SBC Retail Vertical Solutions

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SBC RetailVertical Solutions
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Index

• About the Industry 8-23
• Positioning w/ the Retail Customer 24-41
• Retail Pain Points 25-30
• Qualifying Questions fro Retailers 31-41

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About the Retail IndustrySection 2
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Strategic Analysis Summary

• Retailers are increasingly concerned about the
  capabilities of big-box retailers led by
  Wal-Mart
• Retailers of all sizes are now realizing that
  operational efficiency is not enough to compete.

• The retail sector has a long-standing reputation
  of being conservative in technology adoption.
• One area retailers have been more aggressive is
  in adopting technology to improve business
  processes.

Effective IT solutions, or the lack of them, can
now be a survival issue in the fast-paced but
low-margin retail sector. Gartners Strategic
Analysis Report, June 2003
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Retail at a Technology Tipping Point

• Consumers
• Have alternative channels available
• Are more comfortable with technology
• Have higher expectations
• Competition
• The connected retailer has the advantage
• Enhance the customers experience
• Productive empowered employees
• Legacy equipment expiring
• No future scale w/ existing infrastructure

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Technology Addresses Retail Concerns
Informational kiosks for pricing product info
Customer information that links to merchandising
promotions
Self checkout
Supply chainreal time
Decisions made at the store level
Wireless-instant help at all points in the store
Forecasting data mining, scheduling in sync w/
busy time
Real-Time inventory visibility store to store and
store to consumer
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What Concerns the Consumer

• Findings
• Top 3 services requested
• Having in stock items 79
• Products easy to find 57
• Fast check-out 45
• Helpful staff valued in
• Hardware
• Sporting goods
• Appliance/electronics
• Furniture and drugs
• Recommendations
• Link technology solution w/ the specific value
  prop for each retail sub-vertical
• Run an efficient store
• Increase headquarters responsibility

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Defining Consumer Experience
In store technologies can provide the tools
retailers need to improve their store operations
and deliver the kind of shopping experience the
consumer is looking for. --Gartner Sept 2003

• Self service technology is a way to enhance
  customer experience
• Build communication and training plans to support
  customer associates in the use of in-store
  technology

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POS Connectivity
As retailers upgrade their POS systems many also
try to boost connectivity from HQ to stores to
take advantage of new POS functionality. ---Forre
ster, March 2004
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POS Transformation

• To remain competitive
• Increase in-store sales
• Decrease operating costs
• Boost productivity
• Enhance customer experience
• Move from basic to advanced POS
• Upgrade POS system based on your unique needs

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POS Blueprint by Sub Vertical
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Retailers POS Capabilities
As retailers push forward they are grappling
with inadequate POS systems ---Forrester
More than 1/3 of retailers use kiosks, POS
touch-screens, mobile POS devices signature
capture devices. Many more are considering these
tools. ---Forrester
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Retailers and RFID
RFID costs are high. Many retailers are
considering RFID but may not implement it right
away.
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More About RFID
Soon RFID will flow to existing applications over
existing networks.
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The Successful Retailer is.
Moving Forward
The Connected retailer Resilient future-ready network The secure store Operational integration The Converged retailer Addresses competitive threats Responds to the demanding consumer Simpler manageable platforms The Successful retailer Better visibility to business-critical data Enhanced customer experience Lower total cost of ownership
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Retail Segmentation

• Retailers w/ T1 above
• Alternative channels available
• More comfortable with technology
• Higher expectations
• Retailers w/ sub-T1
• Connect to compete the Wal-Mart effect
• Need to differentiate
• Need to enhance customer experience
• Other criteria
• Number of check-out lanes in each store
• Legacy equip--SNA, DOS, PBXs

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RetailDrivers to Solutions
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Retail in Action
Access to In-Store Inventory
Remote Access
Sync up w/ Platforms
Headquarters
Portals
Data Mining Patterns
Connected to Suppliers
Authorization/ Settlement (Merchant Bank)
On-line
IP Phones, Schedules, Inventory Pricing
WIFI Hotspot Wireless Mobility
In-Store Advertising
Stores
Kiosk
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Positioning with the Retail Customer Section 3
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Software/Applications Providers
Technology is the differentiator applications
are the change agents

• IPcelerate Timecard management and scheduling
• Aptigen Supply chain management
• Tomax Workforce management
• Vytek Supply chain, mobile POS, Mobile
  inventory, retail distribution

