1 2 3 18 Previous Next

SAP for Retail

258 Posts

Fashion, it’s a world of its own. You see, while most of us don’t know what we’re wearing tomorrow, fashion folk are already busy designing what we’ll be wearing in a year’s time. They’re always seasons ahead with innovation, creativity and style. But how do they stay there? Well, hip designs are just part of the story…


Tommy Hilfiger is one of the world’s favourite fashion and lifestyle brands. They process orders for more than 100 million items worldwide-- every year. And, they cannot afford even one of those items to be late. To achieve this, all operations have to fit together seamlessly – because if one thread untangles, the whole system unravels. No purchase order means no distribution, and no sales order mean no purchasing. It’s a real balancing act and it takes more than just fantastic creative and business minds to orchestrate the process. Innovative fashion relies on the most forward-thinking technology to succeed.


Tommy Hilfiger has long been running SAP applications. Now, they are following in the footsteps of their mobile-savvy consumers with SAP mobile applications. It’s no longer just fashionistas that browse the latest collection on their mobile phones, retailers can too. Using their iPads, salespeople can socialize Tommy Hilfiger’s whole look book, complete with high-quality images.  And, thanks to SAP Afaria, they know that their data is safe – a concern for many retailers that are considering a mobile strategy. 


Even if a device is lost or stolen, Tommy Hilfiger can wipe its look book from that device it in under a minute.  As a result, the brand’s designs remain safely under wraps, its competitors are kept in the dark and as for its fans, well they’re left guessing for yet another season.


Watch the Tommy Hilfiger video >> http://bit.ly/1iJWAdz

Aimee McMullan

Show Me The Money

Posted by Aimee McMullan Aug 26, 2014

‘Showrooming’ refers to a customer visiting a store to research products and compare prices right there and then. It’s a phenomenon that has changed the retail environment, with 82% of US and UK shoppers doing it! But retailers can’t always beat or match a price, so how do they get customers to buy from them?


Shop outside the box

In China, many retailers are becoming realtors, by using a store-within-a-store format. They get rent from vendors who in turn get brand exposure – whether a purchase is made in-store or online. Many retailers are asking if they even need stores. To compete with Amazon, companies like Carrefour are turning shops into warehouses. That way, customers can pick up items or get same day delivery. They are changing how they use space, to offer customers ‘instant gratification’.


Retail feng shui

South Korean retailers are re-imagining shop space too. 91% of its population connect on 4G networks via smartphones, so Tesco took the opportunity to offer Seoul subway commuters a ‘virtual grocery wall’. Customers can scan-and-buy products on their way to work and find their groceries on their doorstep when they get home.


Be different

Customers showroom in competitors’ stores too. So, retailers can use price comparison providers to offer special deals: when a product is scanned by a competitor, they can serve up a better price. Retailers can also go further by offering unique products like Tesco’s Hudl and Amazon’s Kindle. Alternatively, loyalty schemes can also make you stand out, and customers pay a premium. Many customers choose British Airways over EasyJet (even though they share departure lounges) thanks to the airmiles rewards. 


The human touch

It is important to remember why customers visit a store in the first place - the human touch is something a tablet can’t provide. You can pick something up, try on a garment and talk to a friendly face.  John Lewis encourages ‘showrooming’ by offering free Wi-Fi in its stores. They can’t always beat the price, but they can create a personal experience and build brand relationships that’ll bring sales down the line.


Retailers are waking up to the fact that a store is only part of their channel network. It has to work with their e-commerce site, and app too. So, store? Showroom? Or something no-one has thought of yet? SAP can help you decide > http://bit.ly/1iJWAdz

Opening with a vivid example of how power has shifted from sellers to buyers, Pat Bakey, Global GM for Retail, addressed the 58th Global Summit of the Consumer Goods Forum in Paris. He shared the adventures of “Sonia,” a connected consumer of the Millennial generation living in Paris.


“She is willing to share personal information about herself with companies and retailers only if they can tailor her experiences, deliver products and services that suit her lifestyle at the right time and context”, explains Pat.  “Sonia has woven technology into her life and expects all the benefits, convenience and immediacy that come from being connected in every sense of the word.”


The Forum is a global network of CEOs and senior executives from 400 elite retailers, consumer goods, and service providers from over 70 countries. Its mission is to bring together consumer goods manufacturers and retailers to address positive change across the industry that benefit shoppers.


This year’s theme, ‘Growth Through Change’, sheds a global perspective on the digital shift that is marking our century. The Global Summit is a CEO level event in which they gain key insights into the challenges facing retailers and consumer product companies today. As a whole, the attendees are strategic decision-makers and key influencers in defining the future of the retail and consumer industries. Several key retailers are active in governance: Carrefour, REWE, L’Oreal, AEON, Dohle Handelsgruppe; with summit participants ranging from to Ahold and Amazon to Walmart and Woolworths SA.


SAP took part in a well-attended session with Pat Bakey (highlight video) addressing the timely topic “Responding to the Next Wave of Retail Disruption.” Accenture, Ernest & Young, and Boston Consulting Group were among the companies addressing the Global Summit attendees.


Surfer _2 - 274473_l_srgb_s_gl.jpg


Applying the metaphor of an ocean surfer, Pat spoke of the inherent power that comes by timing the wave just right, of tapping into that amazing source of energy to create a truly memorable experience.  The key to responding and harnessing the energy of the next wave of Retail begins by understanding changes along three concentric circles of industry, consumer, and technology.

