Question: What are the top three fundamental issues on the minds of retailers today?

Jeff Marker, Junction Solutions: Retailers are spending a lot of time asking themselves how to best navigate through the changes that are happening in today’s retail marketplace. A question I hear over and over again is “how do I better and more effectively manage and control my entire retail value chain?” There are a lot of challenges with globalization, managing relationships across continents, and being able to be efficient in everything they do from their supply chain to their operations and merchandising, to the way that they interact with their customers.

That leads into the next big question they’re asking, and that’s “how do I create a truly exceptional shopping experience that accurately reflects the brand image that I want to have in order to earn and retain the loyalty of my customers? Many of the challenges around the shopping experience are really about embracing the new technologies and trends in social and mobile. So the question that comes around that is how do I effectively embrace these changes in social and mobile channels and remain relevant in this changing marketplace? If you think about all these things together, the big question is how do I build my business and my brand with less? And that’s less mass marketing because of less dollars being available, less capital, and less IT. Retailers are trying to be more efficient, but at the same time, they must continue to focus on what they need to do to build their brand and react to the changing retail marketplace.

Question: What do you view as some of the biggest challenges retailers faced concerning mobility?

JM: Mobility is a pretty important topic today and at the end of the day, the excitement surrounding mobility is all about is the rapid adoption of consumer mobile devices. I don’t think we would be as excited about mobility if it was something that was being driven internally; it’s being driven externally, by the customer. For the past 15 years one of the things we’ve talked about is how the world is evolving from a largely analog world to a digital one, and there are many of us who now consume virtually all the information that we go out and seek in a digital way, which means we’re using that information to make our decisions. For retailers, that means their customers are making their buying decisions based on how well, in many cases, they the retailer engages with them in this new digital world. At Junction, when we’re working with customers, we’ve been calling this the new normal. There’s no question that the changes we are seeing with mobility represent a new normal for retailers.

Question: How do you see the social network sites influencing the retailers and what can a retailer do to ensure their success and participation in that?

JM: As consumers are increasingly using the internet and mobile devices to find product and pricing information, they are also using social networking sites to share their product preferences and experiences They are using social sites to look up, comment, and participate in a way that defines how they choose their favorite products, how they form their opinions, and maybe more importantly, where they find their best deals, which affects where they’re going to go to buy the things they want. The social networking phenomenon of the last few years is very important, and retailers need to engage in that conversation in a way that makes it easy for consumers to connect with them and their brand. If you think about this innovation, social sites are allowing customers to connecting with their favorite brands without engaging directly with the retailer. Retailers were very good at creating that brand experience in an environment that they controlled, and now they’re being forced to adjust to this new normal.

Question: What does it mean to be a customer centric retailer? Should retailers strive to be “customer centric” and, if so, what are some things they should be doing?

JM: Retailers must strive to be customer centric. Customer centric means organizing your business processes around your connections to the customer in a way that meets the customer’s shopping expectations. Most retailers have traditionally been organized around their channels with silos—of executives, and personnel, and systems—that dealt with one individual silo, like the store, or the Internet, or the catalog. We’ve been working with mail order companies for a long time and we know it is much easier for them to be customer centric when you consider the amount of information they store about their customers. Even so, to become customer centric, what retailers have to do is break down those internal and organizational barriers and collaborate and work together to serve their customers.

Question: What effects will the cloud have on retailers and what should they be doing today to ensure success in the cloud?

JM: When we think about the cloud, we think it’s going to have a huge impact in the years ahead. The cloud is important for retailers because it’s really redefining how retailers interact with their customers. In the eyes of a lot of retailers, the consumer, in some ways, has hijacked their ability to control the shopping experience, and now they’re playing catch-up. But what’s really changing is the way consumers make, and even transact, their shopping and buying decisions. So the cloud is connecting retailers and consumers in what I consider to be a new, more convenient, and even more cost-effective way. Here in the US, we love our stores, and they will continue to be an important part of the retail experience, but the cloud, as it relates to how business is transacted, is going to play a huge role. And that’s not just going to be outside of the store, but eventually, we will be using the cloud to connect with customers who are inside the store as well.

Question: IT has dramatically changed over the years, but retailers are often still using older technology. How can retailers get the data they need to grow and manage their business with this older technology?

JM: As a technology provider, the thing that we always emphasize is that technology, at the end of the day, is a tool. And technology is a tool that retailers are using, enabling everyone from their corporate office to their store to do their jobs in the most effective and cost-efficient way as possible. During the last few years, if we really think about it, technology has enabled retailers to connect with their customers wherever they are. Some of the older technology that is out there is continuing to effectively support many retail functions and will probably continue to be around for a long time. But none of those older systems can effectively run a modern retail business by themselves. They simply weren’t built to support today’s mobile, social and digital requirements. What retailers have to do is they have to make new investments; they have to keep pace with the expectations of their customers, and maintain their brand in order to deliver an experience that their customers are looking for.

Question: What should retailers do to become more efficient and balanced while increasing their dependence on technology? How can they manage the cost of IT when everyone wants to increase investment in IT? Where will they need to support their dependence on IT?

JM: It really seems that there is a desire to increase investment in IT in order to address the current trends in social and mobile, in addition to the high costs of maintaining existing systems. What retailers have to do, is they have to look at the big picture, a high-level look at what it is they’re actually trying to accomplish. When I look at what retailers are doing, I see a lot of investment out there. When I look at the successful retailers in the marketplace, the brands that we all know and love, I see companies who are spending enormous amounts of money trying to make their outdated systems support their current strategy. These companies have created a very complex integration of best-of-breed retail solutions, which require a small army of resources to keep working together.

If you look at what Microsoft is doing, you can quickly come to the conclusion that the Microsoft Dynamics AX for Retail approach is simplifying the role of IT by modernizing the business systems, and the business systems’ platforms we use to drive cost out of the overall IT equation. So as we look forward, and companies begin to realize that with Microsoft, they have a comprehensive set of applications built on a powerful platform, they will see they can run their entire business on one platform with one main enterprise system. The trends of the past, of dealing with best-of-breed solutions and trying to connect them together are really going to go the way of the dinosaur.

Question: Where should retailers increase usage of technology when IT budgets are shrinking?

JM: As I’ve been working with prospects who are analyzing new systems in order to decide if they are going to upgrade their legacy systems or begin a strategy of replacing them, many of them are finding it’s actually going to be—and it’s actually turning out to be—less expensive for them to choose replacement. In some cases, we’ve found that we can completely replace a large retailer’s current system with Dynamics AX for half the cost that it would take them to upgrade to the newest version of their legacy system. That’s very significant, and at the end of the day, it’s the proof we need to show that we are doing the right things for our customers. We look at Microsoft as the software provider. We provide the industry expertise and services needed to implement the solution for our customers. That’s our value proposition and it’s consistent with where retailers are finding they need to go.