Deliver a successful Omni Channel Strategy by focusing on optimising people, processes and technology to service your customers across all touch points.

1. Whitepaper: Agile Commerce:
An Introduction for Retailers
Prepared by: Barry Hogan
Deliver a successful Omni Channel Strategy by focusing on
optimising people, processes and technology to service your
customers across all touch points.

2. Table of Contents
What is Agile Commerce? ....................................................................................... 2
Why is Agile Commerce Important? ....................................................................... 4
What does Agile Commerce look like from the trenches? ................................... 7
Conclusion .............................................................................................................. 10
About Version 1 ...................................................................................................... 11

3. Agile Commerce: An Introduction for Retailers
What is Agile Commerce?
Consumers are becoming more connected to the internet every
day. Whether they are using their smartphones to find discount
codes on twitter, using their smart TV to watch digital films that
they purchased free using their supermarket reward points
scheme, buying a discounted screwdriver set via a retailers daily
deal email, using a “Subscribe & Save” service to buy their
consumable goods or switching to a local vegetable box delivery
service purchased and managed through the web.
Users are both engaging with brands and buying products in new
and unexpected ways whilst spreading their purchase journey
across all available touch points. Gone are the days where you
could rely on a customer engaging through a single channel.
The “Internet of Things” has already turned Phones and TVs into
internet connected app stores; soon fridges, heating systems, cars,
watches, radios, printers, glasses and anything else you can
imagine, will become app store platforms, each fighting for the time
and attention of customers and each a viable touch point to include
in an Omni channel strategy.
Figure 2 - Twitter distributed promo codes
Retailers are constantly stuck with the dilemma: do you follow the
leaders in the field and risk losing market share to those who were
first to invest or do you invest in a user journey that does not deliver
the ROI that was expected.
Building good consumer facing digital services is hard. Plus
nobody wants to be caught in a three year project to buy, build and
deliver a platform or channel that may be obsolete before it goes
live.

So what do you build first?

Where are your customers engaging?