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Workforce ManagementPain Points
Retail Driver The Customers Pain Points The Benefits of the Application The Value Proposition The Solution
Workforce Management High Employee Churn Increasing employee training costs Increasing HR expenses Automate administrative tasks such as scheduling, training, HR forms, benefits, etc. Reduces operational costs for training and HR Increases employee productivity-more efficient consistent training DSL, Frame Relay, ATM, IP-VPN, NVPN DIA, HIPCS, IPTA SBC PremierSERV
Workforce Management Difficulty coordinating employee schedules w/ in-store peak times. Sometimes understaffed, sometimes overstaffed. Can forecast peak store times and schedule employees accordingly. There is adequate coverage for check-out as well as assisting customers on the floor. Enhances the customers experience because employees are there to assist them. Increases in-store revenues Reduces costs because staffing is coordinated w/ in-store peak times. DSL, Frame Relay, ATM, IP-VPN, NVPN DIA, HIPCS, IPTA SBC PremierSERV
Workforce Management Employees dont regularly fill out their time sheets, paper work etc. This creates more work for the management team, preventing them from doing other things. A lot of administrative time is spent on creating employee work schedules. Distribution of work schedules to employees is manual sometimes causes confusion. Reduces employee turnoveremployees daily routines and schedules are easier to coordinate, change and manage. Automated scheduling based on in-store trends and workforce options. Schedules are distributed consistently. Schedule changes are tracked realtime. Reduces administrative costs-scheduling management is automated. Increases employee satisfactionmore satisfied employees Enhances the customers experience which is directly linked to increased revenues. DSL, Frame Relay, ATM, IP-VPN, NVPN DIA, HIPCS, IPTA SBC PremierSERV
The SBC solution can include additional products
offered by SBC Telco, affiliates and partners.
More detail located in the solutions section.
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Workforce Management Pain Points (Cont.)
Retail Driver The Customers Pain Points The Benefits of the Application The Value Proposition The Solution
Workforce Management In-store management spends too much time administrating employee benefits programs such as FMLA and disability. Employees. want to manage their own benefits Additionally management is not getting comprehensive reports that provide an accurate picture of the stores daily, weekly, monthly, yearly trends. So they dont know the true impact to their bottom line. Employees can access their benefits forms and information vie the extranet. Gives on-line automation of HR info, payroll, vacation balances, general benefit information, FMLA info, On-line benefit forms Manages annual open enrollment for benefits. Reduces operational costs, improves employee turnover Enhances the customers experience which is directly linked to increased revenues DSL, Frame Relay, ATM, IP-VPN, NVPN DIA, HIPCS, IPTA SBC PremierSERV
The SBC solution can include additional products
offered by SBC Telco, affiliates and partners.
More detail located in the solutions section.
Improve retail decisions with better processes
and better data.
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Workforce Management Pain Points (Cont.)
Retail Driver The Customers Pain Points The Benefits of the Application The Value Proposition The Solution
Workforce Management In-store management spends too much time administrating employee benefits programs such as FMLA and disability. Employees. want to manage their own benefits Additionally management is not getting comprehensive reports that provide an accurate picture of the stores daily, weekly, monthly, yearly trends. So they dont know the true impact to their bottom line. Employees can access their benefits forms and information vie the extranet. Gives on-line automation of HR info, payroll, vacation balances, general benefit information, FMLA info, On-line benefit forms Manages annual open enrollment for benefits. Reduces operational costs, improves employee turnover Enhances the customers experience which is directly linked to increased revenues DSL, Frame Relay, ATM, IP-VPN, NVPN DIA, HIPCS, IPTA SBC PremierSERV
The SBC solution can include additional products
offered by SBC Telco, affiliates and partners.
More detail located in the solutions section.
To achieve sustainable competitive advantage
going forward retailers need to align IT
investments with their unique value proposition.
They must look beyond legacy system and point of
sale (POS) upgrades to invest in the following
Workforce Management, CRM, in-store technology.

