Smarter Retailing

Dilip PopatManaging Director, EMEA Retail Industry UnitMicrosoft Corporationdilippo@microsoft.com

Agenda

People at the coreUpdate of Smarter Retailing Our Overall Direction In RetailPartnering for SuccessQ&A

Business Growth

The Role of People

The Role of Software

The Role of Microsoft

People are the critical differentiator for Retailers

The Vision, Strategy and Blueprint For Leveraging The Shift To The Edge

VisionStrategy

Blueprint

We will facilitate integrated innovation

at the edges of the retail enterprise and

enable retail solutions that allow our

customers to be agile in an ever-changing

landscape

Enable retailers to fundamentally

change the rules of the game in the store environment through visionary

technology leadership

SmarterSelling

SmarterOperations

Smarter Shopping

8

Industry Focus

Leveraging the power of the platform to meet industry requirements

Building strong eco-system of industry partners

Building industry expertise to address customer business needs

Smarter Shopping

Microsoft Smarter Retailing SmarterSelling

SmarterOperations

Consumers Supply ChainStore

DevicesDevicesInformatiInformationon PeoplePeople SystemsSystems

In-StorePromotionServices

Store LaborManagement

Services

StoreManagement

Services

Smarter SellingSmarter Selling

InfrastructureInfrastructure

Connecting Consumer Interaction And Decision-making With Enterprise Information And Capabilities

Smarter OperationsSmarter Operations

Reports andMetricsServices

StoreInventory

ManagementServices

CustomerInteractionServices

SalesServices

ChannelCoordination

Services

StoreExperience

Services

Smarter ShoppingSmarter Shopping

Customer Insight ServicesCustomer Insight Services Data and Tech Management Services Analytic Services Real Time Services Location ServicesData and Tech Management Services Analytic Services Real Time Services Location Services

Central Office Integration ServicesCentral Office Integration Services

InformationInformation ExecutionExecution

Legacy

Smarter Retailing in Action : Some High Lights

275,000 POS Terminals in EMEA WEPOS launched with Pilots Many Enterprise Wins to transform Retailing

Major Customer References

Strong Ecosystem of Partners built This is our biggest RTC!.

First EMEA Partner Advisory Board June 2004 2nd Customer Advisory Board meeting in Feb 2004 Industry Momentum Building

Building Momentum in the Industry EPS and CIO Summits – 4 to 6 October, Lisbon

Manhattan Momentum – 4 to 6 October, Newport Wales

CIES Conference – 7 and 8 October, Paris

JDA/Microsoft events

7 and 8 October, Copenhagen

11 and 12 October, Stratford-on-Avon

14 and 15 October, Paris

EMEA Retail Technology Conference – 4 and 5 November, Barcelona

RAD Awards Dinner – 4 November, Barcelona

NRF Conference – 16 to 19 January, New York

Wincor World – 25 to 27 January, Paderborn

EMEA Retail Customer Advisory Board –1/ 2 Feb

Euroshop – 19 to 23 February, Düsseldorf

Global Retail Technology Forum – 9 to 11 March, Barcelona

Partner Advisory Board Meeting- June 2004

Analysts Day – June 2004

Windows CE 3.0Windows CE 3.0• Small-footprint, robust, high-performance next-Small-footprint, robust, high-performance next-

generation embedded platformgeneration embedded platform

DOS/Win32DOS/Win32*and other proprietary operating systems*and other proprietary operating systems

20002000

19991999

circa 1980/90scirca 1980/90s

19941994

20012001

20052005

Windows Vista (Standard)Windows Vista (Standard)FutureFuture

Windows Embedded for Point of ServiceWindows Embedded for Point of Service Industry-specific operating system from MicrosoftIndustry-specific operating system from Microsoft Supports POS for .NET enabling peripheral plug-n Supports POS for .NET enabling peripheral plug-n

playplay

Windows XP EmbeddedWindows XP Embedded Fastest adopted operating system in industries’ Fastest adopted operating system in industries’

historyhistory

ActiveStoreActiveStore A2A integration > now ARTS IXRetailA2A integration > now ARTS IXRetail Retail-hardened middleware > now Embedded Retail-hardened middleware > now Embedded

