November 2020, IDC #US46038320e

IDC MarketScape

IDC MarketScape: Worldwide Retail Commerce Platform Software Providers 2020 Vendor Assessment

Filippo Battaini Giulio Raffaele Ornella Urso

THIS IDC MARKETSCAPE EXCERPT FEATURES: ORACLE IDC MARKETSCAPE FIGURE

FIGURE 1

IDC MarketScape: Worldwide Retail Commerce Platform Software Providers 2020

Vendor Assessment

Source: IDC, 2020

©2020 IDC #US46038320e 2

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

IN THIS EXCERPT

The content for this excerpt was taken directly from IDC MarketScape: Worldwide Retail Commerce

Platform Software Providers 2020 Vendor Assessment (Doc #US46038320). All or parts of the

following sections are included in this excerpt: IDC Opinion, IDC MarketScape Vendor Inclusion

Criteria, Essential Guidance, Vendor Summary Profile, Appendix and Learn More. Also included is

Figure 1.

IDC OPINION

As the socioeconomic situation is changing at a dramatic speed, so are new trends in the retail

industry. Beyond balancing the need to innovate toward Commerce Everywhere business models and

the efficient management of daily retail operations, retailers are facing new and disruptive challenges.

The relationship between innovation and profitability pushes retailers to abandon legacy structures

and accelerate their path toward business resiliency.

How can retailers prepare themselves for the future of retail while driving innovation at speed and

scale? Not all retailers are equally responsive to change. Retailers such as Walmart, Kroger, and

Walgreens are leading the way for Commerce Everywhere business models, investing on the

essential capabilities of a retail commerce platform and on innovative technologies. According to IDC's

2020 Global Retail Innovation Survey, building a platform for innovation remains the top challenge for

innovation strategy–laggard retailers. Around 64% of retailers globally plan to implement retail

commerce platforms over the next 12 to 24 months. This trend might differ across:

▪ Retail subsegments. For instance, 56% of ecommerce retailers have already implemented

and are currently in the process of implementing a retail commerce platform, followed by

fashion and specialty retailers (in which 69% and 65% of retailers are implementing and plan

to implement a retail commerce platform in 12 months, respectively).

▪ Geographical regions. In the Asia/Pacific region, 24% of retailers have already implemented a

retail commerce platform, while 41% of European retailers and 36% of U.S.-based retailers

are planning to implement a retail commerce platform by 2021.

▪ Retail commerce platform–specific capabilities. Retailers assign a different priority to each

platform-enabling component. Customer experience (CX) services, end-to-end security

services, and commerce services remain the top 3 innovation priorities as cited by 56%, 43%,

and 39% of retailers, respectively.

Based on our assessment of retail commerce platform vendors' offerings for this IDC MarketScape, we

can highlight the following key aspects:

▪ Retail innovation. The retail commerce platform is an essential enabler of innovation, as it

enables retailers to pilot, implement, and scale innovation at speed. However, they must

consider that retail innovation goes well beyond the implementation of new technologies.

Retailers should aim for 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. Most vendors could aim to considerably improve in

providing retail-focused innovation services around retail business model innovation rather

than implement new technologies.

▪ Commerce everywhere. Commerce Everywhere business models involve relational and

operational retail processes that rely on the streamed collection and enablement of internal

and ecosystem data. Such models identify real-time, contextual, and interface-agnostic

©2020 IDC #US46038320e 3

customer experience as the pivotal gear of a company's value proposition, which links CX

back to the extended value chain of the enterprise, suppliers, and partners. These new models

are designed to operate "commerce" beyond the "transaction" and "everywhere" beyond

"customer-facing;" the ecosystem collaboration mindset needed to execute them requires

them to be innovation driven. New CX-oriented value is generated within each branch of the

extended value chain, from upstream to downstream. 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.

