Channels -> Retail
By: Simon Holloway, Practice Leader - Process Management & RFID, Bloor Research
Published: 24th January 2011
Copyright Bloor Research © 2011
Back in September 2010 I was asked to meet those in HP responsible for devising the strategies being offered by HP to the Retail sector, Kobi Elbaz, Director, Client Solutions and Workstations, EMEA, and Emily Dart, Manager, Retail Store Solutions.
Before I look at the solutions and offering being promoted by HP, let us look at the retail industry itself. The retail sector has undergone its biggest ever evolution in the past decade as new technologies have given people greater choice in the way that they shop. People, who shopped in stores or via catalogues and door-to-door selling, can now buy online or via digital TV. This has resulted in a multi-channel approach to selling by retailers intent on ensuring they maximise sales and market share with 2009 and first half of 2010 being one of the toughest recorded for retailers.
Liane Dietrich, MD at LinkShare UK, has recommended that, as customers have increasingly turned to the web in search of the best deals, the key for retailers looking to boost dwindling high street sales is to seize the opportunities which exist online by promoting their brand whilst also appealing to the ever-savvy online shopper. Dietrich explained that one consequence of the bargain hungry customer is that they have become more demanding—shoppers now require more from their online shopping experience and expect to be presented with something extra to entice them into making a purchase. Therefore to be successful in an economy which still remains fragile, retailers need to adapt to the changing shopping habits of their target audience as well as maximise the potential of all revenue streams available to them. Today’s customers are often better connected and hold more technology in their hands than exist in stores, thus enabling to compare prices online through their mobile phones.
So what is HP offering to help with these issues? Elbaz explained that HP saw that retailers needed to invest in the latest customer-friendly technologies and, given HP’s penetration into the vertical with 90 out of the world’s top 100 retailers being customers, HP equipment handles over 3.5 billion credit card transactions annually. Besides the hardware that people are familiar with from HP, the company also offers:
From a services viewpoint, HP aim to be the partner at the customer’s table. In the retail sector they are offering 4 solutions:
Solutions means software, particularly applications, and that is not part of the HP portfolio. However HP has formed major partnerships with the 3 main application vendors in this sector: SAP, Oracle and Microsoft. In addition they have formed strategic partnerships with best-of-breed vendors such as Retallx, eRetail and Aldata, to name just a few. HP, through its EDS acquisition, has also acquired a number of vertical-oriented services groups. Now each of HP’s software vendor partners has a retail strategy of their own, so there would seem to be potential for a disconnect. To avoid this HP are working closely with their major software partners to integrate their solutions with their software partners’ solutions. This results, if you like, in a SAP, a Microsoft, an Oracle and so-on version for each solution, where appropriate.
In an additional discussion with Mario Vollbracht, Worldwide Segment Executive, Retail and Consumer Goods Industries, explained that HP saw that being independent of software applications meant they could better respond to their client’s need with a right combination of hardware and software appropriate to the existing portfolio of their client. Vollbracht also stated that HP saw their ability to manage effectively the legacy portfolio of retail organisations coupled with HP’s business process knowledge as key differentials in the services offered by the company.
Elbaz expounded that HP not only saw the technology challenges that retailers faced, but they themselves were retailers with stores in Eastern Europe where they were learning to eat their own dog food. He explained the HP POS solution was able to support the necessary agility that business required, by providing solutions that were compatible as a retailer grows with the ability to customise and redeploy systems. This business requirement goes hand in glove with HP’s known stability and reliability as a hardware vendor. This approach is very like the way HP went into the use of RFID to track and trace.
For what I was told of a year or so of operating, HP has come a long way, but I felt that they aren’t quite there. The information on the solutions on the web site is a bit sketchy, but what there is is very good. I also feel that the relationship with different software partners needs to be made clearer in terms of what is actually being offered by the partnership. Retailers aren’t going to buy hardware; they want cost-effective and quick-to-implement solutions which give a very good ROI. These solutions are a combination of hardware and software. It is a case of nearly there, but if you do start talking to them you may well find the solution you are looking for, but you need to do some digging to get there.
 Online retail in 2010, John Ronson, Retail Digital, Apr 16, 2010
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