New Oracle retail software tackles problem of fraudulent returns

Oracle's Retek Inc. and 360Commerce Inc. acquisitions will bear fruit next week at the National Retail Federation convention in New York.

Oracle and SAP AG's ongoing battle for supremacy in the retail applications market will escalate further next week when Oracle unveils two new pieces of software aimed at helping the retail set get more out of special promotions and overcome the problem of fraudulent returns.

Oracle's new Retail Returns Management and Retail Promotion Planning and Optimization applications -- expected to be unveiled Monday at the National Retail Federation's 96th Annual Convention & Exposition in New York City -- build on functionality Oracle acquired in the purchases of retail software makers Retek Inc. and 360Commerce Inc.

The two products being announced are important for Oracle because they demonstrate its ability "to take all of these assets acquired over the last couple years and show it can put things together in new ways," said Nikki Baird, principal retail software market analyst at Forrester Research Inc. in Cambridge, Mass.

With Retail Returns Management, Oracle is tackling the growing problem of fraudulent returns, which cost retailers about $9.6 billion per year, according to the National Retail Federation. Oracle says the software lets users accurately process returns across all stores through real-time return authorizations that screen for fraud by analyzing return behavior and identifying specific return patterns. The goal, said Sean Ford, Oracle's vice president of retail marketing, is to detect and deter criminals who take advantage of return polices to launder money, return used items and receive cash for stolen goods.

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Oracle Retail Returns Management also helps retailers ensure that all returns are from legitimate purchases and that employees are following store policies, Ford said.

The returns management application is unique because users can put highly dynamic return policies in place, Baird said. For instance, a company's biggest customer might also be the one who returns the most items, so it's probably not a good idea to hold that customer to the same return policies as most.

"I don't know anybody else who has that particular facet of their return policy management solution," Baird said. "They're taking stuff that's happening at point-of-sale and they're marrying it against customer tracking information within their loyalty application."

Ford said Oracle Retail Promotion Planning and Optimization combines planning, forecasting and analytics to help retailers profit more from special sales and promotions. It does so by analyzing the drivers of customer demand and the effectiveness of past promotions, he said.

Oracle says the promotion planning software lets users predict how much inventory to purchase and which inventory to promote on a location-by-location basis. It includes a graphical user interface and a centralized calendar view that can aid in planning promotions across multiple advertising channels.

Two differing approaches

Oracle and SAP have distinctly different approaches to the retail software market, Baird said.

Oracle, she said, wants customers to think of it as a one-stop-shop, best-of-breed, integrated retail suite vendor, whereas SAP's messaging to retailers has been more focused on performance and giving customers the opportunity to set and reach performance objectives at the executive level.

"SAP certainly has had a lot of success in Europe," Baird said. "But U.S. retailers haven't been quite as receptive to that."

An uphill battle?

Even if the U.S. audience is more receptive to Oracle, the company still has its work cut out for it in terms of getting retailers to adopt new technology. Historically, Baird said, retailers have lagged behind other industries in the adoption of new technologies -- especially when it comes to things like enterprise resource planning (ERP) and integrated software suites.

"I think in general, technology resources in the retail industry are a little more educated about what kinds of commitments you have to make if you're going to go down an ERP or a retail suite path," Baird said. "They're thinking about it, but they haven't started acting on it yet."

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