New Book - out now on Amazon

Latest publication by BCS features couple of my articles. The title of the book is “Management Skills in IT” and it is now available onAmazon.

Retail technology needs to think on its feet

I came across an interesting and relevant blog post by Paul Broome, CTO at TOREX. He lists a number of examples of innovative retail trends and experiments such as, Ebay shop on Oxford Street, Shoreditch Boxpark, John Lewis pop-up shops (listed below) and then argues that IT can play a significant role in leading such future innovations.

• E-tailer giant eBay has taken its proposition to an empty shop just off Oxford Street where it has opened the eBay Boutique. The store is stocked with 350 eBay bestsellers ranging from perfumes to digital cameras and flatscreen TVs. There are no tills, instead customers pay with their smartphone by reading QR codes on product tags.
• Shoreditch's Boxpark project mall recently opened; this being the world's first pop-up mall, built from stripped and re-fitted shopping containers.
• John Lewis pop-up shops at the Vintage at Goodwood festival for the last two years running. The shop was geared towards the festival's audience, stocking vintage products and running sewing workshops, fashion and furnishing advice.

In an example of how technology can respond he cites Apple example. Apple has been using its own products as portable POS system for some time. The combination of a HTML5 POS with the portability and low cost of tablet computing means this type of technology is well-suited to retailers, restaurants and bars looking for a flexible solution. The technology is applicable for delivery through a cloud-based service, making it easily accessible, without a big investment in hardware and can be set up in a matter of minutes. He argues that, such agility and flexibility could allow retailers to explore new sales channels to meet targets, particularly in the run-up to Christmas and over the January sales.

How $1.25 Billion Gets Spent In A Day - Cyber Monday

Further sticking with the theme of past few posts....sharing an interesting article by Karen Frankel on Blockbuster Cyber Monday. She notes that the spending increased 22%, the largest jump on record. Ten million people bought products online, comScore says, gobbling up $1.25 billion in goods easily beating the online sales offered on Black Friday.

Given the chilly economy, this turnabout is something of a surprise. One factor may have been "austerity fatigue," says comScore's Vice President, Industry Analysis, Andrew Lipsman. Consumers were so hungry for a break from the ongoing constraints of the financial crisis that they indulged like chocolate addicts at a Godiva outlet. Shopping sprees at work, where buyers could avoid family members looking over their shoulders as they selected surprise gifts, accounted for half the dollars spent, comScore said. Consumers also had greater-than-ever-access to online promotions and searchable coupons.  Over 550 merchants made special offers on Cyber Monday, including free shipping, hourly specials and exclusives, and sneak peeks of the hourly deals shared via email alerts.

Black Friday and Cyber Monday Bring Much Needed Retail Cheer

Picture courtesy - Reuters

Silicon Valley Business Journal reports, that retailers reported strong holiday sales on Black Friday, through the weekend and more is expected for so-called Cyber Monday. Sales on Black Friday were up 6.6 percent from a year ago, according to the consulting firm ShopperTrak, compared with only a 0.3 percent gain in 2010. For instance analyst Gene Munster of Piper Jaffray said on Monday that Apple Inc sold about 15 iPads per hour at Apple Stores on Black Friday, a 68 percent increase from last year. 

As New York Time reports, cyber Monday may have started as a made-up occasion to give underdog e-commerce sites jealous of Black Friday a day of their own, but it has become an undeniably real thing surprising even the people who invented it. NY Times further reports that, last year was the first time that the Monday after Thanksgiving was the biggest online shopping day of the year by sales, and the first day that online spending passed $1 billion, according to comScore, a research company that measures Web use.  

Reuters report confirms the trend for this year, online sales reached $1.251 billion on Monday, up 22 percent from the same day last year, said comScore Inc, a closely watched Web tracking firm. IBM Benchmark, a unit of International Business Machines Corp, put the increase at 33 percent compared with Cyber Monday in 2010. Department stores saw online sales surge 60 percent this Cyber Monday, compared with last year, while sales of home goods rose 68 percent, IBM Benchmark added.

