Well you might be wondering where I disappeared since last year. I haven’t gone far from Retail, in fact I am now part of the innovative SmackShopping team. If you have not heard of it, please check out SmackShopping which is a unique way to buy products.
Will write more as I get sometime!
ARTS (Association of Retail Technology Standards) is hosting the Retail Technology Summit 2007 in Brussles, Belgium on October 18th 2007. It is a good conference if you want to understand ARTS work in the Retail XML space and also to learn about SOA (Service Oriented Archtitecture) and how it applies to Retail industry. There are some excellent sessions focused on SOA in Retail.
I'll be speaking from Microsoft about how Web services bring agility in the Retail enterprise.
So if you are in Europe, I hope to see your there.
I know its been a while since my last post. Unfortunately I was suffering with flu for a week. It was a nasty one which knocked me out for a week. Anyway's, lets get back to the topic on hand.
During my tour of Indian retailers what I found is they have pretty good technology in the store front. The Point-of-Sale systems used for checkout are the latest ones, in fact better than what some of the western retailers still use (green screen). Most of the items are bar coded and there are both flat bed and hand held bar code scanners for scanning items. Each of the POS terminal is equipped with a scale for weighing items. There is a receipt printer and embedded MSR for capturing credit card information.
Most of these POS systems are from well known brands in retail industry and are NOT home grown. What this means is, they already incorporate the best practices learned from years of experience by these POS vendors. This gives a jump start to the Indian Retail industry and puts them on par with the western retailers.
There is however one key difference and it is the absence of self-checkout terminals and self-service kiosks. While the western world is rapidly moving towards self-checkout terminals, Indian market will take sometime to adapt it. Since organized retailing is a new concept Indian consumers will take time to adapt to it and it'll also take time to streamline and simplify the checkout process before introducing self-checkout.
Self-service kiosks also may take sometime before we start seeing them in the stores. One of the main reasons being the cheap labor. It is easy to find cheap labor to help customers and it is one of the reasons you see many sales clerks and other employees on the store floor who are helping customers and stacking shelves constantly.
I didn't get permission to venture into the manager's office or store back office, however based on discussions it was clear that manager had a workstation for managing store inventory, store scheduling, receiving, etc. Also, there is a store server to collect transaction data and to upload/download information from the corporate office. What is unclear to me how real time is the sales data upload to corporate office? This is a secret that retailers do not want to share easily with outsiders. Considering the bad infrastructure of roads and transportation, my guess is stores operate pretty independently.
I'm sure once the infrastructure improves retailers would want to centralize the supply chain and distribution. However until that happens stores may be operating independently.
As I said in July, I spent 4 weeks in India. It was a great trip, mainly a personal one however I did take out some time to do some official work as well. I had the pleasure to visit Hyderabad, Bangalore, Chennai and Mumbai. Across all the metros, two things are common,
- All the cities are booming with construction, new malls and retail outlets.
- Traffic is really bad, in fact these cities compete with each other to be the worst in traffic
Organized retailing is slowly gaining momentum in 
India. Most of the major industrial conglomerates (Tata, Reliance, Birla, etc.) of India are entering this market to capture the ninth-largest retail market in the world, with an estimated annual retail sales of around USD215 billion in 2005 (Rs 960,000 crore).
I visited most of the new organized retail outlets and they seem to be well organized and modeled after US and European layouts. However the check out process is a bit different compared to the western world. Check out process has three main steps,
- Step 1: Check out clerk scans the items and places them on the belt for bagging
- Step 2: Items are placed in the bag by a bagger and the bags are sealed either by stapling them or using the warm pressure to melt the plastic and seal the mouths of the bags.
- Step 3: A security guard at the gate checks the bags and receipts carefully before letting the customer leave.
Step 2 is very unique to Indian market and does take quite sometime as each and every bag has to be sealed. However considering the new concept of organized retailing this may be necessary to reduce shrinkage.
Another interesting observation was, if you have any bags from another store or any personal items they are not allowed into the store. There is actually a "bag check" counter at the entrance like a "Coat check" where the customer must check in all their bags except the purse/wallet. This is again is in place to reduce shrinkage in the stores.
Stores themselves have lots of items and isle space is pretty tight, which means there is lot of bumping of carts into each other or into other people. Since this whole organized retailing is a new concept, shopping in these places is considered as hip. So the whole family comes out to shop as they all want to experience this new trend and want to enjoy it. This increases the number of folks in the stores.
So in summary,
Pros:
- Great to see finally organized retailing in India which is providing superior experience to consumers
- Consumers consider it to be hip to shop there and love it
- Consumers have same choices of products as the western world
- Opportunities for retailers
Cons:
- Isle space is too tight
- Stores are too crowded irrespective of name or city
- Check out process can be better
Next time I'll share my observation of technology in retail.
Love to hear your experience and comments.
