Intelligent Enterprise

for the Retail Industry

Innovation on the Road
to a New World of Retail
t
February 2021
© 2021 SAP SE or an SAP affiliate company. All rights reserved.
The Road to a New
World of Retail
Ubiquitous access to information has shifted power from the retailer to the consumer. This has increased the
pressure on retailers and brands to invest in innovative business models and new ways of creating value for their
ecosystem.

Consumers demanding new levels of value: With so much choice at their fingertips, consumers expect more than
ever before; ultra-convenience, flawless service and seamless experiences are now foundational to brand loyalty.
Leading brands have been raising the bar for years, and now consumers have come to expect these standards
everywhere.

Disruptive market entrants: New digital-first competitors and innovative business models continue to emerge.
Retailers must embrace disruption and vertical integration, as they are reshaping the traditional retail landscape.

Sustainability paradigm shift: The retail industry is under scrutiny from both consumers and regulators, as retail
companies are a major contributor to carbon emissions. At the same time, retailers are in a powerful position to
enforce sustainability principles across their supply base. Leaders are thinking about environmental and social
governance standards not as problems but as solutions to achieve more efficient and less wasteful practices that
safeguard their business’s license to operate.

Purpose-driven retail: The next generation of customers is looking for brands that align with their values, and they
are willing to “walk the talk.” Commitment to a purpose has become as important as a brand’s digital experience.
The future of retail is about thoughtful curation of products and brands that align with their mission and provide
for a trusted engagement.

The Key to Resilience: Intelligent Enterprise

Resilient businesses are those that can adapt and innovate, integrate data and processes, use intelligent technologies, understand
customer sentiment, and be agile enough to overcome challenges. These attributes help companies stand out from the
competition and build a sustained advantage. SAP defines these companies as intelligent enterprises.
Read the blog.

Brakes, a B2B food delivery service and leading supplier to the food service sector in the United Kingdom, saw its business almost
cease overnight with COVID-19. Yet Brakes was able to pivot, adapt, and add value in a time of crisis.
It launched a new direct-to-consumer platform with SAP® Commerce Cloud solutions in just seven days.
Watch the video.

An example of how knowledge of customer sentiment helps increase loyalty is Berlin-based food-ordering platform Delivery Hero.
With each delivery, customers are asked to fill out a survey. Measuring customer experience has a direct business impact: the
company uses the data to constantly improve process, service, and offers.
Read the customer story.

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 2

Strategic Priorities for
Retailers to Run as
Intelligent Enterprises
To transform their business and be ready to meet the expectations of tomorrow’s consumers, leading retailers set the
following strategic priorities.

Be customer centric across the value chain: Put the customer at the center of all decisions. Enable personalized
customer interactions with a curated experiences and hyper-local assortments of sustainable products.

Serve the “segment of one”: Personalize with purpose. Differentiate through value-added services Use modern digital
capabilities and intelligent technologies combined with real-time customer insights to meet unique customer needs and
preferences at scale.

Implement digital supply chains: Create circular supply chains from the suppliers to the consumers' homes and back.
Enable fast response to changes in demand and supply. Design out waste and optimize transportation.

Redefine stores: Reimagine the store as a place that underlines your customer value proposition by providing unique
shopping experiences and enabling ultra-convenient capabilities such as same-day delivery or curb-side pick-up.
Empower the store associates to enhance each customer’s visit with contextual customer profiles and connect the
digital and physical spaces to fulfill any customer request such as endless aisles or personalized recommendations.

Create new business models: Leverage platform scale and ecosystems to support vertically integrated business models
to expand revenue and differentiated offerings. Create sustainable outcomes and higher brand loyalty through
expansion of service offerings and continuous engagement with consumers.

Customer Segment Digital Redefined New business

centricity of one supply chain stores models

85% ~75% ~70% 74% >60%

Of retailers consider it Of retailers consider it Of retailers consider Of retailers consider it Of organizations
important to make important to deliver a fun, it important to have important to equip consider it important to
strategic use of data, contextual, and visibility into the global store associates with work with their
including integrated, personalized customer inventory pool and real-time product and broader ecosystem
predictive, what-if, and experience . . . optimize it for a “source inventory information to drive successful
scenario planning, and anywhere, fulfill to help them serve business models . . .
they use it as a anywhere” model . . . shoppers better . . .
competitive
differentiator . . .
. . . but only 9% are . . . but only 10% are . . . but only 15% are . . . but only 30% are . . . but only 25% are
able to do so.* able to do so.* able to do so.* able to do so.* able to do so.*

*Source: SAP Performance Benchmarking

3

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 3

From Best Practices
to the Vertical Edge
Today's retailer still relies heavily on the “horizontal” layer that represents the backbone of operational systems. To
change the game on what we call the vertical edge, companies need to double down on digital first and omnichannel
strategies. Agile operating models need to infuse innovation along the customer value chain – from agile planning, to
smart order management orchestration and fulfillment, to redefining the store entirely. Modular cloud services, open
integration, and exposing intelligent technologies to our partner ecosystem and customers are the building blocks for
scenarios at the vertical edge.

