Oracle Changes the Economics of Retail

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Oracle Changes the

Economics of Retail

Retail is undergoing a transformation. Decades

spent pursuing operational excellence have set

the stage for changes in retail economics and

business practices.

Retailers that can respond to increasing customer diversity and demand,

find growth within saturated marketplaces, reinvent themselves with the

local customer market in mind, and make strategic choices based on detailed

customer information are the retailers that will participate profitably in the

new retail marketplace.

Oracle can help you transform the way your retail business works. Oracle

creates a unified view of your information that will deliver economic value

to your whole business, from in-store operations to corporate strategy to

supply chain and logistical management. Oracle Retail solutions deliver

the information that transforms your ability to make decisions—so you’ll

carry the right items all the time and train the right store staff to execute

flawlessly on all your merchandising programs. We do this by providing

accurate, actionable information, fully integrated between merchandising

and financial systems. And we help you coordinate your people, processes,

and technology to make your unique retail experience profitable.

Consumer expectations and demands are becoming more diverse and

more personal. With the help of Oracle Retail you can keep pace with your

customers, transform the way you do business, and change the economics

of your retail business.

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Insightful Information Leads to

Good Decisions

Transform to an insight-driven

enterprise: combine the art of

merchandising with analysis, to

accurately predict customer

demand.

Information is at the core of the

mathematical analysis that enables

localized merchandising and

optimized assortment plans, store

layouts, and pricing. These optimi-

zations result in improved financial

performance that transforms the

economics of retail. Oracle Retail

helps you

• Increase sales

• Improve margins

• Increase growth and market share

• Increase customer loyalty

Transform to an Insight-Driven Enterprise

Too much information and not enough time to make sense of any of it—this is the plight of most merchants. Without appropriate analytical capabilities, data does nothing but slow you down and keep your perspective rooted in the past. Merchants shouldn’t have to spend time number crunching, but they do.

The better alternative? Let the system manage the analytics, let the system handle the forecasting, and let the system generate the recommended changes to the plan—and let merchants be creative retailers again.

Insightful information is more than mere data. It includes forecasts, results, patterns, and trends that boost your decision-making capabilities throughout the planning, pricing, and promotion processes. Retailers need systems that help them blend the art of merchandising with the science of accurate

customer-demand forecasting to gain insights. Insightful information lets retailers

• Increase decision accuracy

• Pursue next-generation, customer-centric strategies that maximize return on inventory investment

• Offer tailored store assortments to increase sales margins, growth, market share, and customer loyalty

Insightful information leads to good decisions—and good decisions lead to profitable business choices.

Accurate Merchandising Drives Loyalty

Customer loyalty is based on a positive perception of service—a perception that depends heavily on whether customers find what they’re looking for on your shelves. The merchandising choices you make are all critical. To transform and improve customer loyalty and drive growth, you must deliver the products that customers want, every time they shop with you and in the channel most convenient for them.

“For the second straight year, retailers will spend on software that makes

consumer demand insight and forecast analytics more prevalent and

accessible throughout the organization. Insights generated from advanced

demand planning will render antiquated reporting processes obsolete and

enable proactive, timely, and accurate decision-making.”

Rob Garf, AMR Research, “Retail Industry IT Spending Profile, 2005-2006: Retailers Continue Technology Spending on Demand Intelligence, Store Execution, and Improved Usability”

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Fact: In softlines, Oracle customers average

US$�.5 billion in sales, 7� percent higher

than their industry peers.

“The Oracle Retail solutions will enable us to streamline and automate our

operations with a single, comprehensive source of accurate sales and inventory

information. We selected Oracle Retail because it offers the most scalable and

integrated suite of retail applications. The improved integration and flexible

technology will provide a solid infrastructure for future growth.”

Eddie MacDonald, Chief Operating Officer, COLORADO group ltd.

Oracle Retail merchandise operations management solutions, such as Oracle Retail Merchandising System and Oracle Retail Price Management, provide a source of accurate information on which to base critical merchandising decisions. Make financial decisions based on your budget, or open-to-buy (OTB). With Oracle Retail, you can rely on up-to-the-minute details—from overall stock positions to planned purchases and incoming inventories.

Transform Your Planning Capabilities

Traditionally, merchants and planners have used history, and knowledge of their business and customers, to make and fine-tune decisions on everything from planning purchases to allocation. Oracle Retail enhances those time-tested methods with better process management capabilities and powerful analytics that empower even more-profitable daily decision-making.

