Cloud-Ready Infrastructure for Retail

Retailers must reinvent themselves to outpace competition in this fast-evolving industry.

1 Retail Industry Trends

2 Power Personalized Experiences with Data

3 Modernize Brick and Mortar with Digital

4 Winning Over Customers with Fast Delivery

5 Embracing the Future with Oracle Engineered Systems

6 Customer Stories

Retail Industry Trends

Digital transformation and climbing consumer expectations are forcing retailers to rethink their IT infrastructure. Not only that, retailers today must deliver better customer experiences, improve supply chain management, and elevate in-store interactions.

Retail reinvents itself.

The retail industry is in the midst of completely reinventing itself. The digital revolution of recent decades has reshaped consumer expectations and behavior. It’s driving some household-name retailers out of business, creating opportunities for new entrants and business models, and driving all retail organizations to rethink their people, processes, and technology from the ground up. To remain relevant, and to survive, traditional retailers need to provide a highly tailored omnichannel customer experience (CX), update the function, role, and appearance of their brick-and-mortar stores, and vastly improve supply chain efficiency—all at the same time.

To meet these challenges, retailers are moving rapidly toward agile, primarily cloud-based IT systems. Retailers depend on these systems to support basic business infrastructure—ERP, database, analytics—as well as essential retail-specific functions such as merchandising, inventory and fulfillment, and customer relationship management.

The new customer experience.

A key focus for retailers is providing personalized customer experiences seamlessly across channels, both digitally and in-store. Customers find a personalized experience not just appealing—90 percent of them, according to Epsilon—now expect it. Nearly half of shoppers are even willing to share data with retailers—from their personal information to their location—to gain these improved experiences across all channels.

Omnichannel consumers—customers who shop both digitally and in-store—are far and away the most important portion of the contemporary retailer’s customer base. According to a recent global survey of retailers, although omnichannel consumers represent only seven percent of the overall universe of shoppers, they account for 27 percent of total sales. On an individual transaction basis, omnichannel shoppers spend about four percent more than the single-channel consumer per trip into the store, and 10 percent more online.

Brick-and-mortar stores find new life.

While a rash of store closings in 2017 and 2018 led to predictions of a “retail apocalypse,” the reality is that 90 percent of worldwide retail sales are still made in physical stores. But even if there is no widespread demise of brick and mortar, there is a fundamental change underway in the nature and role of the store. Today’s consumers, especially younger ones, expect more than merchandise on shelves—they expect an adventure. Retailers are transforming the physical store into a destination, blending the digital experience into the physical location for an enhanced and entertaining shopping experience that consumers can’t find online. Retailers that fail to reinvent their stores and create these unique and elevated customer experiences risk irrelevance—and extinction.

Embracing this change means adopting technologies like augmented reality (AR) and virtual reality (VR) to enhance the in-store experience. IKEA, for instance, has recently introduced an AR app that lets customers see how its furniture would look in their homes. Apparel and cosmetics brands such as Timberland and Charlotte Tilbury added VR-infused mirrors in some stores to make trying products more convenient.

The last mile becomes a top priority.

As retailers fight to stay relevant to today’s customers, the last mile in the supply chain—delivery—has emerged as a competitive differentiator. Overall, retailers are failing to meet customer expectations for delivery: nearly 60 percent of shoppers rate the delivery experience as mediocre at best. Retailers that successfully balance operational cost against fast-changing customer expectations for a prompt and transparent delivery experience can set themselves apart.

The stakes are high for getting it right: 70 percent of consumers say they will not shop with a retailer again after a poor delivery experience. With such a direct impact on revenue, the delivery experience is now a standard KPI.

This represents a business opportunity for retailers able to get on the other side of the dissatisfaction curve. While price is still consumers’ key consideration in selecting a delivery method, nearly 25 percent say they are willing to pay significant premiums to have their orders fulfilled more quickly. Retailers can expect this percentage to grow, according to a recent projection.

How can you prepare for the future?

The solution is to prepare your organization with cloud-ready IT infrastructure that is optimized for on premises as well as in the cloud: Oracle Engineered Systems.