▪ Microservices approach. For many years, retailers have invested in monolithic platforms that

were based on traditional IT architecture, in which 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

achieve the flexibility to rapidly deploy new services and capabilities, following a best-of-breed

approach. Most vendors in this study provide services around cloud integration and

application programming interface (API)- and microservices-based architecture transformation

to support retailers in implementing, rapidly expanding, and innovating their retail commerce

platform capabilities. Some vendors are also improving the platform extension marketplaces

that enable retailers to go to market faster with new capabilities that can be sourced directly

from vendors or their partner ecosystems.

▪ Artificial intelligence/machine learning (AI/ML) analytics foundations. The implementation of a

retail commerce platform will rely on a solid core combined with a best-of-breed approach; it

will primarily leverage AI/ML analytics foundations. An intelligence core is essential for

continuously gathering and processing 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 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 offerings

from specialized partners.

IDC MARKETSCAPE VENDOR INCLUSION CRITERIA

In this IDC MarketScape, IDC Retail Insights assesses the capabilities and strategies of leading

enterprise software vendors in serving the specific needs of retail companies worldwide across

industry segments (food and nonfood retail). Vendors will be evaluated according to their success in

designing, developing, installing, configuring, and maintaining the evolution of a complete retail

commerce platform (as shown in Figure 2). The target platform taken as a reference includes all core

capabilities that enable CX differentiation and seamless commerce, along with the required

operational efficiencies for profitability and business model agility. The core capabilities of the platform

are:

▪ Customer experience services. This enables the discovery of the customer context, real-time

customer journey personalization (including loyalty), and customer interface enablement

across voice, image, text, and augmented reality (AR).

▪ Commerce services. These capabilities provide a single, unified engine to process

transactions, from order capture though configuration and payments to delivery setup.

▪ Order fulfillment services. These capabilities provide fulfillment optimization through

networked-based fulfillment, fulfillment objectives and KPIs (for example, optimized margins or

delivery speed depending on the customer), efficient delivery execution, and returns

management.

▪ Content optimization services. These provide content management and adaptive,

personalized content distribution.

©2020 IDC #US46038320e 4

The retail commerce platform relies on a cloud-first architecture (with possibility of on-premises, public

cloud, private cloud, or hybrid cloud delivery, when necessary). It 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. It also leverages AI, ML, or an

advanced analytics foundation. The retail commerce platform also provides proprietary or third party–

sourced development services that enable retailers to address 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:

▪ The vendor should have a worldwide geographic coverage. The provider demonstrates

evidence of strong market penetration through direct presence and knowledge of the U.S.,

EMEA, and Asia/Pacific business context. 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 the business. It needs to deliver

software solutions (and hardware, when available) regarding the core capabilities of the retail

commerce platform (CX services, commerce services, order fulfillment services, and content

optimization services, including the real-time integration layer). Furthermore, the provider must

be able to deliver the platform as a cloud-first solution (and possibly deliver on premises or as

public, private, or hybrid cloud, when necessary). The vendor also must have the capability to

provide AI foundations embedded in the four core capabilities.

▪ The provider must have relevant experience in implementing retail industry software solutions

in the broadest possible set of industry processes and segments; providers with no relevant

experience will not be included.

In this edition of the IDC MarketScape, IBM and Infor were considered for inclusion but did not meet

one or more of the inclusion criteria.

▪ IBM has disinvested some of the IBM Commerce portfolio. In 2018, IBM signed an agreement

with HCL Technologies to divest selected IBM software products, including WebSphere

Commerce and Digital Commerce. Therefore, IBM's offering no longer covers retail commerce

platform capabilities that this IDC MarketScape aims to assess.

▪ Infor has renewed its retail focus and changed its product portfolio. The vendor is investing in

the retail and fashion industry, offering products focused on network collaboration, end-to-end

visibility, operational control of forecast, supply chain, inventory management, workforce

management, and product innovation. Therefore, the vendor no longer offers retail commerce

platform capabilities as part of an Infor product offering, such as its native Converged

Commerce platform, which was evaluated on the last edition of this research.

