INTELLIGENCE IN. AMAZING OUT. · • Sell in-store merchandise 24x7, 365 days per year. • Facilitate sell through of end-of-season merchandise at non-discounted prices. • Minimize

solution BluePrintintelligent converged

retailing solutionRetail Services

Intelligent Converged Retailing Solution Delivers Consistent Customer Experience

eXecutive summaryCustomers expect a seamless and consistent shopping experience even when they cross channels, like buying an item online and picking it up at a physical store, or buying an item online and then returning it to a physical store. For them, it’s just one retail brand; although behind the scenes it may be a different story, especially when each channel has a unique set of business processes and infrastructure. For that reason, NCR* provides a solution that tightly couples inventory visibility for brick-and-mortar stores and corporate web sites. Such a converged retail solution is the basis for conducting sales transactions across channels in a way that ensures prices, promotions and inventory views are the same regardless of the shopping mode. The solution helps retailers integrate siloed retail systems, present consistent customer touchpoints, keep inventory balanced and simplify transactions.

INTELLIGENCE IN. AMAZING OUT.

Key Business oBjectivesOffer customers a more flexible and seamless shopping experience with the ability to receive and return merchandise the way they want, and when and how they want it.

Who Will Benefit from this solutionThe converged retail solution is a key ingredient for enabling a multichannel shopping experience with clear advantages that benefit both the customer and the retailer.

By providing multiple fulfillment options, including In-Store Pickup, Ship-from Store, and Ship-to Store, as well as traditional direct-to-customer fulfillment from warehouses, customers can take advantage of a broader product selection representing inventory in all of these channels enabling them more opportunities to get their desired merchandise, compared with traditional scenarios where if their item cannot be fulfilled by the warehouse due to out-of-stock conditions, the customer is unable to place the order. Since the solution sources products from the most efficient location, customers can often receive their merchandise sooner, if not the same day.

In addition, customers can save time with a more convenient return experience where they can return items that were purchased online to the physical store that is most convenient for them.

retailers can expect to see an uptick in sales from adding converged retailing processes. In the case of ‘Buy online, return to a store,’ a large retailer said that about 50 percent of the time, customers will purchase another item during their visit. Likewise, around 25 percent of customers will buy an additional item while picking up merchandise from a store. Adding converged retailing processes can also increase sales by reducing the number of lost transactions due to the inability to fulfill a customer’s order.

In addition to increasing sales, this versatile solution provides other sales and inventory management capabilities that enable retailers to:

• Capture lost sales by eliminating channel-specific inventory.

• Improve the visibility of corporate-wide inventory and increase product availability to customers independent of the shopping channel.

• Sell in-store merchandise 24x7, 365 days per year.

• Facilitate sell through of end-of-season merchandise at non-discounted prices.

• Minimize shipping transit time and shipping charges to customers by shipping orders from the closest store, and/or allowing customers to pick up in store.

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table of contents

executive summary . . . . . . . . . . . . . . . . . 1

Key Business objectives . . . . . . . . . . . . . 2

Who Will Benefit From This Solution . . 2

meeting new market Demand . . . . . . . . 3

the Business challenge . . . . . . . . . . . . . 3

solution overview . . . . . . . . . . . . . . . . . . 4

technology . . . . . . . . . . . . . . . . . . . . . . . . . 6

summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

resources . . . . . . . . . . . . . . . . . . . . . . . . . . 7

meeting neW marKet DemanDIf it seems like shoppers are in a hurry, they probably are. “In fact, 70 percent of U.S. consumers say they don’t have enough time to do all the things they need. And 50 percent actually feel that lack of time is a bigger problem than lack of money,” according to Chris Malta of WorldwideBrands.com.1 Online retailing cashes in on this “need for speed” because all it takes is an Internet connection and a computing device to go shopping.

But some retail transactions are more complicated than simply clicking the Purchase button on a web page. Customers who want their merchandise right away may drive to a physical store after verifying availability online. Others may purchase an item online, but prefer to pick it up in a store because they aren’t home during the day to take delivery. Some prefer returning online purchases to a physical store in order to avoid the time and effort of finding a box for the item and mailing it.