  • What’s happening in your industry: supremacy of the super aggregators such as eBay, Amazon, and Alibaba; new business models and value chains; and, going direct to the consumer
  • What’s going on with your consumers: information overflow from word of mouth and peer Sharing; experiences trumping transactions; the call for ethical and sustainable business practices;  innovate with your customers for new revenue; the ‘Now’ economy requires real-time business
  • What are the latest technology trends:  ubiquitous utilization of technology; attacking retail’s complexity; Big Data from insight to action; digitization of everything and Internet of Things; and, delivering on Omni-commerce


With the confluence of the above trends, retailers find themselves at most risk as they run a complex business AND find their shoppers dictating their world.  We have all become fully aware that customers are driving everything across all industries, but nowhere is this phenomenon more true or intense than it is in Retail.


So how will retailers and consumer products companies respond?  Just as in ocean surfing where risk resides below the surface and opportunity above - simultaneously, retailers and consumer products companies can shift the risks in these disruptive trends to tangible opportunities across by listening to and inventing for, and with, their customers. "Technology only matters when we can create value for people! Innovation will help the Retail and Consumer Products industry to open new dialogue with their shoppers to deliver more value and drive loyalty through new interactions."


You can join me on Twitter @bizuser
And you can engage Pat Bakey on Twitter @pbakey

Aimee McMullan

Follow The Leader

Posted by Aimee McMullan Aug 14, 2014

With 1.6m Instagram followers, and 17 million Facebook fans, Burberry is the leading luxury lifestyle brand. Profits are figure-flattering too, with annual sales of US $3 billion. So, what’s its secret?


Swap shop

“What’s unique about shopping today is, consumers are willing to trade a certain amount of privacy for relevance”, explains Paula Rosenblum, managing partner at Retail Systems Research. “But they have no tolerance for retailers who do not curate their offers and assortments and provide irrelevant information, like marketing offers that reflect no knowledge of who they are.” One way Burberry knows who its customers are, is by asking them. Its ‘Customer 360’ programme invites shoppers to share their fashion phobias, buying history, and preferences online. By throwing consumers’ social media profiles and purchase history in the mix, Burberry has created a unified customer experience, driven by data. And there were no cloak-and-dagger tactics - they just asked.


Does my brand look big in this?

So, what do Burberry’s customers get in return? Well, a better in-store experience for one. Sales assistants, in any Burberry store, can use tablets to make on-the-spot recommendations. It’s a killer combination of buying history, Twitter posts, and data on fashion trends. Customers are greeted by name and knocked out by a product thats just for them - say, a clutch bag that’ll go with the dress they just bought on holiday. With ‘Customer 360’, Burberry’s staff have pocket Gok Wans, powered by predictive analytics. Customers can use their own devices too. Burberry attaches radio frequency identification (RFID) tags to clothes in order to trigger interactive videos. So, customers can learn how products were made, watch items being cat-walked by models, and see its must-have accessories. Speaking of its stores, Burberry CEO Angela Ahrendts says, “Walking through the doors is just like walking into our website.” With intelligent use of data, Burberry is delighting customers and driving in-store sales through a unified personal touch. They are no longer just brick and mortar shops, but digitally-integrated showrooms.


Take it personally
Today’s customers expect this kind of connection with brands they love, and interactions are taking place in-store, online, and across all devices. For brands to achieve this kind of intuitive customer experience, they need the clout of in-memory computing to analyse big data, quickly enough for sales staff to see a customer’s likes and cross-sell items faster than a re-tweet.


So, the old adage of ‘give the right offers at the right time’ still rings true. But now the checkout can be anywhere, purchases made at any time, and the groundwork for a sale made by the loyalty a brand has built up. One way to create this connection is by embracing disruptive technology like mobile. As Blippar CEO Ambarish Mitra says, “We live in a physical world and that world is not going anywhere, but we need to start connecting the user and the brand, between the physical and the digital”*.


Part of this bridge-building is enabled by SAP HANA. Discover how SAP is helping retailers make this connection and deliver multi-channel, personal shopping experiences. Go to http://bit.ly/1oRaQWQ

Remember the days when you had to keep track of your favorite trends or new items to shop for? 

Those days are long gone.

Now, the power is with the customer. Each consumer carries thousands of recommendations in hand, as well as trend reports, video tutorials, competing product information, and so much more. Consumers are no longer limited to advice from in-store salespeople before making a purchase, but instead have a wealth of content to reference that is independent of the retailer.

In short, the advent of wireless internet and Big Data created the opportunity for a more educated consumer with expectations of a modern retail experience.

Retail shifted from the traditional, in-store experience toward one allowing for convenient shopping in a cyber space. Many factors combined to create a personalized virtual experience and converted passive content consumers to active online shoppers.


In addition to transforming the digital space, new Big-Data-related technologies revolutionized brick-and-mortar shopping practices. Such technologies are aligned with the trends promoting customer-centric applications that enhance consumer experience and simplify existing processes. Take for example, the new wireless iBeacon technology that bridges the in-store and virtual shopping experiences, bringing the convenience of online shopping to the “real world.”

According to a recent article in Forbes, “The iBeacon technology allows iPhones to seamlessly connect with physical sensors, called beacons, placed within stores…Retailers can use [this technology] to determine not only shoppers’ precise locations but also what product a shopper is looking at or which department he or she is in.”