ADVICE FOR TECHNOLOGY BUYERS

The retail commerce platform is an essential enabler of innovation. It delivers empathy at scale as it

enables retailers to pilot, implement, and scale innovation at speed. As retail organizations evaluate

and plan investments for introducing or enhancing their commerce platforms, IDC recommends that

they consider the following:

▪ Accelerate retail commerce platform investments to successfully implement innovation,

differentiate CX, enable Commerce Everywhere business models, and facilitate a unified and

data-centric digital retail commerce platform approach.

▪ Implement an AI/ML foundation 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 select vendors that have developed a proprietary AI platform,

taking advantage of their broad ecosystems to support retail commerce platform services.

©2020 IDC #US46038320e 5

▪ Move beyond omni-channel. Customer interfaces, moments of interaction, and engagement

input (text, image, voice, video, AR) within the platform enable more rapid delivery of

consumer services and more efficient and personalized execution of customer journeys. CX

differentiation is built on a new way to collect customer data and deliver real-time contextual

experience services to consumers. In this context, marketing and advertising represent the

last mile to increase customer knowledge and engagement across the entire customer

journey. Retailers should prioritize vendors that provide capabilities and services for managing

marketing and advertising strategies as part of CX strategies.

▪ Select vendors that supplement the retail commerce platform core offering with innovation

services. These services should center around business model innovation and support

retailers in building a companywide innovation culture and strategy, with technology as an

enabler of retail innovation and long-term profitable growth.

▪ Design integration services among the four core components of 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 by following a best-of-breed approach. Select retailers

that offer a platform extension marketplace with an appropriate retail catalogs and

demonstrated ease of integration of third-party services.

▪ Define a clear digital road map. In the context of the next normal, targeted investments in retail

business use cases need to be reprioritized. Retailers should engage with vendors that

provide a strong and long-term, retail use-case road map offering, demonstrate the ability to

scale, and indicate plans to support retailers in innovating their business models in response

to unexpected changes.

▪ Seek vendors' partner ecosystems. The implementation of retail commerce platforms with a

best-of-breed approach requires a strong innovation culture. Select vendors that have a

propensity to an open ecosystem approach and are open to new ideas, investing in retail

R&D, M&A, and retail technology start-ups.

VENDOR SUMMARY PROFILES

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 criterion outlined in the Appendix, the

description here provides a summary of each vendor's strengths and opportunities.

Oracle

Oracle is positioned in the Leaders category in this 2020 IDC MarketScape for Worldwide Software

Providers of Retail Commerce Platforms.

Oracle is a software, hardware, and services provider with headquarters in Redwood, California.

Founded in 1977, the company has more than 136,000 employees globally. Oracle has more than

430,000 customers with a presence in 175 countries.

Oracle's retail commerce platform capabilities come from the combination of its Oracle CX Commerce

portfolio (part of the Oracle Cloud CX Platform), which has an API-first architecture, and Oracle Retail

Cloud.

Customer experience services provided by Oracle aim to manage the entire customer journey through

application areas (especially data services, marketing, sales, content and experience, customer data

management, and analytics). These applications leverage Oracle Cloud Infrastructure platform

capabilities. Oracle recently introduced a cloudlet (as part of Oracle's Xstore Point-of-Service) that

monitors the response times of applications running on mobile devices; Fully Mobile Store, which

enables in-store customer and employee experiences; and Next Expected Purchase, leveraging

predictive analytics for customer engagement (e.g., personalized offers).

©2020 IDC #US46038320e 6

In the past three years, the vendor has delivered its Gen2 Cloud Infrastructure and Innovation

Platform, which enables Oracle CX Commerce to support multiple types of product sales (one-time

purchases, subscriptions, hybrid models, etc.) and provide customer support.

Oracle supports order fulfillment services through the Oracle Retail Order Management System Suite.