PGPGOPOSOPOS Now worldwide de-facto Standard for Now worldwide de-facto Standard for

industry-specific peripheralsindustry-specific peripherals

A decade in POS A decade in POS

20042004Windows CE 5.0Windows CE 5.0

Customer Success Stories Access and analyze real-time POS data

Over 50% more fraud cases detected

Windows XP embedded on 28000 POS Lanes

Multi-channel integration using Windows XP Mediacenter

Easy shopping using the remote control

Music Download service on a end to end MS Platform

Build and manage central data warehouse

”For the first time we’re actually on top of the business”

Gets Bigger and Better! RFID Item level tagging

.

French-based global hospitality player has rolled out an intranet

site through which employees around the world can collaborate.

Implemented three new store solutions utilizing the Microsoft .NET

platform and the Windows XP Embedded operating system a counter

weigh-scale solution, a hand-held order-picking device to facilitate home

shopping, and a kiosk solution

Norway’s largest grocery retailer became the first retailer globally to

deploy a point-of-service solution running Microsoft’s Point of Service

(WEPOS).

The Next Steps on the Journey

6%6%

21%21%

21%21%

45%45%

52%52%

56%56%

58%58%

0%0% 20%20% 40%40% 60%60% 80%80% 100%100%

Shareholder pressuresShareholder pressures

Sarbanes Oxley follow-upSarbanes Oxley follow-up

High staff turnoverHigh staff turnover

Vendor consolidationVendor consolidation

Customer intimacyCustomer intimacy

Real time visibilityReal time visibility

Capital constraintsCapital constraints

Source: 15th Annual Retail Technology Trends Survey conducted by RIS News and Gartner, March 2005

Key Retail Concerns Over The Next 3 Years

Store level IT investmentStore level IT investment

18%18%

Retail Sector Hype Cycle, Retail Sector Hype Cycle, 20052005

Technology Technology TriggerTrigger

Peak of Inflated Peak of Inflated ExpectationsExpectations

Trough of Trough of DisillusionmentDisillusionment

Slope of Slope of EnlightenmentEnlightenment

Plateau of Plateau of ProductivityProductivity

MaturityMaturity

Vis

ibil

ity

Vis

ibil

ity

Acronym KeyAcronym KeyCRMCRM Customer relationship managementCustomer relationship managementRFIDRFID Radio frequency identificationRadio frequency identification

As of July 2004As of July 2004

Collaborative Collaborative PlanningPlanning

Contactless Contactless PaymentsPayments

Corporate and Store Corporate and Store Business IntelligenceBusiness Intelligence

CRMCRM

Electronic Shelf LabelsElectronic Shelf Labels

In-Store WirelessIn-Store WirelessDeployment Deployment

(Customer Facing)(Customer Facing)

Labor Management andLabor Management andScheduling ToolsScheduling Tools

Markdown OptimizationMarkdown Optimization

MerchandisingMerchandising

Merchandising and Category Merchandising and Category Analytics and OptimizationAnalytics and Optimization

Multichannel Multichannel IntegrationIntegration

Price OptimizationPrice Optimization

Retail (Supplier) ExtranetRetail (Supplier) Extranet

Product Content Product Content and Data and Data

ManagementManagement

Promotion OptimizationPromotion Optimization

JAVA based JAVA based Based POS SoftwareBased POS Software

RFID (Case/Pallet)RFID (Case/Pallet)

RFID (Asset)RFID (Asset)

Biometric IdBiometric Id

In-Store In-Store Wireless DeploymentWireless Deployment(Store Operations)(Store Operations)

Mobile Mobile POSPOS

Global Data SynchronizationGlobal Data Synchronization

Digital SignageDigital Signage

Store task Store task ManagementManagement

POSPOS

Integrated Demand Integrated Demand and Replenishment and Replenishment

Planning Planning

KiosksKiosks

Self-CheckoutSelf-Checkout

Less than two yearsLess than two years

Two to five yearsTwo to five years

Five to 10 yearsFive to 10 years

More than 10 yearsMore than 10 years

Key:Key: Time to Plateau Time to Plateau

RFID (Item)RFID (Item)