Essentially, a consumer’s steps inside a retail establishment are used to instantly facilitate their experience. iBeacon provides shoppers with customized retail experiences tailored to their personal style, shopping habits, and preferences. Users are also notified about special deals and discounts through this application.

Because of this, shoppers can make informed purchases and avoid incurring the lost time of return trips to their retailer. In addition, the ability to get product information automatically delivered to smart phones before purchase better ensures customers enjoy a more cost effective and therefore, satisfying experience.

Consumers are not the only beneficiaries. According to Apple Insider, retailers can “use data sent by users' handsets to monitor any number of metrics, including customer traffic,” to enhance the attractiveness of their stores.

The applications of Big Data are happening now, constantly growing and shaping a new realm of retail. As Colin Haig says in his SCN post Why Re-invent Retail?, Mobile plays a huge part in the future of omnichannel retailing. It’s a means of connecting and communicating with all shoppers in store, in real time. You can engage shoppers on an individual level…at the point of decision making. It’s what SAP calls ‘Retail. Right. NOW.’”


This technology is providing consumers with simplified processes, unique experiences, and is ultimately establishing a more gratifying, productive relationship between retailer and consumer.



To learn more about how to get started with Big Data, visit us on: http://www.sap.com/solution/big-data/software/services/index.html

Question: What do you get when you take millions of people in emerging markets that are rising to the “middle class” and add them to a millennial generation with a voracious appetite for consuming products, services and gadgets?

Answer:  Supply chains under massive pressure.


Supply chains have never been as long or as complicated as they are today. The globalisation trend of the last two decades has meant that even smaller companies have had to build extended supply networks just to keep pace with growing demand in diverse locations.


In emerging markets as a whole, the middle class has grown from a third of the developing world's population in 1990 to over half today. The developing world is no longer simply defined by being poor. The buyers of today (and tomorrow) are the growing and increasingly well informed and connected global middle class who are not accustomed to having to wait for their needs to be met.


With many companies now trying to differentiate themselves by the responsiveness of their supply chains, the transition from a supply chain to a demand network has already begun. There will come a time in the not too distant future when supply chains will not be chains at all, but rather will transform into demand networks.  For this to happen, it means breaking down the silos and embedding supply chain functions directly into the most powerful functions of the company, such as merchandising, marketing, engineering, service, and logistics.


For example, industries such as retail, consumer products, and high-tech need to become much more tightly integrated with marketing and merchandising organisations. Logistics service providers or wholesalers should leverage market data and customer insights to create new products and services for their customers. Only then can companies unleash the real potential of demand networks, eliminate redundancies, create efficiencies, and introduce truly innovative and differentiating processes.


Sounds good doesn’t it?  Most companies today aren’t there yet, but technology has gotten considerably easier to use in recent years and is having a huge impact. Mobile, in memory computing and cloud are making supply chain optimisation and efficiency much easier now than in days gone by, but you still have to get your house in order with the right processes for integration, collaboration, transparency, traceability and sustainability.


As a business you need to plan, but chances are you also need to adjust those plans due to unexpected surges or shortfalls in demand and changing supplier capabilities. With the right tools, you can now automatically examine alternative scenarios. After the right response is determined, a history of the logic that went into why that is the best of different alternative responses can be stored. This type of advanced visibility is changing the way we think about supply chain agility and innovation, and the insights we can gain into how our supply chains are performing.


Leveraging the wealth of performance data about the supply chain enables real time analysis, provides insight into fragmented business processes and achieves a deeper level visibility.  Not all companies are ready or able to transform their supply chains into demand networks as yet, but they can certainly transition from management by exception to management by information.


I will be continue to blog about the topic of next generation supply chain in Retail as it evolves. Looking forward to hearing from you. You can leave a comment in the comments section below, email me at : joerg.koesters@sap.com or send me a tweet at @joergkoesters


Retail LoB CTA.png

I’ve just re-read a recent Bloomberg Businessweek survey on supply chain innovation. It did put into context just how much the supply chain needs to transform. Supply chains have not only become increasingly complex and globalised, but suppliers are being squeezed to deliver maximum value for the minimum cost, and control is rapidly moving into the hands of consumers, who expect what they want, when and where they want it. In fact, today’s hyper-connected customer expects just about everything to be faster and instantly available. So the need to transform has by now become a reality for all Retailers.


Retailers in particular must reinvent their supply chains into flexible infrastructures with both inventory visibility and intelligence to accommodate consumer expectations who want to shop seamlessly across store and online presences and want to be able to choose on where and how to receive the goods. According to the Bloomberg Businessweek survey, a whopping 73% of companies say supply chain tools are important in meeting their company goals, yet the painful reality is that many are falling short in delivering the type of detailed information fast enough to compete in the brave new world. Left unchecked, this huge functionality gap could put entire businesses at risk.

One of the biggest problems is analytics. Seventy one per cent of respondents claim their current analytics tools only provide insights about prior performance. You can’t predict requirements just by looking in the rear view mirror.  To make matters worse, 59 per cent claim their existing supply chain analytics tools are too slow and that it simply takes too long to get an answer.


How is anyone supposed to make decisions rapidly and accurately using outdated, traditional systems? The short answer is you can’t. Clearly, it’s time for a rethink. Traditional supply chain tools cannot keep pace with the digital modern commercial landscape. And they certainly can’t keep you competitive.


