Multi-channel Retailing in a Service-oriented Future (Review Report)

Publication Date	March 2007
Publisher	Datamonitor
Product Type	Report
Pages	92
ISBN Number	not applicable
Product Code	DAT04798

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Summary

Introduction

This report combines all three briefs from the Retail Technology theme for Q1 2007: multi-channel retailing in a service-oriented future. By addressing the market, strategy and technology aspects of this topic, this Review Report provides an holistic picture of the subject. Forecast data also offers projections for the future direction of the SOA market in the retail sector.

Scope

The Market Focus section provides an overview of drivers and trends across the retail sector
The Strategy Focus section considers the challenges posed by multi-channel retailing and the issues surrounding SOA as a solution
The Technology Focus section looks at SOA compared to traditional integration approaches and offers current and forecast data for the SOA market
Two databooks showcasing relevant data from Datamonitor's interactive model are also included

Highlights

As the growth in eRetailing continues, retailers are increasingly looking to offer a multi-channel approach. Customer expectations are high, however, as retailers refine their offerings to offer a seamless and fully-integrated experience. SOA will need to be deployed to provide this level of service and remain competitive.

The roll out a multi-channel offering brings with it a variety of business challenges that will need to be overcome. While SOA may provide the answers, it brings with it more challenges, both at a technical-level and an organization-level.

SOA provides a flexible and cost-effective solution for multi-channel retailing compared to traditional approaches. While SOA uptake has been slow in the retail sector, growth is set to rise, and retail SMBs could represent a sizeable portion of the SOA market size if vendors can adapt their go-to-market strategies accordingly.

Reasons to Purchase

Gain a 360 degree understanding of the issues involved in implementing SOA to facilitate multi-channel retailing
See current and forecast market data to gain insight into where the SOA market is headed within the retail sector
Find out how vendors can adapt their go-to-market strategies to more effectively sell SOA and maintain growth

