IDC Marketscape: Worldwide Retail Commerce Platform Providers 2018 Vendor Assessment

IDC MarketScape IDC MarketScape: Worldwide Retail Commerce Platform Providers 2018 Vendor Assessment

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IDC MARKETSCAPE FIGURE

FIGURE 1

IDC MarketScape: Worldwide Retail Commerce Platform Providers 2018 Vendor Assessment

Source: IDC, 2018

Please see the Appendix for detailed methodology, market definition, and scoring criteria.

January 2019, IDC #US43380018 IDC OPINION

Retailers are facing a complex reality — they must balance traditional retail operations and omni- channel goals with the need to innovate toward commerce everywhere business models. The main challenge is the implementation of omni-channel operating models within broader digital transformation efforts. The profitability side of the omni-channel equation is the most challenging, as it's held back by increased supply chain costs, competition and promotional pressure, and legacy structures that were not designed for omni-channel commerce.

How can a retailer disrupt its own business model while remaining profitable? Based on IDC's 2018 Global Retail Innovation Survey, retailers are focusing on adopting new technologies, delivering innovation at scale, and accelerating customer growth. But is this feasible or realistic? New business models and innovative technologies will support the future of retail, as demonstrated by Ocado, Ulta Beauty, and Lowe's. These new models use interfaces instead of channels, provide proactive customer service and contextual discovery experiences, trace customer moments and time in place of locations, transform passive shoppers into active and engaged customers, and deliver targeted content at each junction of the customer journey, with customer experience at the heart of it all.

48% of midsize and large retailers in the U.S. and Western Europe are investing or planning to invest in retail commerce platforms (RCP) in the next 12-18 months (Innovating Customer-Experience-Based Business Models: Results from the IDC Retail Innovation Survey 2018 — IDC #EMEA43859418, June 2018), as expressed by retail executives across IT, marketing, omni-channel sales, operations, innovation, and digital transformation. In addition to the ones they will be implementing by 2019, nearly 50% of retailers plan to adopt a retail commerce platform by 2020, which means there is — at most — a three-year window to ensure competitive advantage.

Based on our assessment of retail commerce platform vendors' offerings for this IDC MarketScape, we can highlight the following key aspects:

Commerce everywhere. Retail C-suite top priorities for the coming five years revolve around innovation, digital supply chain, ecosystem enablement, and customer experience. The combination of efforts in these four macro-areas is leading retailers toward commerce everywhere business models. One of the key implications of this dynamic, for example, is that the approach to ecommerce platforms "as products" will gradually fade over next few years. This means ecommerce will be abstracted as a consumer interface, and its specific capabilities will be merged within the overall capabilities of the retail commerce platform's core commerce services. Mature vendors are already prefiguring this convergence by re- addressing their ecommerce offerings into broader retail commerce suites. Retail innovation. The retail commerce platform is an essential enabler of innovation, as it allows retailers to pilot, implement, and scale innovation at speed. However, it is crucial to consider that retail innovation goes well beyond the implementation of new technologies, and retailers should fundamentally point at business model innovation through the development of an innovation culture, the definition of an innovation strategy, execution based on a retail commerce platform, and the attainment of long-term profitable growth, building up what we call retail innovation excellence. The majority of vendors (with some exceptions) have considerable improvement opportunities in providing retail-focused innovation services that center around retail business model innovation, rather than implementing new technologies.

©2019 IDC #US43380018 2 Microservices approach. For many years, retailers have invested in monolithic platforms that were based on traditional IT architecture, in which the modules were customized and integrated with many other legacy systems. Over the past couple of years, large retailers have started to move toward microservices-based retail commerce platforms to become more agile and have the flexibility to rapidly deploy new services and capabilities. Most vendors in this study are providing services around cloud integration and API- and microservices-based architecture transformation to support retailers in implementing, rapidly expanding, and innovating the capabilities of the retail commerce platform. Interestingly, a selection of vendors is also dedicating efforts to the improvement of their platform extension marketplaces that allow retailers to benefit from faster go-to-market for new capabilities that can be sourced directly from vendors or their partner ecosystems. Artificial intelligence (AI)/machine learning (ML) analytics foundations. The implementation of the platform will rely on a solid core, joined with a best-of-breed approach and, primarily, will leverage AI/ML analytics foundations. An intelligent core is essential to continuously gather and process real-time and streamed data from consumers, products, inventories, and partners as well as customer activity. Several vendors are developing proprietary AI platforms and attracting most of the AI talent, continually collecting data from several segments and geographies for quickly improving AI algorithm performance. These vendors are investing resources to cover specific retail domains, potentially integrating and complementing capabilities that support retail commerce platform services with the offer of specialized partners.

IDC MARKETSCAPE VENDOR INCLUSION CRITERIA

In this IDC MarketScape, IDC Retail Insights assesses the capabilities and strategies of several enterprise software vendors in serving the specific needs of retail companies worldwide across industry segments (food and non-food retail). Vendors are evaluated according to their successes in designing, developing, installing, configuring, and maintaining the evolution of a retail commerce platform (Figure 2) — vendors' integrated retail offerings are also examined for overall considerations. The target platform that is taken as a reference includes all core capabilities that enable customer experience differentiation and seamless omni-channel commerce, along with the required operational efficiencies for profitability and business model agility. The core services of the platform are:

Customer experience services. This helps in exploring the customer context, real-time customer journey personalization (including loyalty), and customer interface enablement through voice, image, text, and augmented reality. This set of capabilities provides adapted and consistent interface enablement across current and future consumer services, whether human or digital. Customer experience services also support contextual customer journey personalization, leveraging all data — regarding customers, products, location, the internet of things (IoT), and third party — and processes by composing and delivering highly dynamic services. Commerce services. This set of capabilities provides a single, unified engine to process transactions, from order capturing though configuration and payments to delivery setup. Order-fulfilment services. Retailers get fulfilment optimization through network-based fulfilment, fulfilment objectives and KPIs (e.g., margin optimization, delivery speed depending on customer), efficient delivery execution, and returns management. Content optimization services. This set of capabilities provides content management and adaptive, personalized content distribution.

©2019 IDC #US43380018 3 A retail commerce platform relies on a cloud-first architecture (with possibility of on-premise, or public, private, hybrid cloud delivery, when necessary) and provides development services and API-based integration with enterprise services, data services, and consumer services, while delivering business logic and retail commerce services for four core capabilities. At the same time, it's leveraging artificial intelligence, machine learning, or an advanced analytics foundation. In addition to this, the retail commerce platform provides proprietary or third-party-sourced development services that allow retailers to address the areas of application modernization, development paradigm, code packaging shift, and cloud deployment.

To be included in this report, IDC Retail Insights analysts stipulated that vendors should meet the following minimum criteria:

It should have worldwide geographic coverage. The provider demonstrates evidence of strong market penetration through direct presence and knowledge of U.S., EMEA, and APAC business contexts. The provider must be able to support global retailers in their activities and expansion across mature and emerging markets. The vendor must support clients in designing, developing, installing, configuring, and maintaining systems, applications, or platforms that run their businesses. It needs to deliver software (and hardware, when available) regarding the core services of the retail commerce platform: customer experience services, commerce services, order fulfillment services, content optimization services, including real-time integration services. Furthermore, the provider must be able to deliver the platform as a cloud-first solution (with possibility to deliver on-premise, or as public, private or hybrid cloud, when necessary). The vendor also has the capability to provide AI/ML analytics foundations embedded in the four core services. According to IDC's Worldwide Digital Transformation Use Case Taxonomy, 2018: Experiential Retail (IDC #US44092118, July 2018), IDC defines experiential retail as the digital mission of the retail industry, with the subsequent strategic priorities that support that mission, the programs that will be initiated to satisfy the priorities, and the funded use cases that will be implemented under those programs. The vendor must deliver capabilities and skills that are required to implement the following relevant use cases:

Strategic priority: Omni-channel commerce Program: Seamless and frictionless commerce Relevant use cases: Omni-channel commerce system, frictionless content realization Program: Intelligent fulfillment and returns Relevant use cases: Omni-channel order orchestration and fulfillment, real-time inventory management Strategic priority: Omni-experience customer engagement Program: Next-generation customer care Relevant use cases: 360-degree connected customer management, augmented customer support Program: Autonomic conversational engagement Relevant use cases: Augmented social marketing, augmented content optimization Program: Hyper-personalized engagement Relevant use cases: Contextualized marketing, augmented promotion optimization, omni-channel marketing optimization Strategic priority: Digital supply chain optimization Program: Autonomic supply network optimization Relevant use cases: Dynamic supply network management, augmented forecasting and planning

©2019 IDC #US43380018 4 Program: Digitally optimized fulfillment operations Relevant use cases: Predictive network inventory orchestration Strategic priority: Operational scale and agility Program: Mobile enterprise Relevant use cases: Mobile inventory information management, mobile customer engagement Vendors can fulfill one strategic priority gap — and eventually enrich some capability that is part of their services — through proven collaborations with external partners.

Provider must have a relevant experience in retail industry software solutions implementation in the broadest possible set of industry processes and segments; providers with no relevant experience will not be included.

ADVICE FOR TECHNOLOGY BUYERS

IDC believes a retail commerce platform is an important milestone in making retail businesses digital businesses of today and the future of commerce businesses and to enable the innovation strategy. As your organization evaluates and plans investment for introducing or enhancing its commerce platform, we recommend considering the following:

Rethink core systems and move toward a unified and data-centric digital retail commerce platform approach. Accelerate retail commerce platform investments to achieve successful innovation implementation, customer experience differentiation, and omni-channel execution at speed and at scale. Select a partner that has proven experience in implementing at least three components of the platform: customer experience, commerce, and order fulfillment services. Implement an AI/ML foundations road map that embeds advanced analytics, machine learning, and AI capabilities right into the application components of the platform, as and when necessary. Retailers should prioritize the selection of vendors that have developed a proprietary AI platform, taking advantage of their broad ecosystem to support retail commerce platform services. Don't think only about channels and omni-channel. Abstract customer interfaces and engagement input (text, image, voice, video, AR) within the platform to allow more rapid delivery of consumer services and more efficient and personalized execution of customer journeys. Customer experience differentiation is built on a new way to segment customer data and deliver dynamic experience services to consumers. In this context, marketing and advertising represent the last mile to increase the customer knowledge and engagement across the entire customer journey. Retailers should prioritize vendors that provide capabilities and offer services for managing marketing and advertising strategies as part of customer experience strategies. Prioritize the selection of vendors that accompany the retail commerce platform core offering with an offering for innovation services. These services should be centered around business model innovation and on supporting retailers in building a companywide innovation culture and strategy, having technology as one of the enabling instruments of retail innovation and of long- term profitable growth. Design integration services among the four core components of the retail commerce platforms and to/from enterprise services, consumer services, and data services. An API- and microservices-based architecture should support the implementation and rapid expansion of retail commerce platforms' capabilities. Prioritize the selection of retailers that offer a platform extension marketplace with an appropriate retail catalog and demonstrated ease of integration of third-party services.