What will deliver the most ROI?
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4. Agile Commerce: An Introduction for Retailers
Agile Commerce is a set of processes and principles that can be used to help a retailer answer
these questions. Agile Commerce has its roots in Agile software development and Lean
manufacturing, both de facto processes in their respective industries.
Agile can be summed up by the principles of the Agile Manifesto. However, Agile is often most
recognised as a project management tool where the focus is on developing an organisation and
process to deliver value incrementally and consistently.
Omni Channel Retail
is focused on delivering a seamless shopping experience across all
channels. Forrester has tried to differentiate Agile Commerce from Omni Channel by making them
competing strategies; however Version 1 considers Agile Commerce and Omni Channel to be
complimentary strategies. Whereas Omni Channel outlines the vision of what a retailer wants to build,
Agile Commerce is the delivery engine that is used to build an Omni Channel retail experience.
Lean Manufacturing (Lean) is focused on the creation of value and considers anything else as
wasteful, thus a target for elimination. The Lean principles can be applied to both the process that
builds the product and the product itself.
“An approach to commerce that enables businesses to optimise their people, processes and technology to server
customers across all touch points.”
Martin Gill - Forrester - 27/11/12
While some organisations have been practicing Agile Commerce principles for some time, it was
Forrester who recently coined the term to identify those retail organisations that where reaching out to
their customers on all relevant touch points using a metrics driven, customer orientated approach.
Agile Commerce is big with the online pure play retailers
and has also become popular with more traditional retail organisations
The one thing that all these organisations have in common is that they are constantly
innovating whilst continuing to deliver growth and new business models for their consumers.
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5. Agile Commerce: An Introduction for Retailers
Why is Agile Commerce Important?
Implementing Change
“Businesses change slowly, but customers change quickly”
Sir Terry Leahy, Teradata Conference, 2011
“Retail is about trying things: constantly adapting, nudging and improving parts of the store.”
Richard Hammond, Smart Retail, 2011
The traditional retail business model is consistently being challenged by new organisations that do not
have the incumbent processes that prevent them from innovating. As a result, retailers are struggling
to find their feet in a digital world whilst new models and supply chains are eroding their customer
base and profit margins.
The online pure plays have built their business models and processes following the same
philosophies that they used to build the software that gave them their competitive advantage. As a
result, they have a core philosophy to embrace change which is enabling them to continue to deliver
and innovate in a constantly volatile environment.
“What is dangerous is not to evolve.”
Jeff Bezos
The IT procurement, implementation and management processes used to buy, deliver and run a till
system are designed to reduce risk by tightly controlling change. These processes are entirely
appropriate for solutions that are very well understood and provide a utility that changes very little
during the lifetime of the service; however they tend to create an environment that is opposed to
change and thus start to fall down when they are used to build, deliver and run a consumer facing
digital service where there is a high degree of uncertainty and an ever changing technology
landscape.
Figure 6 Traditional Buy, Deliver and Run model
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6. Agile Commerce: An Introduction for Retailers
Idea
• I believe that an “abandoned basket email will deliver a 15%
conversation rate”
Ideas
Build
• Develop a simple abandoned basket email service
Learn
Build
Deliver
• Push the abandoned basket email to 10% of your existing
customers (early adopters)
Measure
• Measure the conversion rate
Data
Deliver
Data
• Review the data
Measure
Learn
• Share the data and validate idea
Repeat
• If successful repeat the process and optimise or pivot and try
something new
Figure 7 – Agile Commerce Model
Organisations that operate in this environment need to adopt a different mind-set that enables them to
constantly iterate against user feedback and metrics, continuously evolving their service to meet the
needs of the consumer. The iterative process at the heart of Agile Commerce is focused around
delivering ideas early and then validating their success.
Eliminating waste
Jim Johnson of the Standish Group identified that the biggest waste in the software industry was
building features that users never used. With the fragmentation of the customer user journey it has
become increasingly difficult to get a cohesive understanding of how online activity drives sales,
especially when considered across channel. By using the techniques identified in Lean
manufacturing, organisations can develop their digital services iteratively, delivering only those user
journeys that deliver value to the customer, therefore eliminating waste and delivering a higher return
on investment.
“Something we haven’t talked about, but that is super important in our culture, is the focus on defect reduction
and execution. It’s one of the reasons that we have been successful for customers. That is something I had to
learn about… Well, by “learn” I mean I literally learned a bunch of techniques, like Six Sigma and Lean
manufacturing and other incredibly useful approaches”
Jeff Bezos Harvard Business Review, 2007
The fourth rule of Lean is that any improvement must be made in accordance with the scientific
method. Therefore all changes have to have a measurable impact, thus Lean thinking uses metrics as
the key driver for change.
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7. Agile Commerce: An Introduction for Retailers
“What gets measured gets done”
Peter Drucker, Management by Objectives
The only way to know that a change has had an impact to the value proposition is to measure it. It is
only through continuously iterating, measuring and optimising can digital services evolve into mature
platforms consistently delivering ROI and enabling the business to innovate and engage customers
across all relevant touch points today and in the future.
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8. Agile Commerce: An Introduction for Retailers
What does Agile Commerce look like from the
trenches?
Team
SOA architectures are recognised as the foundation for a scalable and maintainable service.
“Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the