And this trend may long continue to the delight of retailers as Matt Warman reports over in the Telegraph, Apps are driving Christmas Toy sales.Sales of app-inspired toys and games increased 65 per cent week-on-week in the run-up to Christmas, John Lewis says. Elaine Hooper, John Lewis toys and books buyer said that “App toys are one of the fastest growing toy categories ever seen.”She claimed that “alongside other technology gifts including miniature digital cameras, camcorders and electronic learning tablets” there were now new types of toy. “Moshi Monsters and Angry Birds were barely on radar last year but are on every child’s Christmas wish list for 2011. We sold two app-inspired products in 2010 compared to the current 14”.

Holiday E-Commerce Spending Set to Grow 15%

The CIO magazine is reporting that, based on the first three weeks of November, comScore is forecasting 15% growth in e-commerce spending for the 2011 holiday season. U.S. consumers have so far spent $9.7 billion online during the first 20 days of the November-December holiday season, which is up 14% compared to the corresponding days last year. The heaviest online spending day of the season to date came on Nov. 16, when sales hit $688 million. Last year, U.S. consumers spent a total of $32.6 billion online during the holiday season (excluding auction sites and travel spending). This year's online holiday spending is expected to top $37.6 billion for a 15% gain, according to comScore's estimates.

"With the persistent backdrop of macroeconomic uncertainty and continued high unemployment, consumers appear to be increasingly favoring the online benefits of convenience and lower prices," said comScore Chairman Gian Fulgoni, in a statement. "Due to the strength leading up to and during the holiday season-to-date, comScore's statistical models are forecasting that U.S. retail e-commerce spending will grow at a rate of 15% vs. last year."

In a related story Bloomberg reports that, Amazon.com Inc. (AMZN) and EBay Inc. (EBAY), aiming to get more consumers to shop online this holiday season, are taking their fight to brick-and-mortar retailers’ home turf on Black Friday, the busiest shopping day of the year. EBay is planning holiday “pop-up” locations in New York, San Francisco and London that will let consumers scan a barcode and buy products on the spot, using mobile phones. Amazon opened an online Black Friday deals store on Nov. 1. It’s packing the site with offers each day to keep shoppers checking in over the Web, instead of heading to the mall. 

Internet sellers aim to spur more buying from couches and armchairs among the more than 95 percent of U.S. consumers who still shop in stores, ratcheting up rivalry with traditional retailers as economic weakness weighs on spending growth. EBay’s outdoor displays and shopping cafes, for example, seek to catch the eye of shoppers who are hurrying in and out of stores, offering an alternative to post-Thanksgiving crowds and lines. 

Multi-Channel Retailing Takes a new Meaning with Retail Apps

Retail Reference Architecture, it's evolution and real-life pragmatic implementations happens to be one of my key interest area. So far on this blog I have discussed the concept of Retail Reference Architecture, proposed a concise yet complete Simplified Retail Reference Architecture and also shared some of the innovations from real-life implementations of Retailers such as ASOS. As a matter of fact I do follow fortunes of ASOS with great interest. To me this is a bold, new take on the science of retailing (...some might call is an Art of Retailing) which combines best practices from innovator's such as Amazon.com and presents a unique and deceptively simple business model. This post shares some of my further observations about ASOS and more importantly how they continue to lead the innovative use of Information Technology in the retail space.

Since summer ASOS  has launched its App for the Apple range of mobile devices. The new service has been designed for iPhone, iPad and iPod Touch users, and along with the function to ‘save for later’ any item of interest sold by the trader, the app also includes a locator for local drop-off points for customers looking to return unwanted purchases.
Free to download, the new app lets you browse and shop directly from fashion editorials, very similar to Net-à-Porter's. The app comes with trend reports and also contains content originally produced for the online version of the Asos magazine as well as exclusive footage and features such as video and 360-degree views of clothing items. The iPad app is available for free from the App Store since August this year with both Android and iPhone versions scheduled to launch by the close of 2011.