This suite provides distributed order-broker and drop-ship options, real-time inventory, and intelligent

routing by leveraging the Oracle Retail Advanced Science Engine (ORASE) for data management. It

can be integrated with retailer's own OMS and call center functions.

Oracle CX includes Oracle's core content management services. It relies on the concept of a

centralized hub for content management functions such as content creation, collaboration, metadata

management, content workflows, and publishing activities. The API architecture enables retailers to

access Oracle CX content services through custom and mobile applications and vocal devices.

Oracle leverages AI/ML capabilities through its retail commerce platform services, including other

Oracle suite applications, such as Oracle Marketing Cloud and Oracle Data Cloud (ODC). ODC,

Oracle's third-party data marketplace, is also a major component of the Oracle Retail Insights (RI)

Suite and Commerce solutions. Moreover, Oracle Retail Insights Suite leverages AI and ML analytics

for data pooling, inventory visibility, CX personalization, customer loyalty data, product

recommendations, targeting, and promotions.

Strengths

▪ Among the retail commerce platform vendors assessed in this IDC MarketScape, only Oracle

reported considerable investment in retail technology innovation and retail-specific R&D over

the past three years, with appropriate focus on areas that are strategic for retailers.

▪ According to a customer, Oracle supports retail teams throughout projects and demonstrates

particular attention in managing the relationship effectively.

▪ As part of Oracle's retail-specific technical support, the vendor also enables its clients to

access to the Retail Reference Library, which collects delivery and development process flows

and best practices that retailers can replicate to solve immediate issues.

Challenges

▪ According to customers, the implementation lead time for Oracle's retail commerce platform

took longer than expected, due to some issues that the retailer and the vendor encountered in

the initial stages of the process.

▪ According to customers, Oracle has space for improvement in technical integration and ease

of upgrades to new versions.

▪ Customers are of the opinion that the user interface could be enriched to improve employee

experience. To address this, Oracle has recently introduced a new UI/UX technology

framework called Redwood. Oracle is planning to make the new framework available in its

portfolio of applications in the future.

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.

©2020 IDC #US46038320e 7

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.

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 in an effort 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 leading

enterprise software vendors in serving the specific needs of retail companies worldwide across

industry segments (food and nonfood retail). Vendors will be evaluated according to their success in

designing, developing, installing, configuring, and maintaining the evolution of a complete retail

commerce platform (Figure 2) that includes all the core capabilities that enable customer experience

differentiation and seamless commerce — CX services, commerce service, order fulfillment services,

and content optimization services.

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. CX-focused organizations are reinventing how

commerce works, combining commerce with interactive activities to create more meaningful

connections with customers and, ultimately, to boost sales.

©2020 IDC #US46038320e 8

FIGURE 2

IDC Retail Commerce Platform Architecture

Source: IDC, 2020

As stated in IDC's Worldwide Digital Transformation Use Case Taxonomy, 2020: Experiential Retail

(IDC #US44303120, July 2020), IDC has identified a digital mission of the retail industry, strategic

priorities that support that mission, programs that will be initiated to satisfy these priorities, and the

funded use cases that will be implemented under those programs. These are summarized in Table 1.

While this taxonomy is an extensive representation, it is not exhaustive.

Vendors can fulfill one strategic priority gap — and eventually enrich some capability that is part of their

services — through proven collaborations with external partners.

