Enterprise software giants deliver best-of-breed for retail

Wal-Mart’s adoption of HP’s Neoview data warehouse and Oracle’s price optimisation application signals just how seriously large enterprise software vendors are taking the retail management market.

Consumer spending has grown globally and new markets have opened. At the same time, retailing has consolidated around major brands and chains, creating a hyper-competitive environment in which well-tuned information systems can provide a vital edge.

Oracle New Zealand’s application manager Callum Ross says Oracle has over 60 retail applications and 1900 customers.

“It’s a very big business for us,” he says, and New Zealand and Australia are considered mature markets.

Among its local customers, Oracle cites Bendon, Placemakers, Country Road, Bunnings and Stephenson Group while rival SAP points to the likes of Whitcoulls, Postie Plus and recent signing Ezibuy.

Ezibuy is implementing a swathe of modules including SAP Financials, Purchasing, Merchandising, Pricing and Promotions, Internet Sales Order Processing, along with warehousing and integration alongside novaRetail from CIBER Novasoft, a system based on SAP for Retail. The modules replace a range of custom-built applications.

Microsoft has keen eyes on the retail market as well, offering its Dynamic RMS software. There are four resellers of the software in New Zealand including Auckland-based Pacific Softworks.

General manager Campbell Downie says retailers are looking for information. They want reporting and inventory control as they move from simple cash register control to a computer-based point of sale system.

“They want knowledge of what they are selling, trends, product groups and categories,” Downie says.

The package comes in two parts: a management back-end and a PoS front end. Downie says a particular strength of the software is in managing store chains with another package, called Dynamic RMS HQ, which allows managers to look at sales, stock levels and even raise purchase orders remotely from a head office.

“The back office in every store is emulated and replicated at head office,” Downie says. “It’s a real strength, even for a small chain.”

Oracle’s Ross says customers are looking for point solutions for their businesses rather than complete system replacements. He says much of the activity in the space is about getting supply chain fundamentals right.

“They want to get the right stuff on the shelves at the right time for the right customers,” he says.

That can be a complex business. Ross points out that even in a country the size of New Zealand, stock held in Dunedin stores could be considerably different from those in Auckland.

“There’s a lot more focus on supplier management and collaboration with suppliers,” he says. That can involve giving suppliers online access to ordering and other systems so they can check inventories and payment details themselves.

Another area of focus, he says, is margin improvement. This is about optimising pricing and the timing of promotions and sales to clear stock at appropriate times – and to do this without cannibalising sales of other products and ranges. This blends into the forecasting of demand.

Retailing is now a multi-channel business, with retailers offering traditional store shopping as well as other channels such as online. Sometimes, retailers will offer multiple online channels as well. Retailers need a single view of the customer and their transactions to understand and optimise their businesses, Ross says.

Those kinds of applications address core business problems, but retailing has other aspects to it as well, Ross says. For instance, many retailers own real estate and may also require real estate management, facilities management, project management and other applications.

He says demand is also growing for applications such as workforce development and online learning. Retailers are usually geographically distributed and such applications can deliver consistent and professional training across a chain.