SAP for Retail

4 Posts authored by: Amitabh Nema

“Change before your have to.” - Jack Welch

 

As we observe the Technology trends today, it is evident that many traditional   business solutions are now converging new technologies for building new solutions.  Mobile POS is one great example of such a trend – implementation of Mobile POS is now a top agenda for almost every retail CEO/ CIO.

 

Industry Pundits are predicting that almost 52% Business Applications will shift to mobile technology by 2015-2016. This means, there would emerge great opportunities for new solutions on Mobility.

 

As a part of Groupsoft SAP HANA and SAP Mobile creative development initiatives – Grouspsoft, using technology convergence, has designed an interesting basic level concept - MOBILE STORE PROFILE - a future Planogram application.

 

In SAP Retail suit, Retail Master / Assortment holds a lot of essential  information on basic business stransactions for a specific Store like store classification, store sales trends / stocking norms, anPic 1.pngd other socio economic information. This information is required frequently on real time basis by the store team to make effective business decisions. To reach an effective decision the team needs not only Data Analysis but also needs to get a real time look and feel of the Store. Now through the use of Grouspoft’s new application Mobile Store Profile - the Stores real time look and feel can be obtained by a remotely based team.

 

Currently, Planogram applications are used to provide the visual
look of the store to Planners. These Planogram's are however, to a large extent rigid and do not provide the flexibility to be revised quickly to evaluate and compare a most appealing look for the local customer. Neither do they provide a sense of feel of the store.

 

I am sure, many of you who have been to the Rockefeller Centre,NY during Christmas, must have also visited the SAKS Fifth Avenue -  amazingly creative work by the Visual Merchandise team resulting in - the store’s foot fall drastically
shot up.

 

In such a scenario where this kind of heavy traffic is anticipated – there is a definite stress on the Supply Chain and a high probability of a Stock-Out situation. Thus, Store Replenishment becomes an important factor.  During holiday season – stores located on key locations such as 5th Avenue or Time Square – carry out store replenishments 3-5 times in a day. Some of the retailers keep their stock floating on a Boat @ Hudson River for quick reach.  (I am sure this would be quite a common phenomena across the globe).

 

Complexity in Retailing increases many fold with High Store Traffic, High Sales Turn and a very limited but a very costly retail space. And yet, every retailer aims to maximize the Store Sales during this period. So as a Store Manager, or a Stock Planner or a Merchandiser - at such times especially, there is a critical need for a SMART Tablet App. The Mobile Store Profiler provides these decision makers with critical real time based information along with real time Analytics.Pic 2.png Now the Store Manager, Stock Planner and the Merchandiser can use this Visual Solution as a Communicator to reach complex decisions based on real time data and analytics.

 

Mobile Store Profile, is designed and meant to be a Merchandise and Local Customer Tracker for a specific store.  The above said is driven by Big Data with unstructured data. To further elaborate – assume a Retailer is  running a 20000 Sq Ft. Store and has a total 600 similar size Stores - converted the Retailer is working on a 12 M Sq.ft of store space.   To cover 12 Million Sq Feet store space the Retailer requires a very Strong Analytics and Visual interactive tool.

 

Within this complex business scenario, Visual Merchandise function needs intense integration with Merchandise / Stock Planning and Store Sales team in order to achieve higher sales revenue from the Store. Key requirements like Store Planogram vs Store Performance can be covered using Mobile Store Profile. From store traffic analysis point of view, Mobile Store Profile can be used by Planners and Merchandise Analysts from remote locations.

 

 

A Retail Productivity Utility like Mobile Store Profile is made possible by converging of SAP HANA/ SAP Analytics and SAP Mobility Technologies to provide a very powerful tool in the hands of the store manager.

Retailers work in distributed environment, where retail stores are located across geographies. Store performance is driven by multiple local factors - which are different at each location. While socio-economic diversity is a key factor, climate plays a different role in terms of Product Sales and Stock consumption. Similarly many different product and consumer attributes are important for in-season store sales performance.

 

However due to typical centralized buying business structure, Store specific requirements are often ignored by planning team. This is primarily due to large number of Style / SKU variation along with Number of Stores. Data volume and linked attributes plays a crucial role in selecting right product for right store. This is essentially important to ensure customer finds the right product at right time; which leads to increased customer satisfaction and build customer loyalty towards Retailer.