Oracle Retail merchandise planning solutions use sophisticated mathematical models and optimization routines to create intelligent estimates of future business opportunities. The solutions provide a common demand-planning engine that works across your enterprise execution system and includes both statistical demand forecasting and casual promotional forecasting.

Transform Your Profit Potential: Price to Sell

Oracle Retail Price Optimization delivers the science necessary for analyzing, optimizing, and executing pricing and promotion decisions. Proven prediction analysis helps you provide the right products at the right prices, promote them to drive sales, and then clear them profitably, while providing more space for fresh, full-price merchandise. Pricing strategies will vary by retailer, but one consistent measure will be net margin—a fundamental imperative of success in transforming the economics of retail.

COLORADO group ltd.

COLORADO group ltd., one of

Australia’s oldest footwear retailers,

is aggressively growing through

increased sales and acquisitions

of retail and wholesale footwear,

apparel, and accessories organiza-

tions. In an important step toward

the future, the retailer deployed

a new merchandising system to

streamline the integration of new

product lines across its chains. The

new Oracle Retail infrastructure will

support current and future business

needs for

• Growth through acquisitions,

distribution channels, and product

extensions

• Improvements in business pro-

cesses to enhance productivity

• Improvements in stock manage-

ment and inventory visibility

• Flexible and open IT systems to

enable future changes

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Enhance Your Brand Promise

Integrate sales channels (store,

call center, e-commerce, catalog,

and partners) and seamlessly

connect your supply chain and

enterprise operations to those

channels to provide a better

shopping experience.

By making inventories interchange-

able among all channels, retailers

give customers choice, which leads

to enhanced customer loyalty

and decreased inventory carrying

costs—business advantages that

play a critical role in transforming

the economics of retail. Oracle

Retail solutions

• Increase comparable store sales

• Improve customer loyalty

• Improve associate productivity

• Reduce store expenses

Transform the Customer Experience

Retailers must never lose sight of the ultimate goal: ensuring that customers have pleasant, memorable buying experiences that build loyalty and drive repeat purchases. Increasingly, that means providing customers with added flexibility and the convenience of multichannel retailing and simplified purchase and return processes. It also means strength-ening the retail brand by ensuring that the brand promise is executed for every customer at every touchpoint in every channel.

Give Your Customer Choice

The lines of traditional retailing are blurring. Retail today is all about providing choice. Do you deliver through stores? Catalogs? Online? All of the above? Multichannel retailing strategies let retailers integrate sales channels to transform the customer shopping experience. By making inventory interchangeable among all channels, retailers have greater flexibility and can improve the customer experience with choice. For

example, a customer may order an item online but pick it up at a nearby store—giving you an opportunity to win loyalty with superior customer service. The cycle of improved service and greater flexibility increases comparable store sales, enhances customer loyalty, improves associate productivity, and reduces store expenses.

Successfully practicing multichannel retailing means that retailers must seamlessly connect the supply chain and their enterprise. The key is to keep all your information in one place. This gives you a single source of truth for making business decisions—whether you’re selecting popular products for reorders or finding the right location for product placement. Real-time, consolidated information is available only if business applications are engineered to work together using a single information repository, as are Oracle Retail solutions.

Strengthen Store Operations

Oracle’s technology and retail business logic adapts to your business style, operating seamlessly with existing networks, data repositories, hardware, and operating systems.

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“Oracle’s point-of-sale system is very easy to use. Our team members comment

on how intuitive it is, which helped to ease the learning curve during a con-

densed rollout timeframe. Our store team members quickly embraced the new

system. Seasonal hires were able to be productive very quickly once they were

taken through the training basics.”

Lucretia Doblado, Senior Vice President and Chief Information Officer, The Bombay Company

Oracle Retail store operations solutions improve merchandise management and productivity, reduce labor costs, support remote store processes, and analyze profit and loss at the store level. Using a high-speed internet connection and portable, handheld wireless devices, your store managers and other personnel can now easily perform an array of in-store operations. For example, they can quickly receive merchandise, manage physical inventories, conduct stock counts, and order and transfer stock.

Develop and Keep Knowledgeable Associates

A superior customer experience drives loyalty and increases sales. The customer experience comes down to having the right people—with the right skills, training, and facilities—to execute the strategy. With most retailers spending tens of millions of dollars in employee turnover costs, maintaining a stable and smart workforce is both a major cost advantage and a prerequisite for delivering a positive experience for the customer.

