Infor shopping for retail success as the next shoe drops with DSW

Previously Derek and Phil have taken deep dives into the ongoing partnership between grocery firm Whole Foods and business applications provider Infor. It’s a relationship that has come to symbolise Infor’s approach to re-inventing the retail sectors use of technology.

The two companies have built a cloud-based retail management solution to meet the needs of Whole Foods, but which can be made available to other companies in the retail industry as Infor CloudSuite Retail. It’s the prime example of how Infor wants to approach retail, a sector that only really caught the company’s eye a couple of years ago.

Heading up Infor’s retail push is Corey Tollefson, who began his career at Anderson Consulting (later Accenture) where he worked on Retek, the retail tech offering acquired in 2005 by Oracle. That acquisition was driven by the current Infor CEO Charles Phillips, then President at Oracle, and saw Duncan Angove, now Infor President, assume the role of GM for Oracle Retail. Memories of Retek as a product are not entirely fond:

In the late 1990s, people gravitated towards having information timely to hand and Retek was positioned for that. It was built on Oracle Forms and had a horrible user interface (UI), but people bought it because the alternative was green screens.

Phillips and Angove both ended up at Infor, where Phillips instigated a complete overhaul of the company’s approach to enterprise software. Infor had become the place where acquired enterprise software went, if not to die then certainly to be put on life-support to keep it alive. Phillips vision was to make business software beautiful, which has led to more than five years of work to reinvent and hardwire design principles into the company’s portfolio. No ugly UIs a la Retek here.

Tollefson joined Infor, initially to work on the firm’s financial products, but things took an unexpected turn in 2014 after he and Angove visited the National Retail Forum (NRF) convention in New York and found that there was evident opportunity in the retail space for the kind of ‘beautiful software’ thinking now espoused by Infor:

There was a clear appetite for this coming out of NRF. We had fifteen really strategic conversations, five of which have led to contracts. We’ve started down the co-innovation path with retailers as a result.

Why there was this appetite is that for retailers there were two choices - Oracle and SAP, nothing in-between. Both of those choices came with their own baggage. They’d sell you an SKU, you’d hire a big consultancy to come in and help you and one $100 million project later…

Having seen the potential of a push into retail, Infor set about creating a team to deliver on this promise. That’s gone from the initial conversation between Angove and Tollefson to become a unit of just under 1000 people in the space of two years. Significantly, says Tollefson, some 900 of those people work in development. That’s a major differentiator, he argues:

It’s a stark contrast to Oracle and SAP, who flood the market with sales people, which then results in those sales people dictating the product direction towards what they can sell. Our approach is to focus on the product development strategically to create the best product. We’re not hiring sales people, we’re hiring developers who have a partner-type mentality.

That partner mentality extends to how Infor works with its retail customers, with Tollefson talking up what he calls a “co-innovation path” with the likes of US shoe shop chain DSW:

Between us, we are re-architecting the DSW in-store experience, which has been based around NCR technology. The use case at DSW was built around improving both the customer and the retail associate experience. DSW employs millennial associates, people who buy their groceries online and take an Uber to work. Then they have to come into the store and engage with 18 pieces of technology, like a Borg from Star Trek, just to do their jobs. That doesn’t add to the user experience or make it consistent with the way that a millennial would shop.

In technology terms, what DSW and Infor aimed for first is a transformed back office operation based around Infor CloudSuite on Amazon Web Services.

The second goal is the creation of a converged commerce application for modern retailing. This will see development teams at DSW, Infor and the latter’s design agency, Hook & Loop, working together. While developed for DSW, the resulting application will contribute to enhancement of the core Infor CloudSuite Retail offering.

This is a different way of working in the retail sector, argues Tollefson:

We’re starting from a place that is more natural for 21st century retail. But one of the question is how do we accelerate growth?

Co-innovation

The answer to that is a combination of co-innovation and strategic acquisitions, such as that of Starmont earlier this year. The driver for that deal was that Starmont offers Infor Retail additional functionality, including point-of-sale, mobile shopping assistant and store inventory management products as well as a data-rich commerce hub.

It also brings its own customer base, which includes the likes of Abercrombie & Fitch, Burlington Coat Factory, Perry Ellis, and Urban Outfitters. And it’s bringing new business to the table, says Tollefson:

Since acquiring Starmont, we’ve signed one of the largest fashion brands on the planet who want to rip-and-replace their existing on premise experience. We believe they will have the largest cloud point of sale offering on the planet.

As for the wider retail market, diginomica has covered multiple examples this year alone of the mixed results among retailers struggling to adapt their business models and hold of competition from digital challengers, with Amazon the consistent ‘Big Bad’ casting its shadow over more and more verticals.

Tollefson agrees that it’s a time of major disruption, but not only in the direction of ‘traditional’ retailers pitching for digital reinvention:

What we’re seeing is a lot of bricks-and-mortar stores trying to beef up their online capabilities, but we’re also seeing online companies now getting into stores. You can see them in malls more and more. What everyone needs to do is to make the shopping experience seamless. Online, mobile, in the mall or the arcade. it has to be a consistent experience.

In a week when Amazon Go’s offline, but smartphone-enabled, store provides a powerful case in point for Tollefson’s thesis, it is tempting to wonder if it’s too late for some of the traditional retail brands to pull off the necessary catch-up?

Tollefson concurs, but argues that this is down to approach as much as anything:

There are few bricks-and-mortar firms for whom it is too late. If you try to compete with Amazon on product assortment and price, then you lose. The companies who embrace the Amazon operating model though can succeed. Look no further than Amazon’s use of AWS which leads to lower cost of IT and enables them to spend more money on the customer experience. Retailers are not used to that sort of approach.

The challenge/opportunity for Infor is to change that mindset. Tollefson reckons that the firm’s customer demographic gives it a head start here:

The Oracle buyer was a CIO, a guy in his mid fifties. What we see at Infor Retail is that the customers are on the business side and come from digital backgrounds. At DSW, the customer is the CEO who was promoted to that role from being the head of e-commerce. At Whole Foods, the CIO is 39, it’s a younger demographic.

My take

Retail digital transformation has been a major topic for diginomica in 2016 - and that's not about to change in 2017.

The continuing progress of Infor in this space is something to keep an eye on.