As the App design James Davie says, "this App design provided a series of new challenges. Most importantly striking the perfect balance between giving the user the familiar ASOS shopping experience, and the equally familiar iPad navigation experience. The final result is a balance of both which should give the user a quick, painless and enjoyable shopping experience."  Having personally used this App now I can confirm that this is one of the best fashion retailing App available out there with intuitive navigation, fresh content, catalogue, bold designs and just tons of "coolness"! Above the cosmetics, what stands out for me is the fact that, customer accounts are totally synchronised across all of the retailer’s platforms so whether they are using the new apps, the standard website or the mobile site all of their details will remain consistent.

This App and iPad appear to be made for each other and not just a lift-off from ecommerce site made to fit with iPad format. Just to clarify I am not a regular ASOS shopper but as a keen Retail Technology practitioner and follower...this company and it's innovation are worth watching!

Google Commerce Search: New Trend for Retailers for the Festive Season?

Google unveiled on Wednesday its Commerce Search Partner Program, designed to market and implement mobile e-commerce sites. The system integrators participating in the program will anchor the implementations with Google's Commerce Search, a cloud-hosted application that retailers buy to power the search engine of their e-commerce sites.

Google states that, "We wanted to make it easier for retailers to adopt Google Commerce Search to help them achieve amazing results and meet their customers’ needs. Through this new program, resellers can work with us to bring the unique capabilities of Google Commerce Search to their retail clients." Branding Brand has worked with Timberland and earlier this year GNC to turn their mobile visions into reality. Before GNC optimized their mobile website, 10 to 15 percent of their e-commerce traffic came from mobile. Since launching it this summer, there are twice as many visitors using search, and mobile search conversions are up 50 percent.

Google claims that, their newest customer, Timberland, just went live with their mobile-optimized website powered by Google Commerce Search in a matter of days. Chris Hardisty, director of Timberland Global E-Commerce, says: “Our first priority in developing our mobile website was making sure customers had the best experience possible. Shoppers today expect fast and relevant results especially on mobile, where speed and interactivity matter most. Since we launched our mobile-optimized website, we have seen mobile sales grow 20 times faster than our desktop site sales.”

Price match or refund at checkout! Now that's a bold a move

Sainsbury's is launching a hi-tech promotion scheme in which price match for shopping basket will be done at the checkout. If any difference found with other retailers such as Tesco or Asda the amount will be refunded in vouchers. This scheme is set to unleash an unprecedented supermarket price war.

Tesco has already said that it will accept the Sainsbury's vouchers while Asda is believed to be responding by installing booths with internet links so customers can check its online price guarantee. It already has a price guarantee scheme which shoppers can access from home.

The store is piloting this on Brand Match till technology.

Retail and Financial Services - Two Sectors Getting Ever Closer

Who handles bulk of the Cash on UK High Street? Who manages bulk of the financial transactions going through the ever-growing ECommerce industry? As you would have guessed the answer is not Banks and Financial institutions, the answer is Retailers. Put all together, the retail operators handle more cash as well as card transaction on the UK High Street as well as in the ECommerce world. And there are indications that, retailers will be making most of this strength and make further inroads in offering financial services. 

The banking arm of the Co-operative Group will today offer everyday-banking services from an additional 250 high street branches as it completes the integration of Britannia.

Building Society.Britannia's branches have previously been used only for Britannia savings accounts but from this week they will be able to carry out everyday current account work for all Co-op customers. In addition, the Co-operative Financial Services will now be known as The Co-operative Banking Group and will operate under both The Co-operative Bank and The Co-operative Insurance brand names.

Unnoticed by many, Tesco recently bought out the banking partner that supplied the back-office skills for its limited range of financial services. That is as big a hint as you could get that it is planning to expand.But it does so with the huge advantage of Tesco Clubcard data, through which it knows almost everything there is to know about its customers' spending habits. This will give Tesco a huge insight into what it can afford to save and to borrow. 

