A Disrupted Industry
There are few industries that have been as disrupted by technology as retail. According to a study of retail executives, 65% cite “changing consumer behavior” as the single largest issue that they face today. Online retail sales, particularly in emerging markets, are growing extremely rapidly; for example, Asia and Latin America’s online sales usage are growing 10 percentage points faster than the rest of the world. Social sharing, personalized recommendations, digital wallets, and wearables all have the possibility to upend traditional retail business models. But technology has brought about benefits to retailers as well; Helen Merriott, managing director of retail at Accenture, says: “Technology has changed expectations, presenting an opportunity for retailers to provide rich experiences that differentiate their business enough to stand out among a sea of competitors – both online and off.”
- The retail world is being transformed by online shopping experiences, the mobile revolution, and more competition than ever before
- Retailers are using numerous customer-facing and back-office mobile apps, SaaS applications, and legacy systems — all of which are generating data silos that are difficult to integrate
- When integration occurs, it’s often point-to-point, which can create a fragile IT infrastructure, risking downtime and scalability issues
- Business-critical applications need to be added frequently, requiring IT architecture to be able to make fast alterations
- Establish a single view of the customer to provide a delightful shopping experience as well as extract more value out of your most valuable customers
- Enable an omni-channel purchasing strategy, both from a UX and backend perspective
- Consider an integrated approach to storing and managing customergenerated data
Customers now expect that retailers offer a personalized, customer service oriented shopping experience, seamless merchandise fulfillment, and omni-channel purchasing. And retail businesses now have more data than ever before about their customers, providing valuable intelligence to create greater customer lifetime value, brand loyalty, and cross-selling across brands and products. For many retailers, the innovations that have come from the digital revolution are unlocking delightful shopping experiences that keep customers returning to their stores.
But providing these experiences hasn’t been easy for a number of businesses. Many try to add a digital component – whether online shopping, CRM initiatives, or interactive store experiences – but they don’t always succeed. It’s not that these technologies don’t exist or that retailers aren’t deploying them; the challenge is how to implement them in a way that actually improves the bottom line. And the disruption that the industry is experiencing isn’t expected to stabilize; even more change is expected in five or ten years as the Internet of Things becomes a consumer reality thanks to widespread adoption of wearables and smart technology. Gap, Inc’s CEO Art Peck says of the retail business, “We’ve been doing business the same way for 40 years, and there are very few 40-year-old business models that are successful forever.” Smart retailers will have to prepare not only for the disruptive technologies of today, but the disruption that will happen a decade from now.
These challenges require that retailers tackle three initiatives:
- Understand their customers better than ever before
- Develop a strategy for omni-channel retailing
- Devise an API strategy that can accommodate apps for customers, partners, and employees today, tomorrow, and years in the future.
Retailers can achieve these goals through an intelligent redesign of their IT infrastructure.
In this whitepaper series, we’ll investigate how API-led connectivity can make these objectives possible. API-led connectivity is an approach to IT infrastructure that unlocks a company’s data assets by accessing it from any source, integrating it, and syndicating it to new applications and audiences where it can be most useful. This approach allows retailers to create experiences that will surprise and delight their customers, grow their revenue, simplify their business processes, cut costs, and provide the capability to accommodate future technology. IT essentially decouples the consumption of data by customers, employees and partners from the provision of data in a secure and well-governed fashion. API-led connectivity can provide solutions to some of the thorniest problems retailers face today.
Why API-led Connectivity Matters to Retailers
API-led connectivity is a three-tiered process of integrating data:
- Providing access to data housed in various silos
- Orchestration of working with that data so retailers can do apples to apples comparison
- Exposing data to different consumers and provide different views of the data depending on what their needs are. The system can be built once and then it can provide different views of the data to different areas of the business.
Access to data
Retailers are using a universe of on-premises systems, SaaS applications, and mobile apps in the course of doing business. All of these generate data that needs to be accessible. The MuleSoft approach to API led-connectivity provides universal connectivity; that is, there are more than 100 ready-built connectors that allow us to plug into different endpoints, e.g. a SAP connector to Salesforce. If there isn’t a ready-made connector for a particular need, the platform allows developers to build one very quickly.