TABLE 1

IDC's Worldwide Digital Transformation Use Case Taxonomy, 2020: Experiential

Retail

Strategic Priorities Programs Use Cases

Omni-channel commerce Experiential commerce Commerce service

Digital content management

Cashierless checkout

Headless commerce

Next-gen payments

Intelligent fulfillment and returns Omni-channel order orchestration and

fulfillment

Just-in-time (JIT) production

Real-time inventory management

Virtual and augmented experience Virtual and augmented engagements

Digitally connected product experiences

©2020 IDC #US46038320e 9

TABLE 1

IDC's Worldwide Digital Transformation Use Case Taxonomy, 2020: Experiential

Retail

Strategic Priorities Programs Use Cases

Augmented and visual product

discovery

Curated merchandise life-cycle

management

Intelligent product design 3D product design and review

Crowdsourced ideation and innovation

Sustainable product life-cycle design

Curated product assortment and

positioning

Assortment optimization

Sentiment analysis

Dynamic pricing

Life-cycle pricing optimization

Product innovation B2B networks/marketplaces

Digital product life-cycle management

Global product requirement compliance

Omni-experience customer

engagement

Next-generation customer care Optimized customer relationship/loyalty

programs

Omni-channel customer support

Social marketing

CX analytics 360-degree connected customer data

management

CX and behavior analytics

Digital content optimization

CX process management

Hyper-personalized engagement Contextualized marketing

Optimized promotion development and

distribution

Omni-channel marketing and advertising

Digital supply chain optimization Optimized supply networks Dynamic supply network management

Supply forecasting and planning

Optimized fulfillment operations Predictive network inventory

orchestration

Advanced technology augmented work

Optimized operations

Advanced enterprise reverse logistics

execution

Supply chain accountability Traceability

©2020 IDC #US46038320e 10

TABLE 1

IDC's Worldwide Digital Transformation Use Case Taxonomy, 2020: Experiential

Retail

Strategic Priorities Programs Use Cases

Smart financial supply chain

Supply chain safety and compliance

management

Efficient and innovation-ready

operations

Mobile enterprise Mobile inventory information

management

Mobile task management

Mobile customer engagement

Connected workforce Digital workforce management

Empowered worker

Augmented knowledge worker

Robotic worksource

Digital sales training and execution

Secure omni-channel operations Fraud management

Next-gen digital security

Next-gen loss prevention

Profitability optimization Sustainable environment optimization

Asset management

Physical safety and risk management

Venue portfolio management

Revenue and margin assurance

Source: IDC, 2020

LEARN MORE

Related Research

▪ IDC FutureScape: Worldwide Retail 2021 Predictions (IDC #US46921120, October 2020)

▪ The Status of Retail Customer Experience in the Next Normal: Challenges and Opportunities

for Improving Customer Experience at Scale (IDC #EUR146598721, October 2020)

▪ Commerce Everywhere Business Models and the Path Toward Retail Innovation Excellence

(IDC #EUR146908220, October 2020)

▪ IDC MaturityScape: Retail Customer Experience Personalization (IDC #EUR146782620,

September 2020)

▪ IDC's Worldwide Digital Transformation Use Case Taxonomy, 2020: Experiential Retail (IDC

#US44303120, June 2020)

©2020 IDC #US46038320e 11

▪ IDC PeerScape: Practices to Enable Food and Grocery Retailers of the Future (IDC

#US43664619, June 2020)

Synopsis

This IDC MarketScape assesses the capabilities and strategies of several key enterprise software

providers in serving the specific needs of retail companies worldwide across industry segments (food

and nonfood retail). Vendors are evaluated according to their successes in designing, developing,

installing, configuring, and maintaining the evolution of a retail commerce platform's services. The

target platform taken as a reference includes the core capabilities that enable CX differentiation and

seamless commerce, along with the required operational efficiencies for profitability and business

model agility.

"As the socioeconomic situation is changing at a dramatic speed, so are new trends in the retail

industry. Beyond balancing the need to innovate toward Commerce Everywhere business models and

the efficient management of daily retail operations, retailers have to abandon legacy structures and

accelerate investments in implementing a retail commerce platform's essential capabilities and

innovative technologies" said Ornella Urso, senior research analyst, IDC Retail Insights. "Retail

software vendors are rapidly evolving their API- and microservices-based retail commerce platform

strategies and capabilities, enabling retailers to become more agile and achieve the flexibility to rapidly

deploy new services and capabilities, following a best-of-breed approach."

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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