STORES Magazine - October 2008 - (Page S5)

NRFTECH ROUNDUP Conference Highlights Business Intelligence and Analytics Retailers could – and sometimes do – drive themselves crazy trying to get inside consumers’ minds to weed through all of their perceived inconsistencies. Richard Flaks, senior vice president of planning, allocation and IT for The Children’s Place, offered strategies for tackling these puzzles using business intelligence and analytics. He called this “a different approach that can help retailers perform better.” Flaks said retailers need to combine historical insights with future fashion direction and outlined several approaches they might use. Leveraging seasonal hindsights. Look at a history of what’s happened in previous cycles and reinvest assortments. Learn from the past so you don’t keep making the same mistakes. Using external trend information. As Flaks put it: “You can’t drive a car or run a business by looking in the rearview mirror.” He suggested combining historical hindsight with current trend information. From consumer research to merchandisers’ insights, don’t let the historical data outweigh what’s happening now. Creating strategies and plans. Flaks acknowledged that this the most difficult component to master, but at least he has a sense of humor. “The only thing I know about strategies and plans,” he said, “is that we’re usually wrong.” The key, Flaks said, is to ensure that the organization is structured in a way that both merchandisers and analysts have equal accountability and similar goals. Executing and reacting in season to trends and themes. Most retailers don’t make every merchan- Greg Wilmer Richard Flaks • Retailers plan to spend 8 percent more for their total IT budget in 2008 • Companies are spending an average of 1.5 percent of revenue on IT • The strengthening of cross-channel strategies, combined with high energy costs, is causing retailers to review warehouse management and transportation management systems • Retailers are investing in internal IT staff and plan to increase training budgets by 20 percent this year The good news, Richardson said, is that companies are “getting smarter and the price for a lot of software and investments is going down.” The flip side: Companies can expect to pay more for software maintenance. Richardson also suggested that companies continue to watch green and sustainability compliance. “There is some talk that ultimately we’ll have to report that,” he said, “but I think it’s wishful thinking by consultants at this point.” SOA Greg Wilmer, vice president of technology for Big Lots, addressed Services Oriented Architecture (SOA). The co-chair of the ARTS SOA Blueprint committee said the true business benefits of SOA are the promises of speed and agility in IT’s capability to meet fast-changing business demands — not to mention the cost savings in squeezing a bit more life out of legacy applications. Given these benefits, why aren’t more retailers adopting SOA more rapidly? Wilmer offered a list of the top obstacles to adoption: maturity expectations (the perception that SOA is still in a nascent phase); a lack of standards (by vendors and retailers alike); difficulty in enabling services in legacy application portfolios due to point-to-point integration complexities; tight development schedules and staff resources; and a lack of retail-specific education. His suggestions? Align SOA initiatives with threeyear business and strategic IT plans, and start small and build out your most appropriate services. To read more about NRFtech 2008, visit the NRF blog at http://tech.nrfblogs.com. STORES / OCTOBER 2008 dising decision flawlessly, so the ability to make quick decisions in season is paramount. This could be something as simple as determining if an item should be hanging instead of folded, he said, or if it sells better in a coldweather store than a store in a warm-weather locale. While technology and analytics are helpful, Flaks said that it is essential to integrate the information into the business. “If you do all this and the result is a printout that you give to everyone, nothing will get done with it,” he said. “Unless you incorporate this into the business process, you’re not going to get the benefit.” IT Spending Bruce Richardson, chief research officer for AMR Research, presented results from the 2007-2008 Retail IT Budget Benchmarking Study. Among the survey findings: WWW.STORES.ORG S5 http://tech.nrfblogs.com http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - October 2008

STORES Magazine - October 2008 Contents Executive Editor's Page President's Page Force of a Different Collar What Shoppers Think Bagging the Competition 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Favorite 50 Sticky Strategies for Retention Concept2Watch Kiosks Online Business Intelligence RFID NRFtech Wrap-up E-Commerce Credit Warehouse Systems Logistics Selling Tools Supply Chain LOEB Retail Letter Arts Update Point of View NRF News Retail Crossword Retail Industry Calendar Last Laugh

STORES Magazine - October 2008

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