Technologies of interest to MS

X Next-Generation Retail OS for POS

X RFID item

X In store customer deployment

X Promotion opt

X Mdse and Ca anal @ optim

X Rfid asset

X Markdown optim

X Global data sync

X RFID case and pallet

X Price optim

X Corp and store bus intel

X Multi channel integ

X Mobile POS

X CRM

Next Gen retail Next Gen retail OS for POSOS for POS

Solutions FocusSolutions FocusPoint of ServicePoint of ServiceSupply Chain MgmtSupply Chain MgmtEnterprise CollaborationEnterprise CollaborationBIBIMulti-Channel RetailMulti-Channel Retail

Deeper Relationships Deeper Relationships with Partnerswith Partners

Microsoft In Retail

Our Top 5 Priorities Remain Unchanged!Our Top 5 Priorities Remain Unchanged!

#3 In

dust

ry P

rior

ity S

olut

ion

Sce

nari

os

#3 In

dust

ry P

rior

ity S

olut

ion

Sce

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os

Job #1Job #1CustomerCustomer

Satisfaction!Satisfaction!

Job #2Job #2PartnerPartner

SatisfactionSatisfaction

#4 Retail Hardened#4 Retail HardenedWindows Embedded for POSWindows Embedded for POSBizTalk ServerBizTalk ServerRFID ServicesRFID Services

#5 Driving Standards#5 Driving StandardsOPOSOPOSARTS – IXRetail, UPOSARTS – IXRetail, UPOSGS1GS1EPCglobalEPCglobal

Global FocusGlobal Focus& Dedicated Team& Dedicated Team

PredictabilityPredictabilityLicensingLicensing SupportSupport

Smarter Retailing - focused Areas

Supply Supply ChainChain

ManagemenManagementt

Merchandise Merchandise ManagementManagementSupply Chain Supply Chain ManagementManagementPlanningPlanning

Enterprise Enterprise Business Business IntelligenceIntelligenceReal-time Real-time retailretailCustomer Customer Value Value AcceleratorAccelerator

BusinessBusinessIntelligenceIntelligence

Content Content managementmanagementCommerce Commerce managementmanagementPaymentsPaymentsCatalog Catalog managementmanagementDistributionDistributionMulti channel Multi channel integrationintegration

Multi-Multi-channelchannel

Information Information distributiondistributionTrainingTrainingInventory Inventory ControlControlHR accessHR accessStore financial Store financial reportingreportingStore Store manager’s manager’s workbenchworkbench

EnterpriseEnterpriseCollaborationCollaboration

Point of Point of ServiceServiceCustomer Customer servicingservicingInventory & Inventory & Order Order ManagementManagement

Point of Point of ServiceService

Microsoft Focus area in the past

Achieving Success Together

From Product Focus From Product Focus To To Integrated Innovation and Integrated Innovation and

InteroperabilityInteroperability

From Transaction Excellence From Transaction Excellence To To Relationship ExcellenceRelationship Excellence

From Technology Success From Technology Success To To Business SuccessBusiness Success

Next Big Bets in Smarter Retailing

Business IntelligenceBusiness Intelligence

Point of ServicePoint of Service

Supply Chain ManagementSupply Chain Management

Enterprise CollaborationEnterprise Collaboration

Base ArchitectureBase Architecture

Multi-channel RetailMulti-channel Retail

Engaging with Partners Develop joint value propositions

Industry Solutions focus Working with Industry mgrs Develop reusable assets

Develop sales and marketing plans Deliver Lighthouse wins as key References Market visibility through

events/Publications/PR

Agree Target accounts Align with account team Joint account plans

Evaluate and Review progress Wins Revenue

EMEA Retail Team

Dilip PopatManaging Director

EMEA Retail Industry Unit

Raquel GoldmannIndustry Manager

Collaboration

David BaileyIndustry ManagerIn-Store Solutions

Sandana Kichenane Industry Manager

BI / Multi Channel R.

David DobsonIndustry ManagerIn-Store Solutions

Willem HarringIndustry Techn.

Strategist

Natalie Edwards Assistant

Gary CookeMarketing Manager

Gerry CallananIndustry Manager

Supply Chain Mgmt