These systems are designed, fully integrated, and optimized with Oracle Database to deliver faster retail reporting, improvements in supply chain management, better customer experience, business and product forecasting, and increased revenue and employee productivity. The Oracle Engineered Systems are integrated to eliminate data loss, a retailer’s most valuable asset and accelerate rapid data recovery across your enterprise. And they provide a seamless path to the cloud when your organization is ready.

Many leading retail customers around the world have already learned that they can optimize for today while planning for tomorrow, with Oracle Engineered Systems.

Power Personalized Experiences with Data

As retailers continue to drive down prices in a battle for customers, many are finding the best way to differentiate is by using data to provide improved, omnichannel customer service.

Retail success requires exceptional experiences.

Until recently, the major differentiators in retail were selection, price, and service. Now, in a global online market, almost no one has exclusive inventory. Price, driven by battling online retailing giants, is headed in just one direction: down. This leaves service as the secret to standing out in today’s hypercompetitive retail climate and providing exceptional service hinges on the ability to create a unique, omnichannel personalized experience.

The golden rule of customer experience (CX) is to “know thy customer,” and doing so requires data—lots of it. Today, retailers can gather data on consumers’ purchases as well as their interactions with email campaigns, banner ads, social media, apps, and different areas of the retailer’s own ecommerce site. They can then marry this data with the consumer’s brick-and-mortar behavior—purchases as well as coupons and offers redeemed—plus demographic and location insights to anticipate unique needs, tailor offers, and serve them up in the channels where each customer is most likely to respond.

This aggregated data can also be used to improve inventory assortment, merchandise displays, store layout, and in-store marketing and promotions. Proximity marketing technology like Bluetooth beacons can alert a consumer to a special offer matching his or her profile, further personalizing the in-store experience.

Harness big data and predictive analytics.

Data powers personalized, omnichannel retail experiences and retailers that are best able to use data insights to their digital advantage will thrive. Vast amounts of data are generated along every customer journey, and retailers must process and analyze that data to inform every digital and in-store customer interaction, project future trends and demand, and devise targeted marketing strategies. In other words, harnessing big data and applying predictive analytics have become competitive necessities.

What’s holding retailers back? They must be able to collect, process, and analyze enormous amounts of data—instantly. But the data often resides in disparate, siloed systems, hampering visibility and making it impossible to glean insights at speed.

By consolidating multi-vendor systems into a single optimized big data infrastructure built on Oracle Engineered Systems which integrate compute, storage, and network, retailers can assemble the intelligence needed. With marketing, inventory, sales, and other data pipelines, they can make smarter decisions in all aspects of the business. An integrated, efficient, and highly scalable IT infrastructure offered by Oracle is imperative to transforming retail operations.

Wumart uses data to meet customer demand.

When China’s leading supermarket chain, Wumart, introduced ecommerce to boost sales and competitiveness, it needed fast, streamlined IT infrastructure to support the massive amounts of data involved in completing hundreds of thousands of daily fresh-food orders and to gain more visibility into customer needs and preferences.

Wumart implemented Oracle Exadata to replace its IBM servers and storage appliances, migrated four Oracle Databases for SAP applications, and extended its warehouse management and business warehouse to Oracle Exadata. With Oracle Exadata, Wumart was able to process its orders eight times faster and generate reports 15 times faster than with the IBM infrastructure. Not only did Wumart save US$100,000 annually by streamlining its IT, it was also able to roll out new services based on better customer insights.

84.51° uses data to make personalization possible.

Analytics firm 84.51° goes beyond knowing which consumers like to buy bottled water or condiments; it tries to identify which ones prefer sparkling water to flat, or Dijon mustard to steak sauce. This required analyzing millions of data points about each individual consumer, including their reactions to previous promotions.

Using Oracle Exadata and Oracle Big Data Appliance, analysts 84.51° leverage a combination of conventional statistical packages and more-advanced machine learning algorithms to generate the analytics foundation required to deliver personalization at scale.

Listen to data from smart technology.

As the number of digital and offline channels and touchpoints available to shoppers continues to grow, so too will the breadth and depth of the data available to retailers. Voice assistant technology, including Google Home, presents a growing opportunity to craft and refine personalized retail experiences. In a recent survey of 1,000 Americans between the ages of 18 and 64, 50 percent of respondents reported using their voice assistant to make a purchase. An additional 25 percent said they may do so in the future.

