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Mi9 Synergy 2019: Ready To Accelerate

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I had the opportunity to attend Mi9’s annual Synergy conference in Las Vegas last week, to see first-hand how that company is poised to address the needs of retailers. By all appearances, the company is ready to accelerate.

That is good news, because for many years the technology choices available to all but the largest retailers that address core merchandising and planning challenges have been limited. Retailers with revenues greater than $500M have the same objectives as the biggest retailers do, but have to spend more on technology as a percent of top line revenues than their largest competitors. That limits their choices. Some time ago, I remember one of my CIO friends telling me, “I can’t even consider using <vendor-X> – it would cost me a million dollars just to say ‘hello’!”. It’s been a common complaint for years.

But today, new methods of developing business applications and new ways of delivering functionality as a set of services via the Cloud opens up new possibilities to a lot of retailers – and to those technology companies that are taking advantage of the new development and delivery methods. So these are exciting times for both those technology companies and the retailers they seek to serve, because of the potential to remove two of mid-tiered retailers’ biggest obstacles to success: that (1) legacy technology is in the way of progress, and (2) that the costs associated with new technology adoption are too high.

Mi9 has built the breadth of its “retail operating system” by acquiring companies (most recently, JustEnough and MyWebGrocer, both in 2018). While that’s not a unique strategy, the determined focus that the company has maintained in making sure that the acquired functionality can live well within Mi9’s data driven architecture is. Mi9 has developed what the company calls an “ingestion framework” that lives between business applications and data services, essentially taking operational data out of the applications and putting the information into a universally accessible data store. This enables that holy grail of retailer “high value” technology capabilities, a single view of product, inventory, and customer data. The applications that access the common data store are Planning, Merchandising, Point-of-Sale, e-Commerce, and Order Fulfillment. Mi9 promises that this data-driven strategy will deliver “accurate, reliable data, and disruptive insights” enabled by AI analyses.

Two Big Announcements: The Google Collaboration Agreement & Incentives

Mi9 made two important announcements at the Synergy 2019 meeting.

The first is that Mi9 has signed a “collaboration and innovation agreement with Google Cloud aimed at advancing the state of unified retail commerce technology. Google Cloud Platform (GCP) will serve as the foundation for the Mi9 Retail Cloud, providing Mi9 customers with one of the most reliable, secure, and scalable cloud platforms.” This is potentially huge for Mi9 customers, since it makes the power of Google’s world leading data and analytics available to them.

Here’s an example. Mi9’s e-Commerce application will be able to use Google’s Recommendations AI engine, which draws from Google’s digital assets (for example, Youtube, Gmail, etc.). Why is this important? According to recent Google research, 90% of consumer click-thrus, 40% of the conversions, and 50% of the revenue, are triggered by recommendations. This capability alone can help retailers that are trying to respond to the competitive threat posed by Amazon.

Google’s AI capabilities go far beyond recommendations, of course. The Mi9/Google relationship opens up Google capabilities like TensorFlow (an open source symbolic math library used for machine learning applications), and Google’s natural language processor (used for Contact Center functions), both which can accelerate innovation at Mi9’s retail client sites.

The second announcement is about incentives Mi9 is offering its current customers to move to the latest, cloud-based, version of the solution set. To encourage them to do that, Mi9 CEO Neil Moses announced that Mi9 will fund 50% of Mi9 implementation costs for strategic upgrades (Merchant, Demand Management, Mi9 Commerce Enterprise) for any existing Mi9 customer that signs up before June 2020.

Three Timely Offerings

The incentive that Mi9’s CEO offered to retailers highlights the company’s three areas of focus, core merchandising (Merchant), managing demand (Demand Management), and omnichannel selling and fulfillment (Commerce Enterprise).

Merchant and Demand Management make use of AI enabled analytics to do two things: to consume non-transactional data from the digital domain (for example, customer path-to-purchase info, market data, weather), and to automate operational decision-making (to improve demand forecasting, and optimize inventory).

Mi9 claims that its cloud-based merchandise management solution is a “95% fit for non-FMCG retailers”, emphasizing the company’s belief that retailer-specific customizations are not required. The objective is to lower implementation costs and to help retailers stay up-to-date with new functionality as it becomes available (in a sidelight to this, several customers at the meeting pointed out that prior to becoming part of the Mi9 portfolio, JustEnough did not roll user-requested customizations into the base code; Mi9 has committed to making those customizations generally available by including them into future releases). The company has also engineered “public APIs” into the application so that users can customize the user interfaces to suite their particular needs without touching the base code.

Commerce Enterprise is the next generation set of capabilities to support BOPIS (buy-online-pickup-instore). This release is the result of Mi9’s acquisition of MyWebGrocer, and it is particularly focused on handling the special requirements associated with FMCG retailers’ needs (large assortments, complex multi-level promotions, big customer baskets, and in-store order fulfillment).

Establishing A Position Of Strength

Mi9’s value proposition to the market is right in line with what RSR is seeing in our research. Next-generation demand planning and core merchandizing functions are top-of-mind for many retailers. And it is abundantly clear that fast-moving-consumer-goods (FMCG) merchants, principally grocers, drug stores, and convenience stores, have gotten religion when it comes to supporting consumers’ desire to order goods online and pick them up in the store.

Mi9 has been careful in its acquisitions, filling out its portfolio with capabilities that the retail industry is asking for now. The company’s integration strategy answers key concerns that retailers have expressed to RSR in its research about having a “single version of the truth” for key operational data and in ensuring that that data is clean and dependable.

Finally, the partnership with Google thrusts Mi9 into a position of real strength. Not only is Google a state-of-the-art operator of cloud-based services, but it is also one of the world’s pre-eminent providers of consumer-related data, and one of the technology world’s leaders in business applications for AI.

All of this is good news for retailers that have the same expansive vision as giant competitors like Amazon, Alibaba, or Walmart, but can’t afford the “high priced spread”. Mi9 is clearly focused on making it possible for those retailers to stand tall among the giants of the industry without getting crushed.

Newsletter Articles September 24, 2019