Microsoft Readies New Dynamics 365 Commerce to Ride Omnichannel Retail Wave

Microsoft has transformed its Dynamics 365 retail offering into an omnichannel solution with a common platform for e-commerce and physical store inventory, point of sale processing and customer management.

The new Dynamics 365 Commerce, set for release on Feb 3, was among several advances that Microsoft showcased at last week’s National Retail Federation (NRF) Big Show in New York. Microsoft was among hundreds of tech providers that traditionally have a major presence at the retail and consumer goods industry’s largest annual gathering, which show organizers claim drew 40,000 attendees, consisting of customers and partners.

At this year’s event, Microsoft was in the spotlight because the company has emerged as the key alternative to Amazon — the nemesis of retailers large and small. Given Microsoft’s stature among retailers and manufacturers, the NRF tapped CEO Satya Nadella to give the opening keynote. Nadella used the prime speaking slot to tout its work with the world’s most influential retailers including Kohls, H&M, Kroger, Ikea, Neiman Macrcus, Starbucks and Walmart, among others.

As many retailers continue to shutter, Nadella touted how creating personalized, multichannel digital experiences online and in the stores, is critical.

Microsoft’s Satya Nadella

“Every retailer needs to build their own tech intensity,” Nadella warned. “It’s not about taking away the art of retailing; in fact, if anything, it’s about reinforcing that core art of retail — that core operational excellence of retail.

“We are learning in terms of how we think about omni channel retail, and really taking all that learning, but more importantly, as a platform company, as a digital technology company, we’re engaging with all of you,” Nadella said, noting that 92 of the top 100 retailers use Microsoft’s cloud platforms and that retail drives 31% of global GDP. “That’s teaching us a ton about how to build technology so that we can serve your needs.”

E-commerce sales of $3.5 trillion worldwide accounted for more than 14% of all retail purchases in 2019, according to a recent forecast by Statista, which estimates the percentage will rise to 22% by 2023. As consumers use multiple channels – their phones, websites and increasingly smart speakers such as Amazon Alexa and Google Home – they increasingly expect those different modalities to become seamless and tied to with their experiences with a retailer’s physical store.

Yet, only 37% of retailers say they are using advanced technology such as IoT and AI to automate their supply chains, inventory management and autonomous checkout, according to results of a srecent survey conducted by Forbes Insights and Microsoft.

“The ability for you to be able to use all of these channels effectively is key,” Nadella said.

Last month’s holiday season reinforced that notion. At Microsoft’s own stores, 15% of customers who ordered online opted to pick up their merchandise at the retail location, Nadella noted.

“The expectation has changed where they really want that seamless experience,” he said.

The rebranded Microsoft Dynamics 365 Commerce will extend the existing retail offering and will allow partners to deliver a unified multichannel platform for retailers. It combines back-office, store and digital experiences that can engage across those channels with personalized capabilities. It comes with its own recommendation engine using Microsoft’s AI technology, which measures a customer’s purchase patterns. The offering also can interface with third-party recommendations.

“We’re taking everything we had in retail before and adding in a native digital channel,” said Brandon Sullivan, Microsoft’s Dynamics 365 product manager, during a demonstration at the company’s booth at NRF. “We brought an e-commerce solution natively into the product, so that you can interact with customers in a true omnichannel fashion.”

RSM was the first Microsoft partner to deploy Dynamics 365 Commerce. RSM helped Woodinville, Washington-based Chateau Ste. Michelle Estates, the largest U.S. wine distributor, implement the omnichannel platform for …