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A digital strategy report on banking value chain

MAY, 28, 2017 R RAVI KIRAN

Confidential Copyright 2014 Tata Consultancy Services Limited










Document Name

1 Confidential

The aim of this project is to find out the need for digital transformation in banking and study the market
for the level of adoption in the banking industry. Define the banking value chain. And lay out the digital
strategies for all the touch-points in the Banking value chain.

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Omni-Channel Banking to Grow : Need for flexibility, Lack of co- Improvement in New Customers Growth Rate
ordination among channels & Threat from non-banks Decrease in Customer Attrition
Experience & Power shift to Customers & merchants in contextual payments Improvement in Brand Image
Integrate payments capability with digital experience Increase in Customer Satisfaction
Engagement Customers are expecting Retail treatment from BFS in terms of Increase in non-branch banking usage ratio
customer experience with a Mobile first focus that is personalized Decrease in cost of acquiring new customers

Opportunity for Improvement & efficient Risk & Fraud Management Reduced number and cost of Fraud incidents
with real-time capabilities (through Big Data, & Analytics) Time to market new products
Operational Efficiency Focus on Next-generation Payment hubs Reduction in Social Reputation Risk
Automation of Onboarding processes in Merchant Onboarding, Decrease in Employees per Branch
Wealth Management Client Onboarding, Lending Customers etc. Decrease in Cost of servicing

Leveraging Insights from Customer Information (External & Internal) Increased revenue through loyal customers
for Up-selling & Cross-selling Products, and Product/Services Design Expansion to untapped markets
New capabilities through partner ecosystem
Optimizing branch portfolio through convergence of digital-physical
Business Growth channels, & self-service capabilities
Increase in Customer growth
Increase in fee based income
Opportunity to creating new value proposition in capital markets using Revenues from new products/services or
digital leading to raise in sales & trading Monetization of Data through APIs

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Advertising Acquisition Deposits & Credits Front-Office Payments

Branding Offerings Securities Middle-Office Trading
Sales Multichannel Financial Products Back-Office Clearing &
Management Corporate Customer Settlement
Investments Support
Asset Management
Advisory Services

Document Name
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Market size and level of digital adoption
Digital Banking Market is Estimated to Grow at Compound Annual Growth Rate of Around 8% during 2016 to 2022
Source :

% of all products can be applied for % of all products can be applied for % of personal banking products that
using digital channels using a mobile device could be set up using mobile device

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Market size and level of digital adoption
Source : Avokas annual State of Digital Sales in Banking report

% of wealth management products Readiness to support digital account % of small business products that
that could be set up on mobile device opening overall (mobile + online) could be set up using a mobile device

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Digital Strategy for those Touch Points in Value Chain


Desktop & Mobile Advertising

Capital One, Citigroup and Chase alone spent
SEO more than $168 million on desktop & mobile
ADVERTISING advertising in the first three quarters of 2016,
& BRANDING Content Marketing
according to Pathmatics data

Source :
Email Newsletters

Usable & Mobile friendly


Sales force automation using

SALES Cloud CRM with Analytics

Mobile devices

By 2019, over 85% of new packaged customer service and Source :

support software will be delivered on a cloud-based model

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Digital Strategy for those Touch Points in Value Chain


Social Media Over 70% percent of internet users are also

active on social media

ACQUISITION Mobile Technology

Source :
Inbound Marketing
Engage older, more profitable and brand-
conscious customers
Digital Branches
MULTICHANNEL Target relevant online offers and content at
MANAGEMENT Internet & Mobile Channels these customers

Personalized offers can be delivered via

targeted, customized messages, through
mobile or Internet channels

Adoption of social media marketing along

with other internet channels

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Digital Strategy for those Touch Points in Value Chain


Opening Saving Account
DEPOSITS & Virtual Debit Card
Mobile Banking App
CREDITS Scan & Pay
Shop, Travel, Entertainment

Kotak Mahindra Bank has set an ambitious target of doubling its total Source :
customers to 16 million in the next 18-24 months from eight million now years/article9676929.ece


