Infor has been making a big splash about its retail focus recently, with a trio of acquisitions coupled with new product launches. I caught up with company President Duncan Angove to hear more about why the sudden interest in the retail sector and how its technology aims to help high street retailers compete with the likes of Amazon.
The firm was a relatively late entrant to the retail industry, only setting up a dedicated unit in October 2015. Since then, Infor has celebrated some big customer wins, signing up Whole Foods Market, shoe chain DSW and homeware store Crate and Barrel as co-developers of its upcoming CloudSuite Retail platform, and pinching Nordstrom business from Oracle. The firm has also splashed out to acquire Predictix, Starmount and GT Nexus, the latter of which is key to the Whole Foods deal, according to Angove:
Applications in the future need to have more of a network mindset to them; that’s why we acquired GT Nexus. Whole Foods will be bringing their 16,000 suppliers onto the network, publishing and managing their item catalogue on the network, they’ll be doing all of their ordering, they have complete inbound visibility of all of the products coming into their shops and depots, and we’ll be doing all of the financial settlement on the network. We’re rethinking every aspect of the retail supply chain with a network mindset, from product discovery and sourcing to purchasing and financial settlement.
The Predictix deal adds demand management to this network layer, for range management to help retailers get the customer offer right across multiple channels. The platform takes advantage of machine learning and artificial intelligence (AI) to support the sheer volumes seen in retail. Angove explains:
Unlike manufacturing and other industries, retail has a much larger product count or SKU count. A manufacturer might have 1,000 SKUs. In retail, companies have 100,000 in a store up to one million active SKUs, then you multiply that by 5,000 stores and you need visibility of daily orders. Suddenly you’re talking about volumes in the billions. That’s why generally in retail, we’ve always managed through averages and that leads to imprecise decisions.
Angove claims Predictix was the first company to solve the range management challenge, using advanced analytics technology powered by elastic super-computing to help make forecasting more precise. He adds:
It’s a very complex process with a lot of volume and flexibility required. Most retailers do that on a spreadsheet with a lot of human horsepower. That’s where really art and science come together. Predictix were the first company to crack it. They took a machine learning approach to it, much like Pinterest or Pandora or Google do.
Every weekend for one retailer, which has 100,000 SKUs across 5,000 stores, we’re producing SKU in-store daily forecasts for them with billions of volume, using Amazon as an elastic super computer. We provision 10,000 computers for 20 minutes at a cost of almost nothing. It’s this massive predictive grid. We run our machine learning modules across it, and produce promotional and daily forecasts. This retailer was able to reduce inventory by $200m just by having a more accurate forecast.
Every retailer you go to is armed with forecast analysts that do nothing but tweak and tune and they’ve been doing it for years. It’s very, very hard to improve forecasting accuracy in retail as it’s been so tuned. To drive that kind of improvement, that’s what we mean by a leap frog.
Despite Angove’s obvious enthusiasm for the sector, some might argue that Infor has picked a strange time to enter the retail space, which is struggling with constant high street store closures, bankruptcies and failing businesses - and the ever present threat from Amazon. Angove obviously disagrees:
Amazon is a technology and supply chain company. What’s going to save retailers is behaving in the same way. As humans we’re not going to stop shopping. I think it’s unlikely that it’s going to end up as one or two online retailers. We love industries where there’s turbulent change taking place, where the core dynamic driving it is technology. Retail is a great place to be.
The retail industry is going through another inflection point. The web has killed off where you compete on value and assortment in-store. We’re seeing a huge spike in bankruptcies and a lot of retailers struggling in the US in particular. There’s a big debt overhang. They need to turn to technology quickly to drive higher margins, make the business more efficient and get more out of the current footprint they have.
DSW competes with Amazon, who’s acquired [online shoe retailer] Zappos. What’s their advantage? They have 500 stores across the US; they are 20 minutes from 75% of the US population. What if they thought of themselves as more of a logistics fulfilment company, about the last mile and same-day delivery. Amazon is a technology and logistics company. Retailers are beginning to understand it’s about how can they rethink their supply chain and store estate, and not just about blurring the physical and digital.
Inventory pooling is another area that Angove sees retailers starting to test out, and one that could help them survive and thrive. This sees stores working together to share stock, so if someone comes into a shop to do click and collect or to pick an item in store and then ship it home, they could reach across to another retailer to fulfil the order.
Outside of the retail sector, Infor has unveiled Project Max, its attempt at offering sales reps a “holistic experience”, according to Angove:
When the CRM space first emerged, it was all about salesforce automation, with standalone applications providing visibility to management for what reps were doing, what’s your pipeline, what’s your close rate, have you updated your notes. It didn’t actually do a whole lot for the individual rep to help them sell more or empower them. If you help sales people sell, and give them time back, you’re helping the whole company grow, versus reps just being forced to fill stuff in on a CRM app and spending all their time updating so management can manage up the chain.
Infor looked at where sales reps were spending most of their time, with the aim of automating tasks from transcribing meetings and updating notes in CRM apps, to advice on the best way to get to a meeting. Angove explains:
Let’s look at it through the eyes of the rep versus the manager - that was really the main driving thesis behind it.
Project Max is currently in engineering, and the technology will be able to sit on top of any CRM or ERP system. Angove said it will be shipping by the end of the calendar year, but added that pricing has not yet been figured out.
Infor has also recently acquired Birst, a privately held analytics company, which Angove said is aimed at consolidating the different business intelligence systems that might be in use across a company:
Birst wanted to solve both the need for top-down governed, clean data coupled with the agility and speed that a business user needs. They were the guys that built Siebel’s BI solution. They leveraged the cloud for networked business intelligence. You can have these super agile business users at a department or regional level and they’d have power to do self-service BI without giving up the benefits of having the single version of the truth.
Angove also reaffirmed that the firm has no plans to subsume Birst into the Infor family:
We want it to compete and win on the strength of a standalone BI tool. We can accelerate the roadmap with the scale that we have. If Birst continues to win in a standalone BI compete in a non-Infor account, selling that back into our base will take care of itself.