There is an excellent interview with Kishore Biyani who is considered to be King of Indian retail. He recently spoke at the Indian Retail Forum. He is the founder of the Indian Retail chain, "big Bazaar", which is really doing well.
According to him 2009 is the defining year in Indian retail as most of the malls would be complete by then and many of the international retailers would have entered into the indian market by then. However the challenge is the real estate market, which seems to be skyrocketing. Real estate prices are touching the sky and for retail to succeed prime real estate is key.
Making credit available at cheap rates is another critical factor to fire up the boom. Credit card industry is booming in India which leads to spending by the middle class.
PCI DSS deadlines are looming right around the corner. Retailers in general are rushing to get the compliance just in time to avoid any penalties. This just shows the importance and criticality of PCI in retail. It has become a huge business and security issue for retailers. So to help the retailers, retail solution developers and the assessors in this process, Microsoft has put together its first PCI conference. It is in Redmond next week. You can learn more about it by visiting the official site.
I'll be on vacation for next month, so you'll most likely not see much from me. While on vacation I'll be checking out the new phenomenon in India known as "Retail Boom'. From what I read India is going through a massive transition 
from the unorgnized mom & pop shops to organized enterprise retailing. So will definitely shed some light on it as I journey through India.
So until I return enjoy your summer!
I was at a roundtable discussion with some 20+ retaile VPs and CTOs. It was a very lively and interesting discussion. We were talking about challenges faced by the retailers in the stores. These were the top challenges in the stores,
- How to improve morale of the store employees. How to keep them motivated, informed and educated on corporate vision and goals.
- How to help customers find products they're looking for without hiring many more employees. It is the most common complaint of customers in the stores and improving in this area improves overall customer experience in the stores.
- How to improve productivity in the stores to enahnce customer experience and build customer loyalty
To enhance customer experience in finding products, some suggested self-service infromation kiosks where customers can do product searches. However these kiosks do not inform the customer about the exact location of the product in the stores. So another suggestion was providing customers with a Toll free number that customers can call and speak into for product information. This can be an automated systems using products such as Microsoft's TellMe. Another suggestion was to use text messaging. Customers can text message the product number and the response should be the location of the product in the stoers. All of these excellent suggestions and should be considered by the retailers seriously.
On improving employee morale, some suggested employee portals as the most important element. Products such as Microsoft's SharePoint Server make it very easy to build employee portals that can be used to communicate corporate vision and goals.
I will provide more information on the architecture of a voice based solution in the next blog..
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With the resurrection of internet bubble once again, which is affectionately called Web 2.0. There has been increasing focus on services. Everyone is talking about services, how they will revolutionalize the software industry, etc. In my humble opinion this is a hype, just like what we have seen during the first DotCom boom. In the peak days of the DotCom, what happened was, there were these new companies which offered online grocery ordering with free home delivery. Some analysts and journalists who were quick to jump on the hype were already writing obituaries for traditional (brick-&-mortar) grocery retailers. They thought why would a customer take the pain to visit a store when they can get the groceries delivered home for free? Well!!, we know what happened in reality. Those newcomers are no where to be found, the traditional grocery retailers started offering online ordering capabiltiies combined with in-store pick up or complementary home delivery based on the size of the order. So suddenly consumers had a choice and also were able acumulate loyalty rewards via different channels. This experience was consumers love, they like to visit stores to touch/feel the products and order online to save on tax or delivery charges or to find he best deal.
So when the dust settles down that's exactly what will happen for services. So you'll see a combination of software and services. There will always be a need for offline functionality in most of the applications, which can only be fulfilled with some software on the host. So what will happen is there will be a place for software and there will be a place for services.
As a first step working with a partner I wrote a white paper on SaaS in Retail. You can read and download the white paper here.
More to come in this space. Drop me your feedback..
Recently I heard from my Chinese counterparts and they showed strong interest in my blog. They wanted to translate it to Chinese for local architects due to the demand. I'm very happy and honored to hear that and wanted to express my appreciation to you all for following my blog.
Architects in China, thank you for reading my blog. It would be great to hear from you, any feedback you may have please send it to me in english or forward it to Microsoft employees in China with reference to my blog. I'm sure they'll be happy to translate your feedback to me.
I do think this is an exciting time to be an architect as the last few years have seen tremendous developments in the technology space. Take the mobility space or the growth of Web 2.0 or the SOA space. All these emerging technological concepts are keeping the job of an architect challenging, exciting and interesting. So keep up the good work...drop me a line when you get time.
Microsoft today announced the availability of Office Business Application (OBA) Reference Architecture Pack (RAP) for Health Plans, also known as Consumer Engagement Reference Architecture (CERA) There is a white paper and two different presentation that walk thorugh the guidance of this RAP. There is a also a video of ARCcast.TV with Ron Jacobs, Dennis Schmuland and myself. This RAP provides the guidance on the value of OBAs to health plans to engage and keep consumers engaged in their health. It also demonstrates several unique advantages to health plans seeking to engage consumers in their health, gain a competitive advantage, and elevate their perception in the eyes of their customers as trusted health advocates.
in general health plan industry is under tremendous pressure to improve quality of care while reducing the ever growing costs. This OBA RAP addresses this particular and demonstrates how technology can help in engaging with consumers to improve their health.