The majority of these purchases were small and did not require visual inspection such as food, groceries, and books. That, however, may change as consumers become more familiar with the capabilities of voice assistants. While only three percent of respondents in the same survey had actually used their voice assistant to purchase clothing, for example, 22 percent said they may do so in the future.

As voice assistants flourish, retailers will need to harness and integrate the data from smart technologies into their personalization processes.

Seven & I Holdings makes omnichannel a reality.

Seven & I Holdings, headquartered in Tokyo, is one of the largest retail operations in the world, with 56,000 stores in approximately 100 countries. Brands include 7-Eleven, Ito-Yokado, Sogo & Seibu, Akachan Honpo, The Loft, Denny’s, and Seven Net Shopping.

The company was looking to launch an omnichannel program, Omni7, to connect all of its stores to customers using individual member IDs. The idea was to provide its customers with a broad, rich online shopping experience across multiple channels, allowing them to shop from any of Seven & I’s brands from a single website.

The company needed powerful infrastructure technology to quickly process enormous amounts of traffic, and selected Oracle Engineered Systems and Oracle Coherence, on a foundation of Oracle Exadata. By sourcing its entire infrastructure from Oracle, Seven & I Holdings was able to move the project forward much more quickly and effectively than if it had been assembling and integrating products from several different suppliers and coordinating their activities.

“An infrastructure that combines products from multiple vendors simply takes too much time and manpower to design, verify, and tune. Especially with a retail system, we need to think of customers first.” Yasuhiro Suzuki, Director, Executive Officer, and Chief Technology Officer, Seven & I Holdings'

Modernize Brick and Mortar with Digital

As consumers become more demanding and shift their attention from brick-and-mortar stores to online, retailers are realizing they need to deliver richer shopping experiences to bring customers in-store.

Stores evolve into destinations.

Many brick-and-mortar retailers are caught on the wrong side of the industry’s digital shift. They find themselves stuck in a dangerous cycle of falling foot traffic, declining comparable-store sales, and increasing store closures. To appeal to new shoppers and evolving consumer expectations, retailers must do more than just deliver good, fast service; they must deliver a modern in-store experience.

This is especially important to millennials and other digital natives, who place a high value on experiences. The convenience of online shopping simply cannot replace the high-touch in-store experience, and a recent survey found that “71 percent of millennials believe a significantly enhanced retail experience would increase their in-store visits and purchases.” Retailers must make the most of this opportunity.

As Oracle’s Chris Sarne, senior director product management strategy, Oracle Retail, states in How Consumer Expectations and Technology are Shaping Today’s Retail Store: “Today’s modern store…[is] where the retailer’s brand can be enhanced by nontransactional activities such as events—after-store-hours happenings and community gatherings. By enabling store associates to build relationships outside the sale/return/exchange cadence, they become the physical embodiment of the brand, allowing a more intimate understanding of their local customer base, which helps drive loyalty. The brick-and-mortar location transforms into a community destination rather than a place of pure transaction, which influences foot traffic and conversion.”

Layout, colors, and even the temperature within the store all play a role in creating an immersive in-store experience, but so does personalization. And technology enables personalization. Radio frequency identification (RFID) technology, for instance, automates merchandise tracking throughout the supply chain and helps retailers choose optimal stocking, manage inventory, understand what drives sales, and handle shipping. It can also shape CX and drive sales: in the fitting room, for example, a search of RFID tags on customer-selected merchandise can help an associate to make quick, accurate recommendations of alternative or complementary items.

Layer digital into the physical store.

Consumers today are rarely without a smartphone—not only millennials; 77 percent of Americans of all ages own smartphones. They not only want the option to shop either online or in the store; they sometimes want to do both at the same time.

Artificial intelligence (AI) and its sophisticated offspring, cognitive computing, can be used in the online experience to drive traffic to the store. Offers can even pop up on smartphones while customers are in the store—a kind of 21st-century version of Kmart’s “Blue Light Special.” Once there, customers at some stores can easily assess their product options, thanks to AR and VR, to enhance the in-store experience, creating a boon for retailers with expectations of as much as US$1.8 billion in additional revenue by 2022. As retail industry expert Michael Forhez, global managing director, consumer markets industry solutions group at Oracle, explains about how digital and physical stores will blend into a seamless, personalized experience: “further in the future, but not too far away, consumers may stop at a store to pick up groceries, and go into the store when it comes time to plan a party. Once inside, the future consumer will expect customized service—perhaps meeting with the butcher to select a special cut of meat, then talking to the wine steward about what wines to pair with the meal, and connecting with a decorating professional to get the party ambiance exactly right.”