Current Practices Next Practices Vertical Edge

▪ Planning of global and local ▪ Demand, usage and consumption ▪ Predictive planning and inventory
CENTRICITY
CUSTOMER

assortments based on signals, adjusting assortments and orchestration

understanding of customer needs promotions in real time ▪ Process automation using artificial
▪ Selective survey execution to ▪ Pervasive capture and inclusion of intelligence
detect experience feedback sentiment and experience data as a
business metric

▪ Segmented offers and ▪ Leverage context and cohort data to ▪ Personalized experience of brand
SEGMENT

predict what consumers want next

OF ONE

recommendations based on current and product across all channels.

customer understanding ▪ Accommodate larger numbers of ▪ Product customization at scale
▪ Selective product customization individualized, small-lot manufacturing combining customer insights and
orders based on captured customer store production capabilities
insights

▪ Digitalized supply chain from ▪ Source-to-consumer delivery to the ▪ Circular economy processes
manufacturer to consumer for place of need with connected homes with principles of sustainable
SUPPLY CHAIN

better tracking and tracing and smart products procurement and production
DIGITAL

▪ Flexible omnichannel delivery and ▪ End-to-end carbon emission tracking such as recycling, reuse, repair,
fulfillment options ▪ Fulfill from anywhere, return from reselling, and more
anywhere leveraging global inventory, ▪ Holistic omnichannel order
dynamic sourcing, and last-mile delivery
management and fulfillment with
distributed order processing

▪ Front line of store empowered with ▪ Sensor-based identification, store ▪ Experiential retail with highly
REDEFINED
STORES

smart apps and real-time insights to interaction, and checkout personalized experiences
better serve customers ▪ Omnichannel store fulfillment ▪ Ultraconvenient and frictionless
▪ Omnichannel sales processes ▪ Unified digital and physical shopping powered by store
experiences automation and AI

▪ Extending business into new offerings ▪ Extended value chain to point of ▪ Cross-industry process operability
BUSINESS
MODELS

and market categories consumption for instant feedback and ▪ Extension of offerings to address
NEW

▪ Merging experience data and usage-based services customer outcomes holistically

operational data to create new offers ▪ Expansion into adjacent and new ▪ Moving from ownership to service-
and services businesses with platform scale oriented business models

Sustainable Retail Innovation at the Vertical Edge

SAP announced the Climate 21 program to support Moving from proven best practices to the vertical edge takes
customers in pursuing their climate-related objectives. In a courage, yet it can offer a significant upside and competitive
multiyear road map, SAP will work with co-innovation advantage.
partners to embed sustainability metrics across SAP’s
Read how Coop Switzerland used advanced forecasting
solution portfolio. This will help customers understand,
enhanced with intelligent technologies to help them increase
analyze, and optimize the carbon footprint of their products
market share during a crisis.
and operations along the value chain.

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 4

Road Map to the
Vertical Edge
Within each of the five strategic priorities of retail companies, there are opportunities to move to next practices and
the vertical edge jointly with our partners and customers. These areas hold significant potential to extend retail core
processes from current best practices to next practices using digital technologies and a digital mindset. Below, you will
find the digital capabilities to advance to next practices
and vertical edge.

Current Practices Next Practices Vertical Edge

▪ Best-of-suite planning ▪ Forecasting cockpit ▪ Predictive inventory orchestration
CENTRICITY
CUSTOMER

applications for merchandise, ▪ Category management planning based on forecasting and

assortment, promotion, and ▪ Promotional buying and allocation optimization services
allocation planning using machine learning (ML) ▪ Agile merchandising based on insights
▪ Intelligent forecast modeling ▪ Capturing and monitoring experience and analytics
▪ Configurable surveys data as well as real-world data ▪ Cloud-based omnichannel demand
and supply planning

▪ Planning for promotions and ▪ Real-time unified customer profile to ▪ Leverage real-time omni-channel data
support personalized commerce and insights in seamless personalized
SEGMENT

campaigns based on dynamic

OF ONE

customer segments. service scenarios experiences and engagement driven by AI

▪ Context-driven commerce ▪ Integrated AI and predictive analytics across all channels including digital, store
experiences based on browsing with marketing execution to scale 1:1 and IoT
behavior personalization.
▪ Integrated and demand-driven ▪ Hands-free robotics supply chain ▪ Omnichannel planning and fulfillment
supply chain planning and execution ▪ Extension of order and delivery based on cloud services for intelligent
SUPPLY CHAIN

with track-and-trace functionality options with click-and-reserve and order orchestration

DIGITAL

▪ Omnichannel order product click-and-collect functionality ▪ Task-driven in-store fulfillment with last-
availability and dynamic sourcing mile delivery and intelligent returns
optimization, reducing waste and
triggering a circular economy

▪ Set of online applications to run ▪ Leverage digitally captured, non- ▪ Fully automated store operations
REDEFINED
STORES

store merchandising and inventory transactional, real-world data and with cloud-based platform
management based on real-time consumer sentiment to optimize the ▪ Unified intelligent mobile application
data from ERP and point of sale store experience and operation. empowering store associates to manage
▪ Enable store associates with mobile ▪ Contactless shopping capabilities, à la daily task and support personalized and
tools to serve customer “grab and go” on-brand interactions with customers