This section briefly explains IDC's key observations resulting in a vendor's position in the IDC MarketScape. While every vendor is evaluated against each of the criteria outlined in the Appendix, the description here provides a summary of each vendor's strengths and opportunities. Aptos According to its analysis and buyer perception, IDC positioned Aptos as a Major Player in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

Aptos is a software provider with headquarters in Atlanta, Georgia. Founded in 1972, Aptos, Inc. (formerly Epicor Retail Solutions) announced its official launch on June 17, 2015, as an independent company and new brand — following its spin-off from Epicor Software Corporation — and has approximately 1,300 employees globally. It has over 1,000 retail customers with a concentration in specialty soft goods and hard goods as well as department stores. Aptos' main geographical markets include the U.S., the U.K., and Canada — its presence in EMEA has been expanded following the TXT acquisition in 2017 and direct hiring in the region.

Between 2017 and 2018, Aptos has been investing in the development of a microservices-based retail commerce platform. The vendor is prioritizing use cases related to commerce services and is planning to also extend the microservices approach to order fulfillment and customer experience services between 2019 and 2020.

Aptos Enterprise Order Management (EOM) gathers capabilities referred to order fulfillment services such as sales (e.g., order change, order split), shipments (e.g., from warehouse, store, or drop-ship partner), returns, credits, and integration to online marketplaces and price comparison engines. Integrated to EOM are point of sale (POS), customer relationship management, and loyalty applications. Furthermore, these applications are integrated to Aptos' enterprise applications for merchandising/inventory management, sales audit, digital commerce, warehouse management, and analytics.

The vendor places Aptos CRM as the starting point of customer experience services. This application allows retailers to manage customer information (demographics, transactions, and interactions) in a single database accessible from multiple employee interfaces at store (through Aptos POS) or at enterprise level. Aptos offers customer experience management capabilities through its own developed functionalities (e.g., campaign planning and management, promotion planning) or through integration to third-party solutions.

Commerce services are offered with the capabilities of Aptos Digital Commerce and of Aptos POS (comprising Aptos Store and Aptos Mobile Store). The integration of these components to Aptos EOM provides real-time inventory visibility and allows retailers to manage multiple use cases (27 identified by Aptos) such as combining in one transaction products available in store and online, buying online and picking up in a store, managing store checkout, accessing customer information, and managing store workforce. Aptos Digital Commerce includes a product information management (PIM) functionality — with responsive design capabilities for mobile customer experience — and provides integration to major payment processing gateways (e.g., Google Checkout, Checkout by Amazon, and PayPal).

Content optimization services rely on integration to Aptos PIM that can be accessed by other systems (e.g., kiosks and mobile apps) using web services to offer content in a store environment.

Aptos POS and Aptos CRM are available in both on-premise and software-as-a-service (SaaS) models. Aptos Digital Commerce and Aptos EOM are deployed in cloud, and many Aptos clients are running them on AWS.

©2019 IDC #US43380018 6 Strengths Aptos' execution of its microservices architecture strategy is strengthening its overall offer flexibility, as it matches with retailers' ongoing preference to implement the retail commerce platform with a best-of-breed approach. Aptos is completely focusing its activity on the retail industry, and its customers recognize its solid industry expertise and the ability to deliver microservices at speed and meeting customization expectations. After the acquisitions completed between 2014 and 2016 (QuantiSense, ShopVisible, BT), the acquisition of TXT is instrumental to appropriately execute on Aptos' global expansion strategy. It is worth reporting a customer's opinion, according to which the latest acquisition not only strengthens Aptos's geographic coverage capabilities, but it is also an important asset for further aligning the company's road map to the needs of retail industry. Also noteworthy are Aptos' plans to expand its services portfolio. For example, the vendor will provide an offering focused on business consulting services and launch a marketplace for third-party-developed applications that will be relying on the overall microservices architecture. Challenges As Aptos is focusing its efforts on delivering microservices for the existing portfolio of applications, the vendor's offering for the core services of the retail commerce platform has remained almost unchanged over past quarters — even if, for example, some advancements have been made in the collection of data from customer interfaces such as voice and augmented reality. Aptos must demonstrate to existing customers and potential customers that the investment in the microservices architecture will be capitalized with the broadening of Aptos' own capabilities (organically or through further acquisitions) and through the timely and effective launch of the mentioned applications marketplace. Regarding the AI/ML analytics foundations, Aptos is not yet addressing them with proprietary capabilities or official third-party sourcing and is focusing on a business intelligence reporting approach. This is an attention point on the overall Aptos offering, and the vendor will need to share a clearer strategy (e.g., key innovation partners that will be involved) and road map for embedding AI/ML capabilities across the core services of the retail commerce platform. Related to this, another attention point is how Aptos will execute on the strategy to deliver third-party-sourced IoT services for which clear plans and timeline have yet to be shared. Diebold Nixdorf According to its analysis and buyer perception, IDC positioned Diebold Nixdorf as a Major Player in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

Diebold Nixdorf is a software and hardware solutions provider with headquarters in North Canton, Ohio, the U.S. Founded in 2016, the company is the result of the merger between Diebold Inc. and Wincor Nixdorf AG, and has approximately 23,000 employees globally, 900 of whom are dedicated to the retail software business. The company has more than 50 retail commerce platform customers with a concentration on food stores, apparel and specialty, and gas service stations.

Between 2017 and 2018, Diebold Nixdorf has invested its efforts in the definition of a renewed company vision and strategy, named "Storevolution." The vendor's new strategy intends to address four retail industry drivers: consumer-centricity, store digitization, connectivity, and store as a service. To execute on the strategy, Diebold Nixdorf has launched a new microservices-oriented SaaS suite named "Vynamic," composed of seven portfolio pillars that build up the core services of the reference retail commerce platform.

©2019 IDC #US43380018 7 The combination of the capabilities of Vynamic Engage, Vynamic Demand, and Vynamic Digital refers to customer experience services. Vynamic Engage focuses on gathering and analyzing customer data, mapping customer journeys, building customer profiles, and executing on these with loyalty and promotion activities. Furthermore, Vynamic Demand focuses on the pre-purchase phase of the customer journey and allows retailers to execute on in-store customer experience by leveraging location-specific inputs such as audio triggers, geo-fencing, and beacons. Vynamic Digital is dedicated to the development of micro apps for retail mobile applications (which the vendor also groups under the name of Vynamic Mobile Retail), including functions such as mobile payments, digital loyalty cards, biometric authentication, and mobile self-scanning.

The Vynamic Transaction Engine includes a set of services that refer to commerce services. Here, the key component is Vynamic Retail Services, an open-API platform dedicated to the integration of existing and new customer interfaces that allows retailers to manage functions such as payment and order setup. In combination with this platform, the vendor also offers Vynamic POS, a hardware- agnostic software that essentially provides checkout capabilities for stationary and mobile POS, with integration to the centralized administration and promotion functionalities.

The combination of Vynamic Retail Services integration capabilities and Vynamic Merchandizer refers to order fulfillment services. The latter application provides order management capabilities on the demand and supply sides. For the demand side, it allows retailers to manage use cases such as home delivery, click & collect, and returns. For the supply side, it allows sales associates to order items from warehouses, both directly and as a replenishment order.

The components oriented to customer experience services offer basic content distribution features within the promotion management functionalities. With reference to the core content optimization services of the retail commerce platform, Diebold Nixdorf points at allowing retailers to select their preferred content management system provider through Vynamic Retail Services integration capabilities.

Furthermore, Diebold Nixdorf offers Vynamic Insights in reference to the AI/ML analytics foundations. The analytics platform provides capabilities for gathering data from available interfaces at consumer and enterprise levels and offers ML-based predictive analysis that can also be combined with the vendor's Advisory Services. The platform also allows retailers to integrate third-parties' AI/ML platforms via open APIs. Strengths Diebold Nixdorf's revised strategy is well-aligned with the trends of commerce everywhere business models. Efforts invested in the microservices-oriented architecture and in customer experience services allow the vendor to offer a broader portfolio that retailers can consider for building the retail commerce platform with a best-of-breed approach. The potential combination of Vynamic Demand with Vynamic Retail services is an interesting foundation for an IoT platform to be complemented with the capabilities of IoT vendors specializing in other domains such as energy and asset management. It is worth reporting the case of a customer that is running a co-innovation program with Diebold Nixdorf. All the custom code that is developed under the program becomes intellectual property of the customer, with the possibility for Diebold Nixdorf to reuse the code in other contexts according to specific agreements.

©2019 IDC #US43380018 8 Challenges Diebold Nixdorf's efforts to expand its capabilities in customer experience services position it at the beginning of a complex journey during which it will face competition from enterprise and specialty vendors that are already established in the domain. The vendor needs to demonstrate to retailers the effectiveness of its new customer experience applications, the capability to integrate to third parties' existing and new applications, and fundamentally, the capability to support its customers in the innovation of customer-experience-based business models before focusing on technology innovation. Fujitsu According to its analysis and buyer perception, IDC positioned Fujitsu as a Major Player in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

Fujitsu is a software and hardware solutions provider with headquarters in Tokyo, Japan. Founded in 1935, the company has 156,000 employees globally, approximately 8,000 of whom are dedicated to the retail industry (with 400 resources specifically dedicated to retail commerce platform development). It has more than 500 retail customers with a concentration in apparel and accessory stores and distribution in Asia, North and South America, and Europe, and Oceania.

Fujitsu's retail commerce platform is called Fujitsu Market Place (FJMP). FJMP relies on a microservices approach, supporting the introduction of new interfaces, technologies, and store formats via a five-layered application architecture. This set of retail functions acts discretely across interfaces in a structure that can be expanded over time as functional requirements change. Each core function has five separate service layers (rules engine, client, workflow manager, data source, data access), and each service layer communicates with the others through a service interface.

The rules engine describes the business rules that need to be delivered across the available enterprise channels to the user interface. The user interface is driven by two services: the client (delivering the user interface) and the workflow manager (allowing different devices to access the business rules in the most appropriate way). Data sources are accessed via a data access service that converts data to/from the source format into the one required for the retail solution.