Orchestration of data
Not only can access to data be provided quickly, but the means of orchestrating the data is fast to deploy as well. The MuleSoft approach allows developers to build the most common pieces of processing logic out of the box, like choice based routing, error handling and data transformation. This has been productized in MuleSoft’s integration templates, like order to cash integration template. What this means is that retailers can think about their integration needs in terms of tasks to be done, rather than just connecting one system or app to another.
Exposing data where it’s needed
API-led connectivity allows the business to expose data via an API platform. This enables retailers you to move from an application-centric view of the world to a data-centric view of the world. For example, a particular business might want to think about buying habits across all its channels. One key need, for example, is to connect Hybris to the ERP, so the business knows what its customers are buying online vs buying in-store. But that’s two different data requests – data needs to be extracted from the ERP for point of sales terminals, and Hybris for ecommerce. The person viewing the data doesn’t care how many data requests the system gets; they just want to view the data. The beauty of API-led connectivity is that it makes these data requests invisible to the person consuming the data and simply tells them what they want to know.
In this series, we’ll take a close look at how API-led connectivity can help with three key retail challenges:
- The Holistic Data Portrait: It’s Time To Meet Your Customer
- The Secrets to Enable Omnichannel Purchasing
- Future-proofing the Retail Enterprise through APIs
We’ll show how the connected retail enterprise can create a deeper and richer relationship with customers than ever before, help make more informed purchasing decisions, deliver superior service, and increase revenue.
The Holistic Data Portrait: It’s Time To Meet Your Customer
Developing a rich and deep relationship with your customer is a goal retailers are acutely aware of; after all, customers are demanding. They expect a superior product, great service, and the personal touch, no matter who they are or how they interact with your business. They have no qualms about moving to a competitor if they’re unsatisfied, and thanks to social media, they have an increasingly loud and influential voice. Customers want a seamless purchasing experience, available on any device or in a brick and mortar store, with an infinite stockroom available at the touch of a button. This, increasingly, is seen as the minimum offering for a delightful shopping experience.
At the same time, retailers are facing a very competitive environment and a great deal of price sensitivity. The best bulwark against losing valuable customers to the competition is to give them what they want almost before they want it. For example, US retailer Target’s use of predictive data caused revenues to grow from 44 billion dollars to 67 billion dollars from 2002-2010. Another example is US furniture retailer Pier 1 using machine learning to create personalized email marketing campaigns, which were more effective than their previous email efforts. These initiatives are done through sifting and analyzing all the terabytes of data generated by customers - prior purchases, email clickthroughs, loyalty card memberships, and coupon redemptions, just to name a few. Once this is complete, the retailer can begin to provide tailored, personalized offers based on the customer’s individual needs, extracting more value and creating brand loyalty.
Therefore, to provide the business intelligence retailers need, and the shopping experience customers want, retailers must have access to the single view of the customer – a holistic portrait of the customer, painted through the seamless integration of data, that allows retailers to better analyze and customize future interactions to increase the odds of future purchases. The single customer view provides numerous benefits, allowing retailers to minimize costs, simplify business processes, and have the strategic edge over the competition. With a 360 degree view of the customer in a single location, business can run more efficiently and effectively. Not only are companies able to better target and drive business with a higher quality of insight, they can also minimize costs by avoiding ineffective marketing tactics. Additionally, a unified view of the customer on a single interface ensures that business can run without complications when employees are out of the office, sick, or on vacation.
For this single view to emerge, retailers have to invest in and integrate systems and applications that cover end-to-end customer touchpoints - no small technical feat, particularly as creating the single customer view requires aggregation of data from various departments. Businesses know that they need to integrate customer-generated data more effectively; according to an Econsultancy study, 70% of businesses say they have a “long way to go” to integrate data that optimizes the customer’s experience.[iii]
However, this type of integration is not an insurmountable problem thanks to API-led connectivity. An API-led approach to integration allows data to be shared seamlessly across all customer-facing and back-office touchpoints; it then becomes possible to create a coherent whole across different starting points. Integration is the only way to ensure that data is always up to date and consistent across all applications, allowing you to improve customer experience and drive revenue.