Vendor Payments, refunds, business
correspondents, SMBs, co-operative societies
API Banking Services has digitized the B2B supply
chain. Instant Banking Facility: API Banking enables instant cash
API banking allows our banking systems to be payment or receivable facility from any ERP system. This completely
seamlessly and securely integrated with corporate reduces turnaround-time for doing a financial transaction
clients ERP systems Hassle-free: No need to send a physical payment request to the
Through API or Application Programming Interface, bank or upload CSV files. With a click of the mouse, cash payable
business enterprises can do all their cash payables and and receivable transaction can be done
receivables management from their ERP in a seamless Improved operational efficiency: Daily account statement is made
secure manner available for easy reconciliation

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Digital Strategy for those Touch Points in Value Chain

Capitalizing on the efficiency and security features of Blockchain, YES BANK has used the Hyper-ledger Fabric supported by IBM to design a
vendor financing solution which allows Bajaj Electricals (anchor client) to digitize the process for discounting and disbursal of funds to its vendors
by integrating seamlessly with YES BANKs systems.
The solution will also facilitate an automated debit from Bajaj Electricals account by YES BANK. The business logic and rules are captured in a
Smart contract (Chain Code) developed by Cateina Technologies.
The entire process cycle for bill discounting reduces from four days (owing to manual intervention and transit) to almost real-time
Transparency to all parties through blockchains shared public ledger & End-to-end digital process eliminating paper trail & manual intervention
The entire transaction history of a particular vendor is recorded and is immutable through blockchain
The transaction status along with details are seamlessly transmitted to Bajaj Electricals Enterprise Resource Planning
Seamless integration with existing API Banking implementation by YES BANK using IBMs Enterprise Service Bus(IIB), API management and
Datapower solution.
This integration offers automated processing of transactions with almost zero manual intervention. Use of a permissioned blockchain with flexibility
to add other participants later
Use of superior Cryptokey to offer state-of-the-art security for both documents and transactions on the Blockchain.

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Digital Strategy for those Touch Points in Value Chain

Mobile & Desktop Application
Improved Working Capital
Efficiency - Time taken to
complete transactions reduced
from 3 hours to 1 hour
Digital Approvals - One touch
approval from your mobile app for
all transaction requests
Bulk Payments - Easy & secure
processing of bulk payments via
NEFT, RTGS & Account to
Account transfer

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Digital Strategy for those Touch Points in Value Chain
14% of High Net Worth Individuals (HNWIs) use robo-
Robo-adviser services advisory services for portfolio management
(AI) 69% of HNWIs are using online banking and mobile
WEALTH banking
MANAGEMENT Cyber Security (In- A little more than 40% of HNWI use digital means to
review their portfolio
house & startups)
About 40% HNWIs use digital means to review market
638 million ransomware attacks were attempted in 2016, a 167 times Almost 60% communicate with their advisors virtually
increase over 2015. Thirteen percent of these targeted the financial A little less than 40% of HNWIs use digital technologies
services industry to manage their portfolio
85% of HNWIs use more than three digital devices
Source : According to the 2017 SonicWall Annual Threat Report 98% of HNWIs surf internet and use apps daily
Only 25% of wealth management firms provide digital
Companies in the United States experience an annual loss of more than services beyond e-mails
525 million US dollars due to cyber crime in 2016
Only 25 per cent of wealth management firms
Source : Statista Source : PwC
globally offering digital channels beyond emails.
According to Bank Director's 2016 Risk Practices Survey77% of bank
executives and board members said cybersecurity was their top Financial services companies are on track to increase their
concern cyber security budgets to $10 billion by 2020

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Digital Strategy for those Touch Points in Value Chain

Robotic Process
IT SYSTEMS Automation Lower transaction processing time by
up to 60%
REGULATORY Improve productivity by up to 70%
REQUIREMENTS Source : MarketsandMarkets Analysis, December 2016* through reduction of manual efforts
Help banks redeploy staff to higher
skilled roles away from repetitive rule
based tasks
Maintain near 100% accuracy levels
due to elimination of manual errors
Automate routine reporting
Adhere to regulatory requirements
and eliminate data security risks

Source :

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Digital Strategy for those Touch Points in Value Chain