The FJMP core offering is centered around the vendor's consolidated store capabilities, thus mainly referred to commerce services of IDC's conceptual platform architecture. This core offering is also called FJMP Commerce and includes capabilities such as sales, order, and basket services; pricing, deals, coupons, vouchers, and promotions management; payments, tenders, and currencies management; and retail peripheral management. Regarding order management capabilities, the vendor covers use cases such as ecommerce to home, click & collect, click & reserve, and contact center order to store. Furthermore, within FJMP Commerce, the vendor provides a set of connectors that allow retailers to integrate third-party applications and functionalities such as gift cards, electronic funds transfer, CRM, and order management system.

For the deployment of FJMP, Fujitsu adopts a four-layer customization and innovation approach. As foundation, the vendor provides the FJMP Base Product that delivers the abovementioned capabilities. A retailer-specific global base sits on the top of the base layer, providing capabilities for enterprise integration, business process support and hardware platform support. A country add-ons layer is available on top of the global one for specific country configurations (such as brands), electronic payments integration, and country legal requirements. The fourth one is the innovation layer that runs innovation pilots on selected test stores and on selected capabilities as well as implements and scales approved pilots on the global base.

©2019 IDC #US43380018 9 Strengths Between 2017 and 2018, Fujitsu has been focusing its efforts in the re-alignment of its strategy to retail industry priorities, identifying the three strategic pillars of retail innovation, connected enterprise, and global delivery. Among the various addressed domains, the vendor focuses on the cloud availability of its entire applications portfolio as well as AI and IoT use cases. The vendor has developed a clear road map for FJMP releases on both fixed and mobile devices covering a time span up to 2019, and — if appropriately supported and complemented by its partners' capabilities — the company will be able to deliver an effective retail commerce platform to its customers. Fujitsu's approach to retail innovation relies on the overall company strategy of co-creation with customers. The combination of business-model-oriented innovation (through its Digital Business Solutions services) and of the platform innovation layer are aligned with retailers' need to address innovation beyond pure new technology implementation. Challenges Fujitsu is gradually introducing FJMP to the retail industry and will need to demonstrate over time the outcomes of platform capabilities. The implementation of the first projects is ongoing, thus customers do not have yet all the necessary elements for a complete evaluation of the final running platform. An attention point is how the vendor will execute on the integration of third-party customer experience personalization capabilities to its existing loyalty and promotion capabilities, and at the same time, which proprietary retail-specific AI use cases it is going to release over 2019. Furthermore, two other attention points must be highlighted. The first one is regarding the effectiveness of the new cloud architecture and its flexibility in supporting retail hybrid models, essential for supporting the implementation of best-of-breed platforms that still carry legacy systems. The second one is about the offered pricing models — so far, the vendor is providing the consolidated per-device model and is planning to adapt new cloud-oriented models. IBM According to its analysis and buyer perception, IDC positioned IBM as a Leader in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

IBM is a software, hardware, and services provider with headquarters in Armonk, New York. Founded in 1911, the company has more than 390,000 employees globally, serving clients across 18 industries in more than 450 locations across 170 countries. In terms of customers, the company has a concentration in apparel, home and garden, department stores, and pure ecommerce retail.

IBM's retail commerce platform is branded as IBM Watson Commerce, and it covers the four core services and the AI/ML analytics foundations. The vendor offers three delivery alternatives based on a microservices architecture: WebSphere Commerce on-premise or WebSphere Commerce managed, hosted, single tenant (both relying on V9) as well as IBM Digital Commerce (multitenant). Essentially, IBM leverages WebSphere Commerce V9 as a bridge toward the SaaS model of IBM Digital Commerce.

Customer experience services comprise microservices such as customer journey analytics, audience creation and management, real-time personalization, marketing automation, digital asset management, customer service, site-search, SMS and email management, and A/B testing. The offer for this area of services is further complemented by partners such as Exchange Solutions, Monetate, MyAlerts, RichRelevance, and Windsor Circle.

©2019 IDC #US43380018 10 Commerce services are the core of IBM's platform and are composed by another set of capabilities that cover areas such as store management, pricing management, promotion management, shopping cart, checkout, and payment management. This set of services is complemented by IBM Commerce Insights that gathers data from the platform components and — based on IBM Watson capabilities — and provides corporate retail professionals with analysis highlights and next best actions to perform, according to the specific roles.

Order fulfillment services are provided by the interoperation between IBM Order Management and IBM WebSphere Commerce. This forms a single transactional engine that includes specific capabilities addressing areas such as inventory management (with global inventory visibility, real-time available to promise inventory and inventory optimization) and, fundamentally, the overall order management portfolio (with order optimization, drop ship, ship from store, buy online and pick up in store, and returns and reverse logistics management). Within order fulfillment services, the vendor also offers IBM Store Engagement for store associates support with functionalities such as mobile clienteling and save the sale, inventory visibility across stores, and pick and pack management.

Content optimization services are offered via content management capabilities that access and deliver content to customers from the native WebSphere Commerce content repository or through other IBM and third-party content repositories. IBM's own content repository is IBM Watson Content Hub, which uses cognitive capabilities to automatically tag content with Watson's deep learning algorithms that analyze uploaded images and documents, and it can deliver experience personalization through interoperation with customer experience services. Strengths IBM continues to a very broad and deep portfolio of capabilities for retail commerce platform services, and it is actively working on its expansion. It must be highlighted that the vendor is addressing AI use cases in alignment with retail macro-trends and long-term retailers' objectives. For example, IBM MetroPulse is an interesting way of addressing the key trend of micro-merchandising, thanks to the combination of first- and third-party data that allow retailers to perform store-specific merchandise and assortment planning decisions. In this kind of data-driven decision, it is fundamental to move from a product-centric to a customer- and profit-centric merchandising approach. IBM is among the few vendors that also offer proprietary content optimization services. This is an important asset to take into account above all, considering the cognitive capabilities that can be delivered through IBM Content Hub and its potential integration with preferred specialty vendors for content management applications. With 60 global partners validated as ready for IBM Commerce, IBM has a consistent ecosystem of third-party business partners that have built integrations from their solutions into IBM's commerce platform. For example, Invodo for IBM WebSphere Commerce enables merchandisers to add product demonstration, how-to, brand, and support video to their WebSphere Commerce stores. Challenges From customers' comments, IBM does not turn out to be a low-cost solution. Furthermore, in some cases, the implementation of the platform may result in complex journeys. However, the vendor is addressing these concerns with the gradual execution of the microservices-based SaaS strategy that should, on one hand, support the reduction of TCO and, on the other hand, reduce the complexity of implementation of the individual capabilities more oriented to a best- of-breed approach. The vendor's offering within IBM Marketplace continues to focus on its proprietary capabilities. Considered the ongoing trend for always more open platform extension marketplaces characterized also by ready-to-integrate third-party services, this is an important attention point for future developments of IBM's integration capabilities, as it will considerably impact retailers' experience in accessing IBM's partners offering.

Infor is an enterprise software and services provider with headquarters in New York. Founded in 2002, the company has more than 15,000 employees globally, 41 offices around the world, customers in 170 countries, 1,745 partners, and over 1,200 support experts. It has a concentration of clients in apparel, building materials, hardware, and garden supply.

Infor's retail commerce platform is named Infor Converged Commerce. A key component of the platform is Infor's Omni-channel Hub that serves as a central data and integration hub — built on service-oriented architecture — and uses open standards that expose APIs to talk to different services, allowing it to provide the functionality needed to support integration with internal and external systems (providing visibility of orders, inventory, customer, purchase history, product, pricing, and promotions).

Infor refers to customer experience services with Infor CloudSuite CX, a platform that can be integrated to Infor Converged Commerce via Infor Omni-channel Hub and to existing ERP systems. The customer experience platform allows to execute personalization activities through capabilities such as experience-focused analytics, content management system, product information management, digital asset management, search (by parametric navigation and keywords), customer service, product configure-price-quote, shopping cart and promotions management, and campaign planning and execution. The platform can also count on UX services provided by Infor Hook & Loop digital agency.

The vendor addresses commerce services through the combination of the capabilities of Infor Engage Point of Service; Infor Networked Order Management (INOM), resulting from the 2018 acquisition of Arvato's IP) Infor Store Inventory Management, Infor Store Fulfillment, and Infor Promote. The vendor has a strong focus on store activities (and their integration to customer experience and order fulfillment services) and offers functionalities such as fixed and mobile POS software, payments and taxes management, order creation, and price and promotion execution services.

Order fulfillment services are essentially provided through the capabilities of INOM that is another core component of the platform. The vendor offers capabilities that include inventory visibility, configuration of availability rules, risk and fraud analysis, order processing and splitting, refund and reverse logistics, a drop shipping portal, and a portal for pick, pack, and fulfill operations (such as buy on-line and pick up in store, or ship from store). Furthermore, INOM includes the functionalities that support customer service operations and offers an integration framework that allows retailers to integrate to third-parties' ERPs, ecommerce services, and warehouse management and logistics services.

Content optimization services are addressed, on one hand, by the mentioned capabilities included in Infor CloudSuite CX. On the other hand, Infor provides open API approach to integrate retailer's preferred third-party content-specific applications.

From the perspective of AI/ML analytics foundations, Infor has plans to leverage Infor Coleman's overall capabilities to develop retail-specific use cases, united to the capabilities of Infor OS (focused on AI for business processes) and of Birst. In addition to this, Infor is already leveraging the assets coming from the acquisition of Predictix, for machine learning, and predictive and prescriptive capabilities.

©2019 IDC #US43380018 12 Strengths Infor's road map is very clear and detailed, covers a timespan up to 2019 and beyond, and demonstrates plans to appropriately address retailers' priorities in customer experience services and order fulfillment services. For example, with the introduction of INOM, Infor is offering a well-architected set of capabilities that can support retailers in the execution of core order fulfillment activities, with the possibility to strengthen these through integration to specialty vendors' offerings. The new micro-services architecture that is being developed by Infor is a very important asset that strengthens the vendor's position on solution flexibility and support to retail innovation compared with enterprise-grade players. Infor's products are offered as subscriptions (SaaS), and the vendor is very open to the co- development of new models according to the innovation needs of the retail industry. Challenges Infor is focusing the development of its commerce services on POS capabilities, with investments on the business-to-business (B2B) side as well. Thus, an attention point is the vendor's effectiveness in providing appropriate integration of web, mobile, and new interfaces services (such as voice activated ones) for commerce purposes through certified partners that offer consolidated capabilities in the ecommerce domain and that are strategically prefiguring the convergence of ecommerce within commerce everywhere business models. Another attention point is the short-term execution of the combination of Coleman, Birst, and OS capabilities for the delivery of a retail-specific offering and how these capabilities will be included in the broader retail industry road map. For example, retailers should keep in consideration how the vendor will execute the integration of AI/ML capabilities within the use cases offered by INOM. Magento, an Adobe company According to its analysis and buyer perception, IDC positioned Magento, an Adobe company, as a Leader in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

Founded in 2007, the company has more than 700 employees globally. It has over 2,000 retail clients (currently, with a focus on small and midsize businesses but expanding to enterprise tiers) with a concentration in apparel, accessories and direct to consumer. The majority of its clients are based in North and South America, followed by EMEA, and a minority in APAC. In June 2018, Magento has been acquired by Adobe and now forms part of Adobe's Experience Cloud portfolio.

