Retail Industry Review Use of Store Automation NCR

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Retail Industry Review Use of Store
AutomationNCR
Group Valeria Antonio-Policarpo Maria
Grant Lashanda Gray Bonnie Johnson Marie
Johnson Hisham Khalafalla John Mascaritolo EBA
612 Issues in Cotemporary Business Professor
Dr. James Coleman March 11, 2006

• Situation Analysis

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Topics

• Retail Industry Use of Store Automation
• Effects, Major Threats and Opportunities of
  Rapid Deployment of E-Commerce Networks/Net
  Enhanced Organizations (NEO)
• Effects, Major Threats and Opportunities of
  Economic Globalization and Outsourcing

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Retail Industry
Rapid Deployment of E-Commerce Networks/Net
Enhanced Organizations (NEO) Effects, Threats
and Opportunities
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Effects of Rapid Deployment of NEO over Last Five
Years

• Maximization of Store Productivity Performance
• Immediate price changes and increased
  competitiveness.
• Reduction of incorrectly priced products.
• Better control of inventory.
• Predictions of out of stocks on fast moving or
  volatile merchandise data mining tied
  to store performance.
• Reduction of operating expenses.
• Warehousing and supply chain efficiencies.
• Reduction in inventory misplacement and theft.
• Cost control.
• Technologies
• NCR NCR RealPrice (Electronic Shelf Labels)
• NCR Teradata (Data Warehousing, CRM, E-business,
  Financial Management, Profitability Analytics,
  Demand Chain Management and Supply Chain
  Intelligence)
• NCR EasyPoint (Web Kiosk)
• RFID tags
• Check 21

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Effects of Rapid Deployment of NEO over Last Five
Years - Cont

• Customer Service Satisfaction Enhancement
• Redeployment of labor from the front-end to
  other areas within the retail environment better
  assisting customers with purchases.
• Increased customer loyalty and improved customer
  service throughout the store.
• Shortening lines and wait times.
• Self-service, providing customer integration,
  with the goal of customer outreach (i.e. placing
  deli order in a supermarket with a kiosk rather
  than an employee price checkers).
• Convenience of online shopping.
• Technologies
• NCR FastLane - Self-Checkout machines
• NCR EasyPoint (Web Kiosk)
• Online shopping

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Effects of Rapid Deployment of NEO over Last Five
Years - Cont

• Labor Costs Reduction Enhanced Productivity
• Redeployment of labor from the front-end to
  other areas within the retail environment.
• Reduced labor costs.
• Identification of cashier productivity
  optimization.
• Training time reduction for new employees.
• Customer self-service.
• Technologies
• NCR FastLane - Self-Checkout machines
• NCR POS Operator Interfaces
• Teradata (data warehousing)
• NCR EasyPoint (Web Kiosk)

• Competitive Advantage
• Operational and historical detail data
  connectivity into a centralized data warehouse.
• Effective inventory tracking.
• Technologies
• NCR Teradata (Data Warehousing, CRM, E-business,
  Financial Management, Profitability Analytics,
  Demand Chain Management and Supply Chain
  Intelligence)
• RFID tags

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Continue Deployment of NEO over Next Five Years

• Opportunities
• Create closed wireless network which broadcasts
  store-related information on services and
  advertisements to consumers PDA, cell phones and
  laptops. This advertising can be localized and
  eventually personalized.
• For those areas without a high PC concentration,
  but high cell phone usage, integrate mobile
  services with websites.
• Streamline operational functions by
  electronically routing all functions that were
  once manual.  Also links between retail and
  banking services creates a "straight-through"
  processing.

• Threats
• Bandwidth, access, and storage not contemplated.
• An Avalanche of Data.
• Implementation costs.
• Downturn in ROI.

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Retail Industry
Economic Globalization and Outsourcing Effects,
Threats and Opportunities
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Effects of Globalization and Outsourcing over
Last Five Years

• Five years ago, people were just getting
  comfortable with the internet and how to purchase
  products on-line with confidence.
• On-line retailers were not that abundant offering
  merchandise on-line for sale. Their activity and
  presence was just as limited as that of the
  consumer looking to buy.
• What made the growth in on-line purchase activity
  was the role outsourcing companies took that
  helped make the sell to buy process very
  transparent.
• The outsourcing companies brought the expertise
  of warehousing, order fulfillment,
  transportation, and help desk/customer service
  support to the major retailers.
• Retailers had their suppliers drop ship
  merchandise directly to the outsource partners,
  thus eliminating major investments in capital
  assets.
• Outsourcing offers the way the retailer can
  become more focused on developing a solid
  strategy for growth without carrying extra costs.

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Effects of Globalization and Outsourcing over
Last Five Years - Cont

• Outsourcing lets the retailer concentrate on
  their core business and eliminate the hassles of
  doing time wasted functions like warehousing and
  order picking.
• Brick and mortar is not the way to expand in
  todays competitive market. It is faster to have
  your product warehoused remotely when people
  place orders on-line to the retailers web site.
  eCommerce has allowed this expansion capability
  that stationary businesses are not able to do.
• The outsourcing companies have developed and
  expanded globally over the past several years and
  through this grow the opportunity for
  globalization became a reality for the retailer.
  Outsourcing coupled with the use of the internet
  allows the retailers product to be available
  anywhere in the world.
• The increased demand for information
  technologists in todays economy and shortage of
  skilled labor and global business expansion,
  promoted US retail companies to outsource many
  tasks to other countries. 

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Effects of Globalization and Outsourcing over
Last Five Years - Cont

• Currently, jobs are outsourced to many countries
  including Egypt, India, Ireland, Israel,
  Malaysia, Hungry and the Philippines. Goods are
  manufactured all around the globe and mainly in
  China.   
• Outsourcing is a trend that is driven by
  necessity in most cases and it is clear that in
  the companies benefit from outsourcing by
  reducing their operating costs and expand to new
  and emerging markets in many cases.
• Substantial savings can be achieved for retail
  companies by outsourcing activities and
  manufacture goods around the globe. 
• Retail companies are able to offer relatively low
  prices to consumers regardless of their
  location.  Consumers now can expect to pay almost
  same prices for goods in their home country as
  well as when abroad.

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Continued Economic Globalization Over the Next
Five Years

• Threats
• Failure of timely Store Automation
  Implementation.
• Failure to take advantage of 3rd party
  outsourcing opportunities.
• Cost of Store Automation investment.
• Increased rivalry threatens market share.
• Global demand for food products stagnates.

• Opportunities
• Emerging countries (Chile, China, and India) are
  experiencing impressive GDP growth rates creating
  tremendous opportunities for retailers.
• Growing middle class in emerging countries
  purchasing power on the upswing - enabling
  consumers to buy more products and become
  increasingly demanding.
• Global consumer growth due to the increasing use
  of the internet.
• Foreign markets have increased profitability for
  retailers which can be leveraged.
• Tenant shops at airports are growing as the
  percentage of people traveling through airports
  worldwide are growing in double digits.
• Interactive mail-order shopping terminals are
  becoming increasingly popular.

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QA