Commerce engines such as customer relationship management and content management are bringing knowledge from the digital space and offering information on customer interactions such as online research and purchasing. Put it all together, and you’re able to leverage insights that will enable you to better personalise and contextualise end-to-end experiences to increase customer satisfaction and loyalty.


Rethinking the supply chain isn’t just about harnessing data. Retailers are also expected to accommodate both physical and digital multi-channel experiences. Like it or not, the omni-channel environment is upon us, making the need for supply chain agility and innovation greater than ever.  Obsolete supply chains designed for a single channel world have no place in today’s market.


Retail leaders have taken this one step further already and talk about Omnicommerce which means a seamless experience across all channels with consistent experiences, flexible delivery, inventory visibility and availability across channels.

If your supply chain systems cannot master the flow of relevant data, chances are you will not be competitive. Success  - and in many cases, basic business survival - depends on having real-time information that enables you to make decisions quicker while giving you visibility, predictive capabilities and most of all, control of your commercial destiny.


I will be continuing to blog about this topic as it evolves. Looking forward to hearing from you. You can leave a comment in the comments section below, email me at : joerg.koesters@sap.com or send me a tweet at @joergkoesters


Regards, Joerg

Retail LoB CTA.png

Have you ever wondered how retail web sites like amazon.com suggests and recommends other products, when you are looking at any item on the site. Before I share how it is done, let me lay out some background.

Every Business and specially retail business is always looking to answer questions around their customers such as How should their products be bundled? Which customers are most likely to leave? What are their customers talking about? Who are their most valuable customers? and How can we improve marketing campaign response? etc.

To respond to these questions, business collect huge amounts of data on customers, products with objectives of customer acquisition, customer retention, up sell or cross sell etc.  Then Data mining and analysis on this data can potentially answer these questions.

These answers are achieved using predictive analysis by spotting patterns in data and by mining data, using various clustering, classification and association analysis techniques for the unexpected insights or facts.

The traditional data warehouse implementations and data mining and that with predictive analysis have been employed typically by large size business only i.e. only those which could support a fairly complex information management infrastructure.


Now with the availability of SAP HANA Technology platform, such analytics are in the easy reach of any information worker. It even becomes easier for the business user, since these analytics can be provided as a HANA Cloud Platform solution as well.

I have been able to successfully build such applications on HANA Cloud Platform, which only requires data file from business user and all customer analysis can be performed real time and results shared instantaneously using a secure single sign on functionality.


Typical customer analytics include

  1. Customer segmentation allowing analysts to understand the landscape of the market in terms of customer characteristics and whether they naturally can be grouped into segments that have something in common and unique marketing campaign be done for each customer segment.
  2. Product Segmentation allowing the optimization of using product affinity; in most cases using Market Basket Analysis.
  3. Voice of customer and sentiment analysis on customer feedback and social media.You may see my earlier blog on this topic here at Voice of Customer , Sentiment analysis & Feedback service
  4. Customer Churn analysis, allowing to predict if business is going to loose any segment of their existing customers. Read about employee churn or turnovers in my blog here at Will your Employees leave in (say) next 2 years ?as an adaption of customer churn example.
  5. Upsell and Cross sell which aim to provide existing customers with additional or more valued products. This falls in the category  of what  sites like Amazon.com uses.


To implement it I chose to use Association analysis predictive algorithm which uncovers the hidden patterns, correlations among a set of items or objects. It helps to understand what products and services customers tend to purchase at the same time and thus by analyzing the purchasing trends of your customers with association analysis, you can predict their future behavior.

In order to perform association analysis, transaction history or list of Sales orders items is needed and  real time analysis can be performed in HANA in memory database . Analysis is done on products bought together or bought over a period of time i.e. not necessarily on the same date & time and rules are identified. Rules such as for example 98% of customers that purchase tires also get automotive services done or customers who buy mustard & ketchup also buy burgers.

Such analysis become basis of rules or past behavior and proposals such as frequently bought items together or customers also buy a product when they purchase a product can be made from these rules. So a rule is classified as if a customer buys a specific product(s) then customer also buys another product(s).

Such proposals can be helpful in retail not only for providing recommendations  or cross selling to customers  but also can further help in store layout, planning for buying patterns and add-on sales .


The key to use these rules or patterns is to understand how useful they are . Statistical terms for the usefulness is Support , Confidence & Lift indicators.

Support is indicator on how frequently the buying pattern is happening i.e. higher the percentage the frequent is the purchasing pattern. For example of all the sales transactions how many times transactions did have mustard, ketchup and burgers ?
Confidence is indicator how certain is this rule ? i.e. Of all the transactions that have mustard and ketchup how many did also have burgers ? because there can be transactions where customers bought mustard and ketchup but did not buy burgers.

Higher Support and Confidence values are good indicator of a useful rule. However it may not be always true. For example in lots of transactions customers could have bought the so called another product anyways, irrespective of the specific product bought in first place or not. i.e. they might be purchasing burgers a lot of times, without buying mustard and ketchup , so it weakens the confidence of rule that if mustard & ketchup are bought then so is burger . So we need to compare the confidence with another indicator  which is number of transactions that will have specific product (in our example burger) out of total transactions.

The ratio of confidence and this new indicator is called Lift . Lift value of more than 1  makes the rule useful.

Running association analysis on several thousands of transactions often results in multiple rules. It is advised to break the rules that have minimum support called large itemsets and the use these large itemsets to find rules with atleast minimum confidence.