Mobile Centric Wallet Apps

Peer-to-Peer payments
Cross-Border Remittances
Mobile Wallet Advantages

Mobile in-store payments are expected to grow at

154% CAGR between 2013 and 2018
Source :

Contactless payments are the fastest growing mobile

payment type, set to grow at 56% annually between
2016 and 2021
Source : Forrester

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Data Management Regulatory & Divergent Customer

& Security Compliance Needs

Niche Players & Profit Pressure &

High Fees Everywhere FinTech Startups Competitive Shifts

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CXO Views and Recommendations
IT should be connected
from end-to-end for
Employees should be
Leadership should helping get rid of silos
trained in digital to
look to bring digital See business from Change
bring about a change
into every aspect Digital point of view Build digital organization
in the culture of the
of banking Infrastructure culture

Digital Transformation

Build cybersecure Most of the banking

firewalls with the Fintechs Build digitally
Secure your data products build
help of best usable products should be on
technology and Mobile devices
keep on updating Try to partner with Fintechs
to use their services on your
Customer base

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Personal Financial Management Digital Identify management Biometrics, etc
Robo-visory platforms for Investment Products Digital IT Capabilities API Platform, DevOps Tools, etc
Algorithmic Trading & Virtual Trading Platform Virtual Assistants
Digitization of Lending Processes (Convergence of Digital & Physical Big Data Analytics in Fraud Prevention and AML regulations
Channels) Social Media Banking
Digital Channels Enabled Portfolio Management Platform for Capital Digital Branches
Markets Analytics driven Risk Management
P2P Payments, & Lending Private Cloud Enablement for Banks
Algorithmic Fraud Detection Omni-Channel Retail Banking
Algorithmic Trading Understanding Customer Movements Mobile App Analytics
Next Generation Payment Hubs for B2B & B2C enabling real-time Automated Reporting and Risk Management in Capital Markets
payments, Credit Monitoring for Corporate Banking
Video Banking Simplification of Onboarding Process for Customers in Retail Banking &
Customer Analytics for Up-selling & Cross-selling Merchants in Payments Business
Personalized Offers in Retail Banking Leveraging Big Data for Payments Data Analysis

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Retail Value Chain

Digital implementation strategy in Retail

-Shahbaz Khan

May 2, 2017

Confidential Copyright 2014 Tata Consultancy Services Limited


Tried to analyze
scope of digitization
in Retail Then identified the different
touch points in Retail Value

Tried to find different digital Discovered challenges while

approach that can be applied implementing these digital
in these touch points strategies.

Recommendations based on
experience of implementing
digital strategies.

Why TCS?

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Digital value at Stake in retail

Digital Value at Stake in retail is of $506 billion worldwide

by 2018.
Value at stake in billions
Retailers are just utilizing 15 percent of their potential $120
Digital Value ( lower than telecommunications (21 $100
percent), financial services (29 percent), and media and $80
entertainment (18 percent)). $40
Highest concentrations of Digital Value at Stake are in
North America (36 percent) and Western Europe (29
percent), Asia Pacific is quickly gaining ground (23

Ciscos analysis shows that a $20 billion retailer can save

$33 million in IT costs and generate $823 million in EBIT Source:A Roadmap to Digital Value in the Retail Industry by Cisco
by fully implementing DBT.
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Retail Value Chain

Logistics and Merchandisin Store Marketing

Supply chain g Operations services

Consumer Multi-
Experience channel

Document Name
and capability
Horizontal Support

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Supply Chain

Includes procurement, Inventory management and Distribution.

Digital Supply Chain
Before Digitization After Digitization
1. Integrated Planning
Supply chain today is a Digitization can make a and Execution
series of largely discrete, integrated ecosystem that 2. Logistics Visibility
siloed steps . is fully transparent to all 3. Procurement 4.0
Companies lack visibility at the players involved 4. Smart
critical points in the supply from the suppliers , to the Warehousing
chain, leading to transporters, and 5. Efficient spare
considerable over or customers demanding parts Management
underselling during peak fulfillment. Autonomous and
seasons. Efficient exchange of B2C logistics
Lack of timely information. information. 6. Prescriptive SCA
Will require digital technologies like the cloud, big data, the Internet of Things, 3D printing, /reports/industry4.0
augmented reality, and others
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Supply Chain

Smart warehousing

The next link in the digital supply chain is the warehouse.