The digital experience depends on being able to collect and use the myriad data that is being created by consumers from their phones and other mobile and desktop devices. By connecting all of the data coming from an individual, the retailer can get real-time insights and make personalized offers or deliver frictionless customer experience. Oracle Engineered Systems—designed from the ground up to handle these enormous amounts of data—provide the infrastructure needed for robust predictive analytics, POS solutions, and other innovative retail technology that creates a unique and personalized experience.

Retail in Four Dimensions: understanding Consumer Behavior in an Age of Relativity

7-Eleven personalizes the in-store experience.

7-Eleven stores might be an ordinary sight for US and Canadian consumers, but there’s little that’s ordinary about the retailer’s adoption of sophisticated digital technologies and strategies. Leveraging Oracle Engineered Systems, Oracle Exadata, and Oracle Enterprise Manager, convenience store giant 7-Eleven has launched a Digital Guest Experience (DGE) initiative across 8,500 stores in North America.

Every day, 7-Eleven connects with tens of millions of customers through point-of-sale terminals, websites, and mobile apps to promote customer loyalty, distribute targeted promotions, customize digital coupons, and accept digital payments. Through DGE and the 7-Eleven app, the company can see what each customer is buying, how often he or she buys it, how special offers affect buying behavior, and which offers individual store guests prefer.

One year after launch, app scans have more than doubled, and customers’ baskets have increased by an average of almost 25 percent. When customers redeem a free-drinks offer, they spend 30 percent more, on average, than they did before the rewards program.

Watch how 7-Eleven leverages Oracle Engineered Systems.

Winning Over Customers with Fast Delivery

Today’s customers don’t want to wait—they want products delivered straight away. This means retailers are focusing more than ever on supply chain management, ensuring they can meet demand.

Master the mile after the last mile.

The expectations of many of today’s retail customers can be summed up very simply: they want their demands met as soon as they recognize a need. And once they’ve made a purchase, they want it delivered immediately. Smartphones and apps have trained shoppers to expect instant gratification all the time—particularly when it comes to retail purchases: retailers report a 50 percent increase in last-mile services over the past 18 months.

This has transformed the definition of successful supply chain management (SCM). Today, SCM success is more about managing direct demand than it is about managing inventory to keep stores stocked. For large retailers, the supply chain must be demand-driven rather than cost-control-driven—capable of fulfillment within hours of orders being placed, whether by pickup at a nearby store, delivery by drone, or other means.

For every retail business or brand, whether or not it has physical stores, the supply chain now extends beyond purchasing, distribution centers, and store inventory to the individual customer. This final step—quick-as-possible order fulfillment—is the mile after the last mile.

Emerging technologies improve delivery.

Mastering the mile after the last mile will require transparency, automation, and speed, which certain emerging technologies deliver especially well. Additive manufacturing (also called 3D printing), in effect, custom manufactures individual orders and has the potential to shorten the distance between supplier and retailer, and between retailer and customer.

Blockchain holds the promise of reducing friction in supply chains and trading networks. Using blockchain’s transparent, distributed-ledger capabilities, retailers can create self-governed networks of suppliers, enabling automated smart contracts, instant payments, and sensor-activated shipments.

This would introduce greater efficiency and speed to the supply chain, particularly the delivery experience. By cutting down on human interaction, retailers reduce errors and information gaps that so often disrupt transactions. For instance, if a shipment unexpectedly needs to be rerouted, a retailer can learn about it immediately through an automated alert and take action to minimize downstream delays and hit delivery targets.

Modern IT infrastructure scales retail.

Technologies such as AR, the Internet of Things (IoT), and RFID hold the keys to creating a data-driven supply chain. They’re built on the back of cloud-ready Oracle Engineered Systems infrastructure that retailers rely on to store, organize, and process mission-critical data coming from customer interactions, supply chain activity, internal transactional data, and other sources.

