After losing 30% of business “overnight” at the peak of the recession, Saks has bounced back by focusing on “strategic investments and cutting costs,” said Mike Rodgers, EVP, Chief Information and Operations Officer, Saks. Rodgers shared these and other insights in a keynote presentation during the Oracle Crosstalk 2013 user group event in Chicago in June.
Rodgers noted that, during the worst times the Saks CEO said: “Don’t let a good recession go to waste.” With that, Saks proceeded to divest under-performing stores, invest aggressively in saks.com, and begin investing in key systems, which included a focus on foundational technology, launching a project with IBM and Oracle. In April 2012, Saks announced the selection of Oracle Retail and E-Business Suite applications to integrate business operations across channels and improve margins and profitability.
Following a phased implementation, Rodgers explained: “We now are looking at a single view of everything in order to offer the customer a single view.”
Today, at $3.1 billion in revenue, Saks operates 43 Saks Fifth Avenue stores and 66 Off 5th outlets, with plans to add five to six new stores per year. Also, “Saks.com is growing substantially,” according to Rodgers. Saks also facilitates more than 620,000 active proprietary credit accounts, which deliver 38% of total sales.
Prior to the recent business transformation, Saks was operating the online and brick-and-mortar businesses completely separately. “We intentionally made dotcom separate 13 years ago,” noted Rodgers. Since then, the omnichannel reality set in: “Our best customers shop across all channels and devices; and mobile is now the fastest-growing segment.” As many as 46% of Saks customers purchase as a result of mobile; and 60% of customers are on social media every day, he reported. “We had to rethink everything, including our organization.”
Coldwater Creek Seeks Growth Through Inventory Planning
After reaching approximately $1 billion in revenue, Coldwater Creek was “losing ground,” according to Deanna Emsley, SVP, Inventory Planning & Corporate Strategy. “There was no voice of planning when I walked in the door 18 months ago.”
When Emsley joined Coldwater Creek, the planning department was not involved in long-term thinking. “They were talking about one week at a time every Monday,” she noted. To improve business processes, the company implemented Oracle Merchandise Financial Planning, Assortment Planning and Item Planning.
Following the implementation, Coldwater Creek has reported that the Oracle solutions have allowed “…further reductions in aged inventory, and allow us to increase our full-price selling, making us more productive and profitable.”
Walgreens Beefs Up E-commerce Architecture
Walgreens is somewhat of a monolith: the 8,000-store retailer serves 6 million customers, including 1.7 million visits per day. The company also operates 10 mobile apps and web sites with 50+ partners. Many app users (35%) are using the app in-store to check Rx order status, read product reviews or check product information online, check inventory or locate items on shelf, noted Jason Fei, Director of architecture, e-Commerce.
In order to keep up with customer preferences, Walgreens adopted the Oracle e-Commerce solution platform, that consists of “a combination of Oracle ATG commerce 10 out-of-the-box feature set, plus common customer extensions and standard eco-system integrations,” explained Fei.
Features of the new solution include:
- multi-layer application architecture;
- multi-tenant deployment architecture;
- multi-site ATG framework; and
- service-first, responsive design philosophy.
“We know we can’t complete with Amazon – we don’t need to and we don’t want to,” said Fei. “We want to compete with convenience and a better experience. If we are in a battle, this digital platform is our aircraft carrier.”
Oracle President, Other Retailers Share Insights During 3-Day Event
A number of other retailers discussed implementations and successes during the Crosstalk event, including Express, Staples, Dubai Duty Free and more.
Additionally, during a closing session, Oracle President Mark Hurd shared his insights on the “broader IT landscape.” He noted that “the customer you deal with is going to get materially harder to deal with; smarter in the way they apply technology to their lives.”
Hurd added that budgets will continue to be a concern regarding IT spending. “I’ll predict that you will not see an economic boom that will drive up IT spending. I don’t know a lot of CEOs that say money is not an option. In most cases we see IT spending at very low growth.”
The typical agenda for CIOs, Hurd added, is: “I have to innovate, particularly around the consumer. Second, I have to chase the data and it’s expensive. I have to save money to innovate to spend money.”
Hurd also mentioned that Oracle spends approximately $5 billion annually on research and development; and recently announced new partnerships with Microsoft, Salesforce.com, NetSuite and Dell.
The Crosstalk event drew 290 retailers from 27 countries, an increase of 20% over the previous year.