Content

- Introduction
- Next-generation retailing: the importance of service-orientation (Market Focus)
- Meeting retailing challenges in a multi-channel environment (Strategy Focus)
- The technological demands of modern multi-channel retailing (Technology Focus)
- SOA forecast for retail industry, 2006-2012 (Databooks)
- NEXT-GENERATION RETAILING: THE IMPORTANCE OF SERVICE-ORIENTATION (MARKET FOCUS)
- Summary
- eRetail is an increasingly effective channel to drive global retail revenues
- eRetail is driving growth in non-store retail channels
- Broadband uptake is a significant driver in the growth of eRetail
- Catalog retailing is being undermined by the virtues of online shopping but hope remains
- eRetail growth is apparent across all global regions
- Growth in eRetailing is being led by the electronics retail sub-sector
- Customer expectations are driving retailers to offer a multi-channel retail approach
- Customers expect seamless purchase and delivery options across channels
- Customer expectations are continually raised as retailers develop their multi-channel offering
- Case Study - Circuit City
- Exploiting cross-channel shopping and increased opportunities for brand equity are also key drivers
- The competitive landscape is changing as retailers embrace multi-channel retailing
- Hypermarkets and supercenters move into mass merchandise format
- New technologies are a tool for helping retailers differentiate themselves from competitors
- Small retailers can compete by embracing an eRetail approach
- Effective IT integration is the key that is providing multi-channel retailers with a competitive advantage
- MEETING RETAILING CHALLENGES IN A MULTI-CHANNEL ENVIRONMENT (STRATEGY FOCUS)
- Summary
- Achieving cross-channel visibility is a key business challenge for multi-channel retailing
- It is critical to achieve visibility across channels for efficient retail management
- A single customer view is vital for effective marketing efforts
- Cross-channel tracking allows accurate forecasting and inventory management to prevent lost sales
- Cross-channel promotions and pricing effectiveness data is needed to refine strategies
- Unified multi-channel customer service is important for improving the customer experience
- Consolidated real-time order information across channels is needed for successful fulfillment
- Multi-channel IT solutions must support the ability for change and growth if costs are to be contained
- Overcoming a lack of knowledge about SOA adoption is the biggest technology challenge
- Service oriented architecture is a natural solution for the challenges of multi-channel retailing
- SOA in the 'real-world'
- A lack of knowledge about SOA is a key impediment to implementation
- Many businesses are not familiar enough with SOA to feel confident deploying it
- Security is another crucial area that needs to be addressed if SOA uptake is to rise
- A variety of other issues are also inhibiting SOA adoption, including a general lack of awareness
- The need to overcome governance issues surrounding SOA is vital once implementation has occurred
- SOA Program Governance
- SOA Design-time Governance
- SOA Run-time Governance
- SOA Change Management
- Organizational challenges revolve around the need to align business and IT strategies
- Successful SOA strategies require internal collaboration among business and IT stakeholders
- Deciding on the right organizational approach to take is critical to SOA success
- Modeling SOA maturity and the business goals is a useful starting point
- The growth of a hybrid approach is gaining ground over top-down or bottom-up execution strategies
- THE TECHNOLOGICAL DEMANDS OF MODERN MULTI-CHANNEL RETAILING (TECHNOLOGY FOCUS)
- Summary
- Legacy integration infrastructure will struggle to deliver an efficient multi-channel offering
- Traditional integration methods result in complexity, lack of scalability or expensive integration
- Point-to-point integration creates costly complexity with multiple applications
- Hub and spoke integration is more manageable but suffers from bottlenecks and a lack of scalability
- Message bus architecture allows a scalable solution but proprietary requirements make it expensive
- SOA using an ESB reduces complexity and provides a more flexible and cost-efficient approach
- SOA in the multi-channel retailing industry
- Case Study: Harrods, UK
- SOA offerings for SMBs represent an important opportunity for vendors
- Current adoption levels suggest the retail sector has some way to go in implementing SOA
- Regional variations
- Growth of SOA in the retail sector is forecast to be impressive
- Growth in the retail SOA market is dependent upon an uptake in the SMB retail market
- Vendors' go-to-market strategies need to be refined for a more widespread uptake of SOA
- Vendors need to develop more non-IT material for demonstrating the benefits of SOA
- Lower pitched marketing material will help business management understand SOA
- Parallel systems that help demonstrate ROI will be useful for IT management
- Vendors can help the SMB market move to SOA by focusing on the flexibility and scalability it offers
- SOA approaches customized to the vertical market will help retailers differentiate between vendors
- SOA PENETRATION FORECAST FOR RETAIL INDUSTRY, 2006-2012 (DATABOOK)