Before describing the vendor's offer for the core retail commerce platform services, it is important to report that Magento — following the acquisition by Adobe — is revising its go-to-market strategy. As of now, two main commercial licensing options are available:

Magento Commerce Cloud (Magento-led offering focused on SMBs and smaller enterprise firms) Magento Experience Driven Commerce (a pre-integrated offering of Adobe Experience Manager, Adobe Target, Adobe Analytics and Magento Commerce, focused on larger enterprises) The Open Source version of Magento (ecosystem-led with a reduced capability set and focused on smaller retailers) is available free of charge In this assessment, we evaluate the Magento Commerce Cloud Offering that includes Magento Commerce and BI Pro, with possible add-ons of Magento Order Management, and other portfolio services including Analytics Foundations from the Adobe Experience Cloud.

©2019 IDC #US43380018 13 The core functionalities of Magento Commerce offer can be integrated, through GraphQL and REST and SOAP, to existing systems or can be extended with Magento's partners applications available in Magento Marketplace.

Customer experience services are addressed through the combination of Magento Commerce capabilities of Adobe Target and Sensei and of Magento's Partner ecosystem. With this offer, the vendor covers domains such as content intelligence, A/B testing, profiles and segmentation, behavioral targeting, product, content and media recommendations, personalized and localized search, merchandising management. Among available partners, it is worth reporting dotmailer and Emarsys (for email campaign management), Zmags (for converting print campaigns in shoppable content), Shopial (for social selling), Windsor Circle, Listrak, Celebros, and Rich Relevance (for promotions and recommendations). Furthermore, the vendor is also investing in its Progressive Web Application (PWA) Developer Studio, allowing retailers and developers to build commerce applications that are written in the Web platform, run in the browser, and behave like a cloud-delivered native application.

Commerce services are provided Magento Commerce and order fulfillment services can be provided as an add-on module through Magento Order Management. The offer addresses capabilities such as order generation, order receipt, inventory availability, estimated ship date, estimated buyer receipt data, status tracking, return authorization, management of simple orders, and a set of customer service-oriented capabilities. Further to this, it provides a single repository of customer orders, performance of tax and export duty calculations, calculation of individual order fulfillment cost, fulfillment of pre-orders, and back-orders according to priority rules, united to fulfillment capabilities such as buy-online-pick-up-in-store, ship-from-store, and ship-to-store. It is worth reporting that Magento Order Management also provides a pre-integrated in-store solution that includes mobile point-of-sales, endless aisle, associate clienteling, and mobile pick/pack/ship applications through a partnership with ebizmarts.

Content optimization services are addressed through the combination of Magento's proprietary CMS capabilities such as creating non-catalog content, tools for product and catalog management, campaign preview functionality, and promotion preview testing — with Adobe's Dynamic Media, and Experience Manager. This set of services is also supported by the capabilities of Magento's Progressive Web Apps Studio.

Regarding the AI/ML analytics foundations, Magento is currently working on the integration of Magento Business Intelligence Pro capabilities to Adobe Analytics Foundation. Strengths The acquisition of Magento by Adobe has considerably strengthened Magento's potential in the important areas of customer experience services and content optimization services. Even though Magento and Adobe already counted on a long-standing partnership, thanks to the ongoing consolidation of the integrated offering, existing (and potential new) clients of Magento will have access to an essential portfolio of personalization-focused capabilities that will be available as an integrated offering within Adobe Experience Cloud. Furthermore, Magento's open ecosystem approach will continue to provide retailers with the opportunity of executing the implementation of their retail commerce platforms with a best-of-breed approach. Over 2018, Magento has continued to have a high percentages of revenue allocation for R&D, that is predominantly retail-focused and follows a strategy that addresses key macro-areas of customer experience personalization, order fulfillment activities, data-driven processes optimization, and ecosystem integration. This approach is always accompanied by an extremely clear, detailed, and retail-relevant road map that — as with a few other vendors — covers 18 months.

©2019 IDC #US43380018 14 Magento customers — interviewed before the announcement of the acquisition by Adobe — consistently praised the vendor for aspects such as cost-effectiveness, relatively short go-to- market timelines, effective mobile-first approach, flexibility and ease of integration of the different services due to the open-source approach, and ease of scalability at international level. Challenges An attention point is the ongoing integration of Magento BI with Adobe Analytics and with Adobe Sensei capabilities, planned for addressing the overall AI/ML analytics foundations of the retail commerce platform. Magento Business Intelligence provides customers insight into their businesses, and the vendor has yet to officially announce a proprietary AI/ML offer that points at supporting commerce and order fulfillment services. For Magento, it will be fundamental to demonstrate that Adobe's existing AI/ML capabilities — focused on customer experience personalization and content intelligence — can be effectively leveraged for a commerce-oriented offer. For Magento, the acquisition opens up a substantial opportunity for accessing the large- enterprise tiers of retail and direct to consumer industries — a market that Magento had already started to invest efforts over past quarters. However, Magento will need to demonstrate its effectiveness in serving large clients' needs for managing commerce and order fulfillment services on complex and large assortments. At the same time, another attention point is how Adobe will adapt its customer experience offer to address the specific needs of Magento's existing small and midsize business clients. Manhattan Associates According to its analysis and buyer perception, IDC positioned Manhattan Associates as a Major Player in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

Manhattan Associates is a software solutions provider with headquarters in Atlanta, Georgia. Founded in 1990, the company has 2,787 employees globally. The vendor has 1,200 clients with a concentration in apparel and accessories stores.

Manhattan Associates is an established provider of supply chain and inventory management software. Over the past few years, it has been expanding its portfolio with Manhattan Active Omni, a retail commerce platform-oriented offering.

Manhattan Active Omni is delivered in SaaS (an on-premise alternative is also available) and uses a component-based architecture consisting of 35 functional microservices. The microservices build up for an overall offer organized in five key applications, integrated among them and identified by the company as follows:

Customer engagement Customer service & returns Distributed order management Store selling & clienteling Store inventory & fulfillment Mapping these five areas to the core services of the overall retail commerce platform conceptual architecture defined by IDC, customer engagement with some functionalities of customer service & returns refer to customer experience services. This set of capabilities essentially focuses on retail customers' case management by providing an ensemble of functions such as customer profile (and related analytics reporting), email management, social listening, CSR dashboard, order tracking and editing, and promotions visibility.

©2019 IDC #US43380018 15 Manhattan Associates' distributed order management application — with the return management functionality included in the customer service application, and with some functionalities included in the store & inventory fulfillment application — refers to order fulfillment services. In this area, the vendor offers some core functionalities sourced from its consolidated portfolio of, for example, real-time inventory visibility and management (for use cases such as ship-to-address, in-store-pickup, same-day delivery, store replenishment) based on what the company calls an "available to commerce" approach.

Lastly, store selling & clienteling application — with some functionalities included in the store & inventory fulfillment application — refers to commerce services. The application — compatible with all major operative systems —focuses on providing store operations functionalities that include payments, product information access, customer engagement and save the sale, and cash management, and it is conceived for integration to existing POS hardware and peripherals provided by third parties. Strengths Manhattan Associates customers recognize the solid background of the company for order fulfillment services — awarding the vendor with high ratings — and they think the vendor is also delivering appropriate capabilities on the commerce services side. Interviewed customers — inclined to a best-of-breed approach, mainly leveraging Manhattan Associates' order fulfillment services and selected capabilities from commerce services — have preferred the vendor for the ease of use of the back office and for its faster deployment plan compared with other enterprise vendors (in some cases, six months shorter than other proposals). Furthermore, a customer specifically reported its high satisfaction for Manhattan Associates' ability to deliver projects on time and according to specifications. Order optimization is a rule-based functionality (with machine learning capabilities) that considers operational factors (such as store operations, price, inventory, customer delivery commitment, and fulfillment costs) and allows setting the related weight and defining the adequate order fulfillment option on a case-by-case basis. Challenges An attention point is Manhattan Associates' strategy and long-term road map for the delivery of new retail commerce platform services and capabilities. For example, as mentioned previously, its customer experience services offering focuses on customer case management related activities, and the vendor is not yet providing clear plans for activity areas related to real-time contextual discovery or customer journey personalization and loyalty management. Furthermore, the vendor is not yet covering content optimization services, and it has no plans for developing a specific offering in the near future. Another attention point is on AI/ML analytics foundations. The vendor focuses on delivering a set of machine learning capabilities for its core order fulfillment offering, and it has no plans yet for extending its capabilities, for example, to activities related to customer experience services (for which is offered a reporting tool). Considering the capability areas not actively covered by Manhattan Associates, the vendor should demonstrate to retailers a clearer strategy for supporting them in the long-term development of best-of-breed retail commerce platforms, through integration to an established and certified ecosystem of partners that complement the offering. Related to this, it is worth reporting the opinion of a customer that said the vendor mainly focuses on delivering its specific implementation program and has room for improvement in its integration approach.

Microsoft is a software, hardware, and services provider with headquarters in Redmond, U.S. Founded in 1975, the company has 114,074 employees globally. It has customers across all retail segments, and offices in every major region using a network of thousands of partners to sell and implement solutions.

Microsoft's retail commerce platform, Dynamics 365 for Retail, is part of Dynamics 365 and offers a set of capabilities that allow to manage the execution of commerce-related activities across available consumer interfaces.

Microsoft refers to customer experience services with a set of capabilities that include behavioral targeting, real-time personalization of product recommendations, customer service-related functionalities, and in-store contextualized offers through consumer mobile applications and sales associates clienteling interfaces based on API integrated and available from within Dynamics 365, bringing insights derived from Cortana Intelligence Suite to POS.

Commerce services are addressed by an integrated commerce engine called Commerce Runtime (CRT). The engine operates on a single source of data and business logic, customer interfaces — including call center, POS, and mobile — while ecommerce, content, and digital asset management solutions are provided by Microsoft partners. CRT key capabilities include customer orders, customer profile, gift cards, and loyalty management. Furthermore, CRT provides inventory visibility across available facilities such as warehouses and distribution centers, surface ATP and on-order quantities, and offline quantity lookups.

Dynamics 365 also refers to order fulfillment services with the integration of stock management with warehousing capabilities that allow to manage multiple automatic workflows for order execution. Essentially, the vendor offers distributed order management capabilities for identifying the optimal shipment location across available facilities, supported by inventory management capabilities such as automatic replenishment based on replenishment rules, cross-dock, and buyers-push.