For example see image below in which first row is an example of rule that whenever a customer purchases product 15686 then customer also purchases 15692 . This rule has over 46% (i.e. it occurs quite often) support value and 95% confidence value.


Shopping basket rules 1.jpg



In the attached video here, for my test application I am sharing the results in a table display. To keep data private, I am using SAP Product numbers on display though Product description will make more sense to the business user.


The rules are available in both JSON and Predictive Model Markup Language (PMML).

A REST web service can  be easily made available on HANA for any web site application to read these rules.


My testing's done on roughly 50,000 transactions or sales line items of test data records, which was extracted from SAP ECC system for a chosen time period. Chosing different time period allowed me to do comparative trend analysis of this predictive behavior analysis, and it could be basis of a further what if investigative analysis for planning of sales in future time periods for different regions or sales areas and/or customer groups. i.e. see purchasing behavior of your customers in Alaska versus customers in Florida in the month of may for past few years , can you spot a pattern ?


Earlier this month, SAP celebrated our customers’ and partners’ success at the premier business technology conference -  SAPPHIRE NOW and ASUG user conference in Orlando, Florida.  It was a resounding success by any measure. Notably, SAP Retail was met with validating enthusiasm by customers, partners, industry analysts, and the retail press – on both new solution releases and future product direction. We have experienced emphatic market adoption of our new technology offerings and have seen the transformative business opportunities that SAP HANA and SAP Customer Activity Repository present to retailers primed to operate at the real-time speed of the shopper.

Our investments are paying off as we deliver on the tools, applications, and platforms necessary to anticipate your shifting business needs. Our strategy has been to understand your needs as retailers and bring the relationship between technology and retail full-circle with a sharp focus on the consumer at the center of the retail processes. In short, we want to simplify the experience along two important dimensions: the current relationship between the retailer and SAP, and along the interaction points forming your engagement with your shoppers.

The data driven understanding behind our customers’ needs would not be possible without your feedback and it’s in moments like SAPPHIRE NOW that I feel especially grateful for our customers and their continued trust in SAP Retail. The event was extremely well attended – 80 expert table meetings, 250 attendees in theatre, 180 demo meetings, and 70 micro forums. We had 500+ retail attendees registered and numerous customers like Jo-Ann Fabrics, Luxottica, Tory Burch, Oxford Industries, Hobby Lobby, Big Lots, 99 cent only, and Target sharing their industry insights with us. Your feedback is critical to delivering successful innovations. Together, we can create memorable customer experiences and engage our audiences. Together, we are creating the future of retail.

Again, I thank you for allowing us to earn your trust as your business and technology partner.  Your continued feedback is invaluable to our mutual success!

For our replay of SAPPHIRE NOW Click Here

This post originally appeared in my company's weekly newsletter, Retail Paradox Weekly. It was written by my partner Brian Kilcourse, and I think you'll enjoy it very much. If you have questions or comments for him, you can reach him at bkilcourse@rsrresearch.com.


Just one short preamble: I really am quite blown away by all of CAR's capabilities.  It has the potential to be very disruptive in the retail industry, in a very positive way.  And with that, here is Brian's piece.


My RSR partner Paula and I had the opportunity to attend SAP’s annual SAPPHIRE conference in Orlando Florida last week. The event was held in the cavernous Orange County Convention Center for 25,000+ attendees from every industry that SAP serves, along with assorted partners, analysts, geeks, and pundits. SAP perceives the Retail industry as a huge opportunity, (Retail is one of its “strategic” industries, meaning, “a substantial growth opportunity”) and it has anticipated the dramatic changes that consumer adoption of mobile technology has triggered. But as Pat Bakey, SAP’s Global General Manager for Retail underlined, it’s important that everyone involved not under-estimate what these dramatic changes portend to retail businesses themselves, and not just the technologies that support them.


SAP has made some impressive improvements to its retail offerings, taking advantage of its HANA technology (an in-memory database management system developed by SAP). While there was once a time (not too long ago!) when technology providers were constantly racing to keep up with retailers’ requirements, the relationship between “technology user” and “technology provider” has shifted 180°. Now, there’s a real question of whether or not retailers can absorb what SAP can deliver. More about this later….


Lori Mitchell-Keller, SVP and Global Head of SAP’s Retail Business Unit, outlined the company’s strategy as “simplify retail”, by hyper-personalizing the customer experience, engaging and empowering employees, and improved planning and optimization capabilities. SAP’s retail industry strategy is in sync with the theme of the entire event, outlined in CEO Bill McDermott’s opening keynote address: “simplify everything, do anything.” McDermott further explained, “complexity drives me crazy – it’s the most intractable CEO challenge”. He went on to ask his audience, “who is accountable for ‘complexity’? It’s insidious, invisible, and everywhere – have we had enough?”


Plattner Raises the Bar

Before you scoff at the very notion of a “simple” SAP, hear what company founder and visionary Hasso Plattner had to say. Plattner was introduced on the main stage by Clayton Christensen, Professor at Harvard Business School and author of the influential 1997 book, “The Innovator’s Dilemma”. The HBS professor set the framework for Hasso’s comments: “disruptive innovations make complex things more usable and accessible.” But he said, “large organizations systematically miss waves of innovation because they make the ‘right’ decisions for the ‘right’ reasons.” While those decisions may lead to sustaining, or incremental, improvements, they don’t lead to disruptive, or breakthrough, innovations. “That,” said Christensen, “is the Innovator’s Dilemma.”


