Fujitsu Statement January 2014

Fujitsu Statement

January 2014

David Concordel, Senior Vice President Global Retail, International Business, Fujitsu

Customer, shop, merchandise, transaction – that’s all there is to it. Shopping – in simple terms – has changed little in two thousand years. However, on closer inspection, the shopping ‘process’ is undergoing a fundamental transformation for customers, retailers and their suppliers. Says Fujitsu’s David Concordel, in the new omni-channel world of shopping – where customers can buy online or via a smart phone and pick up their order in store or have it delivered – retailers will be re-engineering their shopping process in 2014 and beyond to drive future revenues and ensure their business continuity.

“In 2014, fast-followers will chase the 50 global retailers already transforming store, mobile, and ecommerce channels, supply chains, merchandizing, and marketing for the omni-channel customer experience.” This is the #1 prediction made in December 2013 for the global retail sector this year from IDC Retail Insights. It also has the most immediate and arguably the highest impact of IDC’s 10 predictions, in terms of the cost and complexity involved in addressing the issue across every retailer’s entire business.

Analysts are inventing new labels every day - multi-channel, omni-channel, ‘stop-start’ shopping and clienteling – to try to describe what is happening in few words. Fujitsu sees it from the customer’s point of view. There is only one shopping channel – ‘my channel’ – and retailers need to operate their businesses in response to how every customer chooses to shop with them. The store no longer has walls, shopping is ‘everywhere.’ Retailers need to rethink how they set up shop.

New customer-centric operating models, underpinned by new IT architectures, data models and business processes, need to evolve in response to the changes we are experiencing today. Bolting on click ‘n’ collect services to a store model, manually sharing stock across physical and virtual stores, responding to shopper behavior overnight rather than real time – these are no longer viable. A fundamentally new approach is required that will help the ‘fast-followers’ to catch up with the best of the rest.

Customers want ‘old world’ service in a ‘new world’ environment

Technology is driving change not because it appeals to the latent ‘geek’ mentality among the world’s shoppers. This isn’t a Big Bang Theory retailing trend. Technology – primarily the smart phone – is driving change because it is helping customers rediscover a more intimate, personalized and ‘in control’ shopping experience. Revolution is about returning to a bygone age. Customers want the one-on-one personal service, reminiscent of the ‘mom ‘n’ pop’ shops of 50s America, but they want it re-presented and re-delivered for a modern technological age. This may or may not involve human intervention.

Three factors illustrate this change in shopper behavior: shopper power, technology, and the changing role of the store. Firstly, customers these days have greater control over the shopping process as they are more knowledgeable pre-purchase via online research. They want to shop on their own terms and this is making ‘anything, anywhere, anytime’ shopping a hygiene factor for retailers, a minimum level which retailers must now go beyond to secure not just the sale but an ongoing relationship. Personal experience now becomes paramount. Customers will no longer accept a generalized offer, and instead are seeking ranging, pricing, promotions and merchandizing that exactly meets their needs.

On the technology front, the smart phone has become a ubiquitous tool in the hands of the customer – collecting information, making transactions, reviewing brand communication – and has become a key retail interface if not a sales channel in its own right. Customers are in fact now so used to the continual introduction of service-based technologies intended to enhance their shopping experience – from self-checkout to digital media – there’s evidence to suggest this has conditioned the shopper to embrace rather than reject new retail technologies.

Thirdly, the store has now become only one of several channels to the customer, although Fujitsu’s own research suggests that it may remain the ‘hub’ of activity. In-store experience is likely to continue to play an important role in product discovery and sales associate interaction – in the overall service experience – while providing retailers with the opportunity to provide a differentiating ‘wrapper’ around their offerings to convert customers to buy.

However, innovations such as Click ‘n’ Collect are emerging as a key cross-channel service pros why the business and IT operating models that were traditionally founded on the store need to change and adapt to an ‘omni-channel’ environment where transactions can start and stop in different locations.

The point is that these drivers are not conventional retail trends – like own label or smaller format stores have been in the past ten years – these are fundamental ‘disconnects’ in the business of retailing.

  •  ‘Digital’ shopping is deconstructing the way we buy food, fashion, electrical and entertainment products. What is the point of complex store merchandising practices if the customer never visits the store and uses a ‘virtual mall?’

  •   Social media is – in many ways – handing over brand control to the consumer. What does the marketing department do?

  • Click ‘n’ Collect is challenging every property director’s assumptions about the pattern of physical retailing in the modern world. Traditional catchment sizes need to be recalculated.

  • ‘Stop Start’ retailing means the CIO has to rethink how s/he manages data inflow and outflow to feed the needs of the buyer, supply chain analyst, finance manager, store manager and – most importantly – the customer. Data models built on cash registers in store no longer fit.


Rapid response to the new omni-channel world of retailing

High performing retailers are rethinking how they ‘set up shop’. How do you organize a business – people, assets, processes and technology - to meet these new shopper expectations? How do you capture transactions and customer history across multiple touch points at different time intervals? How do you reconfigure your people and processes when they have been based on a store-centric model for 50+ years? This is not about being leading edge, this is about doing the basics in a world when the goalposts have not just moved, they have been removed from the pitch.

This is a tough challenge for the industry, so leveraging the deep retail experience Fujitsu has built over the past 30 years – with more than 500 customers and 82,000 stores in over 50 countries – Fujitsu has introduced a revolutionary new Point of Service (PoS) application that increases retailer revenues by improving both customer service and enterprise efficiency. FUJITSU Retail Solution Market Place (INSERT LINK) achieves this by supporting retailers’ enterprise-wide transaction and order fulfilment to deliver a consistent and seamless buying experience to their customers via traditional PoS, online and mobile channels.

FUJITSU Market Place breaks down the barrier between orders and in-store shopping by combining both in a single transaction. For the customer, this delivers uniform pricing, promotion and customer-relationship experiences whether online, in-store or using a mobile device. It also allows the sales associate to transact business with the customer through a single application rather than switching between PoS and online order fulfillment, making the operation quicker, easier to learn and more likely to be accurate. And for the retailer, it provides increased profitability through a reduction of ‘dropped baskets.’   

So the top 50 global retailers really will have to look out – Fujitsu has exactly the solution those fast-followers need to catch up quickly and without completely re-engineering their IT. Investment risk is future-proofed and total cost of ownership is reduced by FUJITSU Market Place’s modular design, allowing retailers to deliver value-adding changes as they go along.

David Concordel
Senior Vice President Global Retail, International Business, Fujitsu