---Gartner Sept 2003
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Point of SalePOS Pain Points
Retail Driver The Customers Pain Points The Benefits of the Application The Value Proposition The Solution
Point of Sales In Store Technology Difficulty recognizing traffic patterns, consumer trends. Cant respond quickly to trends. Want to be ably to quickly adapt merchandising to address the traffic patterns, such as seasonal changes, customer trends time of day differences. Provides real-time inventory information. Instant price checks product information for employees customers. Can quickly respond, at the individual store level, to consumer trends changes. Reduces operational costs of inventory management and merchandising Enhances the customer experience because items address local trends, traffic patters etc. Increased revenuescustomers have access to products that they want when they want them... DSL, Frame Relay, ATM, IP-VPN, NVPN DIA, HIPCS, IPTA SBC PremierSERV
Point of Sales In Store Technology Long customer lines Employees are spending too much time doing price inventory checks instead of assisting the customer sharing their product knowledge. Faster customer processing - check-out requires less staffing so more employees can be on the floor assisting customers. Reduces time spent on credit card approvals. Can expand to pre-pay gift cards. Reduces operational costscan forecast and plan for better employee to customer time. Enhances the customers experience by providing more payment options faster and w/ more accuracy. Increased revenues DSL, Frame Relay, ATM, IP-VPN, NVPN DIA, HIPCS, IPTA SBC PremierSERV
The SBC solution can include additional products
offered by SBC Telco, affiliates and partners.
More detail located in the solutions section.
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Inventory Management CRM Pain Points
Retail Driver The Customers Pain Points The Benefits of the Application The Value Proposition The Solution
Retail CRM Inventory Management Have high inventory storage costs. There is less in-store space to stock inventory. Increasing leasing costs impact the bottom line , want to use as floor space for merchandising. More effective inventory management, reduced out of stock items, lower cost of managing carrying inventory Reduces operational costs, less inventory is stored at each retail location. Enhances the customers experience because they can locate the items they are looking for which increases revenue. DSL, Frame Relay, ATM, IP-VPN, NVPN DIA, HIPCS, IPTA SBC PremierSERV
Retail CRM Inventory Management Takes too long to locate inventory at other stores. Loss of revenue because customers cannot locate or order the items they want. Customers have faster, more efficient access to product ordering, pricing and information. Can locate items in other stores instantly. Reduces costs by providing more efficient real-time inventory management. Increases revenues enhances the customer experience because customers can locate order items faster. Provides more accurate pricing tracking of promotional offers DSL, Frame Relay, ATM, IP-VPN, NVPN DIA, HIPCS, IPTA SBC PremierSERV
Retail CRM Inventory Management When items are out of stock the only way to verify an in-stock item at another store is to call. Need visibility to other stores inventory. Employees spend too much time calling other stores. Employees and customers are frustrated because of the time it takes to call other stores. Customers are forced to wait in long lines because check-out employees calling other stores Can stock the right products in the store at the right time. Link the stores inventory to the products the customer wants to buy. Can locate in-stock items at other stores faster and with more accuracy. Faster store-to-store and store-to-customer stock transfer. Faster check-out lines. Less waiting time for customers who are looking for out-of-stock items. More efficient use of employee time. Enhanced customer experiencecustomers get what they need when they need it. Increased revenues reduces employee Off-Floor time augments On-Floor time w/ customers, allows more sales to complete. Check out is faster, employees can help more customers per hour. DSL, Frame Relay, ATM, IP-VPN, NVPN DIA, HIPCS, IPTA SBC PremierSERV
The SBC solution can include additional products
offered by SBC Telco, affiliates and partners.
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Starting Point Questions

• Where do you see your business in the future?
• What are your plans to get it there?
• What is your biggest threat opportunity?
• How are you addressing the threats and leveraging
  the opportunities?
• What applications are you planning on
  implementing?
• Capability of existing networks ability to help?
• What is driving need for a WAN or additional
  bandwidth?
• What are your key business drivers?
• Lowering operational costs
• Increasing employee productivity experience
• Enhancing the customer experience
• Increase same store sales
• Expansion
• What is the challenge in getting this decision
  made?
• ROI on applications
• Service provider performance need a resilient
  secure network
• Other

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Qualifying QuestionsGeneral
General Information

• Who are you working w/ internally? externally?
• IT, operations, marketing, sales
• Software company
• Store operations VP, director
• HR for workforce management
• What are your plans for maintaining a secure
  resilient network?
• What are the applications you feel you need now
  and in the future and why?
• Workforce management
• Data mining, forecasting, gift cards, customer
  experience, sales
• Supply Chain, Inventory Management
• In store technologies e.g. self check-out,
  kiosks
• WIFI / Wireless
• How are you ensuring you have right
  infrastructure for future applications/upgrades?
• What are your biggest concerns?

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Qualifying QuestionsInventory Management
Inventory Management

• How do you track your shipments from the supplier
  to the store?
• What kind of visibility do you have when
  shipments are in transit?
• Do you use your own trucks or do you utilize a
  shipping service? How do you integrate to the
  shipping company's system?
• What is the receiving process at the stores? How
  do you track purchase orders sent directly from
  the warehouse to the store? How is this process
  working? What improvements would you like to
  make?
• How do you prioritize special orders or allocate
  inventory when an order arrives? Do you send or
  receive any ASNs or EDI transactions? Do you
  barcode incoming product or is it already
  bar-coded? Are all your products bar-coded? Are
  all your products bar-coded?