Prof. Plattner declared that, “SAP is a model case study for the Innovator’s Dilemma.” He pointed out that certain technology trends are inevitable. For example: “the transition from on-premise to the cloud will happen, no matter what”; “mobile is here to stay – people are always connected”; “technology will continue to make huge performance leaps”; “data access is moving towards zero latency.” Although these are important trends – and SAP has responded to them – they in themselves are not disruptive changes for any one company, From Plattner’s point of view, those are sustaining innovations, not disruptive ones.


So, what is disruptive? “Simplification!”, declared Plattner, “simplification beats complexity!” He then went on to explain why he believes that SAP’s HANA technology enables simplification: it enables radically simpler data structures with no aggregations whatsoever. For the non-technical person, that means “no rollups” – that business decisions can be made from insights derived from the most granular information available in something approaching real-time. That in turn means that businesses can sense changes and respond to them as they are occurring, as opposed to responding to events reported well after-the-fact.


A great example of that was offered on the exhibit floor by Ebay. A representative of the company talked about Ebay’s “information value stack”: Data => Signal => Insight => Action. Anyone in Retail who has talked to any business intelligence solution vendor in the last 10 years has seen something resembling this value hierarchy. The difference in Ebay’s view is in that word, “Signal”. It means that the company can do time-series analyses in real-time (with sub-second latency) to answer the question, “has something changed?” So for example, sales of certain iPhone products are trending in a predictable way but suddenly spike. Ebay can correlate that spike to something Apple has announced, and in turn can respond to the new situation accordingly.


But why is that simpler? According to Plattner, without complex aggregations of data, businesses can move toward prediction and simulation. And, since aggregations of data from which decisions are made have to presume the questions that get asked, they limit the number of new insights that can be found. Without aggregations, new questions can be asked, and thus new insights can be learned and new actions can be taken. Simplicity breeds innovation.

There are other benefits too that sound overtly IT-ish, but also potentially have a big impact on the business (less duplication of data, less code to manage, blistering speed, in addition to those “sustaining” innovations such as much faster response times, less money spent on storage technology, and 360° of visibility by virtue of its ‘enterprise cloud’ delivery model). This gets to a current-day reality that Mr. McDermott had also discussed: on average, 72% of IT budgets are spent managing existing complexity, not helping companies innovate (both Paula and I think that that is an optimistic assessment).


Retail Improvements

At SAPPHIRE, there was a lot of talk about simplification of the user experience (“UX”). This is a perennial topic for legacy SAP users, and SAP now offers a non-disruptive path to modernization of the interface, in essence offering both new and old views of its functionality. The key component of SAP‘s usability agenda is FIORI. Fiori makes it possible to offer a “mobile, beautiful, and easy to consume” experience (as CEO McDermott exclaimed) across devices and deployment options, and it was everywhere at this year’s SAPPHIRE. As an incentive for adoption, McDermott announced that Fiori now comes bundled with its solution licenses (customers used to have to pay separately for it). Fiori is being applied to Retail as well, focusing (for example) on store employee enablement with clean and simple interfaces that work on any mobile device.


SAP has also addressed the problem of vertically integrated companies, for example Brands that have traditionally been a supplier to retailers but are now rolling out stores of their own. SAP’s AFS (“Apparel and Footwear”) solution is widely used by suppliers, but in the past has not integrated well with SAP’s Retail ERP (for example, the product schemas are very different). Thomas Vetter, SAP’s SVP for Retail Product Management described how the newly announced FMS (“Fashion Management”) offering brings those two together. Not only does this address the needs of current AFS customers like Luxottica, Adidas, Armani, and Tommy Hilfiger, who are rapidly expanding their base of branded outlets, but it opens up possibilities for SAP to be the solution of choice for similar Brands that are looking for growth opportunities in retail.


These are just two examples of the kinds of improvements SAP is investing in for the retail sector.


SAP’s Disruptive Innovation

The overarching impression we were left with is that the software giant has seriously advanced retail technology in a number of important ways. But they can all be summed up in one seemingly simple notion, that of moving the business from a purely reactive model to a more predictive one.


At the heart of SAP’s retail strategy is HANA and CAR. We discussed CAR in October 2013 (http://www.rsrresearch.com/2013/10/29/sap-driving-a-new-car/), and it’s worth paying close attention to. The acronym means “customer activity repository”, but it is much more (Paula suggested that SAP rename it “COMMERCE Activity Repository”). Essentially, CAR delivers an “abstracted” layer that contains unstructured and structured data, rules and algorithms, and is used to provide information about product, inventory, and forecasts. It can be used for predictive analytics, loss prevention, and dashboards, and increasingly to integrate components of SAP’s retail portfolio. One almost gets the sense that SAP itself is just discovering how powerful of an accelerator this concept is, and is applying it just as fast as possible. For example, SAP’s eCommerce offering, hybris, is now integrated with HANA and CAR. As Mark Ledbetter, SAP’s Global Vice President for Retail Strategy, explained to a group of industry analysts, retailer adoption of hybris as the eCommerce platform enables its customer-centric capabilities to other selling channels, even if they are supported non-SAP solutions.


The Big Question

I mentioned earlier that at least in Retail, the relationship between the technology consumer and the technology provider has flipped. Now, companies such as SAP are capable of delivering tremendous functionality faster and cheaper than ever before, and (unlike the “old days”) the stuff actually works, meaning that retailers don’t have to spend multiples of the license price to modify the code to get the functionality they need. The other big change is that companies across the globe have come to accept the fact that technology is an enabler, not the solution itself. The solution is the process, and in this time of profound change in retail, the processes of the past are being challenged, perhaps to the breaking point.