Content adaptation services are provided by third-party business partners and integrated with core foundational aspects of Microsoft Dynamics 365.

Microsoft also offers AppSource that includes new industry-specific business apps built on top of Microsoft Dynamics, Office, Cortana Intelligence, Power BI, and the Azure platform. For example, a third-party application such as Exceed for Retail provides functionality for merchandising management, from budget planning and demand forecasting to purchase planning, allocation, and replenishment.

Regarding the AI/ML analytics foundations, Microsoft is currently investing efforts in the development of retail-specific capabilities and is already addressing areas such as personalized product recommendations. Strengths Microsoft Dynamics 365 has integrated Commerce Runtime engine (CRT) for managing the available consumer interfaces (such as POS, ecommerce, contact center, marketing, and social) and gives visibility and management control across storing facilities. CRT serves as the core engine that supports the business logic across the various interfaces, containing a data access layer, services layer, workflow layer, and API layer. Through CRT, it is also possible to integrate external partners. Furthermore, on the customer experience services side, Microsoft can also count on a strategic partnership with Adobe Marketing Cloud that has become a preferred marketing service for Dynamics 365 Enterprise edition.

©2019 IDC #US43380018 17 Localization is available from Microsoft for 36 countries, and Lifecycle Services (LCS) allows the submission of changes in country legislation that may impact Microsoft-supported localized country solutions. Upcoming regulatory changes can be flagged and reported to Microsoft to trigger changes in Microsoft Dynamics. It worth noting that the vendor is currently investing in the development of GDPR for Dynamics 365 for retail. Power BI capabilities can be leveraged across the available set of applications, providing a set of reports and real-time KPIs to monitor business metrics and insights Challenges Microsoft has been considerably revising its go-to-market strategy over the past few quarters, and it now focuses on moving from a horizontal platform approach to offering vertical-specific platforms and partnering with systems integrators that are able to provide micro-vertical- oriented services, and retail industry is one of the vendor's vertical priorities. The execution of the retail-focused strategy will be an attention point, as it is a complex process that Microsoft will need to address from different perspectives, such as the broadening of the capabilities offered for customer experience services, the organizational set up, the increase of retail- oriented talents, the increase of retail-dedicated R&D investments, building the awareness in the market of retail-specific cloud services, and the adaptation of commercial licensing. Through the Cortana Intelligence suite, Microsoft has already implemented AI/ML capabilities in selected use cases and has plans to also deliver these capabilities for areas such as price optimization and discount planning, order management, and order fulfillment. An attention point is the release of a detailed retail-specific AI/ML road map that covers 12-18 months. Another attention point is Microsoft's short-term execution on the delivery of a retail microservices architecture (both for proprietary and third-parties services) that is fundamental to support retailers for implementing their retail commerce platforms with a best-of-breed approach and innovating at speed and scale. NCR According to its analysis and buyer perception, IDC positioned NCR as a Major Player in this in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

NCR is a software, hardware, and services provider with headquarters in Duluth, Georgia. Founded in 1884, the company has more than 30,000 employees globally across six regions and 180 countries. NCR reports over 2,000 retail customers with a concentration in food stores, drugstores, eating and drinking establishments, general merchandise, department and specialty stores, convenience stores, and fuel stations.

NCR's retail commerce platform is called Omni-Channel Decision Support Platform (ODSP). ODSP is a cloud- and SaaS-based open platform that allows retailers to integrate NCR's applications and devices to the existing IT environment and to new potential third-party services. The platform relies on a micro-services architecture and provides RESTful APIs that are exposed to retailers and third parties through NCR's developer portal. On top of the developer portal, it built NCR Marketplace, that provides the vendor's partners to offer their respective services to NCR's customers. ODSP is composed of two groups of services: Platform Foundational Services (providing capabilities for the management of security, storage, workflows, notifications, provisioning and usage data) and Business Services that include the retail-specific micro-services supporting NCR's core capabilities and can be integrated to retailers' own and third-party applications.

Based on its Business Services' offering, NCR refers to customer experience services with capabilities that include digital couponing, integration with promotion engines and loyalty programs, wish lists and product comparisons, search suggestions, product filtering, rating and reviews, and email communications for order status update.

©2019 IDC #US43380018 18 NCR addresses commerce services and order fulfillment services with a set of microservices that include payments processing, taxes management, digital and physical receipts, a catalog service (that provides visibility on items' hierarchy and prices, and can be integrated to third-party MDM services), inventory management functionalities, transaction data management (which captures transactions from available integrated consumer interfaces), delivery setup, and execution functionalities.

Content optimization services are addressed through the integration of retailers' and third-party applications.

Furthermore, NCR offers a data platform that allows retailers to use analytical capabilities for operational and consumer intelligence activities within ODSP. Related to this, NCR recently acquired Zipscene, a company that was originally specialized in consumer analytics for restaurant marketing. Strengths NCR's ODSP focuses on leveraging existing systems, expanding its capabilities through an open ecosystem that connects retailer applications, NCR apps, partners, and third-party vendors. Retailers can prioritize investments and maximize returns through a modular approach. NCR's platform includes a cloud-based payments application that allows retailers to conform with the latest industry regulations, with NCR managing the process of continuous update. It uses point-to-point encryption (P2PE) and tokenization and provides advanced security monitoring and vulnerability management to ensure visibility into the whole payment system. It also gives retailers access to payment methods such as mobile payments and ewallets. Related to data access capabilities, NCR also offers Pulse, a tool that allows store associates to access store systems remotely from mobile interfaces and consult real-time metrics and KPI data. Challenges With the introduction of ODSP, NCR's strategy and road map for the platform are the key attention points. It is essential that NCR provides retailers with a 12-18-month plan on the overall platform developments that will address retail industry macro-trends and key challenges of customer experience personalization, operations performance improvement, and innovating at speed and at scale. AI/ML analytics foundations play a key role for the optimization of retail commerce platform activities and daily operations. NCR is currently developing a set of AI capabilities (e.g., related to NCR Pulse and to recommendation engine). The timeline of general availability to the market of these capabilities — with concrete retail case studies — is an attention point. Related to this, another significant attention point is how NCR will support these capabilities with restaurant-marketing capabilities deriving from the Zipscene acquisition. NCR relies on partners and third-party applications for integrating the retail commerce platform capabilities. Thus, it will be crucial that the vendor demonstrates investments in the continuous improvement of integration services and the development of NCR Marketplace. Oracle According to its analysis and buyer perception, IDC positioned Oracle as a Leader in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

Oracle is a software, hardware, and services provider with headquarters in Redwood, California. Founded in 1977, the company has more than 138,000 employees globally. Oracle has more than 420,000 customers and deployments in more than 145 countries.

As also mentioned in Oracle NetSuite's profile, in this IDC MarketScape, Oracle Retail Suite and Oracle NetSuite are separately evaluated.

©2019 IDC #US43380018 19 Oracle's retail commerce platform is composed of two overarching groups of microservices-based cloud applications: Oracle Customer Experience (CX) Cloud Suite and Oracle Retail Cloud.

Oracle CX Cloud Suite refers to both customer experience services and, partially, commerce services. The suite includes applications such as Oracle's Commerce Cloud, Marketing Cloud, Sales Cloud, Service Cloud, CPQ Cloud (i.e., configure, price, and quote), Content and Experience Cloud, Loyalty Cloud, Engagement Cloud, Customer Data Management Cloud, Sales Performance Management Cloud, Social Cloud, Data Cloud, and CRM Analytics. Oracle Commerce Cloud is the core application that integrates to the other cloud services operating under the two overarching groups. The application is based on APIs that personalize customer experience across the available consumer interfaces and has capabilities such as payments and tax integration, drag-and-drop interface for storefront creation, SEO management, catalog management, promotion management, audiences creation for personalization activities, a loyalty framework for the integration of external loyalty programs, and multisite management for multibrand and international assets.

Oracle's omni-channel suite of services for retail complement these commerce services — and the related capabilities can be integrated to Oracle Commerce Cloud. Oracle Retail Order Broker Cloud Service (OROB) and Oracle Retail Order Management Cloud Service (OROMS) can provide store associates with inventory visibility across enterprise assets to fulfill delivery or pick-up requests, and Oracle Retail Customer Engagement Cloud Services provides retail CRM capabilities such as loyalty, segmentation, campaigns, and gift card functionality. Oracle Retail Xstore Point-of-Service supports omni-channel customer journeys, store management for bank deposits, timekeeping, reporting, store messaging, tasks, and sales goals. Xstore is offered with different deployment options, and it has capabilities such as in-store POS, online basket and checkout, in-store clienteling, loyalty initiatives, and promotions.

Both OROMS and OROB refer to order fulfillment services. In more detail, OROMS provides capabilities related to direct commerce transactions, allowing customer service to perform customer look up and modification, order creation, order edit, returns, refunds and appeasements, while OROB is a distributed order broker and drop ship software application that allows to complete transactions across the available interfaces and provides real-time inventory information with connection to fulfillment methods, such as direct shipment from another warehouse or store, or scheduling a store pickup.

Oracle CX Cloud Suite also offers content optimization services, partially through the basic content management capabilities of Oracle Commerce Cloud, and fundamentally, with the capabilities of Oracle Content and Experience Cloud. With the latter application, Oracle offers a centralized content hub that provides content management features including content creation, collaboration, metadata management, content workflows, and publishing.

Furthermore, Oracle offers AI/ML analytics foundations with the capabilities of Adaptive Intelligent Apps for CX. The vendor leverages its proprietary AI algorithms for customer experience personalization activities, based on retailers' owned data (such as customer profile, orders and customer service interactions) and third-party data (such as consumer advertising profile, geospatial, weather and social) gathered from Oracle Data Cloud, and to search. Strengths Oracle is among the first vendors that — with their road maps and offering portfolio — are prefiguring the convergence of ecommerce capabilities into the overall platform's retail commerce services. Interestingly, during a customer interview, it was pointed out that the vendor demonstrates strong "retail awareness." The customer explained this by highlighting that Oracle's road map is driven by a consolidated understanding of the retail industry compared with other vendors that are often technology-driven.