- Introduction
- SOA penetration forecast for retail industry in APAC, 2006-2012
- SOA penetration forecast for retail industry in Australia, 2006-2012
- SOA penetration forecast for retail industry in Japan, 2006-2012
- SOA penetration forecast for retail industry in New Zealand, 2006-2012
- SOA penetration forecast for retail industry in Singapore, 2006-2012
- SOA penetration forecast for retail industry in Taiwan, 2006-2012
- SOA penetration forecast for retail industry in North America, 2006-2012
- SOA penetration forecast for retail industry in Canada, 2006-2012
- SOA penetration forecast for retail industry in United States, 2006-2012
- SOA penetration forecast for retail industry in Western Europe, 2006-2012
- SOA penetration forecast for retail industry in Benelux, 2006-2012
- SOA penetration forecast for retail industry in France, 2006-2012
- SOA penetration forecast for retail industry in Germany, 2006-2012
- SOA penetration forecast for retail industry in Italy, 2006-2012
- SOA penetration forecast for retail industry in Nordics, 2006-2012
- SOA penetration forecast for retail industry in Rest of Western Europe, 2006-2012
- SOA penetration forecast for retail industry in Spain, 2006-2012
- SOA penetration forecast for retail industry in United Kingdom, 2006-2012
- SOA MARKET SIZE FORECAST FOR RETAIL INDUSTRY, 2006-2012 (DATABOOK)
- Introduction
- SOA market size forecast for retail industry in APAC, 2006-2012
- SOA market size forecast for retail industry in Australia, 2006-2012
- SOA market size forecast for retail industry in Japan, 2006-2012
- SOA market size forecast for retail industry in New Zealand, 2006-2012
- SOA market size forecast for retail industry in Singapore, 2006-2012
- SOA market size forecast for retail industry in Taiwan, 2006-2012
- SOA market size forecast for retail industry in North America, 2006-2012
- SOA market size forecast for retail industry in Canada, 2006-2012
- SOA market size forecast for retail industry in United States, 2006-2012
- SOA market size forecast for retail industry in Western Europe, 2006-2012
- SOA market size forecast for retail industry in Benelux, 2006-2012
- SOA market size forecast for retail industry in France, 2006-2012
- SOA market size forecast for retail industry in Germany, 2006-2012
- SOA market size forecast for retail industry in Italy, 2006-2012
- SOA market size forecast for retail industry in Nordics, 2006-2012
- SOA market size forecast for retail industry in Rest of Western Europe, 2006-2012
- SOA market size forecast for retail industry in Spain, 2006-2012
- SOA market size forecast for retail industry in United Kingdom, 2006-2012
Appendix
- Definitions
- Extended Methodology
- Further reading
- Ask the analyst
List Of Tables
- Table 1: Number of retail establishments, 2006, by region
- Table 2: Return on Investment (ROI) calculation for measuring SOA benefits
- Table 3: SOA penetration forecast for retail industry in APAC, 2006-2012
- Table 4: SOA penetration forecast for retail industry in Australia, 2006-2012
- Table 5: SOA penetration forecast for retail industry in Japan, 2006-2012
- Table 6: SOA penetration forecast for retail industry in New Zealand, 2006-2012
- Table 7: SOA penetration forecast for retail industry in Singapore, 2006-2012
- Table 8: SOA penetration forecast for retail industry in Taiwan, 2006-2012
- Table 9: SOA penetration forecast for retail industry in North America, 2006-2012
- Table 10: SOA penetration forecast for retail industry in Canada, 2006-2012
- Table 11: SOA penetration forecast for retail industry in United States, 2006-2012
- Table 12: SOA penetration forecast for retail industry in Western Europe, 2006-2012
- Table 13: SOA penetration forecast for retail industry in Benelux, 2006-2012
- Table 14: SOA penetration forecast for retail industry in France, 2006-2012
- Table 15: SOA penetration forecast for retail industry in Germany, 2006-2012
- Table 16: SOA penetration forecast for retail industry in Italy, 2006-2012
- Table 17: SOA penetration forecast for retail industry in Nordics, 2006-2012
- Table 18: SOA penetration forecast for retail industry in RoWE, 2006-2012
- Table 19: SOA penetration forecast for retail industry in Spain, 2006-2012
- Table 20: SOA penetration forecast for retail industry in United Kingdom, 2006-2012
- Table 21: SOA market size forecast for retail industry in APAC, 2006-2012
- Table 22: SOA market size forecast for retail industry in Australia, 2006-2012
- Table 23: SOA market size forecast for retail industry in Japan, 2006-2012
- Table 24: SOA market size forecast for retail industry in New Zealand, 2006-2012
- Table 25: SOA market size forecast for retail industry in Singapore, 2006-2012
- Table 26: SOA market size forecast for retail industry in Taiwan, 2006-2012
- Table 27: SOA market size forecast for retail industry in North America, 2006-2012
- Table 28: SOA market size forecast for retail industry in Canada, 2006-2012
- Table 29: SOA market size forecast for retail industry in United States, 2006-2012
- Table 30: SOA market size forecast for retail industry in Western Europe, 2006-2012
- Table 31: SOA market size forecast for retail industry in Benelux, 2006-2012
- Table 32: SOA market size forecast for retail industry in France, 2006-2012