Oracle Human Capital Management automates every aspect of the staffing process, including finding and hiring employees with appropriate skills, performing automated assessments, evaluating developmental needs, and matching skills to open positions. Oracle Retail solutions help you create a knowledgeable workforce that can transform the shopping experience for your customers.

Transform Point-of-Sale Operations

Whether the shopping experience is online, on the telephone, or physically in a store, the point of sale tells all. It either reveals connectivity among your associate training, customer management, and inventory systems, or it showcases functional silos of information and disconnected policies and procedures that can reduce your ability to provide a superior shopping experience and lower the value of your retail brand promise.

In-store operations are critical to retail success. In the eyes of your customers, improvements to sales and customer service are made in the way you execute the smallest details, such as quick inventory lookups

The Bombay Company

The Bombay Company designs,

sources, and markets a unique line

of home accessories, wall decor,

and furniture internationally. Bombay

wanted to provide its store team

members with supporting processes

and technology that enabled the

best possible customer experience.

Recently, the enterprise elected to

roll out a broadband network to all

its stores and introduce new

Oracle store operations software

applications. These new store

solutions let Bombay improve its

fundamental store processes. In

addition, Bombay gained real-time

visibility into store perpetual

inventory throughout the chain.

This provides Bombay with the

ability to marry real-time store

perpetual inventory with supply

chain visibility information—giving

the retailer insights that it can use

to improve the customer experience.

Fact: In softlines, Oracle customers

generated a �.� percent higher operating

income margin return on inventory

investment than their industry peers.

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The Edcon Group

The Edcon Group (Edgars

Consolidated Stores) is South

Africa’s leading group of fashion

retailers. “Edcon is a diverse retail

organization serving different

segments of the South African

market,” said John Day, Group IT

Director for Edcon. “Our chains

need to be able to respond quickly

to changing trends in the market,

so we need a very responsive

supply chain to ensure we are

delivering the latest merchandise

to our customers.” Edcon selected

Oracle Retail Merchandising System

as well as Oracle Retail supply

chain management and logistics

solutions. By standardizing and

centralizing its business operations

across all chains, Edcon now has a

single set of integrated systems to

support the entire retail group.

and layaway and gift card transactions. Offering reserve merchandise on the Web or providing the flexibility to order on the Web and then pick up or return at a store are examples of unique choices that make a crucial difference to your customers.

Oracle Retail Store solutions transform all your in-store operational needs with comprehensive applications, including Oracle Retail Back Office, Oracle Retail Store Inventory Management, Oracle Retail Point-of-Service, Oracle Retail Returns Management, Oracle Retail Labels and Tags, and Oracle Retail Mobile Point-of-Service.

Transform Your Supply Chain

A leaner, more agile supply chain drives down retailing costs by ensuring that the right amount of inventory—no more and no less—is available in the right place at the right time. Oracle Retail supply chain planning and optimization solutions allow you to match supply with demand in the most cost-effective way.

In an agile supply chain, the retailer and its suppliers, distributors, transporters, and warehouses all coordinate their activities using a single, synchronized plan for inventory, delivery, execution, promotion, and events. This requires top-notch execution from retailers across trading-partner collaboration, transportation management, product information management, and advanced inventory planning.

Fact: Oracle softlines customers operate

with ��.� fewer days in inventory than their

industry peers.

“Oracle Retail applications have improved the management of our inventory.

We have shaved days off our supply chain…. We are also using Oracle Retail

Demand Forecasting to accurately determine which stores will sell the greatest

number of core items by color and size.”

Calvin Low, Supply Chain Development Executive, The Edcon Group

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“The combination of Oracle, Retek, and ProfitLogic is appealing on many levels,

but for me the real standout is the ability to integrate planning, optimization,

and execution on one common platform.”

Dion Rooney, Vice President of Systems Development, Toys “R” Us

Collaborate for Greater Efficiency

A single, well-integrated network of internal resources and external trading partners creates and supports a responsive supply chain and lean inventory flow. You need to set collaborative goals with suppliers, participate in shared programs, and create joint plans that tie together demand forecasting and advanced inventory planning. Plus, you have to be able to monitor and validate the effectiveness and execution of those shared plans.

Oracle Retail delivers fully integrated fulfillment planning with transaction-execution systems for warehouse management, store-inventory management, and collaboration. The result is forward

visibility into the demand on distribution, transportation, and store resources—up to months in advance and at intervals as discrete as half a day—so you can get your products to market faster.