We see a lot of examples of this issue in our benchmarks. For example, in RSR’s recent benchmark on supply chain strategy, we saw that while 65% of all retailers agree that they are going to “have to completely rethink <their> supply chain design in the next five years because of emerging cross-channel fulfillment”, only 34% have implemented in “real-time updates to inventory from transactional systems” (a prerequisite to the enterprise-wide inventory visibility that makes cross-channel fulfillment feasible). In other words, the best case is that most retailers know they have to change basic processes and the systems that support them, though many haven’t started yet.


SAP of course has an answer for that – “the Enterprise Cloud” for Retail. The question is, are retailers prepared to absorb what SAP can deliver, and if the answer is “not yet”, then who should help them get prepared? SAP is after all a software engineering company, and it historically has left all that business operating model design work to others such as Accenture, CapGemini, IBM, etc. But it’s an opportunity now for SAP too, and those other companies are also quite willing to implement JDA, Oracle, Manhattan, or any number of point solutions. SAP doesn’t have that ambiguity to deal with. And since this is a rare “reset moment” for the whole Retail industry, it’s a Board of Directors issue for retailers, all about the business operating model and how information and technology enables it. That means top-to-top communication is the name of the game.


The world will have to see if SAP wants to do that or not. But if it chooses to, that will help the company to achieve its objective to be the change accelerator retailers use to achieve disruptive, transformative innovation.

If you are a retail industry stakeholder and will be in Orlando June 3-5 for SAPPHIRE NOW + ASUG Conference, you owe it to yourself to check out this panel discussion featuring Walmart:


Session: LB14425

Optimize Sustainability Across Global Value Chains with Business Networks

Panel Discussion

Tuesday June 3

02:00 p.m. - 02:30 p.m.
Theater 3



Description: Discover best practices for survey-based sustainability assessments of suppliers to meet customer requirements and make compliance declarations. Hear how the SAP Product Stewardship Network online collaboration community enables retailers, suppliers, and manufacturers to efficiently exchange sustainability data needed for compliance and reporting.




  • Steve Pettinger, Sr. Director- Global Integrated Processes, Walmart
  • Jon Johnson, Founder and Chairman of the Board, The Sustainability Consortium
  • Dieter Haesslein, Vice President- Product Management, SAP
  • Moderated by: Steve Illes, Vice President- Solution Management, Product Safety and Stewardship, SAP


Whether you are a retailer, or a supplier in the retail value chain,  or have an interest in the exchange of sustainability information with business partners, make plans to attend this session and hear from industry leaders at 2:00 pm, Tuesday June 3 in Theater 3


Click here for more details and to add the session to your agenda.





sapphirenow  saplob

Dear customers and partners,


I would like to make you aware of a high-profile overview webinar on SAP's mobile offering specifically for the retail industry.


Please find more information and the registration link by following the attached link: Mobile Innovation im Handel


PLEASE NOTE: The webinar will be in German.


Best regards - Felix von Reischach

Retailers handle an enormous amount of data. And in an era of Big Data, they’re finding new ways to leverage that information to improve processes and consumer engagement. But there’s one area where Big Data can have a big impact that companies in the retail space may be missing, and that’s real estate.

The promise of Big Data for retail real estate couldn’t come at a better time. Consumers continue to be tight-fisted with their diminished disposable income. Competition for consumer dollars and attention comes from a growing number of rivals, channels, and venues. Retailers and retail property owners alike need to maximize their revenue per square foot like never before.

To meet those challenges, companies should take three steps to leverage Big Data to transform the way they manage real estate. First, they need to identify sources of Big Data they can act on. Second, they have to invest in the technologies that will position them to take those actions. And finally, they must apply their Big Data insights in ways that show up on the bottom line.

1,000 Points of Light

There are three primary sources for the data for managing retail real estate. First is the retail store or shopping center itself. This might include energy-consumption data down to the sub-meter level for managing energy use. It might also involve sensors on equipment that can improve service and reduce downtime, minimizing disruptions that affect shopping. This data can improve retailer operations, lift tenant satisfaction, and provide mall owners with opportunities in areas like buying and selling energy.

Second is shoppers. Both retailers and mall owners can use video cameras, WiFi, cellular signals, and other technologies to measure shopper traffic to understand consumer behavior, reduce bottlenecks, and optimize staffing. A lot of this data gathering can be done anonymously, protecting shopper privacy.

The last type of information is customer-sentiment data, gleaned primarily from social media. Sentiment data lets you see in near real time what people are saying to their friends about your store or your mall, and offers clues to how you can better engage them. Shopper and sentiment data can help retailers and retail property owners evaluate the best places to open a store, or to acquire or develop a retail facility.

Act and Engage


All these data sources produce information that, with the right analysis, give you new insights, enabling you to take action to improve your business. Gathering that actionable information requires investment in several key technologies.

Machine-to-machine (M2M) sensors and communication can capture facility and equipment data. Mobile technology can give you insights into customer behavior and sentiment. In-memory databases can allow you to pull together this enormous volume of structured and unstructured data in a single place. Advanced analytics enable you to quickly analyze that data to uncover hidden insights and even predict future trends. While cloud platforms can make the resulting insights available to the right people at the right time, and at an affordable cost.