organization's communication structure.”
Conway’s Law
Operations
• Run
Engineering
• Build
Business
• Design
A successful SOA architecture can be achieved by breaking the traditional linear and pillared
approach to software development and implementing cross functional teams that represent the
services required to build an Omni channel platform.
Figure 8 - Traditional Team Structure
Operations
Business
Engineering
Figure 9 – Agile Team Structure
Each cross functional team would be responsible for building, delivering and running their service and
should be composed of all the technical and business personal required to fulfil the full Software
Development Lifecycle (SDLC).
“If your team can’t be fed on two pizzas, then cut people”
Jeff Bezos
Teams should remain small, autonomous and decentralised to free them to innovate and implement
change without the fear of derailing the larger ship.
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9. Agile Commerce: An Introduction for Retailers
Process
The most common agile development process used is called Scrum. Scrum breaks down the
traditional V model of a waterfall project into time boxed iterations called sprints.
24 hrs
30 days
Product Backlog
Sprint Backlog
Sprint
Working increment of the
software
The vision for the platform is broken down into discreet user stories that represent a user’s needs and
are catalogued in a prioritised product backlog. The product backlog should be easily accessible and
is often represented on a wall using post-it notes for each story. Good user stories are written from
the customer’s perspective and include the “what” and “why”. To make sure that you are tracking ROI
every story should include a metric against which success can be measured:
User Story: “As a customer I want to be notified when regular breakfast cereals that I purchase are included in a
special offer so that I can manage my budget effectively and get the best deal possible”
Metric: Measure email click through rates for personalised emails based on a customer’s previous purchase
history.
At the beginning of each sprint the next set of prioritised stories are selected by the team and they
commit to delivering those by the end of the time boxed sprint. The key to a successful agile delivery
process is to keep the “in process” work as small as possible, therefore when adopting Scrum as the
agile methodology it is important to keep the sprint as short as possible. Version 1 recommends that
sprints should be no longer than one week in duration.
Agile teams should use the same continuous improvement processes used to optimise their digital
service on their delivery process. Thus a mature agile team should be able to measure the time
between idea to delivery to validation in days, not weeks, months or years. Once an agile team
reaches maturity alternative agile methodologies such as Kanban should be considered to replace
Scrum, as Kanban provides greater flexibility in workflow as the need for fixed time boxes is removed.
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10. Agile Commerce: An Introduction for Retailers
Delivery Focused
Agile teams have a strong customer focus that is hinged on software delivery. As a result there are a
number of agile mantras that can often be heard within an agile team.
“Release early & release often”
“Going live is the start, not the end!”
Agile teams look to deliver working software to a live production environment early and often. It is not
uncommon to see agile teams delivering working software daily. This can only be accomplished when
the whole team is focused on keeping software production ready at all times. This focus results in an
engineering environment where automation is used to continuously build and validate the platforms
suitability for a production release. The target would be to have a fully autonomous delivery process
that integrates, tests and deploys the changes automatically into a staging environment so that the
business can make the call for when they want the software changes deployed. It is important to note
that “releasing to live” or “go live” are terms that should be associated with the business deciding that
they are ready to start promoting the service, rather than a technical milestone of delivery and should
therefore be decoupled.
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11. Agile Commerce: An Introduction for Retailers
Conclusion
Agile Commerce is a philosophy that combines the best of Agile Software development and Lean
Manufacturing principles to enable a retailer to build a delivery engine that puts the customer first and
delivers value iteratively, based on real numbers.
Version 1 advocates the adoption of Agile Commerce philosophies to enable digital services that
engage customers and support entrepreneurial retailers while at the same time keeping a measured
view on ROI and IT spend.
Next Steps
For retailers considering the Agile Commerce route, the actionable next steps would be to define an
overall vision and start to build a comprehensive product backlog. If existing ecommerce websites,
apps and services are deployed, Version 1 would recommend that the TOGAF Architectural
Development Method (ADM) is used to establish the vision, baseline and target architectures required
and to define a roadmap for incorporating the necessary changes to people, process and technology
required to deliver a viable Agile Commerce environment.
In line with the philosophies outlined in this whitepaper, Version 1 would recommend that the agile
principles are used iterate through the TOGAF ADM and apply lean thinking to evaluate, define and
implement change to the organisation.
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12. Agile Commerce: An Introduction for Retailers
About Version 1
Established in 1996, Version 1 is a trusted technology partner to major domestic and international
customers across all industry sectors in Ireland and the UK. Version 1 has accumulated in-depth
expertise in the Retail Sector and helps leading commercial retailers to deliver solutions which
achieve competitive advantage in this highly competitive and constantly shifting market.
Version 1 operates enhanced partnerships with Oracle, Microsoft and Amazon and has achieved
unrivalled breadth and depth of competency in all three. Our 400 strong team, based in offices in
Dublin, Cork, Belfast and London, are focused on proving that IT can deliver real benefits to our
customers’ businesses.
Version 1 Whitepaper
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13. Agile Commerce: An Introduction for Retailers
Version 1
Version 1
UK Head Office
Ireland Head Office
45 Moorfields
Millennium House
Moorgate
Millennium Walkway
London EC2Y 9AE
Dublin 1, Ireland
Version 1 Whitepaper
www.version1.co.uk
www.version1.com
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