Trends which are developing for the past few years and to watch out for;

• Customer Loyalty Programs collaborating closely with Retail Transactions to monitor and make sense of Consumer buying patterns
• Customer Relationship Programs leveraging Financial offers (cards, loans, etc)
• Third party promotions and alliances. A good example is Boots - Waitrose linkage
• Retailers using established banks to offer white label financial products. Number of retailers now offer store cards which are in turn products from financial services firms such as MBNA.
• Retailers with large enough scale launching their own financial services. A good example if Tesco Bank.
• Large retailers eventually buying small to medium financial services firm 

With Banks and Financial institutions coming under more pressure from regulatory authorities and adverse trading conditions we can only anticipate these trends gaining further momentum in coming months and quarters.

Tesco pulls out of Japan

After ploughing more than £250m and eight years into trying to crack one of the toughest retail markets in the world, Tesco has admitted defeat and announced that it is pulling out of Japan. The move is a rare admission of defeat by the British supermarket group and raised speculation it could be prepared to exit its much larger loss-making business in the United States if its current recovery plan fails to deliver. 

As Reuters reports, Japan is the smallest of Tesco's 13 international businesses, consisting of 129 stores in greater Tokyo employing just over 3,900 people and making less than 500 million pounds ($813.8 million) in annual sales, according to analysts' estimates. Analysts had long tipped the business for disposal after it failed to make significant inroads into a market dominated by general merchandise operators such as Seven & I Holdings and Aeon . 

But Philip Clarke, the chief executive of Tesco, tried to quash any speculation that the grocer may also seek to pull the plug on its Fresh & Easy chain in the US, which suffered losses of £186m in the year to 26 February. Tesco – which has operations in 14 countries, including Japan and the UK – has vowed to make Fresh & Easy profitable by the end of 2012-13. Mr Clarke said yesterday: "We've got great opportunities in Asia in businesses where we are market-leading and I think any comparison with Fresh & Easy would be inappropriate."

Accelarating cloud based ECommerce Apps, now made easy?

If you are a web based business such as an e-retailer hosting your business with Amazon cloud infrastructure, you may be in for a pleasant surprise. Amazon has just announced in-memory caching feature on its cloud services which will enable transactions such as e-retailing to go faster.

ElastiCache, announced on Monday, is software for caching frequently accessed pieces of data 'in-memory' — or in RAM — within the cloud. This speeds response times when querying sprawling databases or running complex calculations, and so should help companies to increase the responsiveness of applications on their websites, according to Amazon.

"Caching has become a standard component in many applications to achieve a fast and predictable performance, but maintaining a collection of cache servers in a reliable and scalable manner is not a simple task," AWS's chief technology officer Werner Vogels wrote in a blog post on Monday.

Traditionally ecommerce or web apps have relied on caching in middleware technologies to achieve similar outcome but often this an expensive undertaking given depedency on expensive software licences and niche skills of finetuning middleware software. If its claims are true, Amazon will make this in-memory caching to boost apps response speed relatively easier to achive.

"Cloud like" infrastructures make sense for large retailers

The bigger the IT landscape the less attractive the business case for shift to cloud computing. Well, you end up with a very large private cloud as economy of scale wipes benefits of public cloud. The argument will probably hold true in large number of cases. Though i can imagine large airlines leveraging public cloud as most common airline processes are interlinked or are shared with a few other airlines. (oh that's Amadeues for you!) i was thinking about this in the context of large retailers. If you are a large retailer like Tesco surely it's scale, growth plans and operational justify your own infrastructure? I was also thinking of this in context of news that Tesco has signed a eight-year deal to use Microsoft products and services. I wondered how much of it would be cloud based and would Microsoft's latest cloud offerings be leveraged in this deal.

"Cloud like" characteristics will certainly be most desirable, no doubt. Any business operation will demand agile, flexible, less capital intensive investment in it's infrastructure. But i am wondering if commercial constructs of such deals can be made to mirror that of "cloud like" contract?

When it comes to E-Retailing is Small the new beautiful?

Just came across the news of BigCommerce raising $15 million and I was wondering when it comes to dynamic growth are retailers better off looking at "small is beautiful" business model?

Launched in 2009, BigCommerce provides a comprehensive SaaS for retailers and merchants to manage e-commerce online. BigCommerce helps small businesses power anything and everything related to an online storefront from search to inventory to online payments to marketing and SEO. And the price for the software is affordable for small businesses, with basic plans starting at $25 per month. The company has $200 million in total transactions via its SaaS and is adding 1,000 clients per month. Sounds like a good growth pattern to me!

Amazon EC2 is clearly growing backing on the same trend. The business model is simple, attract small start ups, low capital investments, pay as you go, adopt social media friendly tools to expand the reach. The issues may arise when business hits medium size growth challenges. But till then, welcome to dynamic growth!

Germany Retail Sales Surge

Retail sales in Germany, the biggest European economy, gained a surprise 6.3 percent in June, provisional figures released Friday showed. Analysts polled by Dow Jones Newswires had forecast a much more modest seasonally-adjusted increase of 1.7 percent from May, but economists agree that the indicator is volatile and subject to frequent revisions. A statement issued by the Destatis national statistics office also noted that the result was affected by a change in the sample of companies that were polled. The increase was still a sharp rebound from the month-on-month fall of 2.5 percent in May, however. The German economy, Europe’s largest, is weathering theregion’s sovereign-debt crisis as companies step up hiring to meet export orders, fueling consumer spending. The Bundesbank last month raised its 2011 growth forecast to 3.1 percent from 2.5 percent, citing stronger domestic demand.

Guess what's in a Box? Photobox acquires Moonpig.com

More of us are jumping on the Social Media bandwagon and sharing aspects of our personal lives online through Facebook, Twitter etc. Though it seems that there is still a market out there to convert and share our favourite images, photos and messages in paper format. The self-service market of tools to enable us do that is relatively small but growing fast. Hence it came as a no surprise when digital photo service Photobox has announced that it is merging with the personalised greetings card company Moonpig.com. Photobox will pay £120m for Moonpig, some of which will be paid for with shares in the new company and some of which will come from bank loans and new funding from private equity investors. 

The deal will see Moonpig's chairman, Nick Jenkins, cash in part of his 35 per cent stake in the company he set up in 2000. He will continue as an adviser to the merged entity.  As FT reports, the companies have about 6m customers between them and both are experiencing rapid growth. Moonpig’s sales rose by 21 per cent to £38m in the year to April 2011, while PhotoBox’s sales rose about 30 per cent last year. PhotoBox’s most popular product is a book of photos which customers can design themselves.

McDonald's Shines on High Street

In contrast to the Retail industry doom and gloom which we are witnessing all around us, one brand stands tall in our High Streets. McDonald's has served record 325m customers at UK stores in the last quarter as its cheap fast food and long opening hours attracted recession-hit consumers.

McDonald's has seen its quarterly profits soar 15% on higher sales across all its global regions. Its net profit for the three months to 30 June totalled $1.41bn (£866m), compared with $1.23bn a year earlier. Revenue growth was led by Europe, where McDonald's same-store sales increased by 5.9%. They rose by 4.5% in US, and by 5.2% for the rest of the world.

No wonder McDonald's loves UK and London in particular, as evidenced by the announcement that they will build four restaurants in London, one of which will be the largest and busiest McDonald's in the world.

Does India Really Need Retail Therapy?

There is an interesting article in WSJ today which makes the case for 100% FDI in India's retail sector. The author makes the claim that, "the arguments for opening up retail start with the technology, expertise and funds that this would bring to build robust supply chains across the nation. This would reduce wastage (estimated at 30% to 40% of total production), improve food safety, hygiene and increase overall efficiency."

While this argument is fairly logical the key question is would you undertake a challenge of this magnitude if you were running a successful retail chain in say US or UK? The culture of small corner shops and community based transactions are very strong, even in big cities. What would break their monopoly and why would local consumer turn to a "foreign" shopping experience? Cost, Quality, Brand? Can a new market entrant take on decades of community rooted businesses, understand shopping ethics and create their own identity?

It is one thing for Government to open 100% investment but how many retail companies have investment muscle and creativity to break a complex market like India?