The Right Products at the Right Time

Oracle Retail supply chain planning and optimization solutions, such as Oracle Retail Advanced Inventory Planning and Oracle Retail Supply Chain Optimization, combine demand-planning functions with supply-execution systems, allowing the real-time monitoring of inventory movement so you can increase the speed of inventory turns, reduce bottlenecks, and increase profits.

Match Supply and Demand

Every Time

A well orchestrated, agile supply

chain lets retailers and their trading

partners create the right balance of

supply—based on up-to-the-minute

information about consumer

demand. Synchronization and

coordination among retailers and

suppliers results in retailers having

just the right quantity of products

at just the right time—leading to

improved sales and profitability.

Oracle Retail solutions

• Reduce supply chain costs

• Improve inventory turns and

asset utilization

• Improve supply chain agility

• Improve speed to market

and responsiveness

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Proven Industry Choice

• Of the �� Fortune �00 companies

that are retailers, �� run

Oracle Applications.

• Of the Top �0 North American

retailers, 9 use Oracle Applications.

• Of the Top �0 specialty retailers,

� depend on Oracle Applications.

• Of the Top �0 North American

food and drug retailers,

� rely on Oracle Applications.

Easily Manage Complex Product Information

Oracle Retail supply chain planning and optimization solutions help you manage large product assortments, multiple store and warehouse locations, and complex distribution networks. Advanced forecasting functionality helps you determine optimal supply chain parameters. By creating insightful, forward-looking, and constraint-based replenishment and allocation plans across the supply network—and converting those plans into orders, shipments, transportation schedules, and receipts at distribution centers and stores—you get the right products to consumers more efficiently. Better inventory plans and more effective replenishment cycles reduce out-of-stocks and the dreaded overstock situation.

Make Advancements Work for Your Enterprise

While innovation and change sometimes represent risk, they can also deliver significant reward. Oracle Retail helps you turn advances in processes and technology—like Lean best practices and radio frequency identification—into transformational operational advantages.

Oracle Retail helps you optimize the flow of inventory to get products to consumers when they want them. The objective is to make the inventory flow transparent: “enablers” in the enterprise systems and processes streamline inventory flows as part of standard practices.

Oracle sensor-based services let you easily integrate sensor-based information into your enterprise systems. With Oracle’s solution, you can reduce inventory-tracking costs while gaining near-perfect supply chain visibility—and the insight necessary to optimize business processes.

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Fact: Oracle softlines customers operate

with US$��9 million (7.� percent) less in

invested capital and create US$�� million

(7� percent) more long-term economic

value than their industry peers.

Oracle Retail solutions help you simplify operations by

• Creating systems that can easily work with existing and future implementations

• Implementing tools and applications that reflect a deep understanding of the unique needs of retailing

• Deploying an enterprisewide global technology infrastructure that can unite the company around shared standards and processes

Connect and SimplifyYour Operations

Finding a way to reduce the complexity of your information systems can dramatically affect your bottom line and alter the direction of your business. Oracle’s single version of the truth makes a difference.

Oracle Retail provides a unified data model that integrates information across the entire enterprise—from supply chain planning and execution to merchandise operations management, multichannel sales operations, and corporate administration.

Information Integrity Improves Profitability

Retail operations are simplified by the implementation of a global systems strategy that creates a consistent and accurate view of information from any region, line of business, or store. However, today most retailers will confess that they often face seas of inaccurate data stemming from functional and regional information silos. Each department and business unit uses different technologies or databases, creating redundancies and inaccuracies that are difficult to manage. The implications? Sub-optimal decisions that reduce profitability.

You need enterprisewide applications supported by an infrastructure that provides one accurate view of product, customer, and competition, and you need to ensure that the entire company works from the same systems and plans to increase efficiency and cost-effectiveness.

Transform Your Information

Accurate, timely data coupled with

powerful analytic capabilities can

transform decision-making, improve

productivity, and give you an advan-

tage over your competition. Oracle

Retail solutions

• Reduce general and administrative

expenses

• Increase employee productivity

• Lower your total cost of ownership

• Increase business agility

“We believe that, with Oracle Retail, we have built an infrastructure for change.

We can’t anticipate how future world events will impact our market, and we

need to maintain flexibility to adapt in whatever way is needed. We have to

stay flexible.”

Victoria Cantrell, Chief Information Officer, North America, Giorgio Armani

�0

Oracle Retail solutions help you improve the efficiency of corporate operations, adapt rapidly to changes in your supply chain, and service customers more effectively through multiple channels.