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Qualifying QuestionsInventory Management
Inventory Management cont.

• How many square feet are in your warehouse?
• What is the total number of SKUs (stock keeping
  units) in your warehouse?
• Which of the following exist within the facility?
  Manufacturing, distribution, work in progress,
  kitting, cross-docking, direct store delivery?
• Do you handle pallets, cases or a combination?
• What portion of your business is full pallet?
  What portion is case level?
• How many receivers and shippers do you have?
• What are your product security procedures i.e.
  theft control?
• Do you use any reusable bins or containers in
  your production processes?

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Qualifying Questions Customer Service
Customer Service Applications

• How do you prepare for the peak seasons?
• How often does your store inventory change?
• How do you train your seasonal employees? How do
  you update or familiarize your employees of
  seasonal inventory changes?
• Do you ever have sidewalk sales or exhibitions
  outside of your store where you sell products?
  (Mobile portable POS. Note Wiring POS
  registers is costly. Many retailers choose to
  make the leap to wireless to cut down on these
  costs in the future.)
• Do you have a large queue of customers typically
  standing in the check-out line or at customer
  service?
• Do you have a large customer base that typically
  has dead time while waiting for orders?

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Qualifying Questions - Communications
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Qualifying Questions Operational
Operational Questions

• Briefly describe your current operational
  process, from receiving, stocking, replenishment
  and shipping?
• What are your operational pain points?
• How do you prioritize special orders or allocate
  inventory when an order arrives? Do you send or
  receive any ASNs or EDI transactions? Do you
  barcode incoming product or is it already
  bar-coded? Are all your products bar-coded? Are
  all your products bar-coded?
• How many square feet are in your warehouse? Where
  are your warehouses located?
• What is the total number of SKUs (stock keeping
  units) in your warehouse?
• Which of the following exist within the facility?
  Manufacturing, distribution, work in progress,
  kitting, cross-docking, direct store delivery?

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Additional Qualifying Questions
Operational Questions

• Do you have pallets, cases or a combination? What
  portion of your business is full pallet? What
  portion is case level?
• How many receivers, stockers and shippers do you
  have?
• How do you prioritize special orders or allocate
  inventory when an order arrives? Do you send or
  receive any ASNs or EDI transactions? Do you
  barcode incoming product or is it already
  bar-coded? Are all your products bar-coded? Are
  all your products bar-coded?
• What type of product do you sell in your stores?
  Are any of your products regulated by the
  government? Are there any safety risks with the
  products? Are they high-value items? Is there a
  high volume for certain items? Does the product
  have a short shelf life (because of expiration
  dates or seasonal changes)?

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Additional Qualifying Questions
Operational Questions

• Do you have a receiving process at the stores, or
  do you accept what is on the purchase order as
  having been sent to the stores (there are an
  amazing number of retail stores who do NO
  receiving at stores - just assume what was sent
  from the warehouse arrived at the store in tact)?
• What is your shrink at the stores? (Note If
  this is high, there is definite potential for
  good ROI for wireless and improved inventory
  tracking.)
• How do you track your shipments from the supplier
  to the stores? What is your visibility of
  shipments when in transit? Do you use your own
  trucks or do you utilize shipping service? How
  do you integrate to the shipping company's system?

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Additional Qualifying Questions - (contd)
RFID Questions

• What items are you interested in tagging? Are
  all of the items made up of entirely metal, or is
  their packaging made of plastic or cardboard or
  other materials?
• Are these products to be shipped to customers, or
  are they internal assets? Are they shipped on
  pallets, in cartons or loose?
• What are your receiving, picking, and shipping
  processes? Do you currently use barcode
  technology to track items or shipments? Do you
  have any manual processes or data accuracy issues
  with your shipping and receiving paperwork?
• Is there a need for real-time inventory on the
  items or just tracking their movements via
  logical choke points (i.e. last known location)?
• Do you use any reusable bins or containers in
  your production processes?

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Additional Qualifying Questions - (contd)
RFID Questions

• Are any of your vendors putting RFID tags on raw
  materials or products sent to you?
• Do you need coverage of the entire campus, or
  certain buildings or locations?
• What wireless equipment do you currently use at
  your locations? What frequencies are used?
• Do you have any security issues with your
  products theft control?
• Are there any government regulations or
  transportation security regulations for crossing
  borders that you must comply with?
• Do you have to report any safety information to
  government agencies on the products you produce
  and sell? Is this a manual process today?
• Have you put together a business case, or do you
  have an idea of the benefits you will gain by
  using RFID technology?

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SBC RetailVertical Solutions