Let’s rethink retail operations
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What if you were to design retail operations for a new company? What would you automate to improve the transaction experience?

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Transparency is critical for the transaction experience. Your customer wants to see when they can get the product. You, as the retailer, want to better manage where to put inventory so customers have the easiest access. Eileen Lowry Vice President, Product Management IBM Automation

“If your transaction experience — the key to your customers staying with you or buying something — is suboptimal, they’re going to go to your competition,” says Eileen Lowry, vice president of product management for IBM Automation. “At the end of the day, that’s the face of your business.”

To be competitive, Lowry says retailers need an omnichannel strategy that delivers seamless transactions. The transaction experience itself comprises a lot of different steps and subprocesses, but if Lowry were to design retail operations for a new company, she’d focus on the inventory process.

Retailers are having to do all these point-to-point checks because the point-to-point system integrations they created over time have narrowed the view of where inventory might reside. Eileen Lowry Vice President, Product Management IBM Automation

IBM’s series “Rethink & Automate” invites leaders to reimagine common business and IT processes by approaching them from a greenfield perspective and embracing automation. According to a report (Link resides outside ibm.com) published by the information technology company Capgemini, the retail industry stands to save USD 300 billion annually by implementing automation processes to more efficiently run everything from customer returns to supply chain management, updated customer databases and inventory management. When it comes to the transaction experience, automation can help retailers become more responsive to consumer demands and react to realtime events and trends.

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Lowry has one tip for retailers thinking about improving their end-to-end inventory process: prioritize API management. The use of APIs and API management software is central to designing a better inventory process because you’ll get accurate inventory checks. APIs enable you to open your applications’ data and functionality to other internal departments and systems within your company, as well as to external third-party developers and business partners.

Inventory data must communicate with a host of other systems: point-of-sale systems, promotional systems and financial performance systems, to name a few. “It becomes critical that the information you extract from those APIs is very exact,” Lowry says, as that information provides transparency. “Transparency is critical for the transaction experience. Your customer wants to see when they can get the product because they’re making a choice between you or a competitor. You, as the retailer, want to understand and better manage where to put the inventory so customers have the easiest access.”

Depending on what is happening online or in the store, integrations can kick off applications to move inventory or change a promotion. Eileen Lowry Vice President, Product Management IBM Automation

By using API management software, retailers can get an immediate and informed overview of all inventory points. APIs can integrate with and automatically trigger information going from system to system and from application to application. Retailers then start to see if the inventory is in a warehouse, a distribution center or a physical store. “You’re also able to create and manage the APIs to know where monetization can occur,” Lowry says. For retailers, this is a massive automation opportunity.

No automation without integration

There are many ways to connect and exchange data between applications. Building individual point-to-point links is costly and difficult to manage. API-led integration between applications simplifies the exchange of information, or the “request and response” of APIs. Automation, meanwhile, can surface or trigger new monetization opportunities. As Lowry explains, “Depending on what is happening online or in the store, those integrations can kick off different applications to, for example, move inventory or change a promotion.”

Here’s a real-world example of how an API-led integration can benefit retailers and their customers. Imagine you want to move inventory with a flash sale. You know that offering both in-store pickup and delivery will likely increase sales. To help customers choose between pickup or delivery, your inventory process needs to surface information about both options. When a customer selects an item, an application needs to make a query to all the local stores to check their stock levels. As the retailer, you can expose the stock level for each store as an API, and the application can use the customer’s location to show a list of the nearest stores with stock.

If the customer wants to reserve an item or order it for delivery, then additional automated integration flows can be used to ensure the stock isn’t oversold and to determine local delivery fees and windows. Automation can also be used to trigger a promotion application if the product isn’t selling fast enough.

Results in 6 months

Lowry says that if a company were to implement integration and automation to improve its inventory process, it could see two noticeable outcomes in about six months: an increase in customer loyalty and an immediate reduction in the time it takes to deploy new applications, such as a promotion.

“There are a ton of studies that show that  retailers that prioritized the customer experience ended up being more resilient, whether it was in response to the pandemic or a financial crisis, and they fare better over time because they can evolve with the change,” Lowry says. “If you make the transaction experience that much smoother and that much easier, you’re going to build on your customer loyalty.”

Creating an omnichannel experience How automation and APIled integration creates a performant platform for the inventory process A unified layer

Connect various inventory applications to a single integration layer

Simplified access

Extract precise inventory data from different applications, making it easier to provide responses to the API requests

Secure and controlled access

Enhance security with APIs that define and control what data can be accessed, and by whom

Efficient updating

Move or replace applications without impacting the other applications connected to the integration layer

Next steps

Manage and monetize APIs across multiple clouds.

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Ch. 1: Let's rethink recruiting Ch. 3: Let's rethink IT DevOps Ch. 4: Let's rethink cloud operations Ch. 5: Let's rethink customer service