- Table 33: SOA market size forecast for retail industry in Germany, 2006-2012
- Table 34: SOA market size forecast for retail industry in Italy, 2006-2012
- Table 35: SOA market size forecast for retail industry in Nordics, 2006-2012
- Table 36: SOA market size forecast for retail industry in RoWE, 2006-2012
- Table 37: SOA market size forecast for retail industry in Spain, 2006-2012
- Table 38: SOA market size forecast for retail industry in United Kingdom, 2006-2012
List Of Figures
- Figure 1: Global retail spend 2006-2012, by channel
- Figure 2: Regional breakdown of global retail spend, 2006
- Figure 3: Online as a percentage of total retail revenue 2006-12, by region
- Figure 4: Top 3 pressures driving retailers to integrate multi-channel initiatives
- Figure 5: Browse/Buy relationships between channel during holiday shopping season
- Figure 6: Global retail spend through hypermarkets and supercenters, 2006-12
- Figure 7: Differing customer details across channels need to be consolidated into a single record
- Figure 8: Tracking projected and actual SKU sales allows stock revisions to be made if necessary
- Figure 9: Multiple order fulfillment systems that are poorly integrated jeopardizes meeting customer needs
- Figure 10: SOA meets the technology requirements that multi-channel retailing brings
- Figure 11: Lack of knowledge is an important obstacle for SOA adoption
- Figure 12: Attention needs to be given to four levels of SOA governance
- Figure 13: IT must be able to demonstration the ROI of an SOA initiative over time
- Figure 14: Maturity Model for Multi-Channel Retailing
- Figure 15: Messaging bus architecture allows scalability but can suffer from high costs
- Figure 16: Messaging bus architecture allows scalability but can suffer from high costs
- Figure 17: An ESB uses open standards to integrate applications on different platforms
- Figure 18: Case Study: Harrods - SOA provides clarity of across multiple channels
- Figure 19: Adoption levels of SOA by vertical industry
- Figure 20: Deployment of SOA among large retailers (250 employees+) in 2006, by country
- Figure 21: Market size for SOA products and services in retail sector, 2006-2012, by region
- Figure 22: Penetration of SOA products and services in retail sector, 2006-2012, by size of retailer
- Figure 23: Market size for SOA products and services in retail sector, 2006-2012, by size of retailer
- Figure 24: SOA penetration forecast for retail industry in APAC, 2006-2012
- Figure 25: SOA penetration forecast for retail industry in Australia, 2006-2012
- Figure 26: SOA penetration forecast for retail industry in Japan, 2006-2012
- Figure 27: SOA penetration forecast for retail industry in New Zealand, 2006-2012
- Figure 28: SOA penetration forecast for retail industry in Singapore, 2006-2012
- Figure 29: SOA penetration forecast for retail industry in Taiwan, 2006-2012
- Figure 30: SOA penetration forecast for retail industry in North America, 2006-2012
- Figure 31: SOA penetration forecast for retail industry in Canada, 2006-2012
- Figure 32: SOA penetration forecast for retail industry in United States, 2006-2012
- Figure 33: SOA penetration forecast for retail industry in Western Europe, 2006-2012
- Figure 34: SOA penetration forecast for retail industry in Benelux, 2006-2012
- Figure 35: SOA penetration forecast for retail industry in France, 2006-2012
- Figure 36: SOA penetration forecast for retail industry in Germany, 2006-2012
- Figure 37: SOA penetration forecast for retail industry in Italy, 2006-2012
- Figure 38: SOA penetration forecast for retail industry in Nordics, 2006-2012
- Figure 39: SOA penetration forecast for retail industry in RoWE, 2006-2012
- Figure 40: SOA penetration forecast for retail industry in Spain, 2006-2012
- Figure 41: SOA penetration forecast for retail industry in United Kingdom, 2006-2012
- Figure 42: SOA market size forecast for retail industry in APAC, 2006-2012
- Figure 43: SOA market size forecast for retail industry in Australia, 2006-2012
- Figure 44: SOA market size forecast for retail industry in Japan, 2006-2012
- Figure 45: SOA market size forecast for retail industry in New Zealand, 2006-2012
- Figure 46: SOA market size forecast for retail industry in Singapore, 2006-2012
- Figure 47: SOA market size forecast for retail industry in Taiwan, 2006-2012
- Figure 48: SOA market size forecast for retail industry in North America, 2006-2012
- Figure 49: SOA market size forecast for retail industry in Canada, 2006-2012
- Figure 50: SOA market size forecast for retail industry in United States, 2006-2012
- Figure 51: SOA market size forecast for retail industry in Western Europe, 2006-2012
- Figure 52: SOA market size forecast for retail industry in Benelux, 2006-2012
- Figure 53: SOA market size forecast for retail industry in France, 2006-2012
- Figure 54: SOA market size forecast for retail industry in Germany, 2006-2012
- Figure 55: SOA market size forecast for retail industry in Italy, 2006-2012
- Figure 56: SOA market size forecast for retail industry in Nordics, 2006-2012
- Figure 57: SOA market size forecast for retail industry in RoWE, 2006-2012
- Figure 58: SOA market size forecast for retail industry in Spain, 2006-2012
- Figure 59: SOA market size forecast for retail industry in United Kingdom, 2006-2012