For example, a limited database of supplier information is an idle asset. On its own, it won’t help a retailer find or become a trusted supplier who can meet variable product demand. But, by using highly scalable systems and cloud-ready data storage, retailers gain the extreme computing power they need to quickly process database workloads and take advantage of customer and supplier insights. They can quickly and confidently access real-time, automated insights and their customers can enjoy a richer digital and physical buyer and application experience.

What’s more, retailers require highly available systems with real-time data protection and recovery so that their data and transaction processing never fails. With Oracle Zero Data Loss and Recovery Appliance (ZDLRA), retailers have the ability to do live backups of consumer purchase information, and other data, while still running their business. It’s a win for retailers since they gain the security and peace of mind needed to succeed in this data-driven world.

For all of the changes that modern retail demands, one thing remains the same: retail is a highly competitive, low-margin business. Even while mastering the mile after the last mile, retail supply chain managers need to keep an eagle eye on costs.

“The biggest challenge in the last mile is matching increasing cost against spiraling consumer expectations. Next-day is already almost standard, and same-day is hot on its heels. Who’s going to pay for all this?” Paul Hamblin, Editor-In-Chief, Logistics Business

Technology and innovation are already providing some of the answers. Retailers—using the same data-crunching infrastructure that speeds their deliveries—are seeking the most optimal transportation routes and trying out new business models for shipping and returns in efforts to drive costs down.

Target delivers last-mile choices.

With more than 1,800 US stores, 38 US distribution centers, a robust ecommerce site, and 323,000 team members worldwide, Target’s retail operation is not short on complexity. Just three months after deploying Oracle Exadata—and just in time for the holiday season—Target was able to build and roll out “pick up at store” and “ship from store” at more than 1,000 locations.

Its new IT infrastructure enables Target to serve its online customers better, ensuring they receive their orders faster and more reliably. In addition to changing customer expectations, says Tom Kadlec, Target senior VP, infrastructure and operations, the new system is raising the bar for performance in Target’s supplier ecosystem.

Watch Tom Kadlec describe the benefits of Oracle Exadata at Target.

Haier Electronics Group accelerates deliveries.

Haier Electronics Group, which designs, manufactures, and sells home appliances and consumer electronics, operates more than 30,000 store locations across China as well as online stores, integrated distribution networks, and after-sales service networks.

To meet its pledge of delivering its products anywhere in China and providing products for free if it fails to meet a 24-hour delivery time frame in hundreds of cities and districts, Haier Electronics Group needed to eliminate database bottlenecks, increase transaction processing speeds, and improve efficiency in its Goodaymart sales and logistics network.

After in-depth evaluations and comparisons with other solutions, Haier Electronics chose Oracle Exadata to replace its HP database servers, and the results speak for themselves.

“Only Oracle Exadata could deliver the extreme performance and high scalability required to improve our operating efficiency and support the growth of our increasingly complex and integrated sales and logistics network. With Oracle Exadata, we’ve accelerated transaction processing speeds for [Oracle’s] JD Edwards EnterpriseOne by 20 times, achieved extreme scalability, and lowered costs—and, as important, we’ve improved our on-time delivery rate.” Cui Xiuyuan, ERP Project Manager, Haier Electronics Group

Embracing the Future with Oracle Engineered Systems

To stay ahead of the competition, and to create the best possible experiences for customers, many retail companies are embracing cloud-based technologies.

Retailers reach for the cloud.

Forward-looking retail companies are moving quickly to leverage new technologies such as AI, VR, and blockchain. They know these capabilities can drive growth and create a competitive edge. Because these new technologies were all born and leveraged in the cloud—and because of the cloud’s financial and operational advantages—retailers themselves are moving to the cloud. It’s the new operating model to optimize how retail business is run.

Macy’s achieves an integrated IT experience.

As Anantha Srirama, VP, systems and technology at US department store chain Macy’s, points out, “Applications are not just database or infrastructure. They’re really a combination of all these: storage, databases, application servers. They all have to work together in harmony.”

That’s why Macy’s chose Oracle Engineered Systems and Oracle Exadata Cloud Service. Rather than having to build its IT infrastructure using disparate components from multiple suppliers, the retailer was able to quickly deploy a completely integrated solution based on Oracle Engineered Systems so it can run on premises or in the cloud with the exact same experience.

Hear more about why Oracle was the natural choice for Macy’s.

Australia’s National Pharmacies delivers a unique customer experience.