▪ Subscription models ▪ Harmonized data models and objects ▪ Fulfilment & Logistics that enable circular
BUSINESS
MODELS

▪ Extension of product offerings with across industries and smart material lifecycles
NEW

value-adding services from other management of attributes ▪ Consumer tools for re-listing previously
industries ▪ Software-as-a-service offering for retail bought items.
▪ Revenue-share model for retailer and
insights on shadow demand

Industry Cloud
Intelligent enterprises strike the balance between optimizing their current
business models and innovating at the vertical edge to develop new revenue
streams and growth potential using digital technologies. SAP and its partners are
offering industry cloud solutions that extend the end-to-end processes of SAP’s
intelligent suite to help drive customers’ core business in their industries.

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 5

Customer Centricity:
Omnichannel Planning
and Optimization
New technology allows retailers to detect, predict, and anticipate unspoken needs. Understanding customer needs and
sentiment is key to providing the right assortment and offerings.

CURRENT PRACTICE
From planning in siloed departments using stand-alone, best-of-breed applications and backward analysis …
NEXT PRACTICE
. . . to being first to serve tomorrow’s demand using predictive insights and intelligence in an integrated planning suite
on one common platform

Merchandise and channel planning Assortment planning

▪ Strategic sales and margin planning across all ▪ Assortment planning and optimization using ML-
channels and categories for full transparency supported forecasting, store clustering, and
throughout the organization automated option optimization
▪ Strategic planning results and open-to-buy budgets Omnichannel ▪ Integration of third-party search data, social media,
automatically integrated into assortment planning planning platform and sentiment analysis
▪ Category management for nonseasonal items
▪ Master data
▪ Inventory and order data
▪ Consumption history
Replenishment planning ▪ Unified forecasting engine Promotion planning
▪ Takeover of nonseasonal products into pull ▪ Optimization services
▪ Simulations ▪ Promotion planning using ML-supported
replenishment
forecasting
▪ Responsive replenishment for cost-optimal
▪ Collaboration with marketing and digital asset
ordering with waste projection, optimization along
management
factors such as lost sales, shelf cost, and expiration
date

Allocation planning
▪ Push of seasonal and promotional products to the store based on assortment and promotion plan
▪ Optimized allocation based on current demand and available stock, KPI targets, and store capacity
▪ In-season refill and end-of-season cross-product allocation

Vertical Edge: Predictive Inventory and Demand Orchestration

Anticipating and executing against dynamic trends and customer preferences require even more flexible ways of planning
and optimization. Comprehensive sets of business services such as forecasting, clustering, and similarity services, mixed
with real-time transactional data and third-party information, build the foundation
for cross-channel insights and a new generation of cloud-based planning and optimization applications.

Beeline Gets Ahead of Fashion Trends with Better Understanding of Customers and
Market
Beeline GmbH started out as a wholesale jeweler almost 30 years ago and grew into a global business,
now selling its brands through concession partners and its own stores worldwide, with over 100 million
individual items sold per year.
Beeline replaced highly manual operations and achieved better tracking of sales along with
accurate planning of future demand. Integrated, end-to-end process management, real-time insight
into customer activities, omnichannel planning content, and powerful analytics with the SAP Analytics
Cloud solution are elements of Beeline’s digital transformation, which allows the company to be first to
market with the trending products its customers are looking for.
Read the customer story.
6

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 6

SAP Solutions: Omnichannel
Planning and Optimization
New business capabilities delivered by the intelligent suite and industry cloud solutions enable flexible, sustainable, and
responsive delivery and value-adding service for consumers.

Intelligent demand data Unified demand forecasting Merchandise and assortment Allocation planning
foundation ▪ Intelligent forecast modeling planning ▪ Smart allocation based on
▪ Orders across channels as a ▪ Cockpit to manage forecasting ▪ Omnichannel planning – retail results of assortment or
common base for omnichannel exceptions and wholesale promotion plans
demand planning along with ▪ Optimized option planning ▪ Initial push followed by
▪ Intelligent services to
transactional data demand-driven in-season refill
determine similar products for ▪ Intelligent store clustering
▪ Embedded intelligence to reference and use in relevant ▪ Cross-product allocation for
▪ External data for product
detect errors in integration or applications (assortment end-of-season distribution
ranking
identify similar products for planning, replenishment
referencing ▪ Flexible planning hierarchies
planning) and business rule framework
▪ Determination of
▪ Closed-loop to shelf-
cannibalization effects
optimization tools

The architecture of the Intelligent Enterprise for retail companies – a combination of SAP and partner solutions for new
business outcomes

SAP Ariba solutions Adverity Marketing

Data Analytics Platform
SAP Integrated Business for marketing
Planning for Supply reporting and
Chain augmented analytics

SAP S/4HANA for

SAP Customer Order
execution of planning
Sourcing for
results
omnichannel order
Across all functions
orchestration
SAP S/4HANA for order-
to-cash process and
Machine Learning
finance
services from SAP
SAP Commerce Cloud
and SAP Customer Data
Platform for trusted SAP Analytics Cloud
and personalized online
customer experience

The Emarsys Omnichannel Customer Engagement Platform SAP Customer Order Sourcing centralizes availability
enables you to deliver the predictable, profitable outcomes information for all of your vendors, distribution centers,
that your business demands and the highly personalized fulfillment locations, retail partners, and stores. So whether
omnichannel experiences that your customers deserve. ordering online, calling in, or using a mobile app, consumers
Accelerate business outcomes with proven, retail engagement can instantly see what is available and when it can be
strategies — crowdsourced from leading brands. delivered to their home or local store.
The business-user-friendly strategy builder allows
employees to establish a smart, cost-effective sourcing
strategy that directly supports your business goals 7

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 7

Segment of One: Connect to Your
Customers’ Lifestyle
Serving your customers by name and according to their personal preferences and needs drives new levels of customer
value, brand loyalty, and profitability.

CURRENT PRACTICE
From catering to customer segments with reactive offers and limited personalization . .
NEXT PRACTICE
. . . to serving the segment of one with individualized offerings and services based on real-time data-driven customer
insights.
▪ Customer visits Web site to look up information and products
▪ Identification and creation of initial visitor profile

▪ Reward for customer advocacy Awareness ▪ Retrieval or reconfirmation of

such as writing a review and consent and activation of unified
posting to social media customer profile for seamless
▪ Zero-click replacement-based Loyalty Consent omnichannel engagement
predicted consumption ▪ Built-in data privacy rules

Personal outcome:
“Better skin” Capturing and collecting
▪ In-store production of
serialized skin-care products Customization Context customer data to create
based on individual personalized skin-care offer:
customer ▪ Environmental data (air
data with personalized quality, weather, UV index,
ingredient mix location) based on AI
▪ Refillable packaging to avoid
Personalization ▪ Personal preferences,
plastic waste calendar, shopping history
▪ Omnichannel delivery ▪ Skin analysis using picture
▪ Personalized recommendations and offers based on contextual
options recognition
data in the moment
▪ Offer to join loyalty program and earn points for social activities
and referring friends

VERTICAL EDGE: Deep Personalization and Production Anywhere

Presenting unique products and offers to customers helps them express individuality and helps retailers establish lifetime
relationships. Vertical retailers that own the entire supply chain from product development and production to
distribution are the first to adjust their processes to mass-customized items. In the future, individualized production will
take place in store or even the customer’s home, using frameworks for digital designs and 3D printing. Availability of DNA
information will allow deeper personalization across product categories.

Competitive Edge with Personalized Shoe shopping Goes Digital

At Aimickey Shoe Company everyone can now design their own pair of shoes
and have them produced within a week. It might sound like science fiction – but
not for those in Chengdu, China. A unique co-innovation project between SAP
and Aimickey Shoe Company uses intelligent technologies and services based on
SAP Cloud Platform to take shoe design and production to the next level.
Watch the video.

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 8

SAP Solutions: Connect to Your
Customers’ Lifestyle
New business capabilities delivered by the intelligent suite and industry cloud solutions enable solutions that precisely
fit the needs of a single customer.
Customer data and Insights Loyalty and personalization
Fulfillment Circular economy
▪ Identity management ▪ Integrate AI and predictive
▪ Flexible consumption models – ▪ Optimized returns processes
▪ Trust and consent analytics with marketing
subscription order, billing, and with intelligent quality
management execution to scale 1:1
revenue management inspection & dispositioning
personalization and
▪ Customer data quality ▪ Local production at retailers’ processes
continuously optimize
management site ▪ Waste and recycling
business results
▪ Customer data platform to ▪ Smart omnichannel fulfillment management
▪ Enhanced behavioral loyalty
enable real-time unified optimization based on real-
with tracking and rewarding of
customer profile across the time business KPs.
social media activity and
business and enable endless
customer behavior across all
value-driven business use-
channels
cases

The architecture of the Intelligent Enterprise for retail companies – a combination of SAP and partner solutions for new
business outcomes

SAP Customer
Experience for SAP Customer Order
Commerce, Customer Sourcing for
data, marketing and omnichannel order
loyalty management orchestration

SAP Billing Annex Cloud for loyalty

and Revenue management
Innovation FINDMINE for
Management for Across all functions
giving guidance on
subscription order complete looks
management
SAP S/4HANA and SAP IoT services from SAP
Customer Activity SAP Analytics Cloud
Repository for
omnichannel
fulfillment

SAP Customer Data Platform for secure customer data management and loyalty

Customer Loyalty Cloud by Social Annex guides customer FINDMINE's technology serves apparel brands, women’s
behavior by offering rewards for a variety of actions wear retailers, and high-fashion leaders with its “complete-
including purchasing, referring friends, writing reviews, the-look” capability. FINDMINE for SAP Commerce Cloud uses
sharing pictures, signing up for newsletters, and more. By predictive intelligence to show shoppers how to use each
rewarding customers, loyalty programs help brands increase product across e-commerce, e-mail, marketing channels, and
retention rates, drive more repeat purchases, and boost in the store.
lifetime value. 9

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 9

Digital Supply Chain: Run
Sustainable Consumer
Supply Chains
Retailers need to redesign supply chains into consumer value chains with full transparency and commitment to customer
service while increasing efficiency and optimizing cost.

BEST PRACTICE
From operational lean logistics processes for material flows that were focused on cost-efficiency . . .
NEXT PRACTICE
. . . to a resilient supply network that quickly and efficiently delivers what customers want where and when they want it
while minimizing the sustainability impact.

▪ Collaborative product design based on a set ▪ Diversified supplier network

of globally secure product data for risk mitigation
▪ Inclusion of customer feedback ▪ Onboarding of smallholder farms
Sustainable design ▪ Establishing fair trade and ethical
and sourcing sourcing principles
▪ Waste and recycling management
applications that will decompose
the product and reintegrate the raw ▪ Supply network design
materials in production ▪ Inventory optimization strategies
across network
▪ Support of intelligent returns
▪ Risk mitigation strategies
▪ Rerouting of processes for product
repurposing
▪ Collaborative demand and supply
planning
▪ Segmentation and allocation of
▪ Customer pickup or delivery supply using rules-based demand
▪ Convenient returns process prioritization
▪ Product and experience feedback ▪ Omnichannel sourcing and order
orchestration
▪ In-store logistics with RFID enablement
▪ In-store fulfillment of online orders and last- ▪ Determination of product
mile delivery availability across locations
▪ Intelligent push strategies for seasonal and ▪ Integrated warehouse and
promotional items Store transportation management
▪ Cost-optimized replenishment reducing fulfillment ▪ Pinpointing disruptive events for
wastage immediate action

VERTICAL EDGE: Hands-Free Supply Chain

The warehouse of the future will be characterized by demand-driven, automated capacity management; advances in
tracking and visibility using the IoT; and advances in automation supported by virtual reality, drones, and autonomous
vehicles. Warehousing and automation will be available on demand to accommodate volatile demand and capacity
needs.

Coop CH offers Sustainable Shopping and aims at

Zero Waste
Coop Switzerland’s long-term goal is to create a sustainable “By improving replenishment processes based on more-
shopping experience and implement its vision of zero waste accurate forecasting, we can better fulfill our responsibilities
for fresh food. Predicting where and when promotional both to our customers and to the environment. Intelligent
goods must arrive at stores is key. Overstocking results in processes supported by integrated SAP solutions are helping
environmentally damaging waste, while understocking us become a more sustainable business while delivering a
leaves customers disappointed. better quality service.”
Read the customer story. Tim Sutor, Head of Merchandise Processes POS (IT), Coop
Switzerland 10

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 10

SAP Solutions: Run
Sustainable Consumer
Supply Chains
New business capabilities delivered by the intelligent suite and industry cloud solutions enable sustainable and circular
supply chains offering responsive and flexible fulfillment options for consumers.

Procurement and Logistics Omnichannel Customer experience Circular economy

production ▪ Demand and supply fulfillment ▪ Store fulfillment ▪ Optimized returns
▪ Supplier network for match, rule-based ▪ Global inventory options for pickup, click processes with
strategic sourcing and order allocation visibility for stores, and collect, ship from intelligent quality
onboarding of small ▪ Control tower distribution centers, store, ship to store, pick inspection processes
farms, plastic pickers, and and suppliers' stock and pack, and ship ▪ Waste and recycling
▪ Integrated supply
artisanal miners ▪ Central order ▪ Last-mile delivery with management
chain execution for
▪ Sustainable product design warehousing and management and integration to carriers, ▪ Integration of new
reducing packaging transportation orchestration public transportation, channels for used
▪ Evaluation and simulation ▪ Dynamic sourcing and and other networks clothing and worn
▪ Logistics business
of product cost structures networks routing and intelligent gear
use of available stock

The architecture of the Intelligent Enterprise for retail companies – a combination of SAP and partner solutions for new
business outcomes

SAP Ariba solutions SAP Intelligent Product

Design
for supplier for collaborative
onboarding product development

INTURN for inventory

SAP Integrated lifecycle management
Business Planning
for Supply Chain parcelLab to control
and SAP Logistics Across all functions postpurchase
Business Network for communication
demand and supply and integration to
carriers
match and risk
SAP Consumer Sales
Intelligence and SAP
SAP S/4HANA for Customer Order
embedded supply Sourcing for global
chain execution inventory and order
orchestration

parcelLab connects online retailers with their customers to Manage & Optimize Excess Inventory by INTURN helps manage
help them deliver the best possible shopping experience. slow-moving or excess inventory. By streamlining workflows, the
With real-time monitoring of every single order, parcelLab platform empowers brands to reduce inefficiencies and improve
helps identify relevant events for the customer and enables product margins – all while ensuring channel protection.
personal, individual, and emotional customer communication
– supported by machine learning.

11

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 11

Redefined Store: Brand
Experience, Ultraconvenience,
Omnifulfillment
The physical store can be harnessed as competitive differentiator to shape memorable customer experiences while
optimizing differentiated omnichannel capabilities such as same day deliveries. Digital convergence is transforming the
role of the store and frontline employees at record speed, innovative capabilities and processes are needed to leverage
it’s full potential.
CURRENT PRACTICE
From traditional “mostly” anonymous shopping with limited personalization…
NEXT PRACTICE
. . . to a digitalized store and empowered associates that serve customers individually and provides additional value
enabled by automation and increased efficiency.

Shopper data capture Clienteling

▪ Capturing customer behavior based on privacy ▪ Shopper recognition based on privacy settings
compliance to optimize store operations, layout, ▪ Recommendations for offers based on known
and price points, detect trends, and support and predicted preferences
clienteling

Store experience
Store performance ▪ Smart mirrors, interactive augmented reality (AR) and
virtual reality (VR) kiosks
▪ Comprehensive, real-time insights into all ▪ Interactive digital signage and in-store navigation
areas of the store business provided through services
role-based dashboards ▪ Frictionless checkout
▪ Employee learning ▪ Scan-and-go shopping concepts
Digitalized store ▪ Product training

Store automation Omnichannel service

▪ Smart shelves for autoreplenishment ▪ Fulfillment service supporting click and collect, curbside
▪ RFID enabled store transactions pickup, endless aisle, and last-mile delivery
▪ Task-driven staff worklist with in-store In-store production ▪ Seamless returns processes
navigation and augmented reality ▪ Convenience food and meals ▪ Dark store processes
▪ Product personalization

VERTICAL EDGE: The Intelligent Store – A Data-Driven, Technology-Enabled, Omnifulfillment Center

The store of the future has bridged the gap between online and physical. It centers around innovative customer
experiences and efficient workspaces for employees. In-store technology such as RFID, AR and VR, smart shelves, and
sensors support a wide variety of use cases for better merchandise and inventory management, dynamic task
management for associates, and one-to-one insight-driven customer engagements.

Valora Created the Convenience Store of the Future

In just six months Valora enabled 24x7 shopping, payment on the go, and digital customer
loyalty programs – providing the convenience of a physical store with the ease of a digital
business model.
Customers can shop around the clock and at their own pace, and a smartphone app is key
to both the store and payment method. When shoppers take a product off the shelf, after
a short scan, it appears in the digital shopping basket. Once customers leave, they are
billed at the touch of a button. This seamlessly integrated digital and store business
model took Valora just six months from conception to implementation.
Watch the video.
12

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 12

SAP Solutions: Brand
Experience, Ultraconvenience,
Omnifulfillment
New business capabilities delivered by the intelligent suite and industry cloud solutions turn stores into data-driven,
tech-enabled fulfillment centers for an ultraconvenient shopping experience.

In-store merchandise and Omnichannel fulfillment My store Shopper experience

inventory management ▪ Picking of online orders Store manager dashboard with: ▪ Product lookup for better
▪ Store ordering ▪ Both single orders as well as ▪ Running promotions service
▪ Goods movements such as multiple orders ▪ Expected goods movements ▪ Capture of customer
move, count, transfer, lookup, ▪ Suggestion of replacement interactions for better
▪ Sales performance
and receive products articles recommendations
▪ Management of store
▪ RFID-enabled transactions for ▪ Handover of online orders to employee assignment ▪ Returns management
end-of-season stock transfer customers ▪ Scan-and-go services for
▪ Physical inventory ▪ Maintenance of picking frictionless shopping
▪ Label printing sequences by merchandise
or article hierarchies

The architecture of the Intelligent Enterprise for retail companies – a combination of SAP and partner solutions for new
business outcomes
SAP Customer KIT – Keytree
Experience for real- In-Store Technology
time customer for clientelling
profiles and Shelf optimizer for
commerce anywhere. SAP Analytics for
SAP S/4HANA better assortments
for in-store and offers
merchandise Across all functions SAP Dynamic Pricing
management by GK
and inventory for optimized
applications markdowns and
SAP Customer Activity real-time pricing
Repository –
a real-time
foundation for SAP Customer Order
omnichannel Sourcing for
orchestration omnichannel order
orchestration

SAP Dynamic Pricing by GK allows retailers to streamline pricing The KIT Solution by Keytree helps bridge the experience gap
for more intelligent, efficient, and successful pricing strategies between digital and physical stores by empowering store
and outcomes by enabling analysis and price-setting automation associates with a mobile application that surfaces all relevant
consistently across sales channels. The application provides an customer and product data from SAP and non-SAP back-end
efficient, next-generation approach to pricing with a cloud processes and services needed to provide a meaningful
deployment to speed up pricing processes and reduce the need customer experience and drive sales through up-selling and
for human intervention – while fostering aligned processes and cross-selling.
improved consistency across channels and locations.
13

© 2021 SAP SE or an SAP affiliate company. All rights reserved. 13

New Business Models:
Create Magnetic Platforms for
Superior Customer Value
The use of Big Data, artificial intelligence, and platform technology creates opportunities for sustained consumer value,
resulting in lifelong customer relationships.

CURRENT PRACTICE
From verticalizing business models in a single industry context . . .
NEXT PRACTICE
. . . to addressing consumers’ personal outcomes holistically, leveraging platform scale with new customer offers across
industry boundaries

▪ Nutrition recommendations
Health ▪ Education and training
▪ Medical treatments

▪ Travel recommendations and

Travel bookings
▪ Dog pensions
Platform networks
Business to Business to • Onboarding
Private-label
business through consumer through • Integration
pet food
franchise stores own stores • Analytics
• Consumer Insights ▪ Liability insurance
Insurance
▪ Health insurance

▪ Dog trainer
Services ▪ Dog walker
▪ Mating and adoption services
▪ Tracking services

Superior customer value with holistic service and product offerings

VERTICAL EDGE: Selling Outcomes Beyond Products

To address customer outcomes in a holistic manner, solution architectures must be able to seamlessly meld together
capabilities across various business areas. Capturing and integrating customer feedback and experience data improve
offerings and services, increase loyalty, and foster subscription renewals.

A Bold Move to Help Reshape Retail

PVH addresses key business priorities in the fast-moving world of fashion in spite
of the global crisis by verticalizing its business from planning to store shelf in an
end-to-end supply chain.
“Our IT platform is key to driving our strategy by supporting innovation,
modernization, digitalization, and scalability,” said Eileen Mahoney, executive
vice president and global CIO of PVH. “Moving to SAP S/4HANA for fashion and
vertical business . . . has given us the transparency and flexibility we need to
continue to grow.”
Read the customer story.
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© 2021 SAP SE or an SAP affiliate company. All rights reserved. 14

SAP Solutions: Create
Magnetic Platforms for
Superior Customer Value
New business capabilities delivered by the intelligent suite and industry cloud solutions enable retailers to create
networks based on an open and flexible architecture to deliver value-added service for consumers.

Vertically integrated Customer Experience Platform and cloud strategy Data intelligence Business networks
value chain ▪ Headless commerce ▪ Software as a service ▪ Big Data analytics ▪ Supplier
▪ Several industry verticals ▪ Customer data ▪ Ecosystems of a certified and machine learning and spend
on one core platform cloud platform for data-driven management
▪ Harmonized data models ▪ AI-driven marketing transformation ▪ Networks for travel
▪ Cloud appliance libraries
across industries engagement at scale ▪ Cloud-based forecast with
▪ Virtualization and
▪ Global master data ▪ Marketplace and optimization SAP Concur®
scalability
services Management services solutions
▪ Integration
▪ Interoperable business
▪ Cloud service solutions for
processes
agile innovation

The architecture of the Intelligent Enterprise for retail companies – a combination of SAP and partner solutions for new
business outcomes

SAP Customer SAP Commerce

Experience for Marketplace
commerce everywhere, Management by Mirakl
customer insights & BUSINESS NETWORK
for expansion of
marketing engagement products and services
at scale. SAP Mobile Consumer
SAP Business Network – Assistant by GK for
Ariba Network and smart mobile
SAP Concur solutions shopping, payment,
and loyalty
SAP S/4HANA for management
industry operability on SAP Data Warehouse
one platform Cloud for enterprise
reporting

SAP S/4HANA is a future-ready ERP system with SAP Commerce Marketplace Management by Mirakl enables
built-in intelligent technologies, including AI, machine organizations to build, launch, and run their own online
learning, and advanced analytics. It transforms business marketplace. With the application, companies can initiate and
processes with intelligent automation and runs on SAP increase their online product and services offerings with
HANA® – a market-leading in-memory database that offers frictionless buying experiences through third-party channel
real-time processing speeds and partners.
a dramatically simplified data model.
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© 2021 SAP SE or an SAP affiliate company. All rights reserved. 15

SAP’s Industry Cloud:
A Joint Innovation Space
Business innovation is driven by everyone – customers, partners, and SAP. It starts with ideas: how to fix a problem,
how to discover and unlock new value, how to deliver new business outcomes. Translating an idea into a business
process or solution needs an innovation space that provides digital tools and content to build and deliver in a fast and
predictable manner. This allows developers and business users to focus on getting things done, to constantly deliver
new services and business outcomes in service of the customer experience and brand promise.

BUSINESS NETWORK

BUSINESS PROCESS
ACROSS ALL FUNCTIONS

BUSINESS PROCESS INTELLIGENCE

EXPERIENCE MANAGEMENT

INDUSTRY CLOUD
Partner Solutions
APPLICATIONS INTELLIGENT
SUITE
SAP Solutions

SUSTAINABILITY MANAGEMENT

TECHNOLOGY BUSINESS TECHNOLOGY PLATFORM

INFRASTRUCTURE SAP DATA CENTER HYPERSCALER

Industry Innovation Spaces Intelligent Technology at Your Fingertips

Stand-alone applications struggle to deliver relevant business Business innovation needs digital technologies that are ready
value. Enterprise applications always need access to essential to use to solve a business problem.
business domains such as products, cost centers, employees,
SAP’s industry cloud, built on SAP Cloud Platform, provides a
and customers. SAP’s industry cloud provides direct access to
full set of technologies ranging from user interfaces to
business domains and processes in the intelligent suite
robotic process automation to artificial intelligence and
through APIs, while our business and technology services
machine learning.
provide the tools and infrastructure to create and run
innovative industry cloud solutions.

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© 2021 SAP SE or an SAP affiliate company. All rights reserved. 16

Open Innovation Platform
and Ecosystem
Every retailer from every part of the globe has a unique business. This uniqueness sets them apart from their
competition and, in turn, creates fundamental differences with everything from the way they do pricing and
promotions to building brand and consumer loyalty.

SAP is joined by our extensive partner ecosystem in delivering industry cloud solutions for retailers that unlock new
levels of efficiency, extend end-to-end business processes at the edge, and enable innovative business models.

SAP partners find a unique environment in our industry cloud, in which the data domains and business processes of the
intelligent suite and our business networks are readily accessible through open APIs.
This allows our partners to accelerate innovation by focusing on the differentiating business capabilities they want to
build and deliver to our joint retail customers.

This enables a spectrum of partnership and innovation models ranging from close co-innovation over identified white
spaces to completely open innovation spaces with free competition to drive customer value.

The innovation models are complemented by a set of commercialization models that are strongly correlated to the
value the solutions deliver to the business of our customers.

Freedom of choice is a key value, so customers can choose any partner or hyperscaler to deploy their industry cloud
solutions.

Open Ecosystems Deliver More Innovation

Open platforms, available to the wider ecosystem, have consistently delivered more innovation and choice for
customers. Therefore, our industry cloud solutions can be run by the major infrastructure-as-a-service providers, giving
our customers the freedom to implement their own individual platform strategy.

Fujitsu: Driving Retail Costs Down

Every day, retailers are challenged with low profit margins, inventory inconsistencies, and low store performance. This can be staff
improperly trained and even fraudulent activity. Using cloud technology from SAP, SAP partner Fujitsu connects transactional data to
loss-prevention analytics to monitor, detect, and prevent inconsistent or fraudulent activity in retailers’ stores.

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RISE with SAP: Business
Transformation as a Service
In today’s world, the companies that thrive are those that adapt quickly. Optimizing and transforming
the business is a customer journey triggered by today’s challenges and tomorrow’s opportunities in
every industry.

RISE with SAP is a combination of modular services and solutions to enable the business and technology transformation
journey of our customers, picking them up where they are today and taking them where they want to go – at their own
pace.

RISE with SAP has three foundational elements:

Business Process Redesign Technical Migration

B U S I N E S S T O O L S & N E T W O R K
P R O C E S S S E R V I C E S
I N T E L L I G E N C E

A P P L I C A T I O N S

P L A T F O R M

I N F R A S T R U C T U R E

Business process intelligence Tools and services SAP S/4HANA Cloud helps you keep your business agile and responsive.
benchmarks your process from SAP and our partners
The business network connects you to customers, partners, and
performance against your industry support the transformation
suppliers.
peers and recommends the areas journey.
where business redesign SAP Business Technology Platform and industry cloud solutions offer
will yield the best results. next practices and technologies for your business.

Your choice of infrastructure as a service (IaaS) is the foundation

for your business in the cloud.

RISE with SAP enables organizations to avoid high up-front investment costs and focus on reduced TCO* and fast time to value,
with the flexibility they need. With RISE with SAP, it’s simple: there is one hand to shake, one offering to customize, and one
partner to manage operations, issue handling, and service-level agreements.
We look forward to joining our customers on their transformation journey into the future. Find more about RISE with SAP at
www.sap.com/RISE.

*RISE with SAP allows customers to realize the value of their investment sooner, with up to a 20% reduction in TCO over five years for SAP S/4HANA Cloud, private edition, as compared to a
traditional ERP deployment.
Source: TCO reductions and timelines are modeled estimates from interviewed company data taken from the following IDC studies: SAP ECC and SAP S/4HANA TCO Study (Nov. 2020) and IDC SAP
S/4HANA Business Value Study (March 2020). Timelines and estimates are intended for illustrative purposes only, and SAP makes no guarantees as to actual results.
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SAP’s Comprehensive
Partner Innovation
Ecosystem
SAP has been a proud solution provider for the retail industry for almost five decades – starting from humble beginnings
and growing into a position of supporting the core business of our customers.

SAP’s industry cloud opens the field for a new level of co-innovation with customers and partners, enabling next
practices and new business models that help our customers capture the new opportunities of the future.

Our open partner strategy gives our customers the choice of whom they work with to design the business models of the
future; whom they partner with to define and implement business processes for efficiency and growth; and whom they
trust with running their infrastructure.

There are many journeys retail companies can take into the digital economy to become intelligent enterprises. No
matter which they choose, our scalability, security, global reach, vibrant business networks, and business process
knowledge across retail and adjacent industries are success factors for our customers, our ecosystem, and SAP.

Our retail-focused partner ecosystem includes, among others:

Engagement Model
SAP is a partner for the retail industry in the long run. We have established a co-innovation and collaboration model
with many of our customers that is based on mutual trust and long-standing, value-based relationships.
This is the foundation to chart the journey into the new world of client experience and outcomes, to capture the opportunities and
tackle the risks in the digital economy.

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© 2021 SAP SE or an SAP affiliate company. All rights reserved. 19

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