 

Point of Sales Data, Stock Consumption and Available Inventory at Store, Customer preferences, demographics, product choices and suppliers capability becomes almost important to track and manage. This is a Big Data processing and as on today, this takes place using BATCH MODE Data processing.

 

For example 600 retail Store company , managing 30000 SKU and take Sales as single attribute - the simple calculation results in 18 Million Combinations. However, we are discussing multiple Attributes and taking effective demand supply planning decision, which is critical for store financial performance as well as Customer expectation. Retailer have to meet up Local customer requirements and that is the Business Requirements of the day.

 

So 3 Key critical Issues for effective management of complex planning and effective demand supply:

 

- How do we plan effectively @ Store / SKU level?

 

- How do Store Team and Central/ Regional Operations / Planning team collaborate -Single View of truth ?

 

-Merchandise Planner and Store Manager have equal “SAY” in managing Product Performance well as Store Profitability ?

 

Solution Brief

 

In today’s ERP Landscape POS Data including Supplies Data is available in BW and POSDM using Batch Job data extraction. Data analysis and initiating changes based on Sales Trends in real time basis at STORE / SKU becomes a Herculean Task or simply becomes impossible to achieve desired results quickly. Cluster Plan and Store Plan on SAP HANA based solution is specially build to take care of large data handling and predicting the store sales forecast / stock requirements on real time basis.

 

- Using trickle functionality POS data can be collected on real time transaction basis, Simultaneously using SAP HANA Sales and  Stock data can be processed along with supply data at any attribute level and store specific demand  can be predicted.

 

• Dynamic Cluster engine can be used to aggregate this demand on real time basis(end of Batch Job- thanks to SAP HANA) and subsequent supply chain decision can be taken either at Cluster level or store level.

 

• While planner making change at Cluster level - change using aggregation and distribution algorithm) can be seen at store level on real time basis.

 

• Plan balancing between Cluster Plan and Store plan can take place on real time basis - (no Batch Job required).

 

• Store Manager can review and suggest the change back to Central team on real time basis.

 

• Store Plan changes can be seen by Central Team instantaneously at Cluster level.

Store Plan and Actual data can be analyzed on real time basis on one side. On the other side, Cluster Plan can be aggregate (using custom aggregation algorithm) the Store plan/ Actual POS data at Cluster Level (Static Cluster - Region, State, City,
Market, Store Type, Store Class. Dynamic Cluster - Sales Through / STR / Sales Ranking / Stock Level based Store Cluster or Cluster Algorithms like Break Point clustering logic)

 

While Cluster Plan changes impact the Store plan, store Manager can also analyze the store performance along with change suggested by Merchandise Planner team. Store Manager can compare the store plan and offer suggestive changes back with central / regional team on real time basis.

 

Due to SAP HANA processing power 2 key aspects are going to be game changer for Retailers:

- Local Store Planning becomes essential for every Retail Store - hence store planning will be done on prevailing need to cater local customer effectively.

 

- Usage of dynamic Cluster Planning - going to be key for Retailers.

 

Finally Store Performance can be analyzed at cluster / store level by Merchandising Head & CFO on real time basis.

 

This makes the whole Cluster planning and Store Planning as interactive Productivity tool - rather than just a Retail Planning tool - Thanks to SAP HANA...

 

Business Impact

 

Based on SAP HANA Big Data performance - it is obvious that Retail Planning process will take a change fundamentally- where along with real time planning - collaboration across the distributed environment will be the key factor for Retailers success and this surely going to shorten the complete supply chain Time cycle. Accordingly stress and emphasis of effective / dynamic supply chain comes in play - very much.

 

Groupsoft SAP HANA Initiative - Thanks to SAP HANA Startup Program

 

Groupsoft is working on SAP HANA based Cluster / Store Planning solution since last 6 months, Groupsoft has build the SAP HANA competency on top of our SAP Retail competency and have Design and developed Cluster and Store Plan on SAP HANA. This solution was show cased in SAP Teched Las Vegas 2012. The offering will shortly be available on Amazon Cloud

 

Retail planning is considered as Science as well as ART. At this time Art is missing ! Watch out our next Blog ; Groupsoft team is working on some break through progress where Art will be embedded into SAP HANA solution.

