Microsoft Unveils Smarter Retailing Initiative, Providing a Comprehensive Solutions Framework to Unleash the Next Generation of Retail Innovation

NEW YORK, Jan. 12, 2004 — Microsoft Corp. today announced its Smarter Retailing Initiative (SRI), created to help retailers improve how they sell and operate, and provide a technology and solutions framework for enabling the next generation of retail innovation. The initiative focuses on three critical areas: Smarter Shopping, Smarter Selling and Smarter Operations. Based on extensive research, feedback from Microsoft’s customer advisory board, and industry-specific development investments by Microsoft’s retail-focused industry solutions team, the Microsoft®
Smarter Retailing Initiative provides an innovative approach, based on open standards, to allow retailers to take full advantage of their legacy investments by connecting the retail enterprise to the store and to the consumer. SRI fundamentally changes the retailer’s rules of engagement with customers and the customer’s in-store experience.

The initiative is launching with the active support of more than 20 companies, all of which have committed to delivering solutions and services that align with the Smarter Retailing vision and using Microsoft’s .NET Framework, the programming model for building XML Web services and applications. The companies include Accenture; BlueCube Software; Cap Gemini Ernst & Young; CRS Retail Systems Inc.; Dell; Fujitsu Transaction Solutions Inc.; HP; Infosys Technologies Ltd.; Intel Corporation; JDA Software Group, Inc.; Manhattan Associates Inc.; NCR Corporation; NSB Group; ProClarity Corporation; Retalix Ltd.; Sysrepublic; Trax Retail Solutions; and Wipro Ltd.

In addition, leading enterprise retailers such as 7-Eleven, Inc., Circuit City Stores, Inc., Costco Wholesale Corporation, Kinkos Inc., Meijer, METRO Group, and Rite Aid Corporation have recently adopted Microsoft-based solutions ranging from smarter operations to smarter shopping. One example is the use of Windows®
XP Embedded technology within the retail industry.

“Microsoft’s Smarter Retailing Initiative flows from our belief that there are many opportunities for innovation in the retail industry today, but they primarily lie on the edges, where retailers interact with consumers and manage their supply chains,” said Brian Scott, general manager for the Retail & Hospitality Industry Solutions Group at Microsoft. “We are excited that many industry-leading solution providers and retailers share our vision and are already working to help make it real for the marketplace.”

Smarter Retailing solutions will focus on three key areas, which work together but offer unique business drivers and financial benefits:

  • Smarter Shopping enables retailers to leverage their IT investments to create a seamless and personalized retail experience to satisfy consumers who demand service, convenience and information. Some focus areas include leveraging the digital devices that employees and customers already know, such as cellular phones and personal digital assistants, to differentiate product and service information.

  • Smarter Selling helps retailers maximize sales and customer satisfaction through labor deployment and by empowering employees with production location and inventory information as well as customer relationship management skills. The sales associate and customer interaction is improved through a more efficient and informed process, enabling employees to confidently address each customer’s question or need and even anticipate the customer’s needs before they are expressed.

  • Smarter Operations offers increased efficiency by providing real-time visibility into the metrics that drive profitability. This includes tools to easily manage the adoption of transforming technologies such as wireless devices and radio frequency identification (RFID). Focus areas include store management and flexible infrastructure.

“It is clear that the rules for engagement with customers are changing, and new technologies such as RFID are playing a big role,” said Jeff Smith, global managing partner of the Retail and Consumer Goods practice at Accenture. “Microsoft’s Smarter Retailing Initiative will help the industry embrace innovations that will allow them to turn customer information into insights they can use to tailor the consumer experience, differentiate themselves from competitors and win customer loyalty.”

Microsoft’s Smarter Retailing Initiative is built on open industry standards such as Web services and XML, and retail-specific standards such as IX Retail, OPOS, RFID and UCCNet. In addition, Microsoft has been working closely with the Association for Retail Technology Standards (ARTS), the standards division of the NRF, to improve the use of technology in the retail industry. Because of its focus on standards, the Smarter Retailing Initiative drives simplicity, consistency and true choice throughout the hardware and software ecosystem.

The Smarter Retailing Initiative was created through in-depth industry and consumer research with many of Microsoft’s key partners and numerous customers worldwide. The initiative was formed in part to help retailers respond to consumer demands for convenience and information on their own terms and across multiple channels, business demands for streamlined operations, and store demands for associate efficiency and customer service capabilities.

Microsoft has invested more than $6 billion in research and development this year on technologies that fulfill its evolving vision for the future of computing. The company also has created an internal group focused on the long-term vision of its companywide R & D efforts and how these efforts apply to industry verticals, such as retail. The group is playing a key role in demonstrating how innovations based on Microsoft’s current and future technologies can come together to meet evolving business needs. Some of these innovations will be demonstrated on the show floor at NRF.

The Microsoft approach is designed to maximize financial benefits now and across the technology life cycle. Smarter Retailing helps retailers win today by helping them make the most of current investments and win tomorrow by easing delivery of new retail experiences. The initiative combines a practical approach of benefiting from today’s digitally enabled consumer as well as providing the best path for simple and affordable integration of future innovations such as in-store communications (via IP or wireless) and RFID.

Microsoft is also looking into the ways in which small and midsize retailers can leverage the findings from the Smarter Retailing Initiative. Small and midsize retailers have unique needs, and Microsoft is working to better address them with Microsoft applications and technology offerings from independent software vendors (ISVs).

The Microsoft technology platform for the retail industry includes Windows XP Embedded, a retail-hardened operating system for rapidly and cost effectively building customized, task-centric devices such as point-of-sales (POS) terminals; Microsoft SQL Server (TM) for native retail analytics and reports; and BizTalk®
Server for superior integration.

The Microsoft Windows XP Embedded operating system is at the core of numerous POS and kiosk solutions, including the cash lanes and kiosks at RadioShack. Since its inception in November 2001, Windows XP Embedded has contracted more than 300,000 POS terminals and kiosks worldwide.

“The timing of this initiative is perfect. On the show floor at NRF, retailers are being exposed to a plethora of new technologies that will impact the future of computing, plus retailers are starting to recognize that many of the technologies that are currently deployed are nearing the end of their useful life,” said Gene Alvarez, vice president at META Group. “Microsoft, with its background in retail, enterprise and consumer technologies such as MSN®
, Smartphones, Tablet PC and Pocket PCs plus its work on emerging technologies, places Microsoft among the vendors that should be considered when seeking solutions and technology that retailers need to meet market demands and customer expectations.”

About Microsoft’s Smarter Retailing Initiative

The Microsoft Smarter Retailing Initiative helps retailers win today by leveraging current investments, and win tomorrow by easing delivery of new retail experiences. Consisting of Smarter Shopping, Smarter Selling and Smarter Operations, the Smarter Retailing Initiative is designed to close the loop between the retailer’s strategy, the in-store execution and familiar technologies already in the consumer’s hands. More information can be found at .

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Microsoft, Windows, BizTalk and MSN are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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