This new analysis can transform the way retailers and retail property owners manage their real estate. Retail investments have generally been based on location and demographics. But today you can add actual behavior of actual consumers, helping you make smarter decisions about where to open a store, where to acquire or develop a property, which products and services should be offered where, what kinds of rents are appropriate, and more.

Beyond real estate, all the new data you’re acquiring can help you better attract and engage consumers—long an explicit goal for retailers, and increasingly one for mall owners. This is a win-win for both retailer and mall owner, with retailersfinding ways to maximize revenues and mall owners able to increase rental income and better retain tenants.

Finding the Payoff

Ultimately, the benefits from these data sources need to show up on the bottom line. In the past, retail finance was always in reactive mode, waiting for the monthly close to make adjustments. Today, with real-time capture and analysis of new data streams, finance can respond dynamically to changes as they’re occurring. Even better, finance can perform what-if analyses to get ahead of the curve.

For example, as you do budgeting and planning, you can analyze store profitability and understand why a particular location is under- or over-performing compared to forecasts. Even better, you can run scenarios to proactively decide to open a store at this location or divest yourself of a retail property at that location.

For retailers and retail property owners, Big Data means you’re no longer operating in a vacuum, making decisions based on best guesses. You have the insights you need to better manage your properties, delivery a superior consumer experience, and run your business more profitably.



Want to learn more about how Big Data is transforming retail real estate? Look for the SAP Big Data Bus while you are at ICSC RECon, May 18 – 20 at the Las Vegas Convention Center (it is parked just across the street).

What’s the one thing any job or specialty requires? Tools. Every doctor wears a stethoscope. Carpenters need power drills. You wouldn’t send a cable technician to an installation without fiber-optic lines. I know my workday is over if I leave for the office without my computer. So why send your  business’ buyers to contract negotiations without the tools they need to expertly close the deal?


Increase agility during vendor negotiation

When buyers and vendors arrive at negotiations with two different agendas, extra time and resources are necessary to finalize the contracts. The buyer has to consult with numerous experts and gather more information to analyze and determine whether the current proposal is good for business. By the time all the pertinent data is compiled and negotiations reconvene, the players have lost sight of what they were trying to accomplish in the first place.

Instant insight and fingertip access to terms and conditions go a long way in simplifying the process. The Contract2Go mobile app from GiCom does just that. With real-time access on a tablet, buyers can:

  1. Concentrate fully on negotiations instead of gathering information
  2. Accelerate the negotiation process by quickly evaluating vendor offers
  3. Sign and print contracts in real time
  4. Store terms and conditions immediately on SAP systems
  5. Improve profit margins
  6. Strengthen the company’s overall bargaining position


Explore a test case: Globus

Want to hear more? Join a free upcoming Webcast to learn how Globus, a leading European retailer, used Contract2Go to boost profits through optimal vendor negotiations and contract creation. Based in Germany, the Czech Republic, and Russia, Globus has 35,000 employees throughout 160 markets. With the award-winningContract2Go app, the company streamlined its relationship with suppliers.

  • Standardize the end-to-end negotiation process from planning and negotiation to contract creation and settlement. Business users get a single view of all negotiated terms and conditions.
  • Simplify negotiation processes by offering flexibility, power, and instant insight to your buyers before, during, and after vendor negotiations.
  • Empower business users to quickly and effectively view the future profitability of vendor agreements during the contract negotiation in real time.



Colin Haig

Why re-invent Retail ?

Posted by Colin Haig May 2, 2014

Retailers need to keep up with fads and fashions. But that doesn’t just mean predicting what shoppers want in their baskets; you also need to understand how they want to shop. And you need to deliver it.


Reinventing retail

Just like the trends you serve up, you need to reinvent your business to keep it relevant and desirable. You’ve brought us late-night shopping and online shopping, taken us from coupons to QR codes, and satisfied our appetite for everything from Fairtrade products to same-day delivery slots. So, what’s next?


A new way to shop

To stay competitive, today’s retailers need to deliver a seamless, personalized customer experience – across all channels. After all, it’s what your customers expect. They want the special offers on your TV ad delivered direct to their inbox, identical prices online and in store, and the same seamless customer service whether using Facebook or chatting to your call center. But while many retailers are achieving this in part, most are failing to impress when it comes to delivering that seamless experience in store. So, what’s the reason?


Get personal

A personalized, in-store experience used to mean one-to-one, face-to-face service. That was fine for luxury retailers and a few other exceptions, but not for the masses. A single sales assistant can’t possibly understand and address the needs of several customers simultaneously. They can’t showcase alternative products, up-sell, cross-sell, or crucially, provide that final push to proceed with a purchase.  But mobile technology can – and it can do much more besides.


Retail. Right. NOW.

Mobile plays a huge part in the future of omnichannel retailing. It’s a means of connecting and communicating with all shoppers in store, in real time. You can engage shoppers on an individual level and communicate personalized recommendations, services, and offers when it matters most – at the point of decision making. It’s what SAP calls “Retail. Right. NOW.” and you can find out a bit more about it – and all its possibilities – in this quick video [http://bit.ly/1foE2Sq]. Take note though, because unlike Hypercolor t-shirts or the Apple Newton (the what?), mobile commerce isn’t just a fad, soon to be forgotten about. Mobile commerce is here, and will be around for the long run.


Filter Blog

By author:
By date:
By tag: