot. You also won't find me wearing a pair of custom boardshorts that come down to my ankles. I'm too old for that. Something, however, is driving this change. The next generation's need for expression is driving the apparel industry less into big logo brands that represented Michael Jordan and more into a style that mimics the uniqueness of icons like Shaun White and Rob Dyrdek. The X-games and the popularity of extreme sports are growing exponentially. The question is, will brands be able to create this style in-store or online, all while maintaining their brand's integrity?

Posted by Seth Lively at 6:31 PM | Permalink | Comments (0) | TrackBacks (0)

Over the last decade the concept of an online market-place and e-commerce have gained all the requisite importance. The way the Logistics/Reverse logistics is handled on a market-place generally depends upon a number of factors including but not limited to the business policy of the Marketplace. For e.g consider a marketplace which takes care of your deliveries if you are a seller, and you returns if you are a customer. The way this would work from an e-commerce perspective would be as follows: 1. A seller would create shipments on a front-end system and on requesting a carrier to collect the same - the Marketplace carrier would collect and deliver the product to the customer address. 2. A Customer would create return parcels on a front-end system and on requesting a carrier to collect the same - the Marketplace carrier would collect and return the product to a return address.  

With this possibility in mind, let us consider a scenario of a market-place where, logistics service providers can also list their services and offerings to deliver products from and to various locations. If this can be enabled the market-place would stand to gain from the immense number of transactions between sellers/customers and the logistics service providers.

Taking this thought further - we may also envision an exclusive market-place for logistics service providers. I could actually find this idea just begenning to bud in India when i happened to visit the following website: http://www.klickcouriers.com/. This concept is quite close to a "makemytrip.com" or a "yatra.com". On Makemytrip and yatra the customer gets a choice to select the best possible airline or a hotel, whereas, on klickcouriers the customer gets a choice to select the best possible Courier/Logistics service. Though not a hundred percent market-place, the concept has a scope to take a larger picture.

What would happen if such a logistics marketplace gets embedded with an online retail marketplace like amazon or ebay? The face of online retailing would change for sure. Just to highlight a few constraints in the implementation of an online logistics marketplace - I would say there are numerous regulations from a legal perspective when an international delivery happens. The operational costs would generally be very high for international logistics as many sellers and customers may generally not deal in bulk on a retail marketplace. Having said that the logistics costs and the per uint delivery costs would be lower on B2B marketplaces where the dealings would be in bulk.

Posted by Sanjeev Kulkarni at 12:27 PM | Permalink | Comments (0) | TrackBacks (0)

In one of my earlier blogs on rediff i had discussed this concept of a socially networked marketplace. I had discussed the concept of a market-place like Amazon or Ebay with an embedded functionality of social networking. Therefore, sellers and customers end up socially networking - Sellers to promote their services and products and customers would network with other customers and sellers. Also there was another idea envisaged there - A scocial networking site with the functionality of an e-commerce website (e.g what happens if Orkut / facebook / Myspace - enable their users to list products and services with a basket checkout functionality). There are other nuances to be considered as well, when we talk of a socially networked marketplace - Would an ecommerce retailer ever want such a functionality to be built into their website, where customers can network amongst each other? 

I happened to come across this artice http://www.storefrontbacktalk.com/securityfraud/setting-limits-on-customers-talking-with-each-other-in-e-commerce/ last week. Amazon has made its first move against customers and sellers getting in touch with each other directly. This only means that Amazon is now moving into a phase where they want customers and sellers to network through the amazon network and not through personal email, as before. Once the communication between users of the marketplace goes out of the network, Amazon looses all control. Having said this, we may assume that amazon would want to enable the feature of social networking on its own network - rather than customers joining the sellers personal twitter, myspace or linkedin networks and letting amazon loose all control over its customers.

This is probably the first move of its kind and in the days to come other retailers would take cue and follow.  

Posted by Sanjeev Kulkarni at 5:22 AM | Permalink | Comments (1) | TrackBacks (0)

I have always been advocating the point of providing physical store experience over the online stores. The idea is to provide great usability experience. A customer entering the stores normally looks after the labels and gets the product. He might flip- flop through various brands within the store.

Recently I was purchasing an airline ticket over one of the Travel agents website. I entered my travel details and got few options. I checked out one of the hot (cheapest with convenient timings) options and went to the order confirmation page. As soon as I confirmed it, I got a message that it is already sold out and I will have to select another option. Now as a customer this is irritating as I have to go all the way again to select another close to hot option and check out again with no guarantee that I will get it. In a physical store one the product is out of stock either the shelf is empty which tells that you cannot take the product or the section itself is removed. Is it so difficult to provide similar experience in an online store?

Hmmm…well good point…Have you ever thought of finalizing a product which you want to purchase after going through several stores unless you are brand conscious and go for a particular store + brand product. Yes you go out on the shopping street where normally most of the stores are located. You flip –flop & flit through various stores and then finalize a store where you get suitable product.

Don’t you want the similar experience over the web where you go to a shopping street where all the stores are located or in other words you do not have to open the website of each of the store individually rather you are provided a gateway to it. Katie has explained about one such website which provides good features in her article on Wall street Journal section.
You can enter a search keyword for example. Shoes and search for it.

You will be shown various stores containing the products and you can browse to any store to purchase the product. 

You can browse the new site and also return to the flit site as there are some buttons which can bring you back.
 

Seems to be nice idea of creating market area. Though the site has to improve certain things like search which can bring results for the stores which do not have inventory for that particular product but from customer experience point of view this is great.

And I am sure that there will be usability improvements in the coming days which can bring e-shoppers and normal shoppers at the same level? Any more ideas which you can share.

Posted by Manish Goyal at 11:04 AM | Permalink | Comments (1) | TrackBacks (0)

I mainly see 3 different phases of evolution of web Analytics in Digital space.

Only thing constant in Digital world is 'change'  and inevitably web analytics will undergo major change as well in 3-5 years time from now. I would like to see next generation of Web analytics for what marketing gimmicks call today as Web 2.0.

1)      Multi channel Analytics thro’ web, mobile, social networks, word of mouth.

2)      Standardization of tracking parameters across RIA (Flash, Ajax, Sliverlight) and online media sites. Tracking of 3d graphics also something I would like to see improving.

3)      In terms of pure numbers, I would like vendors to start giving numbers which state 5% of consumer reported errors reduced on site while 15% increase in customer engagement via analytics reporting output thro the ‘buzzes’.

Tell us how your clients are implementing Web analytics and introducing innovation in this field?

Posted by Akshay Gupta at 1:52 PM | Permalink | Comments (0) | TrackBacks (0)

As social media usage has ramped up, it's become increasingly clear that there's value in all that digital chatter and whisper. If only you can identify what's significant- that’s the multi-million dollar question. Few companies have the resources to personally monitor what consumers are saying, although some have tried- e.g. Comcast and JetBlue.

Posted by Anindya Trivedi at 5:52 PM | Permalink | Comments (0) | TrackBacks (0)