©2019 IDC #US43380018 20 Oracle provides its integration services through Oracle Integration Cloud (OIC). The application leverages a set of adapters and integration flows — prebuilt for Oracle Apps and third-party apps, with automatically suggested connections — that allow the execution of integration tasks with a clear visual configuration tool (using a drag-and-drop approach) based on four main steps: connections configuration, flow setup, data mapping, and activation and monitoring. OIC is accompanied by Oracle's Apps Marketplace that provides proprietary applications and can count on the established IT vendor's partner ecosystem to broaden the offer with third-party applications. It is worth reporting that a customer noted being very satisfied with the pricing options offered by the vendor for Oracle Xstore within the overall contracted offer bundle. Challenges Between 2017 and 2018, Oracle has continued the execution efforts on Adaptive Intelligent Apps. As described in the profile, this set of capabilities is already available for customer experience personalization activities. However, an attention point remains how the vendor will further distribute these capabilities across and in-depth the four core platform services. Related to this, it is important that the vendor provides a detailed road map covering the retail- specific use cases that will be addressed during the next 12-18 months and a collection of concrete retail case studies with outcomes delivered by Adaptive Intelligent Apps. From conversations held with retailers that use or have been using Oracle's offering, the vendor has improvement opportunities for the effectiveness of its integration capabilities. This is an attention point for retailers to consider as, even if the mentioned Integration Cloud Service and Oracle's App Marketplace are easy-to-use services, these may incur some difficulties regarding integration execution. According to a customer, Oracle has improvement opportunities within content optimization services. The customer's opinion is that the portfolio of features and functions could be further expanded and consolidated to be aligned with the offering of other vendors (enterprise and specialty). The customer also commented that some difficulties could be experienced in the integration of Oracle content management capabilities with other applications. Oracle NetSuite According to its analysis and buyer perception, IDC positioned Oracle NetSuite as a Major Player in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

Prior to its acquisition by Oracle in November 2016, NetSuite was a software, services, and solutions provider with headquarters in San Mateo, California. It was founded in 1998 and had more than 5,500 employees globally at the time the acquisition closed. Its customer base includes more than 30,000 companies, organizations, and subsidiaries in more than 100 countries.

The vendor briefings of Oracle NetSuite and Oracle were conducted separately, and IDC is presenting the two vendors with two separate profiles and two separate positions on the IDC MarketScape chart.

Oracle NetSuite is a cloud-based suite of integrated products, including applications for ecommerce (SuiteCommerce Advanced) and POS (SuiteCommerce InStore), as well as applications for order management, inventory management, financials/ERP, CRM, point of sale (POS), and global business management (NetSuite OneWorld).

NetSuite's ERP/CRM is the central repository of the platform where item master, customer master, and transactional data reside. SuiteCommerce communicates with NetSuite ERP/CRM through three different APIs: Item Search API, Commerce API, and SuiteScript API.

©2019 IDC #US43380018 21 SuiteCommerce Advanced is the Oracle NetSuite offering that supports business-to-consumer (B2C) and business-to-business (B2B) ecommerce activities by connecting ecommerce and POS with order management, customer service, inventory, merchandising, marketing, financials, and warehouse management. It supports customer experience services across available interfaces, including functionalities such as dynamic product imaging, zooms, alternate images, quick views, product comparisons, customer specific pricing, product recommendations, and product reviews. Furthermore, the platform can provide capabilities such as multiple types of marketing campaigns (email, paid search, affiliate, or direct mail), customer dynamic segmentation, real-time inventory data on the site (including how many products are available online or in a specific store), shopper experience sharing on social networks, and automatic responsive adaptation of content for different devices.

SuiteCommerce Advanced is supported by two other applications:

NetSuite OneWorld. Allows international ecommerce management with multi-language, multicurrency, multicountry, and multibrand web stores. Bronto Marketing platform. Allows delivery of email, mobile, and social campaigns based on specific use cases such as cart recovery, browser recover, pop–up manager, and coupon manager. SuiteCommerce InStore is built on the same commerce platform as SuiteCommerce Advanced to combine online and in-store customer journey. It consists of a mobile-first service, allowing sales associates to access inventory and customer information. The service can access carts and product lists created online or by a call center agent and provide visibility of orders started or finished in the available channels. These two services allow customer experience services, commerce services, and content optimization services of the retail commerce platform. SuiteCommerce InStore can also provide POS capabilities such as discounting, multitender, override, gift receipts, and suspend or resume transactions.

Order fulfillment services are addressed by NetSuite Order Management. The service allows retailers to take orders across different consumer interfaces and define the way to fulfill, based on the consumer's preferences, inventory availability, and the merchant's configured fulfillment strategies, with inventory visibility across sources of supply. Once the fulfillment method and location have been determined, NetSuite Order Management leverages automated rules for the fulfillment process, including ship from warehouse, ship from store, store pickup, and drop ship.

The SuiteCommerce architecture provides extensibility services that allows developers to integrate NetSuite SuiteCommerce with external applications (two-tier ERP, DWH, third-party app, custom database) using different methods such as Web Services, BAPI, ETL/DB Tables, FTP/File-Based, XML over HTTP, FTP, File-Based, and API calls. Strengths Oracle NetSuite is dedicating part of its efforts to developing and improving order fulfillment services use cases (ship from warehouse, ship from store, store pickup, and drop ship) and merchandizing optimization capabilities, investments that are relevant for the retailers' purpose of transforming the role of the store within commerce everywhere business models. Oracle NetSuite's POS suite, SuiteCommerce InStore, is developed on the same platform that includes the ecommerce suite, SuiteCommerce Advanced. SuiteCommerce InStore provides appropriate integration capabilities among the experiences of the available interfaces and provides sales associates with customer information and enterprise inventory visibility. NetSuite SuiteCommerce includes a content management tool with which retailers can centrally manage product data and attributes across the available channels. Furthermore, it provides an online editing tool for SuiteCommerce engine, allowing business users to control category pages, landing pages, marketing zones, and merchandising rules.

©2019 IDC #US43380018 22 Challenges Oracle NetSuite's solution provides an integrated business intelligence tool to report on data within NetSuite's ecosystem and offering analytics capabilities. Related to this, an attention point is the execution of the vendor's plans to develop a proprietary suite for AI/ML capabilities (i.e., The Intelligent Suite) and how this will integrate to the retail-specific capabilities of Oracle's Adaptive Intelligent Apps. The Oracle NetSuite platform includes an appropriate base of capabilities for the retail commerce platform, and it will be important that the vendor extends the retail-specific road map visibility up to the next 12-18 months. An attention point will be vendors' effectiveness in delivering capabilities for real-time contextual customer experience personalization and capabilities dedicated to supporting retailers' ongoing efforts in micro-merchandizing strategies — two key aspects to address in order to support short-term profitability growth. Salesforce According to its analysis, IDC positioned Salesforce Commerce Cloud as a Leader in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

Salesforce is a software solutions provider with headquarters in San Francisco, California, and has 24,000 employees globally. Salesforce Commerce Cloud — the commerce division of the company — was founded in 2004 as Demandware, which was acquired by Salesforce in July 2016 and had 391 retail customers at the time of the acquisition.

Salesforce Commerce Cloud's main components are B2C Commerce, B2B Commerce (not taken in consideration in this assessment), Commerce Cloud Einstein, Endless Aisle, and Order Management.

Salesforce B2C Commerce allows retailers to manage customer experience services. Its main capabilities include marketing, merchandising, content, promotions, customer service, fulfillment, and predictive intelligence (through machine learning capabilities of Commerce Cloud Einstein). Among the specific functionalities that support customer experience personalization activities is customer interface management, a development environment allowing for control and customization of the digital storefront. The application runs on an open development environment, allowing customization or extension of commerce capabilities (e.g., buy buttons, branded mobile applications, in-store endless aisle, clienteling applications) and shopping options. Commerce Cloud Endless Aisle allows retailers to deliver digital commerce capabilities in-store by providing store associates with functionalities for customer assistance and for purchase execution.

Salesforce Commerce Cloud provides commerce services with a single transaction engine, gathering transaction data from interfaces such as web storefront, contact centers, and retail stores. Specific supported capabilities are order generation, order receipt, order prioritization, and order status and delivery. An integrated view of inventory is elaborated from facilities and services including distribution centers, retail stores, third-party logistics providers, drop ship partners, or other inventory locations. Payments are supported by third-party LINK technology partners.

Salesforce Order Management addresses order fulfillment service and is based on a shared view of orders, customers, inventory, products, and promotions across physical and digital channels. Specific capabilities and functionalities include enterprise inventory availability (single available-to-sell list), distributed order management (e.g., best fulfillment source, returns and exchanges management, invoicing payment processing, and tax processing), store fulfillment (ship from store, store pickup), and customer service (new orders on behalf of a consumer, order intervention).

©2019 IDC #US43380018 23 Content optimization services are also addressed by Salesforce Commerce Cloud capabilities and features include shared product and catalog management, dynamic image management, personalization capabilities (e.g., product recommendations, A/B testing, segmentation, and targeting), geolocation, advanced SEO, and built-in responsive design. Commerce Cloud also leverages an open platform to support the integration of third-party CMS through open commerce APIs.

Salesforce addresses the domain of AI/ML analytics foundations by leveraging the capabilities of Salesforce Einstein, primarily focusing on customer experience personalization use cases. Strengths For Salesforce, the acquisition of Demandware — which in 2015 had already acquired Tomax POS and Mainstreet Commerce OMS — had been an important starting point for building a retail commerce platform offer, and Salesforce's CRM expertise continues to be an asset for the platform. Salesforce is continuing its efforts in the integration of Salesforce Commerce Cloud's capabilities, and this — even if contextualized in a best-of-breed approach — will give access to retailers to a platform with broad customer life-cycle management capabilities. Salesforce Commerce Cloud embeds or can enable third-party services that help improve customer experience (such as Pinterest buyable buttons and Apple Pay, embedded) or contribute to omni-channel profitability (such as UberRUSH, enabled). For pricing, Salesforce Commerce Cloud adopts a shared success model based on a percent of gross merchandise value. This approach facilitates the retailers' objective of reducing capex and opex and collaborating with a vendor committed to the achievement of omni-channel profitability. Salesforce Commerce Cloud offers an easy-to-use integration program named LINK Marketplace. Through this third-party application and services marketplace, retailers can select and download pre-built integrations to their retail commerce platforms or directly contact Salesforce Commerce Cloud certified partners. Challenges The abovementioned continued efforts in the efficient and effective integration of Salesforce Commerce Cloud to Salesforce overall portfolio remains an attention point. It will be important that Salesforce provides retailers with concrete cases of existing integration among different applications, with related outcomes. The vendor's customer base inherited by former Demandware has been historically mainly composed of apparel and sportswear retailers. Another attention point will be Salesforce capability to extend its commerce offering to other retail segments that are as well prioritizing the implementation of the retail commerce platform over next 12-24 months. Salesforce Einstein's AI/ML capabilities have considerable potential, even though at present these are applied on a selection of customer experience-oriented services. An attention point is Salesforce's capability to execute on a timely implementation of Salesforce Einstein across the broader portfolio of Salesforce Commerce Cloud. SAP According to its analysis, IDC positioned SAP Commerce Cloud as a Leader in this 2018 IDC MarketScape on Retail Commerce Platform Vendors.

SAP is a software solutions provider with headquarters in Walldorf, Germany. Founded in 1972, the company has approximately 93,000 employees globally, and in the retail industry, it concentrates on apparel and accessory stores and general merchandise stores.

©2019 IDC #US43380018 24 SAP's retail commerce platform is named SAP Commerce Cloud and is offered as part of the company's SAP C/4HANA suite of customer experience applications. SAP Commerce Cloud is a rebrand of Hybris Commerce, an application that SAP acquired in 2013 — assessed as SAP Hybris in IDC MarketScape: Worldwide Retail Omni-Channel Commerce Platform 2017 Vendor Assessment (IDC #US41453016, April 2017). SAP has defined a front-office strategy consisting of solutions for commerce, marketing, customer data, sales, and service.

SAP Commerce Cloud essentially addresses the four core services of the retail commerce platform by converging the offering of former SAP Hybris applications and other C/4HANA applications integrated through services provided by SAP's Omni-Commerce REST API layer. Integration of SAP's platform with third-party applications is mainly provided through a set of public APIs and use SAP Cloud Platform Integration, SAP's standard platform for integration.

SAP Experience Management (formerly marketed as SAP Hybris Customer Experience) refers to customer experience services and offers content management capabilities such as customization of storefront templates, the "SmartEdit" WYSIWYG editing tool for direct edit, preview, and deployment of pages, and integration of content with behavioral targeting segments. With the integrated SAP Marketing Cloud, the vendor offers capabilities for creating real-time customer profiles, native predictive analytics and modeling for recommendations and audience discovery, campaign management (manual, planned, and triggered), customer journey manager, budget and spend management for bulk and real-time one-to-one targeting, and loyalty management.

Commerce services are provided by the interoperation of capabilities from SAP Product Content Management (PCM), Web Content Management (from SAP Experience Management), Order Management for Commerce, InStore Module, providing stores associates with capabilities such as product identification (through barcode, QR code, NFC tags) — mobile interfaces management, inventory check (in-store and in other locations), search, and merchandising — that includes faceted search and navigation, and customer service. Further store-specific capabilities can be integrated through SAP Point-of-Sale by GK.

Order fulfillment services are provided by the capabilities SAP Commerce Cloud and Order Management that include single view of stock availability with extensible available-to-ship rules, configurable sourcing and allocation strategies, order splitting rules, real-time inventory management, and user interface for pick, pack, label, and confirm shipments. Inventory data can either be synched with the OMS via REST API or using a batch file–based data import process. Drop ship partners and marketplaces use the same interfaces as internal distribution centers to load inventory data into Order Management.

Content adaptation services are provided by the integration of SAP Product Content Management, SAP Commerce Cloud context-driven services, SAP Experience Management, SAP Digital Asset Management by OpenText, and SAP Marketing Cloud. Content is maintained in a single content repository, and the capabilities of the solution include a WYSIWYG editor with live-edit function, responsive templates, context- and rule-based content delivery, real-time collaboration, capturing and analyzing real-time customer interactions for profile building, and native predictive analytics and modeling.

SAP addresses AI/ML analytics foundations by leveraging the overall capabilities of SAP Leonardo that, for the retail industry, currently focuses on predictive asset monitoring, logistics management, and demand forecasting.

©2019 IDC #US43380018 25 Strengths Among the retail commerce platform strategies assessed in this IDC MarketScape, SAP's strategy and road map for SAP Commerce Cloud is one the clearest, most detailed, and most relevant for retail industry trends and challenges — which was also commented by interviewed customers. For example, the vendor is investing in cloud automation, thus addressing aspects such as automated deployment, support for multicloud infrastructure, self-services capabilities, and internationalization. There is a focus on context-driven services on the customer experience services side; merchandising, testing, and optimization, on the commerce services side; and there are ongoing efforts in the JavaScript Commerce Storefront and SAP Enterprise Chatbot for Commerce. SAP reports a very high amount and size of increases in R&D investments over the past years, with appropriate focus on areas that are strategic for retailers. Furthermore, the vendor continues to dedicate efforts on its well-structured start-up investment program (SAPPHIRE Ventures) that so far have more than 19 start-ups offering retail-related services. Interestingly, interviewed customers commented that they are very satisfied with SAP's integration capabilities, above all among the different applications of C/4HANA, and compared with other vendors' platforms that in some cases have issues in terms of fragmentation. Challenges The rebranding of SAP Hybris for its convergence as SAP Commerce Cloud under SAP C/4HANA is, in perspective, an appropriate decision. However, it turns out from customer interviews — and from broader conversations with other retail executives — that this operation could cause branding confusion in existing and new customers (as also highlighted in IDC MarketScape: Worldwide SaaS and Cloud-Enabled B2C Digital Commerce Platforms 2018 Vendor Assessment — IDC #US44288618, October 2018). An attention point is the road map and capabilities for AI/ML analytics foundations that essentially rely on ongoing investments in SAP Leonardo. Even if customers are very satisfied with SAP Commerce Cloud's overall road map, interviews indicate that the vendor still has room for improvement in terms of providing more detailed visibility on retail-specific AI/ML plans for the next 12-18 months. Furthermore, it turns out that the vendor should demonstrate to retailers its ability to improve the effectiveness of the available AI/ML capabilities. There has been a long-standing assumption that implementations representing high transaction volumes and/or complex assortments could incur some difficulties with the capabilities of the former SAP Hybris platform. However, the vendor has closed that gap substantially and is certainly viable in those circumstances.

APPENDIX

Reading an IDC MarketScape Graph For the purposes of this analysis, IDC divided potential key measures for success into two primary categories: capabilities and strategies.

Positioning on the y-axis reflects the vendor's current capabilities and menu of services and how well aligned the vendor is to customer needs. The capabilities category focuses on the capabilities of the company and product today, here and now. Under this category, IDC analysts will look at how well a vendor is building/delivering capabilities that enable it to execute its chosen strategy in the market.

Positioning on the x-axis or strategies axis indicates how well the vendor's future strategy aligns with what customers will require in three to five years. The strategies category focuses on high-level decisions and underlying assumptions about offerings, customer segments, and business and go-to- market plans for the next three to five years.

©2019 IDC #US43380018 26 Vendor footprint, depicted by the size of the bubble, is based on IDC Retail Insights' best estimates of the vendor revenue on a global basis for software (together with hardware and IT services, when available) related to the retail commerce platform. IDC MarketScape Methodology IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC judgment about the market and specific vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants, and end users. Market weightings are based on user interviews, buyer surveys and the input of IDC experts in each market. IDC analysts base individual vendor scores, and ultimately vendor positions on the IDC MarketScape, on detailed surveys and interviews with the vendors, publicly available information, and end-user experiences to provide an accurate and consistent assessment of each vendor's characteristics, behavior and capability. Market Definition In this IDC MarketScape, IDC Retail Insights assesses the capabilities and strategies of several enterprise software vendors in serving the specific needs of retail companies, worldwide, across industry segments (food and non-food retail). Vendors are evaluated according to their success in designing, developing, installing, configuring and maintaining the evolution of a retail commerce platform (Figure 2). Vendors' integrated retail offerings are also taken into account for overall considerations. The target platform that is taken as a reference includes all the core capabilities that enable customer experience differentiation and seamless omni-channel commerce, along with the required operational efficiencies for profitability and business model agility. The core services of the platform are:

Customer experience services. Helping to explore the customer context, real-time customer journey personalization (including loyalty), and customer interface enablement through voice, image, text and augmented reality. This set of capabilities provides adapted, yet consistent interface enablement across current and future consumer services, whether human or digital. Customer experience services also support contextual customer journey personalization, leveraging all data — regarding customers, products, location, IoT, and third-party — and processes by composing and delivering highly dynamic services. Commerce services. This set of capabilities provides a single, unified engine to process transactions, from order capturing though configuration and payments to delivery setup. Order-fulfilment services. Retailers get fulfilment optimization through network-based fulfilment, fulfilment objectives and KPIs (e.g., margin optimization, delivery speed depending on customer), efficient delivery execution, and returns management. Content optimization services. This set of capabilities provides content management and adaptive, personalized content distribution. The retail commerce platform relies on a cloud-first architecture (with possibility of on-premise, or public, private, hybrid cloud delivery, when necessary) and provides development services and API- based integration with enterprise services, data services, and consumer services, while delivering business logic and retail commerce services for four core capabilities. At the same time, it's leveraging artificial intelligence, machine learning, or an advanced analytics foundation. In addition to this, the retail commerce platform provides proprietary or third-party-sourced development services that allow retailers to address the areas of application modernization, development paradigm, code packaging shift, and cloud deployment.

©2019 IDC #US43380018 27 Customer experience is a key priority, and most retailers globally feel the pressure to adopt experience-based business models, prioritizing investments in specific areas such as hyper- personalization and real-time contextual interactions. Customer experience-focused organizations are reinventing how commerce works, combining commerce with interactive activities to create more meaningful connections with customers and, ultimately, to boost sales.

As of today, the main challenge for retail organizations remains to drive profitable growth without compromising service, and continuously innovate their business models to remain competitive in the "Future of Commerce." To succeed, retailers should invest in a retail commerce platform that combines customer journey personalization, omni-channel commerce, and fulfilment intelligence with current and future consumer interfaces, data services, and enterprise services. IDC believes the retail commerce platform is a milestone in making retail companies the digital businesses of today and the future of commerce businesses of tomorrow.

Retailers cannot rely on legacy processes since traditional IT infrastructures and applications architecture won't enable them to provide exceptional customer experience and commerce performance. It's important for retailers to rethink their core systems and move toward a unified and data-centric digital retail commerce platform approach.

FIGURE 2

IDC Retail Commerce Platform: Conceptual Architecture

Source: IDC, 2018

IDC's Worldwide Digital Transformation Use Case Taxonomy, 2018: Experiential Retail For this report, IDC's Worldwide Digital Transformation Use Case Taxonomy, 2018: Experiential Retail (IDC #US44092118, July 2018) is adopted as a reference, as summarized in Table 1 (mentioning selected strategic priorities, programs and use cases that are more relevant to the retail commerce platform). This taxonomy provides structured guidance on how the retail industry vertical is creating and enabling digital transformation success in the digital economy. While this taxonomy is an extensive representation, it is not exhaustive.

IDC's Worldwide Digital Transformation Use Case Taxonomy, 2018: Experiential Retail

Digital Mission Strategic Priorities Programs Use Cases

Experiential retail Omni-channel commerce Seamless and frictionless Omni-channel commerce commerce system

Frictionless content realization

Intelligent fulfillment and Omni-channel order Returns orchestration and fulfillment

Real-time inventory management

Omni-experience customer Next-generation customer 360-degree connected engagement care customer management

Augmented customer support

Autonomic conversational Augmented social marketing engagement

Augmented content optimization

Hyper-personalized Contextualized marketing engagement

Augmented promotion optimization

Omni-channel marketing optimization

Digital supply chain Autonomic supply network Dynamic supply network optimization optimization management

Augmented forecasting and planning

Digitally optimized fulfillment Predictive network inventory operations orchestration

Operational scale and agility Mobile Enterprise Mobile inventory information management

Mobile customer engagement

Source: IDC, 2018

Key strategy measures

TABLE 2

Key Strategy Measures for Success: Worldwide Retail Commerce Platform Vendors

Criteria Definition Weight

Delivery Vendor has specific plans to expand its available delivery models (cloud, hybrid, 13% PaaS, SaaS).

A well-defined road map for the ability to support the retailer in the increase of end- user number, according to local and international store network expansion; the increase of system processing capacity, according to growth of data and content volume.

Financial/funding The company has a strong strategy for improving its performances across retail 16% segments, geographies, sales channels, services portfolio.

Description of management short and long-term profit and growth strategy. Description of how the vendor assesses the future demand of omni-channel commerce and future customers' needs (number of current and expected customer, average revenues per customer, etc.). The vendor is planning new acquisitions, has plan to expand the geographical scope, is expanding its partner ecosystem. The vendor is planning to support this growth strategy with adequate staffing.

Functionality or Description of functionalities that will be covered by the solution in the future (basic 35% offering strategy certified features, enhanced features); description of how the vendor will support solution scalability; description of new releases road map. Future interoperability features of the solutions (standards based, XLM, SOA). Flexibility of the architecture on which the solution will be based and relative integration costs (client only - thin client - web based). Vendor has a well-thought out road map to provide enhanced features and integration capabilities to increase customer loyalty and provide additional opportunities. Vendor also provides a road map for embedding AI foundations in the platform core capabilities.

For a maximum of 12 months from the moment of the assessment, vendor has specific plans to deliver new services urgent to its clients and improving essential offerings to respond to immediate concerns (distinction between in process and planned)

Future interoperability features of the solutions (standards based, as well as business process–level application integration via service-oriented architecture technology including XML and Web services, SOA). Flexibility of the architecture on which the solution will be based and relative integration costs (Client only -thin client -web based).

Key Strategy Measures for Success: Worldwide Retail Commerce Platform Vendors

Criteria Definition Weight

Growth Vendor is planning to expand its business across regions and countries, through 13% organic growth, M&A, and partnerships.

Vendor is planning to expand its business across retail segments and the different business tiers.

Innovation Customers' perception on: vendor innovation culture; openness to new ideas; 8% appropriateness of retail innovation investments.

R&D pace/ The company has a strong innovation culture and is open to new ideas. The company 15% productivity is investing in R&D (percent of R&D investment on revenues) and specifically in retail R&D; Description of future R&D projects; planned hirings dedicated to R&D; investments in retail technology start-ups.

Source: IDC, 2018

Key Capabilities Measures

TABLE 3

Key Capabilities Measures for Success: Worldwide Retail Commerce Platform Vendors

Criteria Definition Weight

Functionality or The essential capabilities to be evaluated are: 1) Customer experience services: 33% offering delivering a seamless customer journey personalization through voice, image, and text interfaces. These services leverage user experience (UX), digital marketing, and customer service applications – integrated with customer relationship management (CRM), campaign management, and promotion planning applications. 2) Commerce services: providing a single transactional engine and unified commerce capabilities across order capture, configuration, payment, and delivery setup. 3) Order fulfillment services: enabling real-time fulfillment decisions and optimized execution and returns, via integration with digital supply chain applications. 4) Content optimization services: providing content management, adaptive content and content distribution with a channel-free approach.

The retail commerce platform is a cloud-first solution (with possibility of on-premise, public, private, and hybrid cloud delivery). The platform provides a clear integration architecture and connects via development and integration services – based on microservices and an open APIs – to: enterprise services; consumer services; data services (product, customer, inventory, 3rd party); IoT services. Furthermore, AI/ML Analytics Foundation is embedded in the core capabilities. The Analytics Foundation gathers and elaborates first, second and third-party data and orchestrates in real-time the ensemble of the retail commerce platform activities.

Key Capabilities Measures for Success: Worldwide Retail Commerce Platform Vendors

Criteria Definition Weight

Solution is available through one or more of the following delivery models: cloud, hybrid, on-premise, PaaS, SaaS. Vendor can mention real-life examples/real-life capabilities of the various delivery models.

Vendor provides the possibility to include an IoT platform (proprietary or third party sourced) in the solution. The IoT platform leverages the AI foundations of the solution or has its own AI foundations integrated with the ones of the solution.

Vendor is evaluated according to its capability to cover retail commerce platform use cases from IDC Digital Transformation Taxonomy (listed in provided inclusion criteria and IDC DX Taxonomy Report).

The solution should provide integration mechanisms with: consumer services (store, mobile, web, connected product, robot, partner ecosystem); enterprise services (supply chain, merchandise and assortment planning, finance and accounting, asset management, HR, etc.); data services (customer, product, inventory, 3rd party); IoT services. Description of solution architecture. A full SOA solution has sound business processes management and orchestration. Description of the interoperability features of the solutions (standards-based integration, as well as business process–level application integration via service-oriented architecture technology including XML and Web services). Description of the flexibility of the architecture on which the solution is based and relative integration costs (client only -thin client -web based). Vendor should be able to demonstrate that its solution is able to separate data, business logic and presentation layers. Vendor should be able to demonstrate that its solution is compliant with payment security standards (PCI) and other applicable data privacy/security standards.

Customer Customers evaluate their satisfaction on a scale from 1 to 5, assessing topics such 12% satisfaction as: value for money, resources and systems reliability, project management, strategic partnerships and alliances, etc.

Customers evaluate, on a scale from 1 to 5, their perception regarding the appropriateness of time intercurred between the first engagement with vendor and the lead time for the generation of value

Customers evaluate, on a scale from 1 to 5, the results obtained for KPIs such as ROI, Net Promoter Score (NPS), and Customer Effort Score (CES).

Customers evaluate, on a scale from 1 to 5, if vendor is delivering expected innovation outcomes for retail IoT, AI, customer experience personalization, digital supply chain.

Customer service Vendor is evaluated according to the worldwide coverage of customer service, along 8% delivery with local presence to ensure knowledge of reference market.

Portfolio benefits The offering is well-supported and enhanced by a portfolio of complementary 5% offerings proposed by the vendor itself or by its ecosystem of partners. Description of internal complementary offering. Description of type of partners included in the ecosystem and of projects delivered together. Relevant complementary offering help for the attainment of strategic objectives, including customer engagement, profitable omni-channel, customer experience personalization, and evolving fulfillment model.

Key Capabilities Measures for Success: Worldwide Retail Commerce Platform Vendors

Criteria Definition Weight

Pricing model Vendor offers a wide variety of pricing models. Description of current pricing and 12% discount models, as well as business terms (e.g., contract/commit requirements). Current packaging/bundling/pricing initiatives to meet customers' needs. Vendor needs to indicate price range.

Vendor is evaluated according to: availability to apply revenue/profit sharing; type of companies with which the model is applied; average amount of projects for which the model is applied.

The vendor adopts a microservices architectural approach, allowing the retailer to 10% execute its plans – and react to market changes – with speed and agility. The microservices architectural approach allows for each microservice to be updated, refreshed, replaced, or rolled back without having an impact on (or requiring requalification of) surrounding services. The vendor provides DevOps tools that allow the development, deployment, and management of applications' life cycle. As applications become a logical grouping of individual microservices, the vendor supports the retailer moving away from the classic waterfall-developed and tested monolithic application development to a distributed application architecture composed of independent components. The microservices architectural approach and provided DevOps tools can be leveraged at the same time by the vendor, by third-party developers and by retailer's internal developers. Within this approach, the vendor also provides the retailer with the necessary capabilities to automate parts of the development and deployment life cycle.

Customer service Vendor offers enhanced customer service to its customers. It has a dedicated 10% offering technology support staff proportioned to customers number; provide training to partners; has in place back-end systems such as customer relationship management, and contract management. The vendor proposes to its customers help desk services with sound and easily measurable SLAs.

Total cost of Solution is perceived by customers as the foundational cost element enabling the shift 10% ownership of to an omni-channel business model (evaluation will integrate customers' feedback). product/offering to The cost vs benefit ratio is perceived by customers as competitive for the functionality IT buyer/user delivered and has competitive implementation and/or maintenance costs (evaluation will integrate customers' feedback). Vendor provides description of solution's cost structure (license, implementation, TCO) and of pricing models (premium price- service/usage based). Vendor is able to provide a reference framework for the evaluation of costs of ownerships.

Source: IDC, 2018

LEARN MORE

Related Research IDC FutureScape: Worldwide Retail 2019 Predictions (IDC #US44384318, October 2018) IDC MaturityScape: Retail eCommerce 1.0 (IDC #US41453217, September 2018) IDC's Worldwide Digital Transformation Use Case Taxonomy, 2018: Experiential Retail (IDC #US44092118, July 2018)

©2019 IDC #US43380018 33 Retail Commerce Platform 2018: Achieving Omni-Channel Profits and Driving Retail Innovation (IDC #EMEA43792118, May 2018) IDC PeerScape: Retail Customer Experience Practices for Enabling Personalization at Scale (IDC #US42174017, March 2018) IDC MarketScape: Worldwide Retail Omni-Channel Commerce Platform 2017 Vendor Assessment (IDC #US41453016, April 2017) Synopsis This IDC MarketScape assesses the capabilities and strategies of several key enterprise software vendors in serving the specific needs of retail companies worldwide across industry segments (food and non-food retail). Vendors are evaluated according to their successes in designing, developing, installing, configuring, and maintaining the evolution of a retail commerce platform. The target platform that is taken as a reference includes the core capabilities that enable customer experience differentiation and seamless omni-channel commerce, along with the required operational efficiencies for profitability and business model agility.

"Retail is evolving at an unprecedented speed, and retailers' operating models and technology platforms need to keep pace. The retail commerce platform is what can deliver omni-channel profits in the short-term and commerce everywhere business models in the future," said Andrea Sangalli, associate research director, IDC Retail Insights, IDC Europe. "Retail software vendors are rapidly evolving their retail commerce platform strategies and investing in the expansion of the capabilities of their platforms' core services, especially around customer experience and order fulfillment services, AI/ML analytics foundations, and open API- and microservices-based architecture, also leveraging platform extension marketplaces."

©2019 IDC #US43380018 34 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact- based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company.

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