In its second-largest acquisition, Amazon buys the company for $970 million.
The product launch is Oracle’s first major move since acquiring Art Technology Group.
Oracle Corp. this week released Oracle Retail Merchandising Analytics, a web-based business intelligence application designed to pull data from multiple retail systems and enable retailers to quickly decide if they should change pricing, product orders, or take other actions to meet sales and profit performance goals. The release marks Oracle’s first major addition to its retail software portfolio since it acquired e-commerce technology provider Art Technology Group Inc. earlier this year.
The new Oracle application would, for example, allow a merchandising staffer to view via a dashboard such reports as volume of unit sales, sales in dollar amounts, and profit margins, and then analyze the expected effects on sales and margins of changing price levels or product mixes, says David Dorf, Oracle’s senior director, product strategy. The application covers online as well as offline retail sales activity, and it can be accessed via mobile devices and desktop computers, he adds.
Because the application integrates directly with a retailer’s merchandising management system, a merchandiser could then make changes such as marking down retail prices or issuing new purchase orders to suppliers for additional products, Dorf says. Oracle Retail Merchandising Analytics enables multiple applications and databases to automatically share information based on business rules set by users. This, in turn, enables retailers to produce reports in a single online dashboard, instead of having to take a more manual approach of gathering data from multiple applications and then feeding that data into a single data repository for analysis, Oracle says.
The application can produce reports, for example, that show “basket analysis” of in-store as well as online purchases, Dorf says. Such an analysis shows the groups of products consumers purchase together in online orders or inside a bricks-and-mortar store; retailers can learn, for example, how promotions on blue jeans influence sales of sport shirts and shoes.
In addition, Oracle Retail Merchandising Analytics is set up so that retailers can more easily compare current sales and margins of products with year-ago data, even when those products had been placed under a different category in the prior year, Dorf says. “If a TV was moved from a small-screen category last year to a medium-screen category this year, it can be difficult to do year-over-year sales comparisons,” he says. “This enables retailers to run those comparisons even if the category hierarchy was changed.”
Industry analysts say the new system puts Oracle in a league with such technology vendors as SAP AG and IBM Corp. that also offer software designed to help retailers view and act on useful data from multiple sources. “The power of Oracle’s new merchandising analytics is the access to and analysis of data from multiple applications,” says Janet Suleski, an analyst at technology research and advisory firm Gartner Inc. “Oracle has also homed in on very pragmatic uses of business intelligence, including the performance indicators for item sales, store performance, and promotion effectiveness, and this is important for driving adoption and use by retailers.”
Brian Kilcourse, managing partner of retail research and advisory firm Retail Systems Research LLC, says the Oracle application can help retailers access deep data on customer activity needed to predict consumer demand. “Modern business intelligence capabilities must be able to deliver insight into how consumers buy, not just what they buy, and that means analyzing granular, unaggregated data from the entire enterprise,” he says.
Kilcourse adds that accessing and compiling such data was difficult to accomplish until recent improvements in data warehouses, which Oracle has also supported. Oracle Retail Merchandising Analytics, he adds, was designed to take advantage of that increased capability of database technology.
The launch of Oracle Retail Merchandising Analytics marks the latest development in the retail market for Oracle, which expanded its reach into retail with its January acquisition of Art Technology Group, a provider e-commerce technology and services whose clients include Sears Holdings Corp., No. 7 in the Internet Retailer Top 500 Guide; Best Buy Co. Inc. (No. 7) and Neiman Marcus Group Inc. (No. 147).
Oracle plans to develop additional retail analytics applications in such areas as supply chain management and store plan executions, Dorf says. The new Oracle Retail Merchandising Analytics, along with those additional applications, eventually will come pre-integrated with ATG e-commerce technology, Oracle says.
Lynn Lanphier, director, digital analytics, at Best Buy, will speak at the Internet Retailer Conference & Exhibition 2011 in San Diego on June 16 from 3:00 p.m. to 3:30 p.m. in a session titled “Keeping control of web analytics data."