To continue with the earlier thought of my previous blog - what really excites me about SAP Retail is that now I find it Social, and Trendy. Over the last decade consumer or user has seen many changes in the Era of Personal Computing!  Today Mobility has become the key trend.  PCs are getting replaced by Tablets and large software applications are beginning a shift to smaller versions – Apps ! This aspect is very well aligned with the economic conditions too - Technology Investments and Budgets are getting smaller and Retailers are looking towards small applications with faster Win / smaller TOC (Total Cost of Ownership).

 

What this translates into for Retailers : -

  • Applications based on Mobility are aimed to be faster to deploy and easier to Manage.
  • Easy to Use - User Experience and response becomes great!
  • Quick Results from productivity point of view.
  • Faster work around to Functionality Gaps.
  • Application on unwired platform – which means distribute business users’ can Access the application remotely
  • Integration / Data Exchange will get emphasized.
  • Data Security will get emphasized.

 

So if you are a SAP Retail user and if you have to really understand the SAP Offering – then simply worded, Big Box thinking is being converted and made available in a small box. However, it is the back bone of ERP that makes this even more interesting - now it is really infused with greater power of Information.

 

Mobility has had a large role to play in success of FACEBOOK and TWITTER – for them Unwired access point of information became a key point! But I feel what really was the biggest key point of success - Mobility brought the user to the “Point of Well Informed”.

 

"Point of Well informed" is a concern with Retailers too.

 

  • How well informed is your Merchandiser or Buyer about SKU Family ?
  • How the new Product Launched is performing across Stores?
  • What are key Sales Trends’ building in a Store?
  • Is Category meeting predicted GMROI across Stores?

… and so on and on.

 

Introduction of SAP Mobility on top of SAP Analytics, is the beginning of a new information era for Retailer users! Using Interactive SAP Mobility Dashboards, Retailers are better informed of their Business today than ever before.

 

In essence User Experience will make a huge difference. Brain Quest of Information, making every person addicted to these Mobile Gadgets - and this is exactly what a Retail user wants – an empowering experience for the User where the available unlimited information drives a faster speedy decision for the User; to take better control of retail performance! That is also exactly the transformation that SAP Technology stack is offering. That is, if you combine SAP Analytics with SAP Mobility – the information technology for retail industry is becoming Simple yet  more Powerful.

 

Should we Say – ‘Mobiltyics’ Era!

 

Mobilytics = MOBILITY + ANALYTICS 

 

I believe, to use my own new word - the ‘Mobilytics’  era is here to stay for good and this will open up opportunity for every other retailer to use it for the competitive business advantage going forward.

 

 

 

After a decade and more of working with SAP Retail, I am finding the latest SAP Retail initiative very interesting.  They look very social, trendy and they are simply atomic! 

 

I am not sure if you have ever used:   http://help.sap.com/?  It is the equivalent of a SAP Product library, where process and functions are written in  the most structured and detailed manner.  It is a sheer knowledge maze for any youngster in which to get lost. One only gets the hang of how to extract the information from this huge knowledge bank after spending some good time on the site.  SAP Retail is a very comprehensive and a very robust solution with enormous advantages both functionally and technically!

 

A typical Fashion Retail Merchandiser manages anywhere from 60-120 categories and within every category 100-200 SKUs are managed.  Further, if you add the parameter of stores, then a typical 100 to 200 stores will get added which means during any given season a Merchandiser is analyzing a minimum of 100,000 data lines! With all this enormous data the only vital objective for a Merchandiser to derive at is INCREASED GMROI, higher profit and higher stock turn.

 

Reverting to period 2001 -2011 with reference to my SAP retail implementations, I observed one common aspect, all my Merchandiser and Buyer friends in Retail organizations used SAP Retail effectively from a transaction perspective. Then they transferred the data into a spreadsheet application in order to analyze and draw conclusions on the GMROI to SKU performance base.  To conclude, Retailers were managing the transaction data in SAP but the visibility of 100,000 data lines in user friendly manner was a struggle area in the overall efficient landscape.

 

Now my retailer friends demand a very different trend, which is smart lively dash boarding. They smartly prioritize the visuals (i.e. the data view) which will improve their instant decision support system, for which SKU or category is "cash cow".  Now they know which store is doing maximum sales, so they can have clear prediction on revenue and stock turns. The bottom line is - Retailers need a tool which will efficiently help them in decision making within a complex, distributed and big data environment.

 

This is exactly what SAP Retail has identified and provided to the user.  Crisp information in a social and trendy manner using SAP Business Objects based Retail Analytics.

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