These are just a few ways that converged retailing offers customers on-the-go greater convenience and time savings, and ultimately increases their satisfaction. This is substantiated by an NPD Group survey of U.S. consumers, where 43 percent said they valued the opportunity to buy online and pickup in the store. Even more respondents, 64 percent, said the ability to buy, take delivery or return a product across all channels (stores, online and mobile) is extremely or very important.2

the Business challengeFor the majority of retailers, their brick-and-mortar stores and online presence evolved in separate channels, each having its own inventory and fulfillment operations. Formerly, the business models were different, and the potential synergies weren’t actively pursued. One reason is the two channels tend to have different profiles regarding personal interaction and transaction processing; for instance, in-store customers pay close attention to the scanning speed of the checkout clerk, whereas online shoppers focus more on the items in their cart and less on how long it takes to process them. Thus, making the transition to converged retailing requires overcoming some critical business issues:

• system “silos”: Since online volume was small at the start, many retail brands did not merge the business processes of e-commerce and physical stores early on. As a result, each may have rather independent inventory and fulfillment systems, with no single view of inventory across sales channels.

Poor system integration only magnifies a long-standing problem for retailers – that of inventory distortion – defined as the cost of lost sales resulting from out-of-stock merchandise, plus the losses resulting from overstocks that must be deeply discounted in order to sell. According to the IHL Group, this combined annual cost is estimated at $818 billion, increasing by $50 billion each year.3

• consistent customer touchpoints: Except for special events, like “online-only promotions,” customers’ confidence is diminished when prices vary across channels, especially if they feel they‘re paying too much. Likewise, customers get upset about inventory discrepancies, such as when the web site shows a product is available in a store, but when they get there, it’s sold out.

In the digital age, unhappy customers can damage a brand image by posting negative product reviews on the Internet. Instead, businesses want to know when and why consumers are dissatisfied so there’s an opportunity to rectify the situation before they leave the store (or online portal). To solve this challenge, businesses can increase brand control by developing a holistic, synchronized, digital experience capable of building and sustaining 1:1 personal relationships with every single customer.

• system complexity: When the back-end systems for physical stores and online are poorly integrated, the staff may need to maneuver around numerous application screens to perform cross-channel transactions. Another sign of poor integration is when a cross-channel transaction requires a dedicated system, as in relying on a one-off system to support in-store pickup of online orders.

• unbalanced inventory: The growth in online sales is making inventory management more difficult because retailers must forecast how many customers will shop at physical stores versus online. This prediction ultimately determines the amount of inventory held in reserve at stores and warehouses, and a poor estimate can lead to over- and under-stocking situations.

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intelligent converged retailing solution Delivers consistent customer experience

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solution overvieWNCR provides a converged retailing solution that simplifies cross-channel fulfillment, and return options such as:

• In-Store Pickup: Customers buy online and pick up in store (often the same day)

– The item may already be in-store inventory or it’s shipped in from another location (Ship-to Store)

– Availability can be checked online

• Ship-from Store: Customers buy online and ship to home

– Item ships from a retail store’s inventory to a customer’s home

• Traditional direct-to-customer fulfillment from warehouse: Customers buy online and ship to home – Item ships from a warehouse to a

customer’s home

• Buy Online/Return to Store: Customers can return items purchased online to a physical store

The solution combines NCR Advanced Store POS solution that runs on NCR RealPOS™ terminals (as well as other manufacturers’ POS terminals) and mobile devices, and multi-channel integration software, which connects inventory systems across commerce channels. The capabilities include tapping into local store inventory in order to fulfill online orders and sourcing products from the most efficient location. This solution enables retailers to create a distinct competitive advantage by better utilizing physical store inventory to increase sales, and improve customer loyalty and satisfaction. NCR Advanced Store software allows sales associates to efficiently conduct cross-channel transactions in-store and provides Enterprise Returns Management, which gives customers the option to purchase items online and return to a physical store.

taking control of online sales

NCR supports a seamless retail sales process and considers all available store

inventories to fulfill sales made over the Internet and at traditional stores. For instance, NCR’s solutions route E-commerce orders to the best available stores based on retailer-defined store allocation business rules, saving shipping time and cost. Additionally, the Web portal provides store personnel with a pick list, packing slip and shipping label. Once orders are picked and packed, the carrier integration feature automates shipment to the store or the customer’s address when requested. The solution ensures each sales channel maintains accurate information by aggregating inventory counts from all fulfillment locations.

Figure 1 illustrates the converged retailing solution, which ties together the existing e-commerce and centralized retail inven-tory management systems, third party shippers and physical stores.

ShipConfirmation Scans from UPS/FedEx

Batch orReal-timeInventoryUpdates

Store 1

Store 2

Store 3

Store 4

Store 5

Store X

E-Commerce/Order Management System

ShipperPickup and Delivery

to the Customer

NCR Multi-Channel Integration Software

Customer

Customer

Store Inventory

NCR POS Terminals

NCR Advanced Store Software

Retail InventoryManagement

System

WarehouseInventory

figure 1 . NCR* Converged Retailing Flow

example: jane Buys online and Picks up in store

The following outlines the business process when a customer makes an online purchase and requests in-store pickup.

> Jane selects a dress and checks the availability of the merchandise.

> Jane requests in-store pickup, and the order is routed to the selected fulfillment location.

> The fulfillment system receives the order and generates a pick list.

> The store associate uses a POS terminal to email Jane when the order is ready for pick up.

> Jane arrives at the store, and the sales associate determines the bin location of the pre-picked order using the POS terminal.

> The sales associate closes the transaction with the POS.

This converged solution scenario helps address several challenges facing retailers by:

• Supporting multiple, cross-channel fulfillment options .

– Multichannel retailers can now offer customers multiple shop online fulfillment options, including In-Store Pickup, Ship-from Store, Ship-to Store and traditional direct-to-customer fulfillment from warehouses that could make the difference between an abandoned cart and always saving the sale.

• Eliminating data inconsistencies and creating sales opportunities by connecting inventory and pricing across commerce channels .

– The customer sees consistent inventory and pricing information across channels because the solution enforces uniform inventory data corporate-wide. Additionally, channel-specific inventory is eliminated, which increases product availability to customers independent of the shopping channel and extends

the selling of merchandise located in physical stores to 24x7, 365 days per year, thus capturing sales previously lost due to inventory distortion.

• Integrating cross-channel transactions into a standard Pos terminal .

– In a logical manner, the retail personnel in physical stores can perform all the necessary transactions using a single POS terminal, which simplifies processing.

• Making corporate-wide inventory available to any store location or online sales .

– The converged retailing solution helps address unbalanced inventory situations by fulfilling an order made at any under-stocked location from an over-stocked location. This capability can increase retailer profitability by lowering inventory carrying costs and minimizing margin loss incurred for aged fashion; for instance, it’s possible to evenly disperse end-of-season merchandise across locations and possibly avoid markdown points that reduce the selling price.

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emPoWering a neW WorlD of retail innovationThe retail industry is in the midst of a dramatic information revolution that is laying the groundwork for new consumer experiences, enhanced productivity, reduced inventory distortion and brand optimization. Intel is addressing this transformation with the Intel® Intelligent Systems Framework, a set of interoperable solutions designed to facilitate connecting, managing and securing devices in a consistent and scalable manner.

What can emerging intelligent retail systems do? Imagine an intelligent store where incoming weather data indicates a severe storm approaching. The store’s digital signs and kiosks immediately begin promoting items commonly purchased during storms, like umbrellas, and prices are adjusted to reflect the predicted increase

in demand. Price updates are transmitted to electronic shelf labels and the back office. Data from checkout confirms umbrella sales are increasing, causing immediate alerts to the stockroom. The store’s warehouses and key suppliers send shipments to replenish the shelves.

The Intel Intelligent Systems Framework helps simplify the deployment of intelligent systems and enables retail OEMs to shift their investments from achieving interoperability to unlocking the value of data. The framework features fundamental capabilities, delivered by components that address connectivity, manageability and security, including software and middleware from Wind River* and McAfee*.

For more information, visit www .intel .com/content/ www/us/en/embedded/intelligent-systems.html.

Sales

Retail Terminal

Stock Room

Server

Supplier

Warehouse

ElectronicShelf Label

technology

ncr* advanced store

Designed for the general merchandise retailer, NCR Advanced Store is a POS software solution that runs on a POS terminal or a mobile device. It is a full-featured application that delivers a robust set of retail functionality right out of the box, or it can be tailored to satisfy specific requirements and business needs.

NCR Advanced Store provides key elements of enterprise system capabilities, offering:

• Multiple and flexible buying and returning options

• Associate-facing mobile selling support

• Touchscreen and gesture-based user interface for ease of use and training

• Consistent shopping experience for customers, whether shopping online or in a store

• Fraud management through coupon and return transaction validation

ncr Pos terminals

The company’s RealPOS line of POS terminals is designed to deliver outstanding performance and investment protection for years to come. One of NCR’s leading POS terminals, the NCR RealPOS 80XRT, enables retailers to deploy industry-leading performance, scalability and systems manageability at the point of service.

http://www.intel.com/content/

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exceptional performance and scalability

With Intel® Core™ processor options (single-, dual- and quad-core), the NCR RealPOS 82XRT (pictured in Figure 2) provides the performance retailers need, when they need it. This scalable POS workstation is designed to meet future business requirements.

enhanced manageability

The POS workstation provides multi-tiered systems management capabilities to maximize system availability and help reduce support costs. With Intel® Active Management Technology (Intel® AMT)4, retail IT departments have unique visibility to system health with secure out-of-band remote management.

Intel AMT provides mechanisms that enable IT personnel to quickly fix many types of system problems remotely, thus improving system availability and the end-customer experience. In addition, Intel AMT allows the IT operators to manage systems even when they are turned off or when the operating system is unresponsive.

superior reliability and serviceability

The NCR RealPOS 82XRT is built to withstand the demands of harsh retail environments for years of dependable operation. Readily accessible components make service and upgrades easy and fast.

ncr system integrity

In the retail business, security issues can impact the bottom line due to penalties, breaches and unscheduled downtime. Security issues also affect customer confidence and loyalty. Retailers know they need to address these issues, and they desire a solution that helps minimize the costs and disruption resulting from system or network upgrades.

NCR System Integrity (SI) offers an automated and proactive security solution designed for retail store environments. Utilizing the McAfee Integrity Control software, NCR SI provides a comprehensive approach to securing NCR retail POS and back-office solutions, whether it’s a legacy system or one that has been recently purchased.

summaryUnderscoring the importance of converged retailing, a CEO of a large multichannel retailer said,

“ We thought our best customers used the stores and our discount shoppers used the web site, and we treated the channels very separately. It turned out that our best customers were buying both online and in our stores, and they are worth almost six times as much to us.”5

An important tool for getting the most out of multichannel selling isthe NCR converged retailing solution because it provides a single view of store and warehouse inventory to the e-commerce platform, thus minimizing inventory distortion. This capability enables various fulfillment options that provide better service to customers and can ultimately lead to greater profitability.

resourcesintel® retail solutions Partner network

Redefining what’s possible, leading solution providers have come together to address the specific needs of retailers, whether it’s consulting, content creation and management, retail systems, hardware customization, deployment support, network management or cloud-based services. The Intel® Retail Solutions Partner Network provides one-stop shopping for cutting-edge technologies that deliver new consumer experiences, enhanced productivity, reduced inventory distortion, brand optimization and more. To learn about member solutions, visit intel .com/retailsolutions.

For more information about NCR Retail solutions, visit www .ncr .com/industries/retail.

For more information about McAfee security solutions, visit www .mcafee .com.

“We thought our best customers

used the stores and our discount

shoppers used the web site, and

we treated the channels very

separately. It turned out that our

best customers were buying

both online and in our stores,

and they are worth almost

six times as much to us.”

“Welcome to the Era of Agile Commerce,” Brian K. Walker, Forrester Research,

March 2011

figure 2 . NCR* RealPOS 82XRT


http://www.ncr.com/industries/retailhttp://www.mcafee.com

1 Source: “5 Product Trends for 2008 that Every Seller Should Know” http://www.worldwidebrands.com/articles/5+Product+Trends+for+2008+that+Every+Seller+Should+Know+About-c17i2600.html

2 Source: “Smarter use of store technology gives retailers a head start in race to attract holiday shoppers,” http://www.ncr.com/newsroom/resources/holiday-shopping3 IHL Group Report: $818 Billion Lost Annually in Global Retail “Inventory Distortion”; 20124 Intel® Active Management Technology (Intel® AMT) requires the platform to have an Intel AMT-enabled chipset, network hardware and software, as well as connection with

a power source and a corporate network connection. With regards to notebooks, Intel AMT may not be available or certain capabilities may be limited over a host OS-based VPN or when connecting wirelessly, on battery power, sleeping, hibernating or powered off. For more information, see http://www.intel.com/technology/manage/iamt

5 Source: “Welcome to the Era of Agile Commerce,” Brian K. Walker, Forrester Research, March 2011

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The products described in this document may contain design defects or errors known as errata which may cause the product to deviate from published specifications. Current characterized errata are available on request. Contact your local Intel sales office or your distributor to obtain the latest specifications and before placing your product order. Copies of documents which have an order number and are referenced in this document, or other Intel literature, may be obtained by calling 1-800-548-4725, or by visiting Intel’s Web site at www.intel.com.

Copyright © 2012 Intel Corporation. All rights reserved. Intel, the Intel logo and Intel Core are trademarks of Intel Corporation in the United States and/or other countries.

* Other names and brands may be claimed as the property of others. 12/12/DM/DM2/MB
http://www.worldwidebrands.com/articles/5+Product+Trends+for+2008+that+Every+Seller+Should+Know+About-c17i2600.htmlhttp://www.ncr.com/newsroom/resources/holiday-shoppinghttp://www.intel.com/technology/manage/iamthttp://www.intel.com

Documents

INTELLIGENCE IN. AMAZING OUT. · • Sell in-store merchandise 24x7, 365 days per year. • Facilitate sell through of end-of-season merchandise at non-discounted prices. • Minimize