Trucks can communicate their position and arrival time which will optimize just in- time and just-in-sequence delivery.
RFID sensors will reveal whats been delivered, and send the track-and-trace data horizontally across the entire supply chain.
The management system will automatically allot storage space for the delivery.
Management software will constantly update inventory in real time, through the use of sensors.
Flying drones to aid in taking inventory with sensor data, and mapping the entire facility.


DHL recently conducted successful ARS where workers used smart glasses for picking. Then robotics were used for packaging.

Efficient spare parts management with 3D printing

The warehousing link is expensive, labor-intensive, and error prone. Digitization will certainly eliminate much of its inefficiency.

Supplier Production Support

Minimal components
Delivery Spare printed on
and materials shipped Production near Local van delivery Demand and
in customer Delivered same day

Supply Chain

Autonomous and B2C logistics robotic transport

Self-driving trucks will depend on mapping software and short-range radar to assess the vehicles surroundings.
Internal sensors will help fleet operators assess damage to cargo and determine maintenance requirements. T
Tightly integrated with ERP system, these vehicles will eventually be able to determine on their own which supplies need
replenishment, pick up loads, drop them and collect returnable packaging.
Contactless sensors and laser safety bumpers on these vehicles will significantly improve on-site employee safety.
Last year, the U.S. state of Nevada licensed two of Daimlers Freightliner Inspiration Trucks for use on public highways.

Track-and-trace technologies

T&T of supplies and products through the transportation system has evolved thanks to new technologies. Radio frequency
identification (RFID) and Bluetooth technologies are being used to track inventory.
3D printers generate readable sensor tags that can be attached to cargo and capture temperature and humidity conditions.
GSM and satellite tracking are used in maritime transport.
Supply chain control tower using IOT, big data can help in track and trace. E.g. Dell

Supply Chain

RPA in Supply Chain Management

Blockchain Strengths, Weaknesses, Opportunities and Threats (SWOT)
Order processing and payments.
Trigger off email or text when an order is processed,
shipped, or delayed.
Procurement and inventory management processes :
Access inventory levels and needs.

Future of RPA
By recording the actions of software robots, RPA is able to
gather information about business patterns and internal
workings to reveal potential disruptions and bottlenecks.
RPA allows businesses to streamline operations , be
innovative and agile supply network.

Block chain in SCM

Provenance is a platform that helps brands provide that
transparency by tracing the origins and histories of
products. E.g Tracing the fish on the plate.

Fight counterfeit Block verify enables

consumers to authenticate products by working with Source: Gartner (March 2017)
manufacturers. Confidential
Supply Chain

16% reduction in
since Wal-Mart
Wal-Mart has used radio frequency identification tags (RFID), which use numerical codes that can be introduced RFID
scanned from a distance to track pallets of merchandise moving along the supply chain. technology
Smart tags, read by a handheld scanner, that allow employees to quickly learn which items need to be into its supply chain
replaced so that shelves are consistently stocked and inventory is closely watched

Supposedly, the
Uses Wi-Fi connected robots to identify products by reading QR codes using built-in cameras.
AI system determines priority orders.
helps Decathlon to
to vendors with
100% accuracy

Uses RFID from check point systems in more than 400 of its store.
Planning to use RFID tagging to millions of its products. Confidential
Store Operations

Artificial Intelligence tools to assist customers

Big Data Inventory management

New Payment options including payment apps.

Video conferencing tools, apps to train and help workforce. E.g McDonalds.

Location sensing technologies like GPS, Wi Fi and Beacon Technology.

Store Operations

Company/Product Feature

Starbucks MOP Pre order and pay

John Lewis Trained workers digitally .Saved 50% expense and 89% in survey
said it saved time.

Macys On Call A mobile web tool powered which helps customers find products
and more easily navigate stores

Macy/Walgreens Experimenting with location sensing technologies with review of

nearby products.


Provides much more dynamic Can be used in optimal display Virtual Store Design
price gathering and price of products based on demand Assortment layout
optimization capabilities. and profitability.

