Leading global Tier 1 retailers are looking for front-end applications that support customer expectations of multichannel, multiformat, multisegment and multinational requirements, while keeping the costs of ownership down. In the newly released version 12 of its store solutions portfolio, Oracle delivers key enhancements to internationalization and integration. However, Oracle must clearly communicate the applications' go-to-market strategy outside North America.

Highlights of version 12 include:

• Internationalization (i18n) enhancements for point of sale (POS), back office, central office and store inventory management.
• Integration between the POS application — Oracle Retail Point-of-Service (formerly 360Commerce) — and merchandising suite (formerly Retek).
• Oracle continues to provide platform independence by testing the Point-of-Service, Back Office and Central Office applications on Oracle's middleware, as well as IBM's Store Integration Framework on the Windows and Linux operating systems.
• Oracle has not clearly communicated its store applications' go-to-market strategy outside North America, particularly for POS applications.

Retailers that are assessing the Oracle store applications suite:

• Keep customer experience at the forefront of your thinking. Look for functionality to support the major strategic business requirements for store and channel execution at the front end.
• For everyday operations, pay particular attention to requirements for improving communication and workflow in store execution.
• Although business application functionality will be your main criterion, pay attention to the underlying foundation for integration to enable flexibility and interoperability.
• If Oracle does not have key functionality for a particular business requirement or segment, seek a road map and timeline for delivery.
• Seek answers from Oracle on its store applications' go-to-market strategy, particularly outside of North America.

Leading global Tier 1 retailers are looking for front-end applications that support customer expectations of multichannel, multiformat, multisegment and multinational requirements, while keeping the costs of ownership down. To this end, Oracle has delivered key enhancements to internationalization and integration in the newly released version 12 of its portfolio of store solutions.

Major strategic business trends in the retail market toward global expansion, consolidation and segment domination or expansion to new segments have fueled a flurry of merger and acquisition activities among retail software vendors. However, another, more crucial factor has really focused the attention of retailers and vendors on store applications: the fight to win and retain customers in aggressive market conditions.

Since 2005, leading enterprise application vendors such as Oracle have steadily acquired smaller retail vendors — particularly those with store applications such as POS to broaden and strengthen their store solution offerings (see Figure 1).

As the past two years has brought some consolidation in the Tier 2 retail vendor space, the major retail vendors have focused on assimilating their newly acquired retail acquisitions and cross-industry solutions into coherent offerings for retail. In doing so, they have had to take into account the major strategic business trends, new technology and new technology standards.

In operational terms, the emergence of the next generation of store applications must be able to handle multinational, multiformat, multichannel and multisegment requirements, while keeping the cost of ownership down as well as delivering revenue growth.

Oracle has just announced a major release of its store solutions (version 12), delivered in line with two major objectives: 1) to drive retailer revenue growth; and 2) to lower the total cost of ownership (see Table 1 and Table 2).

• These capabilities are intended to drive retailer revenue growth:
  • Enhancements to application capability, with functional enhancements, such as internationalization in terms of increased language support and configurable support for value-added tax (VAT)
  • Better sales reporting
  • Better offline support for POS
  • Improvements to the user interface, as well as a common look and feel across all in-store applications, following Oracle's Project Swan guidelines to deliver a more consistent look and feel across applications
• These capabilities are intended to lower the total cost of ownership:
  • Delivery of integration between Oracle Point-of-Service, Oracle Retail Merchandising System (RMS), Oracle Price Management and Oracle Sales Audit
  • A continued commitment to freedom of choice with regard to supporting multiple platforms
  • Support for Business Intelligence (BI) Publisher in line with the stated direction for operational reporting across Oracle applications

These enhancements in version 12 are worth calling out:

• The POS application now has the ability to generate the Retail Sales Audit (ReSA) transaction log, referred to as RTLog. This format supports the integration between the Oracle Point-of-Service and the Oracle ReSA application. In essence, this is a text-based format to support the normal POS transaction log (TLog) for the sales audit application to consume. The RTLog, which can be tailored by the number of stores and network bandwidth, can be produced "on the fly" or at the end of day. Feeds to the sales audit application are then used to update the Store Inventory Management (SIM) application in terms of sales history — for example, items sold and items returned. (Note: Oracle continues to also support POSlog [IXRetail XML format] for other sales audit applications, as well as to create additional transaction log formats to support the retailer's legacy sales audit/financial systems.)
• The POS application has a tax engine that ships with it, and significant enhancements have been made to calculate the price inclusive of tax, all of which is configurable, so users can choose to use the North American configuration or the configuration for VAT, with the VAT-detailed receipt dependent on the setting.
• Improvements in offline capabilities for POS: Previously, a flat-file system was used to maintain the price look-up file in the store. This was normally composed of a cut of the full-price file with prices against store-specific or format-specific item files. However, retailers now want the entire item and price file available in-store — for example, to enable intra- and inter-channel price look-ups. With this in mind, the POS application has been enhanced with a lightweight Java database embedded on the till, which is used to update the local price file. Provided the retailer has enough storage space, this can run offline for longer periods.

This enhancement to SIM is worth calling out:

The Inventory Web Service API enables external POS systems to access and update store inventory information contained in SIM, such as stock on hand or unavailable inventory.

Among other things, the in-development release of store applications promises improvements in performance, integration, security, language, and dashboard support and, of course, more enhancements to application functionality.

Application candidates under consideration for a future tranche of development include:

• Returned goods disposition
• Insight-driven loss prevention
• Task management
• New mobile applications

During the past few years, the acquisition of front-end in-store applications such as 360Commerce gave Oracle a much larger footprint in the North American POS market and broadened the depth of its retail offerings. It also provided opportunities for cross-selling Oracle platforms, applications and services. At the time, Gartner recommended that retailers in Europe, the Middle East and Africa (EMEA) and Asia/Pacific (APAC) should seek assurances from Oracle about support for implementation, development and ongoing maintenance of the newly acquired POS solution in their regions. Understandably, Oracle has been focusing on assimilating its newly acquired retail acquisitions and cross-industry solutions into a coherent product stack for retail. From a product integration strategy perspective, this has been the right move.

While Oracle has been focusing on these areas, messaging in regard to its go-to-market strategy has yet to reach the external market outside North America. Markets in various parts of the globe will soon need clarity on a robust and well-tailored go-to-market strategy that must reflect the realities of local market conditions in terms of infrastructure, dynamics and "cultural" values. In the go-to-market strategy per region, as well as its key marketing messages, Oracle must clarify and communicate to the market, especially to retailers, how it plans to address:

• Sales strategy and structure
• Customer strategy — for existing clients, prospective clients and user groups
• Partner strategy — for example, for consulting, project management, implementation, application development, training, maintenance and customer support

In the meantime, however, visibility in EMEA is likely to be raised on account of a major global apparel retailer rolling out the POS release 12 in the EMEA market, starting with its flagship store in the U.K. in early 2008. This will place increased pressure on Oracle to clearly communicate its go-to-market strategy in this geography.

When assessing the Oracle store solution suite of applications, global Tier 1 retailers:

• Keep customer experience at the forefront of your thinking. Look for functionality to support the major business strategic requirements for store and channel execution at the front end — multichannel, multisegment, multiformat and multinational requirements.
• For everyday operations, pay particular attention to requirements for improving communication and workflow in store execution — such as task management and store replenishment to improve on-shelf availability.
• Although business application functionality will be your main decision criterion, pay attention to the underlying foundation for integration to enable flexibility and interoperability.
• If Oracle does not have a key functionality for your particular business requirements, seek a road map and timeline for delivery. Examples of gaps include grocery enhancements for POS and task management functionality.
• Seek answers from Oracle on its go-to-market strategy — in particular, for geographical areas outside of North America and for its customer and partner strategies.