Health plan RAP shows how to build architectures that unify people, process and technology through familiar Office 2007 user interfaces. It includes an architecture framework for Health Plan with an OBA based scenario, Windows Live platform for member and coach identification and the Windows Live Service Agents as automated bots. As demonstrated through many releases of OBAs, this is a new class of applications that connect people both inside and outside the organization with both existing line-of-business (LOB) systems and third party applications. Also, enable much needed collaboration between various care providers ranging from health coaches to physicians. Collaboration that is contextual, via many channels and scalable.
I encourage you to download the available resources go thorugh them and provide feedback.
I don't mean to say PCI DSS regulation was on fine, but rather the session I was in, got fired down. As I indicated earlier I was on a panel discussion about PCI DSS at the ERIeChange conference in Boston. There were about 6 panelists and it was moderated by Evan Schumann of StoreFrontBackTalk. It started on time and we were doing great with all the panelists enthusiastically chiming in.
Some of the discussion was around, how it is fundamnetally important to identity the data that must stored to do business versus nice to have. There are lots of retailers that retain cardholder data without much thinking and it and that in fact leads to compromises. One panelists suggested a recent compromise where the cardholder data was stored in a marketing database which was obviously not well secured and lead to the compromise.
We were into the session for about 15 minutes when the room started getting filled with smoke from the ceiling. Some cables and/or lights were on fire in the ceiling. We all had to vacate the room and that was the end of the session. By the time the event organizers found another room, it was time for next session. So it was a tragic end to a potentially great session as the session was packed with attendees.
Good news is, we plan to re-host the panel discussion on StoreFrontBackTalk as a webcast. So tune in to listen and ask questions. I'll post the exact date/time of the webcast as soon as it is finalized.
PCI DSS is a hot topic. Every where you turn there are panel discussions, forums, sessions, surveys and solutions to deal with it. Yet, there seems to be lots of confusion and dilemma by the retailers to comply. I think the key to getting compliant is the mindset. The motivation should not be to get compliant but rather to identify and mitigate the business risk as far as credit card information goes. Also, as some one said PCI DSS should be taken up as a way life and not a specific milestone to hit and forget.
Anyways, I'll be on a panel discussion to discuss just this important topic along with Evan Schuman of StoreFrontBackTalk at ERIeXchange in Boston on June 5th 2007. Hope to see you there and connect with you.
Microsoft today released an Office Business Applicaion (OBA) Reference Architecture Pack (RAP) for Price Management. This is a critical area in the industry and many enterprises struggle with communicating the pricing rules to their sales field. Price Management is a crucial aspect of any company’s product sales strategy. Price is where the supply meets demand and is also the fundamental measure of a product or service value in the market. So to help in this critical scenario, Microsoft released an OBA RAP that show cases use of Office Application platform to build a real time price generation solution.
The Price Management RAP shows how to build architectures that unify people, process and technology through familiar Office 2007 user interfaces. It includes an architecture framework for Price Management with an OBA based scenario and BizTalk for the quote creation process. OBAs are emerging as new breed of business applications that connect existing line-of-business (LOB) systems with the people that use them every day through the familiar user interface of Microsoft Office. These OBAs bridge the gap between how business process systems work, and how people work. Price Management OBA helps in quote creation process both in online and offline mode and helps in real time decision making. It also simplifies the process of pricing rule communication especially to the field sales force. Creation and management of real time workflows is another critical area addressed by this OBA. Overall this OBA improves efficiency and ultimately lowers time-to-market, faster turn-around and reduced cost.
Please check it out on MSDN and let me know any feedback you may have. Source code is currently not there, but it'll be posted for you to download for free soon.
Earlier this week Association for Retail Technology Standards announced that it has launched the SOA Blueprint for Retail project, a program that will provide retail businesses with specific guidelines and best practices for implementing a service-oriented architecture (SOA). Retailers require SOA to more easily link business operations across stores, the Web, suppliers and merchandisers.
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The committee working on this effort consists of representatives from variety of vendors and customers. There are close to 25 members in the committee and includes representation from Kohl’s, Big Lots, CSK Auto, IBM, Oracle, Cisco, SAP and Microsoft.
Retails have been slow in adopting the SOA despite all the benefits it brings to the business. So this group's goal is to create the much needed blueprint and define the steps to get started on this path. Talking to Retailers, it was obvious that there is an urgent need for help on how to get started. So this committee will do its work in helping the retailers get started and realize the benefits of SOA.
I'm representing Microsoft on this committee. So if you have any questions, please feel free to ping me.