Walmart uses its app information (including location and browsing behavior)
with in-store sensors, RFID tags, QR codes and iBeacons information to
improve in-store layout, merchandising and product placement.

Marketing and Sales

Get 360 degree view of customers.

Provide same experience in multiple channels.

Social Media, Blogs and

Big Data and Analytics website Target customers
and provide new channel. Smart Store technologies such as IP
Customized promotions
For e.g Instagram tags cameras, sensors, Wi-Fi tags, and
Based on past preferences
mobile technologies, become sources
and responses.
of insight into buyer behavior.

Recent trends as Cloud based CRM

dropshipping and Gives the
click and collect Users access from
any where

VR/AR provide Beacon technology

immersive Environments Helps in providing
and helps in Customized offers
engaging customers,. And promotionsConfidential
Customer Experience

Mobile App can improve the Social media analytics Wayfairs remote digital
In-Store Experience. :Customer conversations on mockup shows how furniture
Walmart app switches to in- social media platforms can will look in your house.
store mode when in one. Has be leveraged by retailers to Sephoras color matching helps
in store navigation, faster engage them online and pick the perfect lipstick to
check out process, and manage their experience in complement an outfit.
Pricecatcher. real time. North Face use VR to transport
Walmart reports increased foot Social media can act as new customers to Yosemite
fall, larger basket sizes and a sale channels like in National Park as they were
4070% customer lifetime Instagram tags. shopping at the stores
value lift for those customers Smart mirrors can increase
using the app. cross selling

Softbank Robotics has Big Data and Analytics : Data

In Store technologies
created Pepper, a robot that from online and offline channels
Amazon Go pilot store, sensors
uses facial recognition and like sensors, WiFi tags and
and cameras mean customers can
language processing to serve mobile technologies will give
simply walk out with their
customers in retail deep insights of customers. It
purchasesno checkout needed.
environments ranging from will help in giving customized
AI tools like Amazons Echo and
Nissan showrooms to
Macys On Call experience.
Nescaf shops
Implementation challenges

Integrating tools into existing infrastructure.

Bridging the knowledge gap and bringing the digital culture

into organization .

Numerous possibilities with the advent of technology. It can

create confusion in selecting the right direction.

Satisfying the highly informed customers expectations.

Data and data management Integrating and creating huge

amount of data .

Creating a single unified commerce platform which offers

holistic & consistent CX across all touch points.

Data Security
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Retailers have to listen to the voice of the customer and try to sell experiences if we want customers to visit our shop.
Like using digital technologies to show customers how clothes look on them

Mobile technologies influence every stage of the customers shopping journeyfrom personalized promotions prompted
by geo targeting to in-store research and price checks, as well as to payment capabilities.
Differentiate your offerings.

Expand revenue and profit pools like Walmart Stores are earning rent from digital assets.

Embracing Omnichannel Systems and Processes :

Align the people and processes with the technology to make real-time retail .
End-to-end supply chain visibility helps to near-real-time decisions to reroute products and streamline transportation

Try to become data driven industry . Try finding where data can add value like in promotions , routing, inventory
management ,assortments.

Short term Mid term 34 Long term Confidential


Business Problem

1. Little floor Space

2. Limited insights on both online and offline customers


1. Using a combination of in-store Wi-Fi and integrated mobile and tablet access for shop associates to gain insight on customer.
2. Free Wi-Fi to track customer journey and give curated content.
3. Interactive kiosks in stores allowed customers to order items online .
4. F&F has also piloted remote expert for style tips.


1. In next 3 months, the number of customers logging onto Wi-Fi increased 50 percent.
2. 30-50 % of the time was spent online thus giving chance for pushovers.
3. Interactive kiosks reduced the number of customers leaving empty-handed,also gain online presence.
4. Remote experts promoted F&F as a fashion brand

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Why TCS?