Australia’s National Pharmacies, with 350,000 fee-paying members, has made it a priority to ensure each of its members feels valued. Its model varies from a typical retailer since it serves members, not customers. Members expect a more personalized experience than they would receive from a typical pharmacy or optical store. According to General Manager of Technology and Innovation Ryan Klose, “We’ve been a membership retail and health organization for 105 years, and we continue to harness a uniqueness in engagement and service that also strengthens our growth.”

To create that unique experience, Klose and his team need to be able to share information among three distinct groups: members, employees, and suppliers. A powerful suite of Oracle Cloud services and identity management based on Oracle Database Appliance enables the company to do it. A mobile app allows members to connect with National Pharmacies—exchanging information with pharmacists, accessing an online library of health information—and make purchases for which they receive rewards and promotions.

The mobile app is just the start. With the suite of Oracle Cloud services in place, National Pharmacies knows it can plan to quickly roll out new, customer-focused innovations—for example, Q&A chatbots and bot-assisted weight readings—to support new revenue streams.

A pivotal time for retail.

More and more retailers are choosing Oracle Engineered Systems to help create a robust IT infrastructure that will improve operations, support new technologies, deliver innovative and personalized services, and drive growth.

All Oracle Engineered Systems consumption models are cloud-ready when you are. Choose traditional on premises deployment, private cloud, or public cloud behind your firewall—and get the same set of world-class, fully compatible, cloud-ready capabilities.

Customer Stories

Hear from retail customers who are experiencing the benefits of Oracle Engineered Systems for themselves.

North America

Oracle Exadata Powers Innovation at Target

Target Corporation, SVP, Infrastructure & Operations, Tom Kadlec, discusses how Oracle Exadata is delivering greater value for Target and Target guests.

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7-Eleven Powers the Digital Guest Experience with Oracle

7-Eleven embarked on an innovation campaign to connect with customers through a digital guest experience. They leverage Oracle Engineered Systems.

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Retailer Tractor Supply Achieves 6x Faster Database Workloads

Tractor Supply Co. is one of the fastest growing retailers. Oracle Exadata has helped them expand to more than 75 stores per year organically and scale during peak seasons with zero downtime. Oracle ZDLRA reduced backup times to 10 percent of the prior infrastructure.

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Europe, Middle East, and Africa

Afibel Gets up to 10x Faster Response Time with Oracle Database Appliance (ODA)

Frédéric Vast from Afibel describes his experiences with Oracle Database Appliance. Afibel has been using ODA for the past three years, experiencing a stable platform and higher performance.

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Sonae Reduces Database Footprint and Improves Processing Speeds 5x to Boost Business Efficiency

Sonae enabled users to access relevant data and analytics rapidly and make increasingly data-driven decisions to improve business performance—thanks to 60 percent faster database transactions.

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Asia Pacific and Japan

DCM Holdings Analyzes Sales Data 50% Faster

DCM Holdings deployed Oracle Database 12c with Oracle Exadata, Oracle SOA Suite, and Oracle GoldenGate to standardize operation workflow across three subsidiaries. It can analyze sales data 50 percent faster after moving off Teradata, reduce IT operating costs by 40 percent, and support business expansion with a single-vendor solution.

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EDION Processes Customer Orders 42% Faster

EDION deployed Oracle Exadata with Oracle GoldenGate and Oracle Advanced Security to provide a high-performance, secure, and reliable core system. This ensures rapid data migration, reduces IT operating costs by 63 percent and provides a high-performing and reliable core business management system to support a multi-channel sales strategy.

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Wumart Stores Reduces IT Operating Costs by US$100,000 Annually

Wumart Stores replaced its legacy IBM hardware with Oracle Exadata to improve SAP application performance, process online orders eight times faster, gain insight 15 times faster, to ensure accurate and faster online orders, and enhance customer service.

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Latin America

Via Varejo Transforms Its Business with Oracle Exadata

Gilliard Delmiro, Via Varejo’s head of operations, tells us how Oracle Exadata brought reliability, high availability, and scalability to deal with growth.

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Natura Increases Order Capture by 125% per Hour with Oracle Exadata

Natura leverages the power of Oracle Exadata for their Oracle Database to deliver more application performance and availability to its consultants and customers, in addition to optimizing business operations.

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