Starting On the Path to Integration
No one application or purchasing channel encompasses everything a customer does with your company; customers touch multiple applications and departments along the purchasing journey. The first thing retailers need to do to establish a 360 degree view of the customer by identifying exactly where and how the customer is interacting with their business.
In many organizations, sales and marketing alone use upwards of 10-15 applications to engage with customers as well as onboard, maintain, and manage customer interactions. As business leaders take more control of cloud purchasing decisions and buying easy to deploy applications to fill gaps, IT often takes the lead role in figuring out how to make all of the pieces fit together. Integrating these applications, systems, and services with each other is crucial to running a streamlined business today and in the future.
Designing your business to have a single, consolidated view of your customer allows you to create demand and awareness, get details on your team’s promotions, create new and add-on business, and provide real-time customer service anywhere your customers demand it. You’ll be able to modernize cross-functional processes such as quote-to-cash and make it easy for employees to collaborate with customers, partners and suppliers across any device.
Expanding Online Presence to Meet Customer Needs
A top 4 UK food retailer knew that it needed to grow amongst fierce competition, and new the fastest area of growth in food retail was online. A middleware manager at this retailer said, “[To] continue to grow our business we needed to expand to new channels on the web while also reinvesting in our core in-store business.” After acquiring an online baby retailer, the company now had a strong online channel, and wanted to migrate its existing customers over to the higher margin baby market, and also wanted to integrate its new customers into the brand experience at existing grocery stores. To make this happen, this retailer knew it needed to establish a single view of the customer, but all the customer and product data were stored in multiple databases, an IBM Unica marketing automation platform, and an Avaya call center platform.
This retailer decided to consolidate a single view of the customer in Salesforce, but also knew they needed a real-time integration platform because, said the middleware manager, “we had multiple endpoints handling a high volume of transactions requiring real-time synchronization.” They also wanted their integration platform to be cloud-based so it could be deployed quickly and easily.
With MuleSoft’s Anypoint Platform, the company achieved a single view of the customer in Salesforce in just 2 weeks. With no hardware or software to deploy and no firewall policy changes or proxyservers required, integrations were fast to configure. The company can now begin multi-channel marketing, an initiative that is expected to be a key driver of growth and competitiveadvantage in the future. Today, Anypoint Platform supports real-time synchronization of 5 million customer records and hundreds of thousands of SKUs. As the business grows, the company is confident that CloudHub will scale to support even larger volumes.
Looking to the future, the retailer plans to build their digital marketing strategy on Anypoint Platform including intelligent campaigns based on customer behavior. “We wanted more than an integration tool. [This] is the platform to build our business as we expand grocery sales online and develop additional marketing promotions across channels to grow our business,”said the retailer’s middleware manager.
Customer Satisfaction Creates Positive Results
A Fortune 500 investment firm, based in North America, realized that it would need to revolutionize how its employees viewed and related to customers. They were committed to technological innovation, analyzing data to provide business intelligence, and providing access to customers 24/7, but discovered their outdated CRM systems simply couldn’t handle the amount of data. The company switched to a cloud-based SaaS CRM application, but needed to connect mission critical data housed in its onpremises databases to its new CRM system. Investment advisors needed real-time access to relevant client data wherever it lived, and because financial data has to meet stringent compliance requirements, the company needed to ensure that access to sensitive client data was controlled and that data was stored securely.
This company chose MuleSoft’s Anypoint Platform as being significantly more architecturally advanced than its competitors, allowing robust integration between existing on-premises systems and cloud-based applications. The CIO of this company said, “MuleSoft offers cost benefit over our existing solution, along with a lighter weight and less complex architecture which includes cloud integration features.” This data connectivity initiative had a profound effect on this company’s business; they were able to serve their customers in a better and more personalized way, improving their customer satisfaction scores by 16%, and allowed them to reduce IT costs and maximize their revenue.