Clients Name Solution Domain

1. Domain Expertise
Home Depot Buy Online Pickup In
Cross Channel
2. 40+TCS tool and Store
applications JC Penny Interactive Kiosks Stores

3. Retail BPS offerings Walgreens mPOS Mobility

Warehouse &
4. Unique Digital Operation Woolworths Digital Supply Chain
Studio and CII tool Customer Engagement
Woolworths Loyalty, Customer CRM & Loyality
5. Long term strategic Ranging & Analytics
Supervalue Customer Mobile App Mobility
6. Proven Track record
M&S Multi Channel Retail Cross Channel
Implementation of Click
Sainsbury's Cross Channel
& Collect
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Digital Operation Studio

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CI&I Retail 1.0 Scope : Summary

IoT based Customer Analytics Platform for Dynamic Segmentation & Targeting for learning
real time customer engagement across physical- driven customer engagement based on goals
digital touch points interfacing with the digital defined through Journey Modeler and Journey
ecosystem Manager

Customer Digital Persona for 360 customer Next Best Action and Next Best Offers for 1:1
insight across their journeys and interactions personalized engagement of customers across their
journeys to drive overall customer engagement
Customer Journey Canvas for modeling Programmatic Customer Engagement for real
customer journeys to create personalized
time and contextual personalized interactions
engagements defining channels, interactions and
through the customers journey with learning based
desired outcomes
interaction models to drive customer engagement
Customer Journey Cockpit for getting real time
visibility to cross channel customer journeys, APIs and Developer SDK for easy integration to
tracking progress and forecasting movements to digital ecosystems, enterprise applications and
improve customer engagement and implement developing channel applications in enhancing
real time retail model customer engagement
Customer Journey Manager for actively
In-Premise & Cloud options for Tier 1 & Tier 2
managing customer engagement programs by
Retailers to quickly deploy and develop digital
setting goals, cascading targets and setting
initiatives to improve customer engagement

Summary of different Touch Points in Value Chain

Connected supply chain Store Operations Marketing

It includes Sourcing, procurement, Physical retailers should try to smoothen Consumers demand a more personalized
inventory management and overall experience of customers with shopping experience, making marketing
distribution seamless navigation, quick information, offers based on consumers shopping
Try to go for overall connected supply easy payment. behavior important
chain. RFID, IoT Live supply status on-hand, on- Analytics Get 360view of customers and
Challenge Incorporating digital order, in-transit and open-to-buy products provide personalized customer experience.
capabilities in existing supply chain. Beacon technology Personalized Also optimize operational decision-making
Sensors and geolocation real time experience to customers Social media, blogs, website to connect to
localization, filling status, product Virtual reality Digital shelves and Kiosks customers .Paid media includes things like
quality Apps Clienteling apps can be used to Google AdWords, paid social media posts,
Robotics Picking palletizing empower associates, consumer apps can native advertising.
Big data --routing optimization, help to locate product in store. For ecommerce and lead generation sites,
Capacity Planning, forecasting Mobile POS Self checkout and mobile social provides a growing opportunity to
Integrated control-tower payment. improve conversion rates and gain new
technologies- Track components in RFID tags to scan conversion channels.
real time, quickly reroute parts items and add them to a virtual shopping
Cloud -- global real time data cart. E.g. Target
available .
Retailers are trying drop shipping and
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Summary of different Touch Points in Value Chain

Sales Customer experience and

Data analytics-Insights can be used to support
fine-tune and differentiate direct- Beacon Technology
channel product offers, promotions and Social Media Helps to support and
online or mobile features. interact with customer.
In house payment solution Starbucks CRM mobile app - Assist sales reps in
Click and collect and drop shipping by staying connected with prospects.
manufacturers are possible with digital Internet of Things - Improve customer
capabilities. experiences within the device and/or
Big Data - Analyze massive volumes of based on data regarding the usage of the
customer data that contains insights device like predictive maintenance.
into customer behaviors. Virtual reality Digital shelves and
Cloud Takes CRM to new level.CRM Kiosks.
data can be accessed from anywhere. Big Data Help treat customers like
Social Media Analyze social individual.Like Southwest Airlines started
sentiments of the product. using speech analytics to extract value-
rich data from live-recorded interactions
with customers.
Zappos is poster-child for exceptional
omnichannel service thanks to their
efforts in pleasing their customers.
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BPS_Offering Capability_Retail Digital Operations Studio_ppt
CII Retail 1.0 - KIX Webinar ver 0.3.3
Retail Value Chain Case Studies v1
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