With Oracle, you create and maintain one definition of your customers, suppliers, employees, and products—all aspects of your business—so everyone in your company has immediate access to the same critical global information such as sales positions, inventory levels, headcount, revenue, and expenses across all organizations, lines of business, products, and geographies. You achieve a streamlined and consolidated financial and operational infrastructure that lets you make better use of the resources that differentiate your company from the competition.

Maximize Technology Investments

Slim margins mean little money to spend investing in infrastructure. Retail systems need to leverage legacy assets, avoid vendor lock-in, last longer, and be very cost-effective to customize, integrate, implement, and maintain.

Oracle gives you the flexibility of implementing solutions as individual modules or as an entire suite, letting you build a fully integrated solution at your own pace. Oracle’s open architecture allows standards-based integration with your other business applications.

By consistently leveraging standards, Oracle Retail increases the interoperability of your applications and the exchange of data with external systems. This reduces the costs of integration and ongoing maintenance, and gives you the freedom to select the best products for your needs, avoiding vendor lock-in.

Take Profitable Action

Oracle Retail profit optimization

solutions have helped

retailers achieve

• Up to a �5 percent increase in

gross margin dollars

• Up to a �5 percent increase in

sell-through

• Up to a �5 percent increase in

inventory turns

“Oracle has delivered an efficient solution that is saving us money and time, and

has enhanced our levels of customer service.”

Ed Sansom, Director of Information Technology, The Edinburgh Woollen Mill Group

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Maintain One View of Your Customer

As retailers seek to improve the customer experience and develop more and better interactions with their customers, many are looking for a complete, single picture of their customers. The goal is to create one personalized profile for each customer so that each touchpoint—whether it’s online, over the phone, through the mail, or in person—adds value toward gaining a lifetime customer and increasing revenue opportunities.

Oracle Customer Data Hub integrates, centralizes, and enriches customer data, while it removes redundancies and then continually synchronizes it with important touchpoints across the enterprise—such as marketing and loyal systems, direct sales channels, and others. Every employee has the same accurate view of customers, including up-to-date contact information and purchase history. Comprehensive customer knowledge helps you boost customer loyalty and promote products more effectively.

Oracle Retail Transforms Your Business

Oracle Retail solutions begin and end with value—start with an immediate ROI and continue with sustained improvements that will sharpen your business strategy and execution for years to come and transform the way you do business.

According to a recent internal study,* Oracle softline retailing customers

• Average US$3.5 billion in sales— 72 percent higher than their industry peers

• Increase their average annual revenue 3 percent faster than their industry peers

• Generate a 2.2 percent higher operating income margin return on inventory investment

• Operate with 16.2 fewer days in inventory than their industry peers

• Operate with US$119 million (7.6 percent) less in invested capital

• Annually create US$36 million (72 percent) more long-term economic value than their industry peers

Oracle Leads the Industry

For more than �,900 retail

customers, Oracle leads the way

with value-based implementations

and methodologies, deep industry

expertise, and one of the largest

teams of retail-focused experts in

the industry.

* Oracle Corporation study of softline retail

customers. Results announced January,

2006. The internally conducted study is

based upon publicly available financial

data provided by Stratascope, Inc.

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profits from an agile supply chain; and operates with certainty—thanks to the integrity of its business information.

CONTACT US

To learn more, visit

oracle.com/industries/retail,

or call +1.800.ORACLE1 to speak

to an Oracle representative.

Oracle Retail Solutions

Oracle Retail helps you create an insight-driven enterprise that relies on accurate, timely information; maintains an intense focus on the customer;

Maximize Your Investment

with Oracle Services

Oracle Consulting has the

experience to meet your needs,

with results-oriented strategic

planning and rapid, low-risk

implementations.

Oracle University provides

comprehensive training tailored to

your organization’s requirements.

Oracle Support delivers technical

and operational expertise to help

you get the most out of your

Oracle solutions.

Oracle Financing offers affordable,

flexible, and predictable

payment options.

“Before Oracle Retail was created, each individual company [PeopleSoft, Retek,

ProfitLogic, and 360Commerce] offered a compelling set of applications and

technology for the industry. Now retailers can team with Oracle Retail to address

one particular business need or all of their needs with a common view of

customers, demand, and inventory across the entire enterprise.”

Duncan Angove, Oracle Retail General Manager, Oracle

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